c e g california

CITY OF ELK GROVE, CALIFORNIA Incorporated July 1, 2000

COMPREHENSIVE ANNUAL

FINANCIAL REPORT

Fiscal Year Ended June 30, 2017

COMPREHENSIVE ANNUAL FINANCIAL REPORT


INTRODUCTORY SECTION

(UNAUDITED)

CITY OF ELK GROVE, CALIFORNIA

Comprehensive Annual Financial Report

For the Fiscal Year Ended June 30, 2017

TABLE OF CONTENTS

Page

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INTRODUCTORY SECTION(unaudited)

Letter of Transmittal ....................................................................................................................... I

Certificate of Achievement for Excellence in Financial Reporting -

Government Finance Officers Association .............................................................................. VI

Organizational Chart ....................................................................................................................... VIII

City Council .................................................................................................................................... IX

Executive Team .............................................................................................................................. X

Location Map .................................................................................................................................. XI

Acknowledgement .......................................................................................................................... XII

FINANCIAL SECTION Independent Auditor’s Report ......................................................................................................... 1

Management’s Discussion and Analysis(unaudited) ...................................................................... 4

Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position ...................................................................................................... 17

Statement of Activities ........................................................................................................... 18

Fund Financial Statements:

Governmental Funds:

Balance Sheet .................................................................................................................... 20

Reconciliation of the Governmental Funds Balance Sheet to the

Government-Wide Statement of Net Position – Governmental Activities ..................... 21

Statement of Revenues, Expenditures and Changes in Fund Balances ............................. 22

Reconciliation of the Statement of Revenues, Expenditures, and Changes

in Fund Balances of Governmental Funds to the Government-Wide

Statement of Activities – Governmental Activities ......................................................... 23

Proprietary Funds:

Statement of Fund Net Position ......................................................................................... 24

Statement of Revenues, Expenses and Changes in Fund Net Position ............................. 25

Statement of Cash Flows ................................................................................................... 26

Fiduciary Funds:

Statement of Fiduciary Net Position ................................................................................. 27

Statement of Changes in Fiduciary Net Position ............................................................... 28

Notes to Financial Statements ................................................................................................ 29

Required Supplementary Information(unaudited):

Budgetary Comparison Schedules:

General Fund .............................................................................................................................. 77

Affordable Housing Special Revenue Fund ............................................................................... 78

Notes to Budgetary Comparison Schedules ............................................................................... 79

Schedule of Funding Progress for OPEB Plans ......................................................................... 80

Schedule of Changes in the City’s Net OPEB Liabilities and Related Ratio ............................. 81

Schedule of City’s OPEB Contributions .................................................................................... 82




TABLE OF CONTENTS

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Schedule of Investment Returns ................................................................................................. 83

Schedule of the City’s Proportionate Share of the Net Pension Liability .................................. 84

Schedule of the City’s Contributions ......................................................................................... 85

Combining and Individual Fund Statements and Schedules:

Nonmajor Governmental Funds:

Combining Balance Sheet ...................................................................................................... 87

Combining Statement of Revenues, Expenditures and Changes in Fund Balances .............. 88

Special Revenue Funds:

Definition ............................................................................................................................... 89

Nonmajor Special Revenue Funds:

Combining Balance Sheet ................................................................................................. 92

Combining Statement of Revenues, Expenditures and Changes in Fund Balances .......... 98


Recycling Grant Fund ................................................................................................... 103

Used Oil Grant Fund ..................................................................................................... 104

Household Hazardous Waste Fund ............................................................................... 105

Tire Collection Disposal Grant ..................................................................................... 106

BSCC Local Police Grant ............................................................................................. 107

COPS Universal Grant Fund ......................................................................................... 108

OTS Grants Fund .......................................................................................................... 109

Local Police Grants Fund.............................................................................................. 110

CA Law Enforcement Equipment Fund ....................................................................... 111

State COPS Grant Fund ................................................................................................ 112

Gas Tax Fund ................................................................................................................ 113

Agricultural Preservation Fund ..................................................................................... 114

Swainson’s Hawk Fund ................................................................................................ 115

Tree Mitigation Fund .................................................................................................... 116 10

Street Trench Cut Fees Fund......................................................................................... 117

Community Development Block Grants Fund ............................................................. 118

Police Services CFD Funds .......................................................................................... 119

Maintenance Services CFD Funds ................................................................................ 120

Street Maintenance District Funds ................................................................................ 121

Street Lighting Maintenance District Funds ................................................................. 122

Asset Seizure – State and Federal Funds ...................................................................... 123

Library Ownership Fund .............................................................................................. 124

HUD Home Grant ......................................................................................................... 125

Neighborhood Stabilization Program Fund .................................................................. 126

Measure A Street & Road Maintenance Fund .............................................................. 127

Development Services Fund ......................................................................................... 128




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Capital Projects Funds:

Definition ............................................................................................................................... 129

Major Capital Projects Funds:

Supplemental Budgetary Comparison Schedules:

Roadway Fees Fund ...................................................................................................... 130

Mitigation and Fee Funds ............................................................................................. 131

Laguna Ridge CFD 2005-1 Fund .................................................................................. 132

Nonmajor Capital Project Funds:




Federal Capital Grants Fund ......................................................................................... 139

State Grants Fund .......................................................................................................... 140

Measure A Construction Funds .................................................................................... 141

LTF Bike & Pedestrians Fund ...................................................................................... 142

Capital Facilities Funds................................................................................................. 143

Laguna West Service Area Fund .................................................................................. 144

Lakeside Service Area Fund ......................................................................................... 145

In Lieu Funds ................................................................................................................ 146

East Franklin CFD 2002-1 Fund ................................................................................... 147

Poppy Ridge CFD 2003-1 Fund ................................................................................... 148

Laguna CFD Fund......................................................................................................... 149

Laguna West CFD Fund ............................................................................................... 150

Lakeside CFD Fund ...................................................................................................... 151

Debt Service Funds:

Definition ............................................................................................................................... 153

Nonmajor Debt Service Funds:



Budgetary Comparison Schedules

Elk Grove Finance Authority Fund............................................................................... 156

Internal Service Funds:

Definition ............................................................................................................................... 157

Balance Sheet ......................................................................................................................... 158

Combining Statement of Revenues, Expenses and Changes in Fund Net Position ............... 159

Combining Statement of Cash Flows .................................................................................... 160

Agency Funds:

Definition ............................................................................................................................... 161

Combining Statement of Assets and Liabilities ..................................................................... 164

Combining Statement of Changes in Assets and Liabilities .................................................. 166




TABLE OF CONTENTS

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STATISTICAL SECTION(unaudited)

Table of Contents ............................................................................................................................ 173

Net Position by Component ............................................................................................................ 174

Changes in Net Position .................................................................................................................. 176

Fund Balances, Governmental Funds ............................................................................................. 178

Changes in Fund Balances, Governmental Funds .......................................................................... 180

Assessed Value and Estimated Actual Value of Taxable Property ................................................ 182

Direct and Overlapping Property Tax Rates ................................................................................... 183

Principal Property Taxpayers .......................................................................................................... 184

Property Tax Levies and Collections .............................................................................................. 185

Taxable Sales by Category .............................................................................................................. 186

Direct and Overlapping Sales Tax Rates ....................................................................................... 188

Ratios of Outstanding Debt by Type. ............................................................................................. 189

Direct and Overlapping Governmental Activities Debt .................................................................. 190

Legal Debt Margin .......................................................................................................................... 192

Demographic and Economic Statistics ........................................................................................... 194

Principal Employers ........................................................................................................................ 192

Government Employment Information ........................................................................................... 197

Operating Indicators by Function/Program .................................................................................... 198

Capital Asset and Infrastructure Statistics by Function/Program ................................................... 200

FINANCE DEPARTMENT

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8401 Laguna Palms Way

Elk Grove, California 95758

Phone: 916.683.7111

Fax: 916.691.3182

Web: www.elkgrovecity.org

December 29, 2017

Honorable Mayor,

Council Members,

Citizens of Elk Grove, California:

The Comprehensive Annual Financial Report (CAFR) of the City of Elk Grove (City) for the fiscal year

ended June 30, 2017, is hereby submitted in compliance with California Government Code. Management

assumes full responsibility for the completeness and reliability of the information contained in this report,

based on a comprehensive framework of internal control it has established for this purpose. Because the

cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather

than absolute, assurance that the financial statements are free of any material misstatements.

Maze and Associates, Certified Public Accountants has issued an unmodified opinion of the City of Elk

Grove’s financial statements for the fiscal year ended June 30, 2017. The independent auditor’s report is

located in the front of the financial section of this report.

Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report

and provides a narrative introduction, overview, and analysis of the basic financial statements. The

MD&A complements the letter of transmittal and should be read together.

PROFILE OF THE GOVERNMENT

The City of Elk Grove incorporated under California law on July 1, 2000, as a general-law city. The City

operates under the City Council/Manager form of government. The City Council is a five member body

with a Mayor and four Council Members. The elected mayor serves a two-year term and is elected

citywide (at-large) with the first mayoral election conducted November 6, 2012 and the elected Mayor

sworn in December 2012. The four Council Members positions are also elected citywide (at-large) and

each represent one of four council residency districts where the councilmember must reside within.

The City provides a variety of services to its residents which include public safety, animal control,

highways and streets, public improvements, planning and zoning, code enforcement, building permits,

transit, solid waste, drainage, and general administration. The City’s CAFR includes all funds of the City

and reports all activities considered to be a part of, controlled by, and dependent on the City. Generally

accepted accounting principles require the disclosure of blended and discretely presented component units

that together comprise the financial reporting entity. In fiscal year 2005-06, the City added two blended

component units: The City of Elk Grove Finance Authority and the City of Elk Grove Parking Authority.

The Elk Grove Finance Authority is shown in the financial statements as a Debt Service Fund. The Elk

Grove Parking Authority did not have any financial activity during fiscal year 2016-17.

There were no discretely presented component units.

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The accounts of the City are organized on the basis of funds with each fund considered a separate

accounting entity. The operations of each fund are accounted for with a separate set of self-balancing

accounts that comprise its assets, liabilities, fund equity, revenues and expenditures/expenses, as

appropriate. Government resources are allocated to and accounted for, in individual funds based upon the

purpose for which they are to be spent and the means by which spending activities are controlled. A

complete explanation of each fund type is contained in Note 1B to the financial statements.

The budget is prepared by City staff under the direction of the City Manager. A public hearing is

scheduled in either May or June. Final adoption is required by the end of the fiscal year. Transfers

between funds, appropriation of reserves and appropriations of unassigned reserves, and interfund loans

require City Council action. The City Manager has the authority to transfer between departments or within

a fund, and for the appropriation of replacement reserves.

ECONOMIC CONDITION AND OUTLOOK

In 1850, Elk Grove was established as a hotel and stagecoach stop. Located in the State of California

(State), 15 miles south of historic Sutter’s Fort in Sacramento, Elk Grove became a crossroads for

business, entertainment, mail service and agriculture and acted as a home base for gold miners in nearby

communities. After the early gold rush, a close-knit community evolved with a distinctly rural and

western lifestyle. Today, the City of Elk Grove is a thriving community.

On March 7, 2000, voters passed Measure J to incorporate the communities of Sheldon, Elk Grove and

parts of Laguna into the new City of Elk Grove. This was the third attempt to incorporate since 1986. The

City of Elk Grove officially incorporated on July 1, 2000, with the newly elected City Council assuming

management of the majority of the governmental aspects of living and doing business within the City. A

second annexation occurred on December 15, 2003 to incorporate Laguna West into the City’s boundaries.

The City is approximately 42 square miles and 171,059 residents as of January 1, 2017, a population

increase of approximately 1.7% over the previous year. The City is the second largest incorporated city

within Sacramento County.

The region continued to maintain strong employment statistics over the last year. According to the

Employment Development Department (EDD) unemployment in the Sacramento metropolitan area as of

June 2017 was 4.8% and Sacramento County at 5.0%. Unemployment rates have not been this low since

2007. Census block unemployment data that is more specific to Elk Grove is even lower at 4.1% as of

June 2017. Construction permits are moderately healthy compared to the low experienced during the

recession.

Residential Permits Commercial permits

2016-17 315 9

2015-16 625 9

2014-15 568 14

2013-14 378 11

2012-13 441 13

2011-12 322 77

2010-11 247 48

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Property assessed valuations increased again during fiscal year 2016-17, an increase of 6.4% in

Sacramento County and 6.6% in Elk Grove over the prior year. Expectations are that the City will

continue with assessed valuation increases in fiscal year 2017-18.

Sales Tax receipts outpaced budget expectations in fiscal year 2016-17 by exceeding the original budget

by 8.1%. and exceeded amended budget by 2.1%. The Elk Grove Auto Mall continues to be a significant

sales tax driver for the City. Sales Tax receipts experienced a 1.39% increase over the prior fiscal year or

13.2% after adjusting for the State triple flip reimbursement. Final triple flip reimbursement was issued to

the City in fiscal year 2015-2016.

LONG-TERM FINANCIAL PLANNING

The City’s General Fund Balance is approximately 51% of fiscal year 2017-18 appropriations of $68

million, with a 20% component committed to Economic Stabilization and 10% committed to Capital

Reserves. Majority of the Capital Reserves balance is dedicated to the sewer lift station that is located in

the Southern Laguna Ridge. Construction contract was awarded during summer 2017. The remaining is

the balance of other committed, assigned and unassigned fund balance. The City generally will not

obligate the General Fund to secure long-term financing except when the marketability can be significantly

enhanced. Feasibility analysis will be prepared for each long-term financing to assess debt service on

current and future operations. The City policy is to seek investment grade ratings of Aaa/BBB, or greater,

on any direct debt and will request credit enhancements such as a letter of credit or insurance when

necessary for marketing purposes, availability, and cost-effectiveness.

MAJOR INITIATIVES

Parks

On May 24, 2017 City Council accepted Horseshoe Park Project as completed. The nine-acre park is now

being enjoyed by residents.

Civic Center Program

The Civic Center Park has been a multi-year preparation effort that has been refined over time to now

include an Aquatic Center, Community/Senior Center, Veterans Hall and Commons Area. The Aquatic

Center is planned with a combination of pools designed to serve competitive aquatics, instruction, water

fitness and family recreation. Aquatic Center construction began in summer 2017. The Community/Senior

Center will be a 27,000 square foot building that will include a main hall, Veterans Hall, commercial

kitchen, catering kitchen, conference room, café and classroom spaces. Design of the Community Center

is underway and is scheduled for construction in 2018 with completion in early 2019. The funding for this

almost $53 million dollar project is in place with final funding acquired in the successful completion of the

August 2016 Laguna Ridge Community Facilities District bond issuance.

Animal Shelter

The City is in the process of developing a City animal shelter. On March 17, 2017, staff submitted the

Animal Shelter Project to the Planning Department for the design review process. The animal shelter will

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include an indoor facility for cats and other small mammals, as well as indoor and outdoor kennels for

dogs, for a total of 48 housing units for dogs and 48 housing units for cats, three outdoor exercise yards, an

agility yard, veterinary space which includes low/no-cost spay and neuter services, administration offices

for shelter and animal control operations, and numerous site improvements such as parking and

landscaping.

Purchase of Los Rios Land

On June 28, 2017 City Council approved the purchase of surplus real property from the Los Rios

Community College District. This property acquisition is planned to be a potential solution for park land in

Laguna Ridge. The cost to purchase the property is approximately $3.25 million and a resolution

authorizing reimbursement from a future debt issuance was also approved. The proposed 2018 bond

issuance replenishes the funding for the land acquisition and provides construction financing for the

animal shelter.

Other Initiatives

The City is actively engaged in spurring planned economic development within its limits. The City is

designing two new roadways including utilities and a sewer lift station within the Laguna Ridge Specific

Plan and the South East Policy Area (SEPA). These roadway projects will extend Big Horn Blvd from Los

Rios College Driveway to Bilby Rd and Bilby Road from Bruceville Road just past Big Horn Blvd. The

sewer lift station will provide service to the southern areas of Laguna Ridge, as well as the majority of

SEPA. These infrastructure improvements will favorably position the City for employment-oriented

development.

Governor Jerry Brown signed Assembly Bill 1606, giving the Wilton Rancheria Tribe the go-ahead to

build a $400 million entertainment and gaming facility in Elk Grove. The Wilton Rancheria Casino will be

built on 36 acres of land near Highway 99 and Kammerer Road. It will include a 12-story resort and

casino, complete with 300 rooms and 30,000 square-feet of event space. The project will create more than

1,600 construction jobs, 1,750 full-time casino and hotel jobs and 3,000 other direct and indirect jobs.

There has been legal actions filed that challenge the actions that placed the land in trust; this will influence

the timing of the tribe’s ability to construct and operate. The City and the tribe have an existing

Memorandum of Understanding that will provide funds to the City to mitigate the resulting impacts, such

as public safety and roads, when the facility is constructed and becomes operational.

DEPARTMENT FOCUS

Public Works

The City has completed or substantially completed several projects during the fiscal year that enhanced the

community or increased public safety: Citywide Curb Ramp Improvements Project, Slurry Seal Project,

Union Parkway Pavement and Drainage Rehabilitation Project, and the Elk Grove-Florin Road Sidewalk

Infill Project.

Development

Meadow House - A seven-bedroom transitional housing facility for homeless families was opened.

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OTHER INFORMATION

Independent Audit State statutes require an annual audit of the City’s accounts by an independent certified public accountant.

The accounting firm of Maze and Associates, Certified Public Accountants performed the 2016-17 fiscal

year annual audit.

Awards

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a

Certificate of Achievement for Excellence in Financial Reporting to The City of Elk Grove for its

comprehensive annual financial report for the fiscal year ended June 30, 2016. This was the fifteenth

consecutive year that the City has achieved this prestigious award.

In order to be awarded, the government unit must publish an easily readable and efficiently organized

comprehensive annual financial report in which the contents conform to program standards. Such reports

must satisfy both generally accepted accounting principles and applicable legal requirements. The GFOA

award is valid for a one year period.

The City of Elk Grove received the GFOA’s Distinguished Budget Presentation Award for its annual

budget document dated May 25, 2016. To qualify for the distinguished Budget Presentation Award, the

government’s budget document had to be judged proficient as a policy document, a financial plan, an

operations guide, and a communications device.

The City received the GFOA’s Award for Outstanding Achievement in Popular Annual Financial

Reporting for fiscal year ended June 30, 2016. To qualify for the Popular Annual Financial Reporting

Award a government must publish a report whose contents conform to program standards of creativity,

presentation, understandability and reader appeal.

Acknowledgements

The preparation of the CAFR was made possible by the dedicated service of the Finance Department’s

Accounting Division. I want to express my appreciation to Marsha Ley who led the team of Jannet Meyer,

Eric Swensen, Olga Voronova, Jude Kennedy, Maria Rodriquez, and Fiera Dolar for the contributions,

dedication and hard work made in the preparation of the report.

Appreciation is also expressed to the staff of Maze and Associates, Certified Public Accountants, who

made this presentation possible.

I would like to thank the Mayor, Members of the City Council, the City Manager and Department Heads

for their interest and support in planning and conducting the financial operations of the City in a

responsible and prudent manner.

Respectfully Submitted,

Brad Koehn

Director of Finance and Administrative Services

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COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2017

From left to right: Stephanie Nguyen, Councilmember; Pat Hume, Councilmember;

Steve Ly, Mayor; Steven Detrick , Vice Mayor; Darren Suen, Councilmember

CITY COUNCIL

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EXECUTIVE TEAM

Laura Gill, City Manager Jason Behrmann, Assistant City Manager

Kara Reddig, Deputy City Manager Brad Koehn, Finance Director Bryan Noblett, Chief of Police Jonathan Hobbs, City Attorney

Jason Lindgren, City Clerk

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LOCATION MAP

Redding *

Sacramento

*

San Francisco *

* San Jose

Elk Grove

* Lake Tahoe

* Fresno

Bakersfield *

Santa Barbara *

* Los Angeles

San Diego *

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ACKNOWLEDGEMENT

Prepared by the City of Elk Grove Finance Department

Accounting Division

Marsha Ley, Accounting Manager

Jannet Meyer, Administrative Analyst

Eric Swensen, Senior Accountant

Olga Voronova, Senior Accountant

Jude Kennedy, Accounting Technician

Maria Rodriguez, Payroll Technician



FINANCIAL SECTION

INDEPENDENT AUDITOR’S REPORT To the Honorable Members of the City Council City of Elk Grove, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Elk Grove, California, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 17, the City restated net position of Governmental Activities and fund balance of certain Governmental Funds and the beginning balance of the Agency Funds related to the reclassification of debt without City commitment and the removal of an accrual for future sales taxes receivable. The emphasis of this matter does not constitute a modification to our opinions. Change in Accounting Principles Management adopted the provisions of the Governmental Accounting Standards Board Statement No. 74 – Financial Reporting for Post-employment Benefit Plans Other than Pension Plans, which became effective during the year ended June 30, 2017 as discussed in Note 11 to the financial statements. Management also implemented the provisions of the Governmental Accounting Standards Board Statement No. 82 – Pension Issues – An Amendment of GASB Statements No. 67, No. 68, and No. 73 during the year ended June 30, 2017 as noted in the pension-related Required Supplementary Information. The emphasis of these matters does not constitute a modification to our opinions. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and other Required Supplementary Information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Introductory Section, Supplemental Information, and Statistical Section listed in the Table of Contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.

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The Supplemental Information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplemental Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 29, 2017, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Pleasant Hill, California December 29, 2017

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Management’s Discussion and Analysis (unaudited)

This section of the City of Elk Grove’s (City) Comprehensive Annual Financial Report presents a discussion

and analysis of the City’s financial performance during the year ended June 30, 2017. Please read it in

conjunction with the City’s basic financial statements following this section.

FINANCIAL HIGHLIGHTS

City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of

resources at the close of the 2016-17 fiscal year by nearly $1.3 billion (Net Position). Of this amount,

$257 million is restricted for capital projects, debt service and legally segregated taxes, grants and fees;

and $1.1 billion is invested in capital assets.

As of June 30, 2017, the governmental funds reported combined fund balances of $271 million, of

which is all available to meet the City’s current and future needs (Restricted, Committed, and

Unassigned balances).

At fiscal year end the committed amount in the General Fund for stabilization totaled $13.7 million, or

nearly 23% of total general fund expenditures. General Fund Capital Project reserves totaled $7 million,

or nearly 12% of total general fund expenditures. The General Fund has an additional unassigned

amount of $9.4 million or nearly 16% of total expenditures.

Governmental capital assets increased by nearly $9.1 million prior to depreciation in comparison with

the prior year representing capital street improvements, facilities, and equipment. The increase is

reflected in the net investment in capital assets.

The City’s total long-term liabilities decreased by $102 million compared to the prior year. This

decrease is due to the reclassification of the two Special Districts (East Franklin and Poppy Ridge). The

City no longer reflects the two special assessment debts in the Debt Service Funds, but the activity is

now reported in the Agency Funds.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The

City’s basic financial statements comprise three components 1) Government-wide financial statements; 2)

Fund financial statements and, 3) Notes to the basic financial statements. Required Supplementary Information

is included in addition to the basic financial statements.

Government-wide Financial Statements are designed to provide readers with a broad overview of the City

finances, in a manner similar to a private-sector business.

The Statement of Net Position presents information on all City Assets and Deferred Outflows and Liabilities and

Deferred Inflows, with the difference reported as Net Position. Over time, increases or decreases in Net Position

may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The Statement of Activities presents information showing how Net Position changed during the most recent

fiscal year. All changes in Net Position are reported as soon as the underlying event giving rise to the change

occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement

for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but

unused annual and administrative leave).

Both of these government-wide financial statements distinguish functions of the City that are principally

supported by taxes and intergovernmental revenues (governmental activities) from other functions that are

intended to recover all or a portion of their costs through user fees and charges (business-type activities). The

governmental activities of the City include general government, public safety, public ways and facilities, and

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community development. The business-type activities of the City include Solid Waste, Transit, and Drainage.

The government-wide financial statements can be found on pages 17-19 of this report.

Fund Financial Statements are groupings of related accounts that are used to maintain control over resources

that have been segregated for specific activities or objectives. The City, like other state and local governments,

uses fund accounting to ensure and demonstrate finance-related legal compliance. All of the funds of the City

can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds are used to account for essentially the same functions reported as governmental activities

in the government-wide financial statements. However, unlike the government-wide financial statements,

governmental funds financial statements focus on near-term inflows and outflows of spendable resources, as

well as on balances of spendable resources available at the end of the fiscal year. Such information may be

useful in evaluating a City’s near-term financing requirements. The City considers revenue to be available if

collected within 60 days after the fiscal year end.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is

useful to compare the information presented for governmental funds with similar information presented for

governmental activities in the government-wide financial statements. By doing so, readers may better

understand the long-term impact of the government’s near-term financing decisions. Both the governmental

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.

The City currently maintains approximately 79 governmental funds. Information is presented separately in the

governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and

changes in fund balances for the General Fund, Affordable Housing Fund, Roadway Fee Fund, Laguna Ridge

CFD 2005-1 Fund and the Mitigation and Fee Fund. Data from the other governmental funds are combined into

a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is

provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for all funds. Budgetary comparison statements have been

provided as required supplementary information to demonstrate compliance with the budget. The governmental

funds financial statements can be found on pages 20-23 of this report.

Proprietary funds are maintained two ways. Enterprise funds are used to report the same functions presented as

business-type activities in the government-wide financial statements. The City uses enterprise funds to account

for Solid Waste, Transit and Drainage enterprises. Internal service funds are an accounting device used to

accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds

to account for its risk management, facilities, fleet and equipment maintenance and improvement, and

information technology services. Because these services predominantly benefit governmental rather than

business-type functions, they have been included within governmental activities in the government-wide

financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in

more detail. The City’s internal service funds are combined into a single, aggregated presentation in the

proprietary funds financial statements. Individual fund data for the internal service funds is provided in the

supplementary information section of this report. The proprietary funds financial statements can be found

on pages 24-26 of this report.

Fiduciary funds are used to account for resources held for the benefit of parties outside the government.

Fiduciary funds are not reflected in the government-wide financial statements because the resources of those

funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like

6

that used for proprietary funds. The fiduciary fund financial statements can be found on page 27-28 of this

report.

Notes to the Basic Financial Statements provide additional information that is essential to comprehend the

data provided in the government-wide and fund financial statements. The notes can be found on pages 29-75

of this report.

Required Supplementary Information is presented on the City General Fund and major Special Revenue

Fund budgetary schedule. The City adopts an annual appropriated budget for its General Fund. A budgetary

comparison schedule has been provided for the General Fund to demonstrate compliance with this budget. The

required supplementary information can be found on pages 77-85 of this report.

The combining and individual fund statements and schedules information for non-major governmental funds,

enterprise and internal service funds are presented immediately following the required supplementary

information. Combining and individual fund statements and the supplementary budgetary comparison

schedule for the major capital projects fund can be found on pages 87-172 of this report.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

This analysis focuses on the Net Position and changes in Net Position of the City as a whole.

2017 2016* 2017 2016* 2017 2016*

Current and other assets 316,838,153$ 287,531,543$ 36,173,994$ 35,443,506$ 353,012,147$ 322,975,049$

Capital assets 1,058,220,603 1,078,302,300 35,892,563 35,753,920 1,094,113,166 1,114,056,220

Total Assets 1,375,058,756 1,365,833,843 72,066,557 71,197,426 1,447,125,313 1,437,031,269

Deferred outflows of resources related to pensions - 12,372,114 - - - 12,372,114

Deferred amount on refunding 17,427,658 3,339,624 - - 17,427,658 3,339,624

Total Deferred Outflows of Resources 17,427,658 15,711,738 - - 17,427,658 15,711,738

Current and other liabilities 31,944,450 38,239,470 3,983,440 4,300,503 35,927,890 42,539,973

Long-term liabilities 23,878,133 125,642,664 9,466,855 9,751,075 33,344,988 135,393,739

Total Liabilities 55,822,583 163,882,134 13,450,295 14,051,578 69,272,878 177,933,712

Deferred inflows of resources related to pensions 3,861,153 4,874,087 - - 3,861,153 4,874,087

Net Position:

Net investment in Capital

Assets 1,053,280,603 976,664,371 28,608,561 28,132,236 1,081,889,164 1,004,796,607

Restricted Net Position 257,008,259 215,829,204 272,077 1,398,464 257,280,336 217,227,668

Unrestricted Net Position 22,513,816 20,295,785 29,735,624 27,615,148 52,249,440 47,910,933

Total Net Position 1,332,802,678$ 1,212,789,360$ 58,616,262$ 57,145,848$ 1,391,418,940$ 1,269,935,208$

*Not restated for the effects of the changes discussed in Note 17.

Governmental activities Business-type activities Total

City of Elk Grove Net Position

The City’s Net Position totaled nearly $1.4 billion as of June 30, 2017, an increase of $121 million as compared

to fiscal year ended 2016. The City’s Capital Improvement Projects activity increased over the prior year such as

the Sheldon Road and Waterman Road roundabout and the Big Horn and Bilby Road extension.

The change in Net Position is reflected in the Statement of Net Position table on page 17.

The City’s government-wide Net Position as of June 30, 2017, comprised the following:

Cash and investments comprised of $215.3 million in the city treasury and $56.5 million of restricted

cash held by fiscal agents. Substantially all of the city treasury amounts were held in relatively short

7

and medium term investments in securities to support operating activities, as detailed in Note 2 on

pages 39-45 to the financial statements.

Governmental receivables comprised $11 million of current receivables and long-term receivables of

$72 million, which are over one year or longer time periods. Long-term receivables remained flat from

prior year due to development fee deferrals and/or credits and due to the recording of additional

Affordable Housing loans and subsidies. The low to moderate housing loans have varying repayment

terms and interest rates. The terms and details of these programs can be found in Note 3 on pages 45-

46.

Net capital assets of over $1 billion include the City’s entire infrastructure in addition to all other City

assets. The City has fully implemented GASB Statement No. 34 capital assets requirement as it relates

to infrastructure and GASB Statement No. 51 as it relates to intangibles.

Governmental current liabilities, totaling nearly $32 million, include accounts payable, refundable

deposits, fee credits earned by developers, unearned revenue, and other miscellaneous amounts.

Restricted Net Position, totaling $257 million; $79 million to construct specified capital projects, and

$178 million may be spent on other projects specified by funding source restrictions.

The following tables indicate the changes in Net Position:

City of Elk Grove Changes in Net Position

For the Year Ended June 30, 2017

2017 2016* 2017 2016* 2017 2016*

Revenues:

Program revenues:

Fees, fines and charges for services 16,449,997$ 26,258,310$ 23,926,307$ 23,983,328$ 40,376,304$ 50,241,638$

Operating grants and contributions 15,651,340 27,881,745 8,869,845 12,468,916 24,521,185 40,350,661

Capital grants and contributions 79,906,262 16,286,252 - - 79,906,262 16,286,252

112,007,599 70,426,307 32,796,152 36,452,244 144,803,751 106,878,551

General Revenues:

Property taxes 23,670,228 11,443,260 1,379,717 1,301,708 25,049,945 12,744,968

Sales and use taxes 25,535,498 20,504,422 - - 25,535,498 20,504,422

Other taxes 10,191,818 14,879,009 - - 10,191,818 14,879,009

Other revenue 5,727,764 4,671,926 162,698 879,777 5,890,462 5,551,703

65,125,308 51,498,617 1,542,415 2,181,485 66,667,723 53,680,102

Total Revenues 177,132,907 121,924,924 34,338,567 38,633,729 211,471,474 160,558,653

Expenses:

General government 19,975,018 18,070,372 - - 19,975,018 18,070,372

Public safety 33,957,641 32,251,276 - - 33,957,641 32,251,276

Public ways and facilities 79,170,655 60,661,733 - - 79,170,655 60,661,733

Community development 9,373,576 9,688,271 - - 9,373,576 9,688,271

Interest on long-term debt 501,705 6,364,518 - - 501,705 6,364,518

Solid Waste - - 16,025,115 15,688,146 16,025,115 15,688,146

Transit - - 11,549,568 10,827,002 11,549,568 10,827,002

Drainage - - 4,195,296 3,427,573 4,195,296 3,427,573

Total Expenses 142,978,595 127,036,170 31,769,979 29,942,721 174,748,574 156,978,891

Excess (deficiency) before transfers 34,154,312 (5,111,246) 2,568,588 8,691,008 36,722,900 3,579,762

Transfers 1,098,174 1,096,291 (1,098,174) (1,096,291) - -

Change in Net Position 35,252,486 (4,014,955) 1,470,414 7,594,717 36,722,900 3,579,762

Net Position - Beginning 1,297,550,192 1,216,804,315 57,145,848 49,551,131 1,354,696,040 1,266,355,446

Net Position - Ending 1,332,802,678$ 1,212,789,360$ 58,616,262$ 57,145,848$ 1,391,418,940$ 1,269,935,208$

*Not restated for the effects of the changes discussed in Note 17.

Governmental Activities Business-type Activities Total

8

Fees, fines

and charges for services

9%

Operating

grants and contributions

9%

Capital

grants and contributions

45%

Property

taxes13%

Sales and use

taxes14%

Other taxes

9% Other

revenue1%

Revenue by Source - Governmental

Activities

Fees, fines

and charges for services

70%

Operating

grants and contribution

s

26%

Property

taxes4%

Revenue by Source - Business-

type Activities

As the previous tables show, $145 million, or 69% of the City’s fiscal year 2016-17 revenues are derived from

program revenues and $67 million, or 31%, from general revenues such as taxes and interest. The increase in

program revenue is due to debt refinancing of the Laguna Ridge CFD 2005-1 that provided capital project

funding to the City of $72.7 million. The new funding from this refinancing is programmed to be invested in

capital facilities and infrastructure. The increase in property tax is primarily due to the reclassification of the

VLF in Lieu that was classified in prior fiscal year as intergovernmental. This is an increase of nearly 32% from

the prior year.

Revenue Expense

General Government 1,505,256$ 19,975,018$

Public Safety 4,787,860 33,957,641

Public Ways and Facilities 96,419,857 79,170,655

Community Development 9,294,626 9,373,576

Interest on Long-term Debt - 501,705

112,007,599$ 142,978,595$

Program Revenue and Expense - Government Activities


$-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

Program Revenue and Expenses - Government

Activities

Revenue

Expense

Government activities program related expenses outstripped revenues during the fiscal year due partially to

public ways and facilities projects already in progress such as Sheldon and Waterman Road roundabout and the

Big Horn Boulevard and Bilby Road extension; and the commitment of the City to public safety, and also

because non program related revenues supported these functions.

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

Solid Waste Transit Drainage

Program Revenue and Expense - Business-type Activities

Revenue

Expense

Revenue Expense

Solid Waste 17,295,470$ 16,025,115$

Transit 9,868,373 11,549,568

Drainage 5,632,309 4,195,296 32,796,152$ 31,769,979$

Program Revenue and Expense - Business-type Activities


The City’s Solid Waste and Drainage revenues continue to support their activities. Transit revenue exceeds

expenses in the current year due to a subsidy from the General Fund.

9

FINANCIAL ANALYSIS OF THE CITY’S FUNDS

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal

requirements.

Governmental funds. The general government functions are reported in the General, Special Revenue, Debt

Service, and Capital Project Funds. The focus of the City’s governmental funds is to provide information on

near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the

City’s financing requirements. The implementation of GASB Statement No. 54 and the classification of

spendable fund balances to committed, assigned and unassigned, is intended to be more helpful in measuring the

resources available for spending at the end of the fiscal year.

Four major funds (one special revenue and three capital project) and the general fund were included in the city’s

governmental fund statements in the 2016-17 fiscal year. An analysis of significant balances and transactions are

as follows:

General Fund – General fund revenues experienced an overall increase of 3%. Property taxes increased 26.6%

and intergovernmental revenues decreased 96%. Fluctuations in property taxes and in intergovernemntal

revenue were mainly due to the Property Tax in Lieu Vehicle license fee being reclassified from

intergovernmental revenues to property tax revenues. Combined comparative of Property tax and Property tax

in Lieu Vehicle license fee from fiscal year 2016 and fiscal year 2017 realized a 2.7% increase. The Property

Tax in Lieu Vehicle license fee realized a 6.4% increase. All other revenues in the General Fund remained

comparable to last year.

General fund expenditures decreased by by 5.7% over the prior fiscal year, resulting in an excess of revenue

over expenditures of $1.6 million during fiscal year 2016-17. A few areas that saw a significant savings were,

Non-Departmental division that had a midyear budget adjustment for an early payoff of an interfund loan, this

payoff was done through the balance sheet rather than the income statement. City Council division had savings

in salary and benefits. Economic Development division main savings came from professional services.

Affordable Housing Fund – The City imposes a fee on residential development to provide financing assistance

for adequate low income housing in the City. Loans are granted and repaid with varied interest rates and

prepayment time. During the 2016-17 fiscal year loan proceeds include payments of existing loans in the

amount of $1.9 million for low income apartment projects and new loans in the amount of $177 thousand

through the Cal Home Loan for down payment assistance.

Roadway Fee Fund – The City imposes a citywide fee on development to fund center lanes and medians of

major roadway, intersections, interchanges and bridges. The fund balance decreased by $786 thousand during

the fiscal year as the City continued to invest in infrastructure improvements including authorized projects in

prior fiscal years that received funding from the Roadway Fee Fund projects. Various roadway projects were

funded using both current fee revenue and fees collected in prior fiscal years.

Mitigation and Fee Fund – These funds were established to supplement various fees in specific areas, which are

paid directly to the City via developers’s fee and building permits. Licenses fees and permits declined $5.2

million or 65% due to a decrease in residential permits of 625 in fiscal year 2015-16 to 315 in fiscal year 2016-

17.

Laguna Ridge CFD 2005-1 Fund – This fund was established to account for special taxes to fund the cost of

infrastructure and a portion of police protection operational costs within the boundaries of this finance district.

In August 2016 the City refinanced the Special District (Laguna Ridge) existing debt and received additional

proceeds of $72.7 million from the District. The new funding is programmed to be invested in capital facilities

and infrastructure.

10

Proprietary funds. The City’s proprietary enterprise funds provide the same type of information found in the

government-wide financial statements, but in more detail.

The following table presents the amount of governmental revenues from various sources:

Revenues Classified by Source

Governmental Funds

For the Fiscal Years Ended June 30

Revenues by Source 2017 2016 % Change

Taxes 59,397,544$ 46,826,691$ 26.85%

Licenses, fees and permits 13,741,076 23,521,281 -41.58%

Intergovernmental 24,099,150 42,849,356 -43.76%

Fines and forfeitures 354,504 387,185 -8.44%

Charges for services 1,804,824 2,481,403 -27.27%

Use of money and property 77,827,917 4,040,144 1826.36%

Other 947,939 970,243 -2.30%

Total Revenues 178,172,954$ 121,076,303$ 47.16%

Taxes33%

Licenses, fees and permits

8%

Intergovernmental 13%

Fines and forfeitures1%

Charges for services1%

Use of money and property

44%

Revenues by Source - Governmental Funds

Governmental revenues increased by 47% or $57 million from the prior fiscal year. The increase in overall

revenues is primarily from use of money and property. The increase in use of money and property was from

August 2016 when the City refinanced the existing Special District (Laguna Ridge) existing debt and acquired

additional proceeds of $72.7 million. The new funding from this issuance is programmed to be invested in

capital facilities and infrastructure. Primarily infrastructure that will open up South Laguna Ridge to

development and additional funding for the Aquatic Facility, Community Center, Senior Center, Veterans Hall

at the Civic Center Park.

The increase of Tax revenues of 26% or $12 million in the 2016-17 which is primarily due to the reclassification

of the VLF in Lieu that was classified in prior fiscal year as intergovernmental. The decrease in

intergovernmental in the current year is also due to the reclassification. Combined comparative of Property tax

and Property tax in Lieu Vehicle license fee from fiscal year 2016 and fiscal year 2017 realized a 2.7% increase.

The Property Tax in Lieu Vehicle license fee realized a 6.4% increase.

The following table presents governmental expenditures by function:

Expenditures by Function

Governmental Funds

For the Fiscal Years Ended June 30

General government

18%

Public safety27%

Public ways and facilities

45%

Community development

7%

Capital outlay

1%Debt service-

principal retirement

1%

Debt-interest and charges

1%

Expenditures by Function - Governmental Funds

Expenditures by Function 2017 2016 % Change

General government 23,312,594$ 19,971,477$ 16.73%

Public safety 36,067,903 35,356,689 2.01%

Public ways and facilities 59,011,979 15,331,077 284.92%

Community development 9,193,193 9,444,746 -2.66%

Capital outlay 488,306 19,170,128 -97.45%

Debt service-principal retirement 2,335,000 1,315,000 77.57%

Debt-interest and charges 784,508 6,478,311 -87.89%

Total Expenditures 131,193,483$ 107,067,428$ 22.53%

11

General governmental expenditures increased 17% or $3.3 million, the City Public Safety expenditures slightly

increased 2% or $700 thousand due primarily to increased positions and equipment, while Public Ways and

Facilities increased 284% or $43.7 million, mainly because in FY 2017 the City began classifying the majority

of Capital Outlay in Public Ways and Facilities due to a change in accounting policy. Therefore, Capital Outlay

decreased 97% or $18.7 million because of the change in the policy.

Debt-interest and charges decreased 88% or $5.7 million because the City no longer reflects the two special

assessment debts that are now reported in the Agency Funds. Further discussion is in the Debt Administration

Note 6.

GENERAL FUND BUDGETARY TO ACTUAL HIGHLIGHTS

The difference in projections between the original and final amended revenue budget for the fiscal year was an

increase of $1.4 million. The midyear budget increase was in Sales and Use tax. Actual revenues exceeded the

final amended budget by $1.1 million.

Actual property tax increased over the prior year by $12.2 million, it surpassed budget projections by

$700 thousand. This is primarily due to the reclassification of the VLF in Lieu that was classified in

prior fiscal year as intergovernmental. Combined comparative of Property tax and Property tax in Lieu

Vehicle license fee from fiscal year 2016 and fiscal year 2017 realized a 2.7% increase. The Property

Tax in Lieu Vehicle license fee realized a 6.4% increase.

Sales tax revenues were above budget expectations by $535 thousand.

Transient Occupancy Tax (TOT) revenues were $102 thousand over budget projections, revenues

exceeded the prior year’s receipts by $279 thousand. The City’s hotels experienced growth in both

rental revenue and occupancy rates and have benefited from the growing economy.

Appropriations between the original and final amended expenditure budget increased $800 thousand for the

fiscal year. The actual expenditures were $4.9 million below expectations. The main components of the

difference between final budget and actuals include:

Law enforcement actuals were $2.2 million below expectations primarily generated in salary savings

and benefits, and professional services. Budget savings were realized in the transition between

employee terminations and the time needed to recruit and hire new employees.

Under the terms of incorporation, the City transfers 75% of property tax revenue from a large section of

the City back to Sacramento County; this is described as revenue neutrality. The actual transfer to

Sacramento County was $171 thousand below expectations.

Other-nondepartmental includes many nondepartment specific charges such as fixed required PERS

liability payments, internal service charges for Risk, IT, GIS, Fleet and Facility, and accelerated PERS

liability payments.

The economic development department expenses were below expectations for advertising, professional

services and community promotion.

The City Manager and City Attorney’s office also ended the year with reduced professional and legal

services.

The City paid in full the interfund loan from the drainage fund, for the purchase of 100 acres of land that

will create opportunity for potential City recreational or other public uses. The original term of the loan

was for an annual payment of 10 years with the last payment in October 2024 This accelerated payment

12

was directed by council during the FY 2016-17 midyear budget resolution.

The City made an additional payment of almost $1.6 million to PERS to accelerate funding towards the unfunded liability. The City was able to make this payment because of budget savings during 2016-17. This accelerated payment will reduce future required unfunded liability payment.

The City is taking steps to build an animal shelter since the contract with County of Sacramento will expire June 30, 2019. The project is in the schematic design and environmental review stage, which will refine the project budget and reduce some of the uncertain fiscal cost with the current conceptual design.

CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets Capital assets for the governmental and business-type activities are presented below to illustrate changes from the prior year:

Capital Assets at End of Year

2017 2016 2017 2016 2017 2016

Land 196,013,370$ 192,332,701$ 5,580,438$ 4,123,911$ 201,593,808$ 196,456,612$ Construction in progress 47,800,737 35,101,251 2,340,123 1,798,967 50,140,860 36,900,218 Infrastructure 1,463,469,626 1,459,254,992 6,331,701 6,152,095 1,469,801,327 1,465,407,087 Building and improvements 37,718,385 37,265,369 10,954,575 10,954,575 48,672,960 48,219,944 Vehicles and equipment 16,438,496 12,472,024 23,267,602 23,336,877 39,706,098 35,808,901 Parks and park improvements 2,925,733 2,448,812 - - 2,925,733 2,448,812 Accumulated depreciation (706,145,744) (660,572,849) (12,581,876) (10,612,505) (718,727,620) (671,185,354)

Total 1,058,220,603$ 1,078,302,300$ 35,892,563$ 35,753,920$ 1,094,113,166$ 1,114,056,220$

Governmental Business-type Total

The City investment in capital assets as of June 30, 2017, totaled about $1 billion, (net of accumulated depreciation). The investment in capital assets includes land, infrastructure, building and improvements, equipment, parks and park improvements and construction in progress. The increase in the City’s investment in capital assets prior to accumulated depreciation for the current year totals $28 million ($25 million in Governmental funds) which funded construction in progress, infrastructure and equipment. Additional information on the City’s investment in capital assets can be found in Note 4 to the financial statements on pages 47-48. Debt Administration

The following schedule shows the changes in bonds payable for the year:

Bonds Payable

Governmental Activities 2017 2016 2017 2016 2017 2016

Special assessment debt -$ 90,630,000$ -$ -$ -$ 90,630,000$ -100%Lease revenue bond debt 4,940,000 9,535,000 9,410,000 9,645,000 14,350,000$ 19,180,000 -25%

Total Governmental Activity 4,940,000$ 100,165,000$ 9,410,000$ 9,645,000$ 14,350,000$ 109,810,000$ -87%

Governmental Activities Business-type Activities Total Increase (Decrease) %

Change

The City’s total debt decreased by $95 million during the year ending June 30, 2017, due to the Elk Grove Financing Authority refinance of debt for the Elk Grove Finance Authority Lease Revenue Bonds (2007 Capital Projects) and the reclassification of the two Special Districts (East Franklin and Poppy Ridge). The City no

13

longer reflects the two special assessment debts because they were determined to be debt without city

commitment. The activity is now reported in the Agency Funds. The City is the collecting and paying agent for

the debt issued by the Districts, but has no direct or contingent liability or moral obligation for the payments of

the debt. Therefore, debt issued by the Districts is not included in long term debt of the City. The information

on the City’s long-term debt refinancing, including the City’s Net Pension Liability can be found in Note 6 to

the financial statements on pages 49-52.

Economic Factors and Next Year’s Budget

Overall the financial state of the City of Elk Grove is being closely monitored. The City Council

has adopted a Contingency Reserve and the fiscal year 2017-18 contingency reserve is 20% of the

fiscal year 2017-18 appropriations of $68 million. In addition, the City has set aside as committed

an additional 10% for future capital projects and the combined unassigned and committed fund

balance is at 13%. Expenditures will continue to be matched to available resources and the City

Manager will continue to recommend balanced operations.

According to the California Employment Development Department, the City’s unemployment rate

continues to be relatively low, and as of June 2017 was 4.1%. The City is also doing well compared

to Sacramento County’s unemployment rate at 5.0 % in June 2017 and the Sacramento Metro Area

at 4.8%.

Sales Tax receipts experienced 1.39% over the prior fiscal year or 13.2% after adjusting for the

State triple flip reimbursement. The increase reflects continued strong auto sales for this year, and

increasing retail and dining options in the City due to the strong economy.

During fiscal year 2016-17 the employer portion of the Defined Contribution Plan and the Annual

Required Contribution for the HRA Plan and the Rate Subsidy Plan were fully funded based on

the most recent roll forward valuation date of November 2017. In addition, an actuarial report

on both plans were completed July 2016 and the Rate Subsidy Plan is 95.3% funded and the

HRA Plan is 60.9% funded. The HRA plan was closed to new employees in 2009.

The City completed a refinancing of debt in August 2016 for a Special District (Laguna Ridge).

The $128 million achieved cost efficiencies and new funding that are programmed to be invested in

capital facilities and infrastructure. Primarily infrastructure that will open up South Laguna Ridge

and South East Policy Area to development and additional funding for the Aquatic Facility,

Community Center, Senior Center, Veterans Hall at the Civic Center Park.

The City completed a refinancing of debt in June 2017 for the Elk Grove Finance Authority Lease

Revenue Bonds (2007 Capital Projects). City was able to secure lower interest rates and reduce

overall lease payments. The present value savings is estimated to be 5.98% of the outstanding debt.

After the first year of debt service, ongoing General Fund savings will be approximately $140,000

per year.

All of these factors were considered in preparing the City budget for FY 2017-18.

Other Subsequent Events and Economic Factors were:

In June of 2015, the GASB issued GASB Statement 75 (GASB 75), Accounting and Financial

Reporting for Postemployment Benefits Other Than Pensions, with required implementation for the

City during the year ended June 30, 2018. The primary objective of GASB 75 is to improve

accounting and financial reporting by state and local governments for other postemployment

benefits (OPEB) by establishing standards for measuring and recognizing liabilities, deferred

14

outflows of resources, deferred inflows of resources, and expenses/expenditures. It will require

employers to report a net OPEB liability for the difference between the present value of projected

pension benefits for past service and restricted resources held in trust for the payment of benefits.

The Statement identifies the methods and assumptions that should be used to project benefit

payments, discount projected benefit payments to their actuarial present value, and attribute that

present value to periods of employee service. GASB 75 is required to be implemented retroactively

and will require a restatement of beginning net position.

The City contracts with the Public Employees’ Retirement System (PERS) to provide retirement

benefits to the City employees. Increasing PERS costs have been widely reported to be increasing

for many local agencies. The City’s PERS costs are also projected to increase compared to current

costs, but the City has actively planned accelerated payments to the unfunded liability which will

constrain some of those increasing costs. The City since fiscal year 2016 and including the

programmed payment in fiscal year 2017-18 has accelerated payments to the unfunded liability of

$3.3 million. The savings from interest costs are likely to be similar to the amount of the

accelerated payments overtime.

Since both the City and State implemented Pension Reform in 2013, the City has realized an

increase in the number of employees enrolled in the less expensive Tier 2 and Tier 3 plans.

Similarly there has been a reduction in employees enrolled in the Tier 1 plans as employees leave

employment with the City. The table below demonstrates the changes and the fiscal year 2016-17

employer rate that the City pays for each tier. It is also important to note that PERS is an

Alternative Retirement System that replaces Social Security for employees. The PERS employer

rate that the City pays is instead of the 6.2% Social Security rate and not in addition to.

Employer Rate

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017(*)

Misc. Tier 1 153 143 126 110 104 100 11.634%

Misc. Tier 2 0 9 14 16 20 22 8.880%

Misc. Tier 3 0 3 15 34 49 58 6.555%

Safety Tier 1 134 138 113 107 97 85 16.536%

Safety Tier 2 0 2 8 16 22 21 14.689%

Safety Tier 3 0 2 6 14 21 30 9.082%

TOTAL 287 297 282 297 313 316

Number of Members Per Fiscal Year

*Current fiscal year 2017 employer rate adjusted for 3% employer rate paid by the POA and PMA employees per their MOU agreement.

The City is planning two bond issuances for Spring 2018. The first bond would provide

construction financing for the Animal Shelter and reimbursement of park land acquisition. The

sizing of the bond will be dependent on the construction bids, but is not expected to exceed $22

million. The annual debt service will be the responsibility of the General Fund, the Park Impact Fee

Funds and the Capital Facility Fund (Corporate Yard).

The second issuance will be for the Laguna Ridge Special District and the Laguna Ridge special

taxes will be the sole source of debt service payments. There will be no General Fund obligation to

service this debt. The proceeds will provide reimbursement funding for developer delivered public

infrastructure and also City led public projects. The proceeds are anticipated to be approximately

$25 million.

The City during fiscal year 17-18 initiated contract awards for construction of a sewer lift station,

Big Horn Boulevard extension and Bilby Road extension which when completed will not only open

up for development the southern portion of the Laguna Ridge area, but significantly construct the

15

infrastructure needed to the employment oriented development area of the South East Policy Area.

The City also began construction of the Aquatic Center in the Civic Center Park, and anticipates

construction to begin for the Civic Center Park Community Center/Senior Center/Veteran’s Hall

and Commons Area in Spring of 2018.

The State of California approved legislation known as SB1 Road Repair and Accountability Act that

will dramatically increase road maintenance funding for the City. This new funding source is

estimated to be $1.1 million in fiscal year 2017-18, $3 million in fiscal year 2018-19, and over $4

million annually thereafter. This will significantly increase the City’s ability to maintain and keep

City roads in good repair. Besides the road maintenance, funding will become available for

congested corridors, bridges and other transportation purposes in a competitive funding process. In

addition to this annual maintenance for road repair, SB 1 will provide increased funding for transit

operations and transit vehicle funding.

Request for Information

This financial report is designed to provide a general overview of the City’s finances for all those with an

interest in the government’s finances. Questions concerning any of the information provided in this report or

requests for additional financial information should be addressed to:

Finance Director

8401 Laguna Palms Way

Elk Grove, CA 95758

(916)683-7111

Or you may visit our website at www.elkgrovecity.org for contact information.

http://www.elkgrovecity.org/

16

THIS PAGE LEFT BLANK INTENTIONALLY

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

17

Governmental Business-Type

Activities Activities Total

ASSETS

Cash and investments 179,813,383$ 35,492,135$ 215,305,518$

Cash and investments with fiscal agent 54,457,310 2,011,320 56,468,630

Restricted cash - 1,070,405 1,070,405

Accounts receivable, net 1,890,367 1,154,227 3,044,594

Taxes receivable 4,975,464 - 4,975,464

Interest receivable 724,003 18,827 742,830

Due from other government agencies 3,280,088 644,736 3,924,824

Long-term loans receivable 62,303,879 114,678 62,418,557

Affordable housing subsidies receivable 2,302,416 - 2,302,416

Long-term development fees receivable 2,280,498 - 2,280,498

Internal balances 4,332,334 (4,332,334) -

OPEB asset 478,411 - 478,411

Capital Assets:

Nondepreciable 243,814,107 7,920,561 251,734,668

Depreciable, net 814,406,496 27,972,002 842,378,498

Total Assets 1,375,058,756 72,066,557 1,447,125,313

DEFERRED OUTFLOWS OF RESOURCES

Deferred outflows of resources related to pensions 17,427,658 - 17,427,658

Total Deferred Outflows of Resources 17,427,658 - 17,427,658

LIABILITIES

Accounts and retention payable 8,778,789 2,385,958 11,164,747

Accrued salaries and benefits 839,996 28,099 868,095

Interest payable 9,664 - 9,664

Refundable deposits 1,719,341 771,055 2,490,396

Unearned revenue 6,678,024 798,328 7,476,352

Fee credits 13,918,636 - 13,918,636

Long-Term Liabilities: -

Portion due or payable within one year: -

Bonds payable 265,000 245,000 510,000

Compensated absences 319,323 4,549 323,872

Claims payable - - -

Portion due or payable after one year: -

Bonds payable 4,675,000 9,165,000 13,840,000

Compensated absences 3,672,209 52,306 3,724,515

Claims payable 421,154 - 421,154

Net pension liability 14,525,447 - 14,525,447

Total Liabilities 55,822,583 13,450,295 69,272,878

DEFERRED INFLOWS OF RESOURCES

Deferred inflows of resources related to pensions 3,861,153 - 3,861,153

NET POSITION

Net investment in capital assets 1,053,280,603 28,608,561 1,081,889,164

Restricted for:

Capital projects 79,021,894 272,077 79,293,971

Affordable housing projects 139,887,285 - 139,887,285

Special revenue projects 38,099,080 - 38,099,080

Unrestricted 22,513,816 29,735,624 52,249,440

Total Net Position 1,332,802,678$ 58,616,262$ 1,391,418,940$

Primary Government

CITY OF ELK GROVE

Statement of Net Position

June 30, 2017


18

Fees, Fines and Operating Capital

Charges for Grants and Grants and

Functions/Programs Expenses Services Contributions Contributions

Primary Government:

General Government 19,975,018$ 1,062,583$ 442,673$

Public Safety 33,957,641 7,300 4,780,560

Public Ways and Facilities 79,170,655 13,173,695 4,344,800 78,901,362

Community Development 9,373,576 2,206,419 6,083,307 1,004,900

Debt Service - Interest 501,705 - - -

Total Governmental Activities 142,978,595 16,449,997 15,651,340 79,906,262

Business-Type Activities:

Solid Waste 16,025,115 16,863,927 431,543 -

Transit 11,549,568 1,430,071 8,438,302 -

Drainage 4,195,296 5,632,309 - -

Total Business-Type Activities 31,769,979 23,926,307 8,869,845 -

Total Primary Government 174,748,574$ 40,376,304$ 24,521,185$ 79,906,262$

General Revenues:

Taxes:

Property taxes

Sales and use tax

Utility user tax

Transient occupancy tax

Property transfer tax

Franchise tax

Other revenue

Miscellaneous

Transfers

Total General Revenues and Transfers

Change in Net Position

Net Position - Beginning, as restated

Net Position - Ending

CITY OF ELK GROVE

Statement of Activities


Program Revenues


19

Governmental Business-Type

Activities Activities Total

(18,469,762)$ -$ (18,469,762)$

(29,169,781) - (29,169,781)

17,249,202 - 17,249,202

(78,950) - (78,950)

(501,705) - (501,705)

(30,970,996) - (30,970,996)

- 1,270,355 1,270,355

- (1,681,195) (1,681,195)

- 1,437,013 1,437,013

- 1,026,173 1,026,173

(30,970,996) 1,026,173 (29,944,823)

23,670,228 1,379,717 25,049,945

25,535,498 - 25,535,498

5,681,559 - 5,681,559

2,130,201 - 2,130,201

844,471 - 844,471

1,535,587 - 1,535,587

5,727,764 162,698 5,890,462

- -

1,098,174 (1,098,174) -

66,223,482 444,241 66,667,723

35,252,486 1,470,414 36,722,900

1,297,550,192 57,145,848 1,354,696,040

1,332,802,678$ 58,616,262$ 1,391,418,940$

Primary Government

Net (Expense) Revenue and

Changes in Net Position


20

Total

General Nonmajor

Fund Funds Total

ASSETS

Cash and investments 25,277,813$ 11,355,895$ 25,077,177$ 25,071,102$ -$ 84,575,149$ 171,357,136$

Cash and investments with fiscal agent - - - - 54,434,998 22,312 54,457,310

Accounts receivable, net 426,481 - 287,500 - - 4,024,938 4,738,919

Taxes receivable 4,975,464 - - - - - 4,975,464

Interest receivable, net 37,754 499,058 15,640 12,182 - 155,313 719,947

Due from other government agencies 1,731,807 - 34,645 - 530 1,513,106 3,280,088

Due from other funds 33,705 - 608,125 - - - 641,830

Advances to other funds 3,510,730 - 6,563,405 - - - 10,074,135

Long-term loans receivable - 61,700,346 2,386 - - 601,147 62,303,879

Affordable housing subsidies receivable - 2,302,416 - - - - 2,302,416

Long-term development fees receivable - 28,188 1,943,008 - - 309,302 2,280,498

Total Assets 35,993,754$ 75,885,903$ 34,531,886$ 25,083,284$ 54,435,528$ 91,201,267$ 317,131,622$

LIABILITIES

Accounts payable 887,862$ -$ 625,679$ 130,861$ 848,350$ 5,694,375$ 8,187,127$

Accrued salaries and benefits 724,788 1,380 524 900 337 59,393 787,322

Due to other funds - - - - 530 33,705 34,235

Retention payable 13,422 - 101,888 - - 245,584 360,894

Refundable deposits - - - 150,200 - 1,569,141 1,719,341

Advances from other funds - - - - 521,918 5,827,478 6,349,396

Fee credits - - 5,390,224 8,490,251 - 38,161 13,918,636

Unearned revenue - - 6,620,990 - - 57,034 6,678,024

Total Liabilities 1,626,072 1,380 12,739,305 8,772,212 1,371,135 13,524,871 38,034,975

DEFERRED INFLOW OF RESOURCES

Unavailable revenue 51,353 527,246 2,370,057 - - 4,140,845 7,089,501

FUND BALANCES

Nonspendable 3,510,730 - - - - - 3,510,730

Restricted - 75,357,277 19,422,524 16,311,072 53,064,393 78,180,414 242,335,680

Committed 21,000,138 - - - - - 21,000,138

Assigned 357,858 - - - - - 357,858

Unassigned 9,447,603 - - - - (4,644,863) 4,802,740

Total Fund Balances 34,316,329 75,357,277 19,422,524 16,311,072 53,064,393 73,535,551 272,007,146

Total Liabilities, Deferred Inflows of

Resources and Fund Balances 35,993,754$ 75,885,903$ 34,531,886$ 25,083,284$ 54,435,528$ 91,201,267$ 317,131,622$

Roadway Fee

Fund

Mitigation and

Fee Fund

Laguna Ridge

CFD 2005-1

Fund

CITY OF ELK GROVE

Governmental Funds

Balance Sheet

June 30, 2017

Affordable

Housing Fund


21

Fund Balance - total governmental funds 272,007,146$

Amounts reported for governmental activities in the statement of Net Position are

different because:

Capital assets used in governmental activities are not current financial resources and,

therefore, are not reported in the governmental funds. 1,058,220,603

Certain other long-term assets are not available to pay current period expenditures

and, therefore, are reported as unavailable revenue in the governmental funds. 4,163,776

Long term OPEB asset is not a current financial resource and therefore not reported

in the governmental funds. 478,411

Interest on long-term debt is recognized as it accrues, regardless of when it is due

in the government-wide statements. (9,664)

Internal service funds are used by the City to charge the cost of risk management and

other services to individual funds. The assets and liabilities of the internal service

funds are included in governmental activities in the statement of net position.

Internal service fund net position are: 7,740,179

In governmental funds, deferred outflows and inflows of resources relating to

pensions and refunding are not reported because they are applicable to future

periods. In the statement of net position, deferred outflows and inflows of

resources are reported as follows:

Deferred outflows of resources related to pensions 17,427,658

Deferred inflows of resources related to pensions (3,861,153)

Long-term liabilities are not due and payable in the current period and, therefore,

are not reported in the governmental funds.

Bonds payable (including unamortized issuance premium) (4,940,000)

Net pension liability (14,525,447)

Compensated absences (excluding amount recorded in the internal service funds) (3,898,831)

Net Position of governmental activities 1,332,802,678$

CITY OF ELK GROVE

Reconciliation of the Governmental Funds Balance Sheet

to the Government-Wide Statement of Net Position - Governmental Activities

June 30, 2017


22

Affordable Total Total

General Housing Nonmajor Governmental

Fund Fund Funds Funds

REVENUES

Taxes 59,397,544$ -$ -$ -$ -$ -$ 59,397,544$

Licenses, fees and permits 607,404 1,262,349 2,664,578 2,796,210 7,000 6,403,535 13,741,076

Intergovernmental 442,673 - 802,000 - 33,743 22,820,734 24,099,150

Fines and forfeitures 354,504 - - - - - 354,504

Charges for services 100,675 - - - - 1,704,149 1,804,824

Contributions and donations - - - - - -

Use of money and property 29,324 551,234 659,258 146,538 43,477 3,668,086 5,097,917

Contribution from property owners - - - - 72,700,000 - 72,700,000

Contributions and donations - - - - - 30,000 30,000

Other revenue 947,939 - - - - - 947,939

Total Revenues 61,880,063 1,813,583 4,125,836 2,942,748 72,784,220 34,626,504 178,172,954

EXPENDITURES

Current:

General government 23,312,594 - - - - - 23,312,594

Public safety 35,218,555 - - - - 849,348 36,067,903

Public ways and facilities - - 4,611,709 3,577,769 24,760,112 26,062,389 59,011,979

Community development 1,294,598 13,467 - - - 7,885,128 9,193,193

Capital outlay 488,306 - - - - - 488,306

Debt service:

Tax administration - - - - 2,849 64,012 66,861

Principal - - - - - 2,335,000 2,335,000

Interest - - - - - 613,069 613,069

Bond issuance costs - - - - - 104,578 104,578

Total Expenditures 60,314,053 13,467 4,611,709 3,577,769 24,762,961 37,913,524 131,193,483

Excess (Deficiency) of Revenues Over

(Under) Expenditures 1,566,010 1,800,116 (485,873) (635,021) 48,021,259 (3,287,020) 46,979,471

OTHER FINANCING SOURCES (USES)

Refunding bonds issued - - - - - 4,940,000 4,940,000

Payment to refunded bond escrow agent - - - - - (7,200,000) (7,200,000)

Transfers in 6,902,636 - - - - 6,506,055 13,408,691

Transfers out (2,093,362) - (300,905) (136,883) (12,391) (8,283,556) (10,827,097)

Total Other Financing Sources (Uses) 4,809,274 - (300,905) (136,883) (12,391) (4,037,501) 321,594

Net Change in Fund Balances 6,375,284 1,800,116 (786,778) (771,904) 48,008,868 (7,324,521) 47,301,065

Fund Balances, Beginning 27,941,045 73,557,161 20,209,302 17,082,976 5,055,525 80,860,072 224,706,081

Fund Balances, Ending 34,316,329$ 75,357,277$ 19,422,524$ 16,311,072$ 53,064,393$ 73,535,551$ 272,007,146$

Roadway Fee

Fund

Mitigation and

Fee Fund

Laguna Ridge

CFD 2005-1

Fund


CITY OF ELK GROVE

Governmental Funds

Statement of Revenues, Expenditures and

Changes in Fund Balances


23

Net change to fund balances - total governmental funds 47,301,065$

Amounts reported for governmental activities in the statement of activities

are different because:

Governmental funds report capital outlay as expenditures. However, in the

statement of activities, the cost of those assets is allocated over their

estimated useful lives and reported as depreciation expense. In addition,

governmental funds report proceeds from disposals of capital assets as revenues,

while only the gain or loss on the sale of capital assets is reported in the statement

of activities. Finally, donated assets are not reported in governmental fund statements

since they do not represent current financial resources, but donated assets are

reported as capital contributions in the statement of activities.

The change in governmental activities capital assets consists of:

Capital outlay expenditures 25,393,365$

Donated capital assets -

Retirement of capital assets (55,123)

Nonreciprocal transfers of capital assets from Internal Service Funds 1,037,221

Less: current year depreciation (46,457,160) (20,081,697)

Revenues in the statement of activities that do not provide current financial

resources are not reported as revenues in the funds. (1,191,381)

Long-term debt proceeds provide current financial resources to governmental

funds, but issuing debt increases long-term liabilities in the statement of net

position. Repayment of debt principal is an expenditure in the governmental funds,

but the repayment reduces long-term liabilities in the statement of net position.

Issuance of special Revenue Bonds, including premium (4,940,000)

Payment to escrow agent 7,200,000

Principal payments on special assessment debt 2,335,000 4,595,000

Some expenses reported in the statement of activities do not

require the use of current financial resources and, therefore, are

not reported as expenditures in governmental funds.

Change in accrued interest on debt 215,942

Change in compensated absences (excluding amount reported in

the internal service funds) 22,741 238,683

Long term net OPEB liability change not paid out of current period resources 41,699

In governmental funds, pension costs are recognized when employer contributions

are made. In the statement of activities, pension costs are recognized on the

accrual basis. The difference between accrual-basis pension costs and actual

employer contributions was: 3,079,447

Internal service funds are used by management to charge the costs of

certain activities to individual funds. The net revenue of certain activities

of the internal service funds is reported with governmental activities. 1,269,670

Change in net position of governmental activities 35,252,486$


CITY OF ELK GROVE

Reconciliation of the Statement of Revenues, Expenditures, and

Changes in Fund Balances of Governmental Funds to the

Government-Wide Statement of Activities - Governmental Activities


24

Governmental

Activities

Solid Total Internal

Waste Transit Drainage Enterprise Service

Funds Funds Funds Funds Funds

ASSETS

Current Assets:

Cash and investments 13,448,972$ -$ 22,043,163$ 35,492,135$ 8,456,247$

Cash and investments with fiscal agents 2,011,320 - - 2,011,320 -

Restricted cash and investments - capital - 1,070,405 - 1,070,405 -

Accounts receivable, net 765,269 349 388,609 1,154,227 77,173

Interest receivable 6,329 338 12,160 18,827 4,056

Due from other government agencies 1,202 606,908 36,626 644,736 -

Advance to other funds - - 2,312,000 2,312,000 -

Total Current Assets 16,233,092 1,678,000 24,792,558 42,703,650 8,537,476

Noncurrent Assets:

Long-term loans receivable - - 114,678 114,678 -

Capital assets, nondepreciable 4,140,900 81,669 3,697,992 7,920,561 -

Capital assets, depreciable, net 8,404,451 13,705,114 5,862,437 27,972,002 -

Total Noncurrent Assets 12,545,351 13,786,783 9,675,107 36,007,241 -

Total Assets 28,778,443 15,464,783 34,467,665 78,710,891 8,537,476

LIABILITIES

Current Liabilities:

Accounts payable 1,066,712 672,783 646,463 2,385,958 230,768

Accrued salaries and benefits 10,712 12,425 4,962 28,099 52,674

Recovery zone bonds payable 245,000 - - 245,000 -

Due to other funds - 607,595 - 607,595 -

Customer deposits 771,055 - - 771,055 -

Unearned revenue - 798,328 - 798,328 -

Compensated absences 2,101 2,094 354 4,549 7,417

Total Current Liabilities 2,095,580 2,093,225 651,779 4,840,584 290,859

Noncurrent Liabilities:

Advances from other funds - 6,036,739 - 6,036,739 -

Recovery zone bonds payable 9,165,000 - - 9,165,000 -

Compensated absences 24,160 24,076 4,070 52,306 85,284

Claims payable - - - - 421,154

Total Noncurrent Liabilities 9,189,160 6,060,815 4,070 15,254,045 506,438

Total Liabilities 11,284,740 8,154,040 655,849 20,094,629 797,297

NET POSITION

Net investment in capital assets 5,146,671 13,786,783 9,675,107 28,608,561 -

Restricted for capital projects - 272,077 - 272,077 -

Unrestricted 12,347,032 (6,748,117) 24,136,709 29,735,624 7,740,179

Total Net Position 17,493,703 7,310,743 33,811,816 58,616,262 7,740,179

Total Liabilities and Net Position 28,778,443$ 15,464,783$ 34,467,665$ 78,710,891$ 8,537,476$

Business-Type Activities

CITY OF ELK GROVE

Proprietary Funds

Statement of Fund Net Position

June 30, 2017


25

Governmental

Activities

Solid Internal

Waste Transit Drainage Service

Funds Funds Funds Total Funds

OPERATING REVENUES

Charges for services 16,679,910$ 1,430,071$ 5,574,798$ 23,684,779$ 11,299,761$ .

Total Operating Revenues 16,679,910 1,430,071 5,574,798 23,684,779 11,299,761

OPERATING EXPENSES

Salaries and benefits 651,169 604,438 197,116 1,452,723 1,378,280

Services and supplies 14,321,482 8,804,358 3,845,824 26,971,664 6,734,244

Claims expense - - - - 566,699

Depreciation 240,450 2,140,772 152,356 2,533,578 -

Total Operating Expenses 15,213,101 11,549,568 4,195,296 30,957,965 8,679,305

Operating Income (Loss) 1,466,809 (10,119,497) 1,379,502 (7,273,186) 2,620,456

NON-OPERATING REVENUES (EXPENSES)

Taxes - - 1,379,717 1,379,717 -

Intergovernmental 431,543 8,182,187 - 8,613,730 -

Penalties and fees 184,017 - 57,511 241,528 -

Investment income 150,119 (16,250) 28,829 162,698 132,634

Interest expense (812,014) - - (812,014) -

Total Non-Operating Revenues (Expenses) (46,335) 8,165,937 1,466,057 9,585,659 132,634

Income Before Contributions and Transfers 1,420,474 (1,953,560) 2,845,559 2,312,473 2,753,090

Donated Capital Assets - 256,115 - 256,115 -

Transfers in 45,402 835,304 - 880,706 -

Transfers out (896,318) (568,143) (514,419) (1,978,880) (1,483,420)

Net Contributions and Transfers (850,916) 523,276 (514,419) (842,059) (1,483,420)

Change in Net Position 569,558 (1,430,284) 2,331,140 1,470,414 1,269,670

Net Position - Beginning 16,924,145 8,741,027 31,480,676 57,145,848 6,470,509

Net Position, Ending 17,493,703$ 7,310,743$ 33,811,816$ 58,616,262$ 7,740,179$


CITY OF ELK GROVE

Proprietary Funds

Statement of Revenues, Expenses and Changes in Fund Net Position



26

Governmental

Activities

Solid Internal

Waste Transit Drainage Service

Fund Funds Funds Total Funds

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from customers/other funds 16,743,922$ 1,429,722$ 5,514,550$ 23,688,194$ 11,317,820$

Cash paid to suppliers for good and services (14,317,018) (8,825,936) (3,961,836) (27,104,790) (7,507,227)

Cash paid to employees for services (709,262) (637,084) (210,031) (1,556,377) (1,382,568)

Net Cash Provided (Used) by Operating Activities 1,717,642 (8,033,298) 1,342,683 (4,972,973) 2,428,025

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Taxes - - 1,377,510 1,377,510 -

Intergovernmental revenue received 482,208 10,385,119 - 10,867,327 -

Penalties and fees received 184,019 - 57,511 241,530 -

Transfers in 45,402 835,304 - 880,706 -

Transfers out (896,318) (568,143) (514,419) (1,978,880) (1,483,420)

Interfund loans - proceeds and collections - (1,324,684) (684,255) (2,008,939) -

Net Cash Provided (Used) by Noncapital Financing Activities (184,689) 9,327,596 236,347 9,379,254 (1,483,420)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING

ACTIVITIES

Interest paid on Capital debt (812,014) - - (812,014) -

Repayment of loans receivable - - 52,126 52,126 -

Repayment of recovery zone bonds (235,000) - - (235,000) -

Acquisition of capital assets (64,024) (207,354) (2,144,728) (2,416,106) -

Net Cash Provided (Used) by Capital and Related Financing Activities (1,111,038) (207,354) (2,092,602) (3,410,994) -

CASH FLOWS FROM INVESTING ACTIVITIES

Investment income (loss) 143,790 (16,539) 21,696 148,947 128,167

Increase in restricted cash and investments - capital - (1,070,405) - (1,070,405) -

Net Cash Provided by Investing Activities 143,790 (1,086,944) 21,696 (921,458) 128,167

Net Increase (Decrease) in Cash and Cash Equivalents 565,705 - (491,876) 73,829 1,072,772

Cash and Cash Equivalents, Beginning of Year 14,894,587 - 22,535,039 37,429,626 7,383,475

Cash and Cash Equivalents, End of Year 15,460,292$ -$ 22,043,163$ 37,503,455$ 8,456,247$

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED (USED) BY OPERATING ACTIVITIES

Operating income (loss) 1,466,809$ (10,119,497)$ 1,379,502$ (7,273,186)$ 2,620,456$

Adjustments to reconcile operating income (loss) to net cash

provided (used) by operating activities

Depreciation 240,450 2,140,772 152,356 2,533,578 -

Changes in assets and liabilities (Increase) decrease in:

(Increase) decrease in:

Accounts receivable 101,017 (349) (60,248) 40,420 15,916

Interest Receivable - - - - -

Increase (decrease) in:

Accounts payable 4,464 (21,578) (116,012) (133,126) (144,338)

Accrued salaries and benefits (28,988) (20,020) (5,426) (54,434) (5,083)

Deposits (37,005) - - (37,005) -

Compensated absences (29,105) (12,626) (7,489) (49,220) 3,020

Claims payable - - - - (61,946)

Net Cash Provided (Used) by Operating Activities 1,717,642$ (8,033,298)$ 1,342,683$ (4,972,973)$ 2,428,025$

SUPPLEMENTAL DISCLOSURE OF Cash and Cash Equivalents

Cash and investments 13,448,972$ -$ 22,043,163$ 35,492,135$ 8,456,247$

Cash and investments with fiscal agents 2,011,320 - - 2,011,320 -

Cash and Cash Equivalents, End of Year 15,460,292$ -$ 22,043,163$ 37,503,455$ 8,456,247$

-


CITY OF ELK GROVE

Proprietary Funds

Statement of Cash Flows



27

Retirement

Health Trust Agency

ASSETS Fund Funds

Cash and Cash equivalents 98,028$ 15,290,866$

Investments - 8,057,057

Mutual Funds - Equity 4,090,303 -

Mutual Funds - Fixed Income 1,241,665 -

Accounts receivable - 526,712

Interest receivable - 7,197

Long-term receivable - 58,375

Total Assets 5,429,996$ 23,940,207$

LIABILITIES

Accounts payable 14,665$ 98,120$

Interest payable - 202,476

Due to other member agencies - 543,251

Due to bondholders and others - 21,926,089

Deposits - 1,170,271

Total Liabilities 14,665 23,940,207$

NET POSITION

Held in Trust for Health Retiree Benefits: 5,415,331$

CITY OF ELK GROVE

Fiduciary Funds

Statement of Fiduciary Net Position

June 30, 2017


28

Retirement

Health Trust

Fund

ADDITIONS

Net investment income:

Interest income and net increase (decrease) in the fair value of investments 393,560$

Investment management fees (13,729)

Employer contributions 600,000

Total additions 979,831

DEDUCTIONS

Withdrawal of excess contributions 50,720

Benefits 221,373

Total deductions 272,093

Change in plan net position 707,738

NET POSITION

Held in Trust for Retiree Health Benefits:

Beginning of year 4,707,593

End of year 5,415,331$


CITY OF ELK GROVE

Fiduciary Fund

Statement of Changes in Fiduciary Net Position

CITY OF ELK GROVE

Notes to Financial Statements

June 30, 2017

29

NOTES TO FINANCIAL STATEMENTS

The notes provided in the financial section of this report are considered an integral and essential

part of adequate disclosure and fair presentation of this report. The notes include a summary of

significant accounting policies for the City, and other necessary disclosure of pertinent matters

relating to the financial position of the City. The notes express significant insight to the financial

statements and are conjunctive to understanding the rationale for presentation of the financial

statements and information contained in this document.

CITY OF ELK GROVE


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30

Note 1: Summary of Significant Accounting Policies

A. The Financial Reporting Entity

The City of Elk Grove (City), California, was incorporated in July 2000. The City

operates under the Council-Manager form of government and provides the following

services: public safety, highways and streets, public improvements, planning and zoning,

general administration, transit, solid waste and drainage.

The financial statements presented herein include all of the funds relevant to the

operations of the City. The City’s fiscal year begins July 1 and ends on June 30.

The accounting methods and procedures adopted by the City conform to generally

accepted accounting principles as applied to governmental entities. These financial

statements present the government and its component units, entities for which the

government is considered to be financially accountable. Reporting for component units

on the City’s financial statements can be blended or discretely presented. Blended

component units, although legally separate entities are, in substance, part of

government’s operations. Blended component units are an extension of the City and so

data from these units is combined with data of the primary government. Discretely

presented component units, on the other hand, are reported in a separate column in the

combined financial statements to emphasize that they are legally separate from the City.

The City’s reporting entity includes the following blended component unit:

Elk Grove Finance Authority

On July 13, 2005, under Article 1 of Chapter 5 of Division 7 of Title 1 of the Government

Code of the State of California, the City authorized the formation of a joint powers

authority with the Parking Authority of the City to be known as the Elk Grove Finance

Authority (Finance Authority).

The primary purpose of the Finance Authority is to facilitate the financing of public

improvements, as well as other facilities and improvements which will be funded through

the issuance of tax exempt bonds. The City Council acts as the governing board of the

Finance Authority in concurrent session. The Mayor serves as Board chairperson.

The Finance Authority is a separate and legal entity, distinct from the City itself. The

Finance Authority provides services entirely for the benefit of the City and the governing

body consists solely of members of the City Council. The Finance Authority is treated as

a blended component unit. The Finance Authority’s financial data is presented as a debt

service fund type.

Other Agencies:

Elk Grove Tourism Marketing District

In February 2015 City Council approved the formation of the Elk Grove Tourism

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June 30, 2017

31

Marketing District (EGTMD). The EGTMD is a benefit assessment district proposed to

help fund marketing and sales promotion efforts for Elk Grove lodging businesses. The

EGTMD currently includes all existing and future lodging businesses located within the

boundaries of the City and a portion of unincorporated Sacramento County. EGTMD will

have a five (5) year life.

The lodging businesses formed a nonprofit corporation, Visit Elk Grove (VEG), which

serves as the EGTMD’s Owner’s Association (“Owner’s Association”). The Owner’s

Association is private non-profit corporation charged with managing funds and

implementing programs in accordance with the Management District Plan and state law.

The Owner’s Association must also provide annual reports to the City Council. The City

is responsible for collecting the assessment on a monthly or quarterly basis from each

lodging business located in the boundaries of the EGTMD. The City forwards these

assessments to VEG. The City is paid a fee equal to one percent (1%) of the amount of

assessment collected to cover its costs of collection and administration.

The EGTMD and VEG are not considered component units of the City and as a result,

financial information for these entities is not presented in the City’s financial statements.

B. Basis of Presentation

Government-Wide Financial Statements

The statement of net position and statement of activities display information about the

primary government and its blended component units. These statements include the

financial activities of the overall government, except for fiduciary activities.

Eliminations have been made to minimize the double counting of internal activities. The

internal services provided and used are not eliminated in the process of consolidation.

These statements distinguish between the governmental and business-type activities of

the City. Governmental activities, which normally are supported by taxes and

intergovernmental revenues, are reported separately from business-type activities, which

rely to a significant extent on fees charged to external parties.

The statement of activities demonstrates the degree to which the program expenses of a

given function are offset by program revenues. Program expenses include direct

expenses, which are clearly identifiable with a specific function, and allocated indirect

expenses. Program revenues include 1) charges paid by the recipients of goods or

services offered by the programs and 2) grants and contributions that are restricted to

meeting the operational or capital requirements of a particular program. Revenues that

are not classified as program revenues, including all taxes, are presented instead as

general revenues.

Fund Financial Statements

The fund financial statements provide information about the City’s funds, including

fiduciary funds and blended component units. Separate statements for each fund

category ~ governmental, proprietary and fiduciary ~ are presented.

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June 30, 2017

32

The emphasis of fund financial statements is on major governmental and enterprise

funds, each displayed in a separate column. All remaining governmental and enterprise

funds are discretely aggregated and reported as nonmajor funds.

Proprietary fund operating revenues, such as charges for services, result from exchange

transactions associated with the principal activity of the fund. Exchange transactions are

those in which each party receives and gives up essentially equal values. Nonoperating

revenues, such as subsidies and investment earnings, result from nonexchange

transactions or ancillary activities. Operating expenses for proprietary funds include the

cost of sales and services, administrative expenses, and depreciation on capital assets. All

revenues and expenses not meeting this definition are reported as nonoperating revenues

and expenses. When both restricted and unrestricted resources are available for use, it is

the City’s policy to use restricted resources first, then unrestricted resources as they are

needed.

The City reports the following major governmental funds:

The General Fund is used to account for all revenues and expenditures necessary

to carry out basic governmental activities of the City that are not accounted for

through other funds. For the City, the General Fund includes such activities as

general government, public safety, community services, equipment replacement,

economic development and a capital reserve.

The Affordable Housing Special Revenue Fund was established to account for

development impact fees paid by new development for affordable housing and

administration.

The Roadway Fee Capital Projects Fund was established to account for

development impact fees paid by new development for roadway related projects.

The Mitigation and Fee Capital Projects Funds was established to account for

development impact fees, except from those described above.

The Laguna Ridge CFD 2005-1 was established to account for special taxes to

fund the cost of infrastructure and a portion of police protection operational costs

within the boundaries of this finance district.

The City reports the following major enterprise funds:

The Solid Waste Funds were established to account for the operation and

maintenance of the City’s solid waste program, which plans, coordinates,

promotes and implements citywide solid waste reduction, recycling, composting,

and public education activities. Beginning in fiscal year 2011, the Solid Waste

Funds include the proceeds and debt service of the 2010 Recovery Zone

Economic Development Bonds and the activity revolving around the operations of

the Household Hazardous Waste Facility.

CITY OF ELK GROVE


June 30, 2017

33

The Transit Funds were established to account for the transit allocation of

Transportation Development Act (TDA) and other funding, which is used for

public transportation planning, public transportation services, and community

transit purposes.

The Drainage Funds were established to account for the cost to manage and

deliver drainage and flood control services.

The City reports the following additional fund types:

Internal Service Funds account for the City’s facilities, fleet, information

technology, and GIS services provided to other departments, unemployment

insurance, and insurance programs – workers’ compensation and “general

liability” - on a cost-estimate basis.

Fiduciary Funds account for Trust and Agency Funds. The financial activities of

these funds are excluded from the Government Wide Financial Statements, but

are presented in separate Fiduciary Fund Financial Statements. The Trust and

Agency Funds consist of:

The HRA Trust Fund accounts postemployment benefits (OPEB) trust

funds used for administration of health insurance for retirees.

The Agency Funds account for assets held by the City as an agent for

various local governments and other entities. The Trust and Agency Funds

consist of:

Planning Deposits Fund – Established to account for Developer

deposits intended as payment for future permits and fees.

Community Services District & Sac County Funds –

Established to account for development fees, which are collected

and remitted to the Cosumnes Community Services District or to

Sacramento County for fire and recreation and transportation

facilities as well as landscape maintenance.

Special Assessment/Community Facility District (CFDs) –

Established to account for the monies collected and disbursed for

land-based debt, where the City is not obligated for the debt.

Laguna Springs Open Space Preserve – Established to maintain

the wetlands.

Laguna Ridge/Poppy Ridge Reclaimed Water Fund –

Established to account for the collection of fees for reclaimed

water.

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June 30, 2017

34

East Elk Grove Specific Plan Fund – Established to account for

developer impact fees which are collected for the East Elk Grove

Specific Plan.

Elk Grove Employee Sunshine Fund – Established to account for

the donation by payroll deduction of Employee funds which are

collected and used for Employee functions and activities.

Donation Community Programs – Established to account for the

donations by citizens for various City programs.

Utility Billing Refund Fund – Established to account for the

Utility bill refund checks which have remained unclaimed by the

property owner and have become stale dated. The City publishes

an itemized listing of these funds on the website which is kept

current.

EGPD Property & Evidence Fund – Established to account for

the collection for confiscated funds which may become evidence

or asset seizures.

C. Basis of Accounting

The government-wide financial statements are reported using the economic resources

measurement focus and the accrual basis of accounting, as are the proprietary funds,

internal service funds and the OPEB benefit trust funds. The agency fund financial

statements have no measurement focus, and use the accrual basis of accounting.

Revenues are recorded when earned and expenses are recorded at the time liabilities are

incurred, regardless of when the related cash flows take place. Nonexchange

transactions, in which the City gives (or receives) value without directly receiving (or

giving) equal value in exchange, include property and sales taxes, grants, entitlements

and donations. On an accrual basis, revenue from property taxes is recognized in the

fiscal year for which the taxes are levied. Revenues from sales tax are recognized when

the underlying transactions take place. Revenues from grants, entitlements and donations

are recognized in the fiscal year in which all eligibility requirements have been satisfied.

Governmental funds are reported using the current financial resources measurement focus

and the modified accrual basis of accounting. Under this method, revenues are

recognized when measurable and available. Property and sales taxes, interest, certain

state and federal grants and charges for services are accrued when their receipt occurs

within 60 days after the end of the accounting period so as to be measurable and

available. Expenditures are generally recorded when a liability is incurred, as under

accrual accounting. However, debt service expenditures, as well as expenditures related

to claims and judgments are recorded only when payment is due. General capital asset

acquisitions are reported as expenditures in governmental funds. Proceeds of general

long-term debt and capital leases are reported as other financial sources.

CITY OF ELK GROVE


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35

D. Current Year GASB Implementation

GASB Statement No. 74 – In June 2015, GASB issued Statement No. 74, Financial

Reporting for Postemployment Benefit Plans Other Than Pension Plans. The objective of

the Statement is to address the financial reports of defined benefit OPEB plans that are

administered through trusts that meet specified criteria. The Statement requires more

extensive note disclosures and RSI related to the measurement of the OPEB liabilities for

which assets have been accumulated. The Statement is effective for periods beginning

after June 15, 2016. The City implemented the provisions of the Statement in fiscal year

2017, as discussed in Note 11.

GASB Statement No. 82 – Pension Issues—an amendment of GASB Statements No. 67,

No. 68, and No. 73. The objective of this Statement is to address certain issues that have

been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No.

68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and

Financial Reporting for Pensions and Related Assets That Are Not within the Scope of

GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and

68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll-

related measures in required supplementary information, (2) the selection of assumptions

and the treatment of deviations from the guidance in an Actuarial Standard of Practice for

financial reporting purposes, and (3) the classification of payments made by employers to

satisfy employee (plan member) contribution requirements. The City implemented the

provisions of the Statement as noted in the Pension-Related Required Supplementary

Information.

E. Property Tax

The County of Sacramento is responsible for the collection and allocation of property

taxes. Under California law, property taxes are assessed and collected by the County up

to 1% of the full cash value of taxable property, plus other increases approved by the

voters and distributed in accordance with statutory formulas. The City recognizes

property taxes when the individual installments are levied, provided they are collected

within 60 days after year-end.

Secured property taxes are levied on or before the first day of September of each year.

They become a lien on real property on March 1 preceding the fiscal year for which taxes

are levied. These taxes are paid in two equal installments; the first is due November 1

and delinquent with penalties after December 10; the second is due February 1 and

delinquent with penalties after April 10. Secured property taxes, which are delinquent

and unpaid as of June 30, are declared to be tax defaulted and are subject to redemption

penalties, cost and interest when paid.

The City participates in an alternative method of distribution of property tax levies and

assessments known as the “Teeter Plan.” The State Revenue and Taxation Code allow

counties to distribute secured real property and assessment and supplemental property

taxes on an accrual basis resulting in full payment to cities each fiscal year. Any

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June 30, 2017

36

subsequent delinquent payments, penalties and interest during a fiscal year will revert to

the County.

F. Cash and Investments

Cash equivalents consist of cash on hand, demand deposits, and short-term investments

with original maturities of three months or less from the date of acquisition. Investments

in the California Local Agency Investment Fund (LAIF) are stated at cost, which

approximates their estimated fair value. Other investments are stated at their fair value.

G. Receivables

Receivables consist of development impact fees, property taxes, sales taxes, mitigation

fee credits, grants, solid waste and drainage utility fees, and long term loans. An

allowance for doubtful accounts has been recorded in the General Fund for $83,721,

Affordable Housing related to interest receivable on loans for $15,325,617 and the

Development Services Fund for $215,737. Accounts receivable components are located

in each of the financial statements. In the proprietary funds, allowances for uncollectible

accounts of $62,873 and $42,852 have been recorded in the Solid Waste and Drainage

Enterprise Funds, respectively, at June 30, 2017.

Long term loans by governmental funds are recorded in the fund statements and are

reflected as nonspendable or restricted in the fund balance because they are not in

spendable form. The loans are recognized when advanced in the government-wide

statements.

Affordable housing subsidies receivable represent amounts due to the City from home

owners resulting from qualified individuals being provided a home by a developer at a

subsidized price below market value. This program allows qualified homeowners to

obtain financing to help the City satisfy low income housing requirements. The City

records potential amounts due under this program as affordable housing subsidies

receivable.

The California Fish and Wildlife issued the City Swainson’s Hawk Fund Mitigation Fee

Credits. The City will use these fee credits as mitigation for the purchase of public and

private projects. The fee credit balance was $2,925,725 at June 30, 2017.

H. Unearned Revenue

Unearned revenue includes amounts received from grantors and developers that have not

yet been earned.

I. Prepaid Items

Certain payments made to vendors reflect costs applicable to future accounting periods

and are reported as prepaid items in both the government-wide and fund financial

statements. Prepaid items as reported in the financial statements are offset by a

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June 30, 2017

37

nonspendable fund balance for assets in governmental funds to indicate that they do not

constitute resources available for appropriation.

J. Capital Assets

Capital assets (including infrastructure) are recorded at historical or estimated cost.

Contributed capital assets are valued at their estimated acquisition value on the date

contributed. Capital assets include public domain (infrastructure) consisting of certain

improvements including roadways, parks, bridges, water/sewer, lighting system, drainage

systems, and flood control. Donated capital assets, donated works of art and similar

items, and capital assets received in a service concession arrangement is recorded at

acquisition value rather than fair value.

The City’s policy is to capitalize all capital assets (excluding infrastructure) with a cost of

$5,000 or more and with an estimated useful life of three years or more. The City’s

infrastructure with a cost of $50,000 or more and with an estimated useful life of twenty

or more years is capitalized. The straight-line method of depreciation is used for capital

assets and infrastructure.

Maintenance and repairs are charged to expense as incurred. Significant renewals or

betterments are capitalized and depreciated over their estimated useful lives. Costs

incurred for major improvements or construction of capital assets are carried in

construction in progress until the project is completed at which time costs related to the

project are moved to the appropriate classification and depreciated.

The estimated useful lives are as follows:

Infrastructure (other than pavement) 20 to 75 years

Pavement Subsystem 40 years

Buildings and improvements 20 to 50 years

Equipment 3 to 15 years

The City has five networks of infrastructure assets – roadways, water/sewer, lighting,

drainage.

K. Deferred Outflow/Deferred Inflow of Resources

In addition to assets, the financial statements report separate sections for deferred

outflows of resources and deferred inflows of resources. Deferred outflows of resources

represent a consumption of resources that applies to a future period(s) and will not be

recognized as an outflow of resources (expense) until then. Conversely, deferred inflows

of resources represent an acquisition of resources that applies to a future period(s) and

will not be recognized as an inflow of resources (revenue) until that time.

The City’s deferred amount on refunding, resulting from the difference in the carrying

value and reacquisition price of the refunded debt, is reported as a deferred outflow of

CITY OF ELK GROVE


June 30, 2017

38

resources and is amortized over the shorter of the life of the refunded debt or refunding

bond.

Contributions made to the City’s pension plan(s) after the measurement date but before

the fiscal year-end are recorded as a deferred outflow of resources. Additional factors

involved in the calculation of the City’s pension expense and net pension liability include

the differences between expected and actual experience, changes in assumptions,

differences between projected and actual investment earnings, changes in proportion, and

differences between the City’s contributions and proportionate share of contributions.

These factors are recorded as deferred outflows and inflows of resources and amortized

over various periods. See Note 12 for further details related to these pension deferred

outflows and inflows.

Under the modified accrual basis of accounting, unavailable revenue is reported as a

deferred inflow of resources. Unavailable revenue is reported in the governmental funds

balance sheet and represents receivables associated with non-exchange transactions that

will not be collected within the City’s period of availability.

L. Compensated Absences

The City’s annual leave policy was restructured on November 18, 2009, with the

adoption of the Memorandum of Understanding with Elk Grove Police Officers

Association (EGPOA MOU) and allows for accrual as follows:

Annual Maximum

Years of Service Accrual Accrual

1 through 4 176 hours 352 hours

5 through 14 216 hours 432 hours

15 or more 256 hours 512 hours

Annual leave includes vacation and sick leave. City employees have vested interests in

the amount of annual leave accrued and are paid upon termination. Annually, an

employee may elect to be paid out a maximum of 80 hours of unused annual leave at the

discretion of the City Manager. Payouts are contingent on the following criteria:

The employee used at least 40 hours during the previous year; and,

The employee will have a minimum balance of 80 annual leave hours after the

payment.

All annual leave is accrued when incurred in the government-wide and proprietary fund

financial statements. A liability for compensated absences is reported in the governmental

funds only if they have matured, for example, as a result of employee resignations or

retirements that are currently payable. The General Fund, Development Services Fund,

Risk Management Fund, Solid Waste Fund, Transit Fund and Equipment Replacement

Funds are used to liquidate compensated absences, depending on where the employee’s

salary is recorded.

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June 30, 2017

39

The City offers to exempt employees either 40 or 80 administrative leave hours annually,

depending on their level of management. Administrative leave is recorded on July 1st and

is prorated for new employees starting after July 1st. The accrued time is carried over

each year, with a maximum limit of double the employee’s annual allotment. Employees

have the option to cash out 50% of their administrative leave balance annually.

No liability is recorded for non-vesting accumulating rights to receive sick pay benefits.

M. Pensions

For purposes of measuring the net pension liability, pension expense, and deferred

outflows/inflows of resources related to pensions, information about the fiduciary net

position of the City’s portions of the Public Agency Cost-Sharing Multiple-Employer

Defined Benefit Pension Plan (the Plan) maintained by the California Public Employees’

Retirement System (CalPERS) and additions to/deductions from the City’s portions of

the Plan’s fiduciary net position have been determined on the same basis as they are

reported by the Plan. For this purpose, benefit payments (including refunds of employee

contributions) are recognized when due and payable in accordance with the benefit terms.

Investments are reported at fair value.

N. Interfund Balances

Interfund transactions are reflected as loans, provided services, reimbursements or

transfers. Loans are reported as receivables and payables as appropriate, are subject to

elimination upon consolidation and are referred to as either “due to/from other funds”

(current portion) or “advances to/from other funds” (noncurrent portion). Net interfund

activity and balances between the governmental activities and business-type activities are

shown in the statement of net position as internal balances. The “doubling-up” effect of

internal service fund activity has been removed by adjusting the expenses shown in the

various functions within the statement of activities.

Advances are amortized over the life of the loan or available cash. Interest is calculated

based on the City’s pooled interest rate at the time of the agreement. Reimbursements are

when one fund incurs a cost, charges the appropriate benefiting fund and reduces its

related cost as a reimbursement. All other interfund transactions are treated as transfers.

O. Use of Estimates

The preparation of financial statements in conformity with GAAP requires management

to make estimates and assumptions that affect the reported amounts of assets, deferred

outflows, liabilities and deferred inflows and disclosure of contingent assets and

liabilities at the date of the financial statements and the reported amounts of revenues and

expenses during the reporting period. Actual results could differ from those estimates.

Note 2: Cash and Investments

The City’s deposit and investment balances as of June 30, 2017, consist of the following:

CITY OF ELK GROVE


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40

Restricted and

Cash Held with Third Total Cash

and Investments Parties and Investments

Cash and deposits 2,700,503$ 1,092,899$ 3,793,402$

Investments 227,912,772 69,916,298 297,829,070

Total Cash and Investments 230,613,275$ 71,009,197$ 301,622,472$

Total cash and investments were classified and reported on the City’s financial statements as

follows:

Restricted and

Cash Held with Third Total Cash

and Investments Parties and Investments

Governmental activities 179,813,383$ 54,457,310$ 234,270,693$

Business-type activities 35,492,135 3,081,725 38,573,860

Fiduciary funds 15,307,757 13,470,162 28,777,919

Total Cash and Investments 230,613,275$ 71,009,197$ 301,622,472$

Fair Value Measurements

The Pool categorizes its fair value measurements within the fair value hierarchy established

by generally accepted accounting principles. These principles recognize a three-tiered fair

value hierarchy, as follows:

• Level 1: Investments reflect prices quoted in active markets;

• Level 2: Investments reflect prices that are based on a similar observable asset either

directly or indirectly, which may include inputs in markets that are not

considered to be active; and,

• Level 3: Investments reflect prices based upon unobservable sources.

The Pool has the following recurring fair value measurements as of June 30, 2017:

Quoted Prices in

Active Markets for

Identical Assets

Significant Other

Observable Inputs

Significant

Unobservable

Inputs

Amount (Level 1) (Level 2) (Level 3)

Investment Securities

16,279,383$ $ - 16,279,383$ -$

4,104,353 - 4,104,353 -

6,697,919 - 6,697,919 -

9,224,595 - 9,224,595 -

3,481,747 - 3,481,747 -

Federal National Mortgage Associaton 23,758,862 - 23,758,862 -

US Treasury Notes 25,743,094 25,743,094 - -

23,990,697 - 23,990,697 -

30,255,279 - 30,255,279 -

143,535,929$ 25,743,094$ 117,792,835$ -$

Fair Value Measurement Using

Investments by fair value level

Total investments measured at fair value

Certificates of Deposit (Negotiable Time Deposits)

Federal Farm Credit Banks

Federal Home Loan Banks

Federal Home Loan Mortgage Corp Medium Term Notes

Federal Agriculture Mortgage Corp

Municipal Securities

Medium Term Corporate Notes

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Investments

LAIF and CalTRUST, being investments pools, are subject to fair value measurement;

however, they are not subject to the fair value hierarchy. Certain Certificates of Deposit and

Money Market Funds are not negotiable and therefore, not subject to fair value measurement

as redemption terms do not consider market rates.

The City invests both individual fund and pooled monies, subject to California Government

Code Section 53600, Chapter 4 – Financial Affairs. The pooling of monies, referred to as an

internal investment pool, is theoretically invested on the whole and not as a combination of

monies from each fund belonging to the pool. In this manner, the City’s Treasurer is able to

invest the monies at a higher interest rate for a longer period of time.

Interest revenue is apportioned monthly to each fund in the pool based on the average cash

balance of the fund for the month.

Investments Authorized by the California Government Code and the City’s Investment Policy

The table below identifies the investment types that are authorized for the City by the

California Government Code or the City’s investment policy, where more restrictive. The

table also identifies certain provisions of the City’s investment policy that address interest rate

risk, credit risk, and concentration risk.

Authorized Investment Type

Maximum

Maturity

Maximum Percentage

of Portfolio

Maximum Investment in

One Issuer

U.S. Treasury Obligations 5 years None None

U.S. Agency Obligations 5 years None None

Banker's Acceptances 180 days 40% 30%

Commercial Paper 270 days 25% 10%

Negotiable Certificates of Deposit 5 years 30% 5%

Repurchase Agreements 90 days 20% 15%

Reverse Repurchase Agreements 5 years 20% of base value 15%

Medium Term Corporate Notes 5 years 15%(*) 15%

Mutual Funds/Money Market Mutual Funds N\A 20% 10%

Time Deposits 5 years 25% 5%

Local Agency Investment Fund (LAIF) N\A None $65m per account

Investment Trust of California (CalTRUST) N\A 30% 15%

Municipal Securities - California Local Agencies 5 years 20% 5%

State Municipal Securities (CA and Others) 5 years None None

*Limitation includes both commercial paper and medium term coprporate note types in the calculation

Investments Authorized by Debt Agreements

Investment of debt proceeds held by bond trustees are governed by provisions of the debt

agreements, rather than the general provisions of the California Government Code or the

City’s investment policy. The table on the following page identifies the investment types that

are authorized for investments held by the bond trustee. The table also identifies certain

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42

provisions of these debt agreements that address interest rate risk, credit risk, and

concentration of credit risk.

Authorized Investment Type

Maximum

Maturity

Maximum Percentage

of Portfolio

Maximum Investment in

One Issuer

U.S. Treasury Obligations None None None

U.S. Agency Obligations None None None

Government National Mortgage Associaton None None None

Federal Farm Credit System None None None

Federal Home Loan Bank Board None None None

Federal National Mortgage Association None None None

Federal Home Loan Mortgage Association None None None

Banker's Acceptances 270 days None None

Commercial Paper 180 days None None

Medium Term Corporate Notes 5 years None None

Money Market Mutual Funds N/A None None

Municipal Obligations None None None

Investment Agreements 30 years None None

LAIF None None None

Federal Securities None None None

Time Deposits None None None

Corporate Obligations None None None

Disclosures Relating to Interest Rate Risk and Credit Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair

value of an investment. Generally, the longer the maturity of an investment the greater the

sensitivity of its fair value to changes in market interest rates. One of the ways that the City

manages its exposure to interest rate risk is by purchasing a combination of shorter term and

longer term investments and by timing cash flows from maturities so that a portion of the

portfolio is maturing or coming close to maturity over time as necessary to provide the cash

flow and liquidity needed for operations. The City monitors the interest rate risk inherent in

its portfolio by measuring the weighted average maturity of its portfolio, as well as limiting a

securities maturity to five years or less for investments in the investment pool. Investments

held outside the investment pool can have longer maturities as these funds are restricted by

bond covenants and are held to the maturity of the bonds.

CITY OF ELK GROVE


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43

Investment Type Amount

Weighted Average

Maturity (in years)

Investments in Investment Pool:

Federal National Mortgage Association 23,758,862$ 2.52

Federal Agriculture Mortgage Corp 3,481,747 3.54

Federal Farm Credit Banks 4,104,353 2.18

Federal Home Loan Banks 6,697,919 2.90

Federal Home Loan Mortgage Corp Medium

Term Notes (FHLMC MTN) 9,224,593 1.95

US Treasury Notes 25,743,094 2.35

Municipal Securities(CA Local Agencies & State of CA) 23,990,697 2.65

Certificates of Deposit (Non-NegotiableTime Deposits) 5,759,800 0.54

Certificates of Deposit (NegotiableTime Deposits) 16,279,383 2.53

Medium Term Corporate Notes 30,255,279 2.68

CalTRUST 19,743,073 2.05

LAIF 58,873,972 0.53

Total Investments in Investment Pool 227,912,772 1.74

Investments outside Investment Pool:

Money Market Mutual Funds 64,584,330

Mutual Funds 5,331,968

Total Investments 297,829,070$

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to

the holder of the investment. This is measured by the assignment of a rating by a nationally

recognized statistical rating organization. Presented below and on the following page is the

minimum rating required by the California Government Code, the City’s investment policy, or

debt agreements and the actual rating at year end for each investment type.

Minimum

Investment Type Amount

Legal

Rating AAA/AAAm AA+/AA/AA- A+/A

Not

Rated

Investments in Investment Pool:

Certificates of Deposit (Non-Negotiable Time Deposits) 5,759,800$ N/A -$ -$ -$ 5,759,800$

Certificates of Deposit (Negotiable Time Deposits) 16,279,383 N/A - - - 16,279,383

Federal Farm Credit Banks 4,104,353 N/A - 4,104,353 - -

Federal Home Loan Banks 6,697,919 N/A - 6,697,919 - -

Federal Home Loan Mortgage Corp

Medium Term Notes 9,224,593 N/A - 9,224,593 - -

Federal Agriculture Mortgage Corp 3,481,747 N/A - - - 3,481,747

Federal National Mortgage Assoc 23,758,862 N/A - 23,758,861 - -

US Treasury Notes 25,743,094 N/A 25,743,094 - - -

Municipal Securities (CA State and local agencies) 23,990,697 A 316,537 22,948,561 725,599 -

Medium Term Corporate Notes 30,255,279 A 6,504,224 18,402,161 5,348,894 -

CalTRUST 19,743,073 N/A - - - 19,743,073

LAIF 58,873,972 N/A - - - 58,873,972

Investments outside Investment Pool:

Mutual Funds 5,331,968 - - - 5,331,968

Money Market Funds 64,584,330 64,584,330 - -

Total Investments 297,829,070$ 97,148,184$ 85,136,448$ 6,074,493$ 109,469,943$

Ratings as of Year End (Standard and Poors)

CITY OF ELK GROVE


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44

Concentrations of Credit Risk

The California Government Code and the investment policy of the City contain limitations on

the amount that can be invested in any one issuer. Investments in any one issuer (other than

investments issued by or explicitly guaranteed by the US Government and investments in

mutual funds, external investment pools, and other pooled investments) that represent 5% or

more of total City investments are required to be disclosed. The City holds 10% of its

investments in the Federal National Mortgage.

Custodial Credit Risk

The custodial credit risk for deposits is the risk that, in the event of the failure of a depository

financial institution, a government will not be able to recover its deposits or will not be able to

recover collateral securities that are in the possession of an outside party. The custodial credit

risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-

dealer), to a transaction, a government will not be able to recover the value of its investment

or collateral securities that are in the possession of an outside party.

The California Government Code and the City’s investment policy do not contain legal or

policy requirements that would limit the exposure to custodial credit risk for deposits or

investments, other than the following provision for deposits:

The California Government Code requires that a financial institution secure the City’s

cash deposits by pledging securities in an undivided collateral pool held by a depository

regulated under state law. The market value of pledged securities in the collateral pool

must equal at least 110% of the City’s cash deposits. California law also allows

institutions to secure City deposits by pledging first trust deed mortgage notes having a

value of 150% of the City’s total cash deposits.

At June 30, 2017, the recorded amount of the City’s petty cash and demand deposits was

$7,700 and $3,785,702, respectively, and the recorded amount of mutual funds classified as

cash and deposits was $119,606. Out of the $3,785,702 that was deposited in financial

institutions $500,000 was insured by the Federal Depository Insurance Corporation (FDIC)

and $3,285,702 was covered by a financial institution collateral pool that insures public

deposits. The City’s remaining investments were held by US Bank trust division and Union

Bank in the City’s name and were not subject to custodial credit risk or invested in LAIF and

CalTRUST.

Investment in California Local Agency Investment Fund and CalTRUST

The City is a voluntary participant in the California Local Agency Investment Fund that is

regulated by the California Government Code under the oversight of the Treasurer of the State

of California. The fair value of the City’s investment in this pool is reported in the

accompanying financial statements at amounts based upon the City’s pro rata share of the fair

value provided by LAIF for the entire LAIF portfolio. At June 30, 2017, the City’s

investment position in LAIF was $58,873,972.

CITY OF ELK GROVE


June 30, 2017

45

The City is also a voluntary participant in the CalTRUST which is a Joint Powers Authority

governed by a Board of Trustees made up of local treasurers and investment officers. The

Board of Trustees sets overall policy for CalTRUST, and selects and supervises the activities

of the Investment Manager and other agents. As of June 30, 2017, the City’s investment in

CalTRUST is $19,743,073; all of which is invested in the Medium term and money market

fund.

Note 3: Loans Receivable and Affordable Housing Subsidies Receivable

The City has a number of multi-family affordable housing loans and Community

Development Block Grant (CDBG) owner occupied and emergency repair loans outstanding

at year end. The multi-family affordable housing loans provide gap financing to private

developers to construct multi-family housing projects and totaled $60,944,996 at June 30,

2017. The loans carry interest rates ranging from 0% to 4% and principal and interest are

deferred for up to 30 years, subject to various conditions specified in the loan agreements.

The City has a down payment assistance program that assists the City’s citizens with

obtaining home ownership. This program provides families with down payment assistance

through a 30 year 3% annual interest loan. The interest accrues for the first ten years and

then the interest rate drops to 0% and during years 11 through 20, the accrued interest is

forgiven at a rate of 10% of the total accrued interest per year until all interest is forgiven at

the end of year 20. No principal or interest payments are required until the end of the loans

term at which time all outstanding principal is due. As of June 30, 2017, the total

outstanding principal for the down payment assistance program loans is $333,788.

The City began a Homebuyers Assistance Program through California’s Department of

Housing and Community Development CalHome program in fiscal year 2015. This program

is designed to enable low and very-low income households to become or remain

homeowners. Similar to the City’s down payment assistance program, interest accrues at 3%

for the first ten years and then the interest rate drops to 0% and during years 11 through 20,

the accrued interest is forgiven at a rate of 10% of the total accrued interest per year until all

interest is forgiven at the end of year 20. No principal or interest payments are required until

the end of the loans term at which time all outstanding principal is due. The CalHome loans

totaled $795,350 at June 30, 2017.

The City sold a commercial building known as the Hull Building during fiscal year 2011/12.

The building was acquired with other land that was needed for highway 99 interchange

improvements. The Hull Building was not needed for public use and was sold with the City

holding on to the loan. The loan amount is $656,000 at 6%, amortized over 30 years with a

required monthly additional principal payment of $1,250, and a balloon payment due June 1,

2019. Voluntary extra principle payments up to $50,000 may be paid annually over and

above the required additional monthly principal payment. The remaining principal amount

of $549,798 was repaid during fiscal year 2017.

The CDBG owner occupied repair and emergency repair loans were made to rehabilitate

owner occupied low and moderate income housing. The owner occupied repair loans totaled

$128,035 at June 30, 2017, and carry an interest rate of 3% with principal and interest

CITY OF ELK GROVE


June 30, 2017

46

deferred for up to 30 years or until the owner refinances or sells the subject property. The

CDBG emergency repair loans totaled $99,324 at June 30, 2017, are interest free and may be

forgiven if the borrower continuously resides in the subject property for ten years.

In December of 2012, the City purchased property using drainage funds for the purposes of

alleviating potential flooding and water quality issues on existing, deficient drainage systems

within the City. Subsequently, the City split the parcel into two pieces as only part of the

parcel was needed for storm drainage. In October of 2015 the City sold the unused parcel for

commercial purposes while retaining the loan. The loan amount of $200,000 earns interest at

5.5%, with the outstanding principal being amortized over 45 months. At June 30, 2017, the

principal amount outstanding was $114,678.

Activity in loans receivable for the year ended June 30, 2017, was as follows:

Balance at

July 1, 2016 Additions Repayments Adjustments

Balance at

June 30, 2017

Major Enterprise Funds

Drainage 166,804$ -$ (52,126)$ -$ 114,678$

Major Governmental Funds

Affordable Housing Special Revenue 63,392,861 177,170 (1,869,685) - 61,700,346

Roadway Fee 549,798 - (549,798) - -

Other Governmental Funds

HUD Home Grant 40,000 - - - 40,000

Neighborhood Stabilization 408,049 - (74,261) - 333,788

Community Development Block Grant 232,613 21,849 (27,103) - 227,359

Totals 64,790,125$ 199,019$ (2,572,973)$ -$ 62,416,171$

The City also has a subsidy program called the Affordable Homeownership Program which

was implemented to make homeownership affordable to low and moderate-income

households. Typically, an affordable housing fee is charged to each new market-rate housing

unit (single-family or multifamily) at the time a building permit is obtained. However, under

certain circumstances, the City offers developers the opportunity to provide affordable

housing units in lieu of paying the affordable housing fees on their development. The

developer agrees to sell the home to low- and moderate –income families at a below market

value amount that is subsidized by the City. This subsidy value changes with the house’s

market value at each subsequent sale and the house must be sold to another qualified low- or

moderate income family for a period of 55 years. There is no associated interest and the

subsidy is secured by a regulatory agreement, shared appreciation promissory note and

shared appreciation deed of trust. As of June 30, 2017, the City had subsidies valued at

$2,302,416.

CITY OF ELK GROVE


June 30, 2017

47

Note 4: Capital Assets

Capital asset activity for the year ended June 30, 2017, was as follows:

Balance

7/1/2016 Additions Deletions

Transfers/

Adjustments

Balance

6/30/2017

Governmental Activities:

Capital assets, not being depreciated:

Land 192,332,701$ 3,680,669$ -$ -$ 196,013,370$

Construction in progress 35,101,251 17,915,429 - (5,215,943) 47,800,737

Total capital assets, not being depreciated 227,433,952 21,596,098 - (5,215,943) 243,814,107

Capital assets, being depreciated:

Infrastructure 1,459,254,992 2,303,269 - 1,911,365 1,463,469,626

Building and improvements 37,265,369 453,016 - 37,718,385

Vehicles and equipment 12,472,024 1,601,282 (939,388) 3,304,578 16,438,496

Parks and park improvements 2,448,812 476,921 - 2,925,733

Total capital assets, being depreciated 1,511,441,197 4,834,488 (939,388) 5,215,943 1,520,552,240

Less accumulated depreciation for:

Infrastructure (642,993,399) (44,121,547) - - (687,114,946)

Buildings and improvements (9,222,232) (946,621) - - (10,168,853)

Vehicles and equipment (8,132,337) (1,144,596) 884,265 - (8,392,668)

Parks and park improvements (224,881) (244,396) - - (469,277)

Total accumulated depreciation (660,572,849) (46,457,160) 884,265 - (706,145,744)

Total capital assets, being depreciated, net 850,868,348 (41,622,672) (55,123) 5,215,943 814,406,496

Governmental activities capital assets, net 1,078,302,300$ (20,026,574)$ (55,123)$ -$ 1,058,220,603$

Balance


Transfers/

Adjustments

Balance

6/30/2017

Business-type Activities:

Capital assets, not being depreciated:

Land 4,123,911$ 1,456,527$ -$ -$ 5,580,438$

Construction in progress 1,798,967 714,932 - (173,776) 2,340,123

Total capital assets, not being depreciated 5,922,878 2,171,459 - (173,776) 7,920,561

Capital assets, being depreciated:

Infrastructure 6,152,095 5,830 - 173,776 6,331,701

Buildings and improvements 10,954,575 - - - 10,954,575

Vehicles and equipment 23,336,877 519,949 (589,224) - 23,267,602

Total capital assets, being depreciated 40,443,547 525,779 (589,224) 173,776 40,553,878

Less accumulated depreciation for:

Infrastructure (258,174) (153,995) - - (412,169)

Buildings and improvements (652,174) (279,187) - - (931,361)

Vehicles and equipment (9,702,157) (2,100,396) 564,207 - (11,238,346)

Total accumulated depreciation (10,612,505) (2,533,578) 564,207 - (12,581,876)

Total capital assets, being depreciated, net 29,831,042 (2,007,799) (25,017) 173,776 27,972,002

Business-type activities capital assets, net 35,753,920$ 163,660$ (25,017)$ -$ 35,892,563$

CITY OF ELK GROVE


June 30, 2017

48

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities:

General government 1,058,734$

Public safety 957,254

Public ways and facilities 44,121,547

Community development 319,625

Total depreciation expense - governmental activities 46,457,160$

Business-type activities:

Transit 2,140,772$

Drainage 152,356

Solid Waste 240,450

Total depreciation expense - business-type activities 2,533,578$

Note 5: Unavailable Revenue and Fee Credits

Unavailable Revenue

Governmental funds report unavailable revenue in connection with receivables for revenues

considered unavailable to liquidate liabilities of the current period. As of June 30, 2017, the

various components of unavailable revenue in the governmental funds are detailed as follows:

Government Activities :

General Fund: Intergovermental receivables 51,353$

Affordable Housing Fund : Housing project loan interest receivable 499,058

Housing subsidies receivable 28,188

Roadway Fees: Development impact fees receivable 2,370,057

Other Governmental Funds: Intergovermental receivables 744,588

Housing project loan interest receivable 162,205

LT development fees receivable 308,327

Swainson's Hawk Fund: LT mitigation fees receivable 2,925,725

7,089,501$

Fee Credits

The City has $5,390,224 recorded in the Roadway Fee Fund for credits granted by the City

Council to developers in exchange for the installation of roadway related improvements in the

Laguna Ridge and East Franklin area.

The City has a total of $6,402,391 recorded in the Mitigation and Fee Funds for credits

granted by the City Council to developers in exchange for the installation of park related

improvements in the Laguna Ridge areas and other fees of $38,161.

The City has a total of $2,087,860 recorded in the Mitigation and Fee Funds for credits

granted by the City Council to developers in exchange for dedication of various parkland

satisfying Quimby requirements in the Laguna Ridge areas.

The City expects the fee credits to be fully redeemed in future fiscal years.

CITY OF ELK GROVE


June 30, 2017

49

Note 6: Long-Term Liabilities

The following is a summary of long-term liabilities transactions of the City for the fiscal year

ended June 30, 2017: Restated

Balance at

7/1/2016 Additions Deletions *

Balance at

6/30/2017 *

Amount Due

Within

One year

Governmental Activities:

Lease revenue bond debt 9,535,000$ 4,940,000$ (9,535,000)$ 4,940,000$ 265,000$

Total Bonds Payable 9,535,000 4,940,000 (9,535,000) 4,940,000 265,000

Net Pension Liability 11,536,416 6,850,230 (3,861,199) 14,525,447 -

Compensated absences 4,011,253 2,781,666 (2,801,387) 3,991,532 319,323

Claims payable 483,100 43,500 (105,446) 421,154 -

Totals 25,565,769$ 14,615,396$ (16,303,032)$ 23,878,133$ 584,323$

* Full funding of the Series 2007 Lease Revenue Bonds were placed in an escrow account on June 8, 2017 and defeased on July 1, 2017.

Balance at


Balance at

6/30/2017

Amount Due

Within

One year

Business-type activities:

Lease revenue bond debt 9,645,000$ -$ (235,000)$ 9,410,000$ 245,000$

Compensated absences 106,075 66,545 (115,765) 56,855 4,549

Totals 9,751,075$ 66,545$ (350,765)$ 9,466,855$ 249,549$

The General fund has typically been used in prior years to liquidate the net pension obligation

and net other postemployment benefit obligation.

As of June 30, 2017, annual debt service requirements of governmental activities to maturity

are as follows:

Year Ending

June 30: Principal Interest

2018 265,000$ 86,977$

2019 470,000 112,668

2020 485,000 101,341

2021 495,000 89,652

2022 510,000 77,723

2023-2027 2,715,000 199,067

Total 4,940,000$ 667,427$

Governmental Activities

Lease Revenue Bond Debt

CITY OF ELK GROVE


June 30, 2017

50

Individual issues of bonds at June 30, 2017, are as follows:


Lease Revenue Bond Debt

Maturity

Date

Interest

Rates

Annual Principal

Installments

Original Issue

Amount

Outstanding at

6/30/2017

2017 Refunding of the Elk Grove

Financing Authority Lease Revenue

Bonds (2007 Capital Projects)

2027 2.41% $265,000 -$565,000 4,940,000$ 4,940,000$

Note: Full funding of the Series 2007 Lease Revenue Bonds were placed in an escrow account on June 8, 2017 and defeased on July 1, 2017.

Lease Revenue Bonds are payable from any source of legally available funds of the City,

which includes the General Fund. The City covenants under the lease to take such actions as

may be necessary to include rental payments due under the lease in its annual budgets.

Revenue Bonds

Elk Grove Finance Authority 2007 and 2017 Lease Revenue Bonds

On May 31, 2007, the Elk Grove Finance Authority issued the Series 2007 Lease Revenue

Bonds in the amount of $18,585,000 to fund the purchase of the City’s administrative office

located at 8401 Laguna Palms Way and to pay off the capital leases for 8380 and 8400

Laguna Palms Way, which comprise the City Hall complex. On June 8, 2017, the Elk Grove

Finance Authority placed the funding of the bonds into an escrow account, for full

defeasement on July 1, 2017. The bonds were refunded with the 2017 Refunding of the Elk

Grove Financing Authority Lease Revenue Bonds (2007 Capital Projects). The 2017 bonds

bear an interest rate of 2.41% and mature on March 1, 2027.

The refunding resulted in an overall debt service savings of $3,551,757. The net present value

of the debt service savings is called an economic gain and amounted to $722,663. The 2007

Lease Revenue Bonds were called on July 1, 2017.

Business Type Activities

As of June 30, 2017, annual debt service requirements of business-type activities to maturity

are as follows:

CITY OF ELK GROVE


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51

Year Ending

June 30: Principal Interest

2018 245,000$ 795,096$

2019 250,000 777,459

2020 260,000 759,461

2021 270,000 740,744

2022 285,000 718,741

2023-2027 1,625,000 3,224,965

2028-2032 2,035,000 2,469,573

2033-2037 2,580,000 1,497,830

2038-2040 1,860,000 327,651

Total 9,410,000$ 11,311,519$

Business-type Activities

Recovery Zone Economic Development Bond Debt

Recovery Zone Economic

Development Bond Debt

Maturity

Date

Interest

Rates

Annual Principal

Installments

Original Issue

Amount

Outstanding at

6/30/2017

Lease Revenue Bond DebtElk Grove Finance Authority Series

2010 Lease Revenue Bonds 2040 3.4 -8.7% $205,000 - $650,000 10,715,000$ 9,410,000$

Elk Grove Finance Authority 2010 Lease Revenue-Recovery Zone Economic Development

Bonds

On December 15, 2010, the Elk Grove Finance Authority issued the Series 2010 Lease

Revenue Bonds in the amount of $10,715,000 to fund a portion of the costs of construction of

a household hazardous waste collection facility, the acquisition of land, furnishings and

equipment related to the facility, net a projected Recovery Zone Economic Development

subsidy. The bonds have interest rates of 3.4% to 8.7% and mature beginning March 1, 2012,

through March 1, 2040. The bonds will be payable from, and secured by, lease revenues and

refundable credits from the Federal government under Section 6431 of the IRS Code of 1986

determined in accordance with Section 1400U-2 of the Tax Code, which the Finance

Authority has elected to receive.

Special Assessment District Bonds

During fiscal year 2017, the City reviewed its responsibilities with respect to the various

Community Facilities District special tax assessment bonds. This review determined that the

City has no legal or moral liability for the special tax assessment debt issued by the districts;

this debt is payable solely out of the special assessments on property owners in the districts.

Accordingly, the City no longer reflects the special assessment debt, which totaled

$90,630,000 at June 30, 2016, in its financial statements. The Community Facilities Districts

are now reported in Agency Funds. As a result of this change, the beginning net position of

the Governmental Activities and the fund balance of Other Governmental Funds have been

reduced in the amounts of $10,309,583.

Special Assessment Districts (Districts) within the City have issued debt under the Mello-

Roos Community Facilities Act of 1982 to finance infrastructure improvements and facilities

within the boundaries of the Districts. The City is the collecting and paying agent for the debt

CITY OF ELK GROVE


June 30, 2017

52

issued by the Districts, but has no direct or contingent liability or moral obligation for the

payment of the debt. Therefore, debt issued by the Districts is not included in long term debt

of the City.

The outstanding balance of these issues at June 30, 2017, is:

Special Assessment Debt with no

Governmental Commitment

Issue

Year

Maturity

Year

Outstanding at

6/30/2017

E. Franklin Community Facilities

District No. 2002-1, Series 2015 2015 2038 $ 47,985,000

Poppy Ridge Community Facilities


Laguna Ridge Community Facilities


Note 7: Fund Balance Policies

In the fund financial statements, fund balance is reported in classifications that comprise a

hierarchy based on the extent to which the City is bound to honor constraints on the specific

purposes for which amounts in those funds can be spent. The classifications of fund balance

are:

Nonspendable – includes fund balance amounts that cannot be spent either because they are

not in spendable form or because of legal or contractual constraints.

Restricted – includes fund balance amounts that are constrained for specific purposes which

are externally imposed by providers, such as creditors, or amounts constrained due to

constitutional provisions or enabling legislation.

Committed – includes fund balance amounts that are constrained for specific purposes that are

internally imposed by the government through formal action (Resolution) of the highest level

of decision making authority (City Council) and do not lapse at year-end. All use of

committed fund balance requires the City Council, which is the highest level of decision

making authority, to take formal action with a resolution, including a budget resolution, to

modify or rescind a committed fund balance.

The City’s stabilization arrangement, as set forth in the Fund Balance Reserve Policy

approved by the City Council in December 2009 by Resolution No. 2009-37 states that the

City will set an annual reserve amount between 15% to 20% of adjusted appropriations as part

of the Annual Budget Resolution adopted each fiscal year. If the stabilization arrangement

falls below 15%, the City Council will approve a plan for replenishment of the Stabilization

Fund Balance with a reasonable period not to exceed three budget years. The Stabilization

amounts may be spent to minimize the effects of local disasters, State budget difficulties and

other severe financial hardships or unforeseen changes in revenues and/or expenditures and

will be available for budget stabilization. In addition, the stabilization amount may be used to

minimize the immediate financial impact of potential costs not covered by the City’s

CITY OF ELK GROVE


June 30, 2017

53

insurance programs, such as claim costs within the City’s deductible, self-insured retentions

and/or major costs associated with disasters and other events which will not be reimbursable

from insurance or from Federal or State government. The actual amount will be set annually

in response to economic conditions. Reductions to the reserve will be appropriated by the

annual budget and approved by City Council. The Fund Balance Policy states that Council

will normally set the amounts or target amounts of the committed reserves including use of

reserves for a specific purpose with the adoption of the budget.

Assigned – includes fund balance amounts that are intended to be used for specific purposes

that are neither considered restricted or committed. Assigned Fund Balance represents

budgeted amounts set by City Council’s approval of the subsequent year budget, as set forth

in the Fund Balance Reserve Policy approved by the City Council in December 2009 by

Resolution No. 2009-37 directs that Council will assign any restricted reserve (assigned) fund

balance.

Unassigned – Unassigned includes positive fund balance within the General Fund which has

not been classified within the above mentioned categories and negative fund balances in other

governmental funds.

When both restricted and unrestricted resources are available for specific expenditures,

restricted resources are considered spent before unrestricted resources. Within unrestricted

resources, committed and assigned are considered spent (if available) before unassigned

amounts.

As of June 30, 2017, the fund balance details by classification are below:

General Fund

Affordable

Housing Special

Revenue Fund

Roadway Fee

Capital Projects

Fund

Mitigation and

Fee Funds

Laguna Ridge

CFD 2005-1

Fund

Other

Governmental

Funds Total

Fund Balance:

Nonspendable

Advance to other funds 3,510,730$ -$ -$ -$ -$ -$ 3,510,730$

Restricted:

Affordable housing projects - 75,357,277 - - - 754,466 76,111,743

CDBG - - - - - 139,985 139,985

State grants - - - - - 83,962 83,962

Public safety - - - - - 2,592,575 2,592,575

Public works maintenance - - - - - 25,644,118 25,644,118

Agricultural preservation - - - - - 1,955,640 1,955,640

Swainson's Hawk - - - - - 1,835,324 1,835,324

Tree mitigation - - - - - 1,057,505 1,057,505

Library - - - - - 828,543 828,543

Capital projects - - 19,422,524 16,311,072 53,064,393 43,288,296 132,086,285

Committed:

Stabilization 13,685,911 - - - - - 13,685,911

Capital projects reserves 7,024,057 - - - - - 7,024,057

Economic development 290,170 - - - - - 290,170

Assigned:

Subsequent years budget:

Approriation of fund balance 357,858 - - - - - 357,858

Unassigned: 9,447,603 - - - - (4,644,863) 4,802,740

Total Fund Balances 34,316,329$ 75,357,277$ 19,422,524$ 16,311,072$ 53,064,393$ 73,535,551$ 272,007,146$

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Note 8: Interfund Transactions

Interfund balances as of June 30, 2017, consisted of the following:

Due From/To Other Funds: Receivable Fund Payable Fund Amount

General Fund Other Governmental Funds 33,705$

Roadway Fee Fund Transit Fund 607,595

Roadway Fee Fund Laguna Ridge CFD 2005-1 Fund 530

641,830$

During the year, various funds borrowed cash to cover their operating cash deficits. These

amounts are intended be repaid in the following fiscal year.

Advances From/To Other Funds:

Receivable Fund Payable Fund Amount

General Fund Other Governmental Funds 3,196,529$

General Fund Other Governmental Funds 314,201

Drainage Fund Other Governmental Funds 2,312,000

Roadway Fee Fund Laguna Ridge CFD 2015-1 Fund 521,918

Roadway Fee Fund Other Governmental Funds 4,748

Roadway Fee Fund Transit Fund 6,036,739

12,386,135$

The City is undertaking the advancing of the Intelligent Transportation System Phase IV

Project. In order to pursue the Advanced Funding Agreement the City first needs to provide

evidence of its ability to fully fund the project. The advance from the Drainage Fund to the

Federal Grant Fund was approved by Council to provide the local funds. Repayment of the

loan will be repaid any time during the five year term. The loan will be amortized using a

variable interest rate, tied to the Local Agency Investment Fund (LAIF) investment earnings.

The remaining balance is $2,312,000.

The City advanced funds between General Fund’s Capital Reserve Fund and Street Lighting

Maintenance District Funds Zones 1 and 2 for the LED Streetlight Replacement Capital

Project. The remaining balance is $3,196,529 is reflected as an advance from other funds in

the Street Lighting Maintenance District Funds Zones. There is 8 years remaining with

variable interest rate, tied to the Local Agency Investment Fund (LAIF) investment earning.

The advance is due August 28, 2025.

The Transit Fund had a series of years prior to fiscal year 2009-10 were the fund operated in a

deficit. The General Fund has assisted over the past fiscal years by reducing the Transit

unrestricted deficit to the current balance of ($6,748,117). In April 2017 City Council

adopted the Transit Comprehensive Operation Analysis Plan. This plan, implemented at the

end of October 2017, will reduce the cost of transit services and is expected to eliminate the

CITY OF ELK GROVE


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55

deficit fund balance by 2026. Roadway Fee Funds not needed for current capital projects in

near term has provided the advance necessary to keep fund balance out of negative status.

Interfund transfers as of June 30, 2017, consisted of the following:

Transfer From Transfer To Amount Purpose

General Fund Solid Waste 45,402$ LifeLine Rate Subsidy

Transit Fund 835,304 Transit Operations Subsidy

Other Governmental Funds 1,212,656 Cost Recovery

2,093,362

Roadway Fee Fund Other Governmental Funds 300,905 Cost Recovery

Mitigation and Fee Funds General Fund 127,469 Cost Recovery

Other Governmental Funds 9,414 Cost Recovery

136,883

Laguna Ridge CFD General Fund 4,175 Cost Recovery


12,391

Other Governmental Funds General Fund 3,710,000 Police Funding

General Fund 1,411,143 Fund Closure

Other Governmental Funds 2,400,736 Cost Recovery

Other Governmental Funds 761,677 Debt Service

8,283,556

Solid Waste Fund General Fund 637,649 Cost Recovery

General Fund 258,669 Code Enforcement Services

896,318

Transit Fund General Fund 381,634 Cost Recovery


568,143

Drainage Fund General Fund 107,744 Cost Recovery


514,419

Internal Service Funds General Fund 522,822 Cost Recovery


Other Governmental Funds 933,585 Debt Service

1,483,420

14,289,397$

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Note 9: Excess Expenditures over Appropriations

For the year ended June 30, 2017, the following budgetary units had expenditures that

exceeded appropriations:

Fund Appropriations Expenditures Over

Special Revenue Funds

Recycling Grant Fund 31,228$ 35,231$ (4,003)$

CA Law Enforcement Equipment Fund 298,934 307,167 (8,233)

Capital Project Funds -

Federal Capital Grants Fund 1,510,589 1,510,591 (2)

In Lieu 187,229 187,371 (142)

Debt Service Fund 1,819,568 3,055,314 (1,235,746)

Note 10: Deficit Fund Balances

As of June 30, 2017, the following funds had deficit fund balances. The deficits occurred

because expenditures exceeded revenues. The City expects that future funding will reduce the

deficits.

Fund Deficit

Special Revenue:

Tire Collection Disposal Fund 5,892$ Result of timing difference between expenditures and the receipt of Grant funding.

Local Police Grants Fund 36,324 Result of timing difference between expenditures and the receipt of Grant funding.

Street Lighting Maintenance District Funds 3,020,529 Result of interfund loan for LED street light

replacement

Development Services Fund 364,556 Result of timing difference between expenditures

and the receipt of future development fees

Capital Projects:

Federal Capital Grants Fund 920,096 Result of timing difference between expenditures and the receipt of Grant funding.

Lakeside CFD Fund 8,039 Result of timing difference between expenditures,

will clear with future special tax revenue

Debt Service:

EG Finance Authority (EGFA) Fund 289,429 Result of timing difference between expenditures,

will clear with future special tax revenue

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Note 11: Other Postemployment Benefits Other than Pension Benefits

Plan Descriptions

The City provides three separate Other Post Employment Benefit (OPEB) plans for qualified

executive staff and employees who retire from the City. One OPEB plan is a single employer

defined benefit health reimbursement arrangement administered through the use of an OPEB

Trust Fund (the HRA Plan), the second plan is a defined contribution plan to which the City

and employees may contribute an amount each pay period to employee accounts (defined

contribution plan), and the third OPEB plan is a single employer defined benefit plan

providing a health insurance premium rate subsidy administered by California Public

Employees Retirement System (CalPERS) on behalf of the City (the Health Insurance Rate

Subsidy Plan).

Eligibility and Benefit Information of the HRA Plan

On August 22, 2007, the Elk Grove City Council adopted Resolution 2007-191 to establish

an IRS Section 115 Trust for the City’s HRA Plan, adopt eligibility criteria for employees to

participate in the plan and designated $1.5 million to prefund a portion of the future

liability. The financial statements for the HRA Plan are included in the Retirement Health

Trust Fund statement of fiduciary net position and statement of changes in fiduciary net

position. Separate financial statements are not issued for the HRA Plan.

The benefit provided by the HRA Plan to eligible retirees of the City (Councilmembers and

employees) is an irrevocable contribution of up to $800 per month for each covered employee

deposited into a health reimbursement account for use by the retiree and eligible dependents

to pay for medical expenses allowed under the Internal Revenue Code. On December 9,

2009, the City Council amended the HRA plan with Resolution 2009-266 which limited

employee eligibility in the HRA plan to employees within six years of CalPERS retirement

eligibility at July 1, 2009. At June 30, 2017, the City had 39 retirees who met eligibility

requirements for the HRA Plan, and the number of active plan members still employed was

17. The eligibility criteria for employees established under the plan agreement are as follows:

Executive staff who report directly to the City Council or the City manager who are

retiring from the City in the CalPERS retirement system, with at least 5 consecutive

years of service working with the City.

All other staff who are retiring from the City in the CalPERS retirement system, with

at least 10 consecutive years of service working with the City.

Employees who terminate before retirement with the City forfeit contributions upon

separation.

Eligibility and Benefit Information of the Defined Contribution Plan

Employees not meeting HRA plan eligibility have been enrolled in the Defined

Contribution Plan where the City contributes an amount per pay period to a deferred

compensation account with the HRA vendor in the employee’s name, which is fully vested

and has no funding liabilities. Employees are enrolled in this plan on their date of hire with

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58

no waiting period. Non Representative employees received an employer paid $100 per

pay period. Elk Grove Police Officers Association (EGPOA) employees covered by the

Memorandum of Understanding (MOU) contributions are structured as outlined in the

following tier structure.

Employee Age Employee Contribution Employer Contribution

34 and under $60.00 $70.00

35-39 $70.00 $80.00

40-44 $80.00 $90.00

45 and over $90.00 $100.00

The plan is administered by Health Secure HRA. Employee contributions for the fiscal year

totaled $404,125. Employer contributions of $704,435 were paid into the Defined

Contribution Plan. No liability for the defined contribution has been included in the

report since the City fully paid the annual required contribution. Since the assets held

under this plan are not the City’s property and are not subject to claims by general creditors

of the City, the assets have been excluded from these financial statements.

Eligibility and Benefit Information of the Health Insurance Rate Subsidy Plan

Under the Health Insurance Rate Subsidy Plan, the City provides retirees the ability to

continue their healthcare coverage under the City’s cafeteria plan at a cost to the retiree

equal to current eligible employees, which is administered by CalPERS. The City pays the

minimum mandatory Rate Subsidy amount required of State Statute. On February 26, 2014,

the Elk Grove City Council adopted Resolution 2014-44 to establish an IRS Section 115

Trust for the City’s Health Insurance Rate Subsidy Plan. The fiscal year 2016-17 Budget

programmed $32 per employee per pay period as planned funding for the existing plan’s

liability. The financial statements for the Health Insurance Rate Subsidy Plan are

included in the Retirement Health Trust fund statement of fiduciary net position and

statement of changes in fiduciary net position. Separate financial statements are not issued

for the Health Insurance Rate Subsidy Plan. The current rate subsidy is $128 per eligible

retiree per month.

At June 30, 2017, 320 employees were plan members.

Funding Policies

For all three OPEB plans, the contribution requirements of plan members and the City are

established and may be amended a) by the City Council through negotiations with the City’s

bargaining units, or b) by administrative directive for non-represented employees. Bi-

annually actuarial reports are prepared by an actuary that calculates the HRA and

Health Insurance Rate Subsidy plan annual required contributions (ARC) and the actuarial

accrued liability. New actuarial reports were prepared as of July 1, 2016. These amounts are

disclosed in the table that follows.

The following disclosures are for the HRA Plan and the Health Insurance Rate Subsidy

Plan only. These disclosures do not apply to the Defined Contribution Plan since it

CITY OF ELK GROVE


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59

does not have any defined benefit characteristics and no liability beyond the on-going

employer contribution.

Annual OPEB Cost and Net OPEB Obligations

The City’s annual OPEB cost (expense) is calculated based on the ARC. The ARC represents

a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each

year and to amortize any unfunded actuarial liabilities (or funding excess) of the plans over a

period not to exceed thirty years. The following table shows components of the City’s annual

OPEB cost for the year, the amount actually contributed to the OPEB plans, and changes in

the City’s net OPEB obligation to the plans:

Rate Total

HRA Plan Subsidy Plan OPEB Plans

Annual required contribution (ARC) 344,299$ 194,712$ 539,011$

Interest on net OPEB obligation (10,249) (15,022) (25,271)

Adjustment to annual required contribution 24,723 19,838 44,561

Annual OPEB cost (expense) 358,773 199,528 558,301

Contributions made 400,000 200,000 600,000

Increase in net OPEB asset 41,227 472 41,699

Net OPEB asset - beginning of year 186,353 250,359 436,712

Net OPEB asset- end of year 227,580$ 250,831$ 478,411$

Health Insurance

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to each OPEB

plan, and the net OPEB asset for the year ended June 30, 2017 and the two preceding years

were as follows:

Fiscal Percentage of Net OPEB

Year Annual Annual OPEB Asset

Ended OPEB Cost Cost Contributed (Obligation)

June 30, 2015 290,907$ 192% 163,715$

June 30, 2016 347,362 107% 186,353

June 30, 2017 358,773 111% 227,580

HRA Plan

Fiscal Percentage of

Year Annual Annual OPEB Net OPEB

Ended OPEB Cost Cost Contributed Obligation

June 30, 2015 211,315$ 414% 212,767$

June 30, 2016 173,708 122% 250,359

June 30, 2017 199,528 100% 250,831

Health Insurance Rate Subsidy Plan

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Funded Status and Funding Progress

The funded status of the plans as of June 30, 2017, based on the most recent roll forward

valuation date of November 2017 for both the HRA and the Health Insurance Rate Subsidy

Plan is as follows: Rate

HRA Plan Subsidy Plan

Total OPEB Liability 4,542,982$ 2,777,214$

Fiduciary Net Position 2,768,133 2,647,198

Net OPEB Liability 1,774,849$ 130,016$

Funded ratio (Fiduciary Net Position) 60.9% 95.3%

Covered payroll (active plan members) 1,495,962$ 27,743,749$

Net OPEB Liability as a percentage of covered payroll 118.6% 0.5%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts

and assumptions about the probability of occurrence of events far into the future.

Examples include assumptions about future employment, mortality, and the healthcare

cost trend. Actuarially determined amounts are subject to continual revision as actual results

are compared with past expectations and new estimates are made about the future. The

schedules of funding progress, presented as required supplementary information following

the notes to the financial statements, present multiyear trend information about whether the

actuarial values of plan assets are increasing or decreasing over time relative to the actuarial

accrued liabilities for benefits.

The actuarial assumptions for both OPEB plans were prepared using the entry age normal

cost method, allocating OPEB cost based on years of service and using the level dollar

amount method to allocate amortization cost by year. For the HRA Plan the actuary used a 10

year closed amortization period for the initial unfunded actuarial accrued liability (UAAL)

and a 10 year open amortization period for the residual. For the Health Insurance Rate

Subsidy Plan, the actuary used a 30 year closed amortization period for the initial UAAL and

a 24 year open amortization period for the residual, we are in year 7 of this schedule. The

valuation assumptions were based on the substantive plans. The formulations of the plans

were based on a review of written plan documents as well as historic information provided by

the City regarding practices and with respect to employer contributions and other relevant

factors. The actuarial assumptions for the HRA Plan included a 2.75% inflation rate, a 5.5%

investment rate of return, and a 2.75% per year payroll increases. The actuarial

assumptions for the Health Insurance Rate Subsidy Plan included a 2 .75% inflation rate,

a 6% investment rate of return, and 2.75% per year payroll increases. Health insurance

premium rate increases of 4% were used.

Additional Information for the HRA Trust Fund and Rate Subsidy Trust Fund

The City entered into the HRA Plan and Trust agreement on March 17, 2008. The irrevocable

trust issues a quarterly stand-alone Participant Activity Statement. The City entered into the

PARS Post-Retirement Health Care Plan Trust Agreement on March 4, 2014. The irrevocable

trust issues a monthly activity statement.

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Investments are reported at fair value based on quoted market prices of identical assets in

active markets as determined by the trustee. The account activity and investment allocation is

included in the monthly investment report to Council and can be viewed on the City’s website

at www.elkgrovecity.org under the Office of the City Clerk Agendas and Minutes. The

statement for the fiscal year ended June 30, 2017, is presented below:

HEALTH RETIREMENT ACCOUNT TRUST

Retirement HealthSecure HRA

Beginning

Balance Contributions Earnings/Loss DisbursementsTransfers

Administrative

Cost

Market

Value

Trust Investment Activity 2,454,215$ 400,000$ 185,597$ (266,052)$ -$ (5,627)$ 2,768,133$

RATE SUBSIDY TRUST

Post-Retirement Health Care

Beginning

Balance Contributions Earnings/Loss DisbursementsTransfers

Administrative

Cost

Market

Value

Trust Investment Activity 2,253,378$ 200,000$ 207,963$ (6,041)$ -$ (8,102)$ 2,647,198$

Net OPEB Liability

The City’s HRA and Rate Subsidy Plans discussed above are required to implement the provisions of

Governmental Accounting Standards Board Statement No. 74 in fiscal year 2017, which requires the

following additional disclosures:

Plan Administration – The City is the Plan administrator. PARS administers the investment trust for

the HRA Plan and ICMA administers the investment trust for the Rate Subsidy OPEB Plans.

Plan Membership – As of June 30, 2017, membership in the Plans consisted of the following;

Rate


Retirees and beneficiaries receiving benefits 33 21

Terminated plan members entitled to, but

not yet receiving benefits - -

Active plan members 23 299

Total Number of Participants 56 320

Investment Policy – PARS and ICMA offer different investment portfolios as part of the investment

vehicle. The investments held as of June 30, 2017 are included in Note 2.

Rate of Return - For the year ended June 30, 2017, the annual money-weighted rate of return on

investments, net of investment expense, was 5.64% for the HRA Plan and 4.70% for the Rate Subsidy

Plan. The money-weighted rate of return expresses investment performance, net of investment

expense, adjusted for the changing amounts actually invested.

Net OPEB Liability – The components of the net OPEB liability of the City at June 30, 2017, were as

follows:

CITY OF ELK GROVE


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Rate


Total OPEB Liability 4,542,982$ 2,777,214$

Plan Fiduciary Net Position (2,768,133) (2,647,198)

Net OPEB Liability 1,774,849$ 130,016$

Plan Fiduciary Net Position as a Percentage

of the Total OPEB Liability 60.93% 95.32%

Actuarial Assumptions - The total OPEB liabilities for the HRA Plan and Rate Subsidy Plan were

determined by actuarial valuations as of June 30, 2016 and July 1, 2016, respectively, rolled forward

to June 30, 2017 using standard update procedures. The valuations used the following actuarial

assumptions, applied to all periods included in the measurement, unless otherwise specified:

Rate


Inflation 2.75% 2.75%

Salary Increases 2.75% 2.75%

Investment Rate of Return 5.5%, net of OPEB plan investment expenses 6.0%, net of OPEB plan investment expensesHealthcare Cost Trend Rates 4.00% 4.00%

Mortality Tables

2014 CalPERS Mortality for Active Safety

Employees and Active Miscellaneous

Employees

2014 CalPERS Mortality for Active Safety

Employees and Active Miscellaneous

Employees

The long-term expected rate of return on OPEB plan investments was determined using a building-

block method in which best-estimate ranges of expected future real rates of return (expected returns,

net of OPEB plan investment expense) are developed for each major asset class. These ranges are

combined to produce the long-term expected rate of return by weighting the expected future real rates

of return by the target asset allocation percentage and by adding expected inflation. The best

estimates of arithmetic real rates of return for each major asset class included in the target asset

allocation as of June 30, 2017 are summarized in the following table:

Asset Class

Percentage of

Portofolio

Assumed Gross

Rate of Return

Percentage of

Portofolio

Assumed Gross

Rate of Return

Equities 50% 7.00%

Fixed Income 50% 4.00%

All US Domestic Stock 60% 7.795%

Long-Term Corporate Bonds 40.0% 5.295%

Rate

Subsidy PlanHRA Plan

Discount rate - The discount rates used to measure the total OPEB liabilities as of June 30, 2017 were

5.5% and 6.0% for the HRA Plan and Rate Subsidy Plan, respectively. The projection of cash flows

used to determine the discount rate assumed that City contributions will be made at rates equal to the

actuarially determined contribution rates. Based on those assumptions, the OPEB plans’ fiduciary net

position was projected to be available to make all projected future benefit payments of current plan

members. Therefore, the long term expected rate of return on OPEB plan investments was applied to

all periods of projected benefit payments to determine the total OPEB liabilities.

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate - The following presents the

net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were

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63

calculated using the discount rate that is 1-percentage-point lower or 1-percentage point higher than

the current discount rate:

1% Decrease Discount Rate 1% Increase

4.50% 5.50% 6.50%

Net OPEB Liability (Asset) 2,298,896$ 1,774,849$ 1,337,049$


5.00% 6.00% 7.00%

Net OPEB Liability (Asset) 666,715$ 130,016$ (293,665)$

HRA Plan

Rate Subsidy Plan

Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates - The following

presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if

it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-

point higher than the current healthcare cost trend rates:


Net OPEB Liability (Asset) 1,774,797$ 1,774,849$ 1,774,797$


Net OPEB Liability (Asset) (321,600)$ 130,016$ 693,139$

HRA Plan

Rate Subsidy Plan

Note 12: Defined Benefit Pension Plan

Plan Description

All qualified permanent and probationary employees are eligible to participate in the Public

Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (the Plan),

administered by the California Public Employees’ Retirement System (CalPERS). The Plan

consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a

miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer

rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or

miscellaneous pools are not separate plans under GASB State No. 68. Individual employers

may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City

sponsors 6 rate plans (three miscellaneous and three safety). Benefit provisions under the

Plan are established by State statute and City resolution. CalPERS issues publicly available

reports that include a full description of the pension plan regarding benefit provisions,

assumptions and membership information that can be found on the CalPERS website.

Benefits Provided

The Plan provides service retirement and disability benefits, annual cost of living adjustments

and death benefits to plan members, who must be public employees and beneficiaries.

Benefits are based on years of credited service, equal to one year of full time employment.

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64

Classic members and PEPRA Safety members with five years of total service are eligible to

retire at age 50 with statutorily reduced benefits. PEPRA Miscellaneous members with five

years of total service are eligible to retire at age 52 with statutorily reduced benefits. All

members are eligible for non-duty disability benefits after five years of service. The death

benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the

Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are

applied as specified by the Public Employees’ Retirement Law.

The Plans’ provisions and benefits in effect at June 30, 2017, are summarized as follows:

Employer rate plan

Classic

Miscellaneous

Miscellaneous

Second Tier

PEPRA

Miscellaneous

Hire date

Prior to

August 12, 2012

On or after

August 12, 2012*

On or after

January 1, 2013*

Benefit formula 2.7% @ 55 2.0% @ 55 2.0% @ 62

Benefit vesting schedule 5 years of service 5 years of service 5 years of service

Benefit payments Monthly for life Monthly for life Monthly for life

Retirement age 50-55 50-63 52-67

Monthly benefits, as of % of eligible

compensation 2.0% to 2.7% 1.426% - 2.418% 1.0% to 2.5%

Required employee contribution rates 8.00% 7.00% 6.25%

Required employer contribution rates 11.634% 8.880% 6.555%

Employer Rate Plans in the Miscellaneous Risk Pool

Safety Police Safety Police Second Tier PEPRA Safety Police

Classic

Hire date

Prior to

August 12, 2012

On or after

August 12, 2012*

On or after

January 1, 2013*

Benefit formula 3.0% @ 50 3.0% @ 55 2.7% @ 57

Benefit vesting schedule 5 years of service 5 years of service 5 years of service

Benefit payments Monthly for life Monthly for life Monthly for life

Retirement age 50 50-55 50-57

Monthly benefits, as of % of eligible

compensation 3.0% 2.4% to 3.0% 2.0% to 2.7%

Required employee contribution rates 9.00% 9.00% 11.50%

Required employer contribution rates 19.536% 17.689% 12.082%

Employer Rate Plans in the Safety Risk Pool

*Employees hired on or after January 1, 2013, enter the City’s second tier or PEPRA plans depending on previous

experience. Employees who were previously participating in a PEPRA plan through CalPERS, or who were not

participating in any CalPERS plan within six months prior to hire date, are enrolled in the City’s PEPRA Miscellaneous or

PEPRA Safety Police rate plans. Employees who were participating in a non-PEPRA CalPERS plan within six months prior

to hire date are enrolled in the City’s Miscellaneous or Safety Police Second tier plans.

Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a

percentage of payroll for the normal cost portion as noted in the rates above and as a dollar

amount for contributions toward the unfunded liability. The dollar amount is billed on a

monthly basis. The City’s required contribution for the unfunded liability was $476,130 in

fiscal year 2017.

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Contributions

Section 20814(c) of the California Public Employees’ Retirement Law requires that the

employer contribution rates for all public employers are determined on an annual basis by the

actuary and shall be effective on the July 1 following notice of a change in the rate.

Contribution rates for the employer rate plans are determined through the CalPERS’ annual

actuarial valuation process. Each employer rate plan’s actuarially determined rate is based on

the estimated amount necessary to pay the employer rate plan’s allocated share of the cost of

benefits earned by employees during the year, and any unfunded accrued liability. The City is

required to contribute the difference between the actuarially determined rate and the

contribution rate of employees. The City’s contributions to the Plan for the year ended June

30, 2017 were:

Contributions

Legally requried 3,518,175$

Additional contributions 1,221,262

Total contributions 4,739,437$

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources

Related to Pensions

As of June 30, 2017, the City reported a net pension liability for its proportionate share of the

net pension liability of the Plan of $14,525,447.

The City’s net pension liability for the Plan is measured as the proportionate share of the net

pension liability. The net pension liability of the Plan I s measured as of June 30, 2016, and

the total pension liability for the Plan used to calculate the net pension liability was

determined by the actuarial valuation as of June 30, 2015 rolled forward to June 30, 2016

using standard update procedures. The City’s proportion of the net pension liability was

based on a projection of the City’s long-term share of contributions to the Plan relative to the

projected contributions of all participating employers, actuarially determined. The City’s

proportionate share of the net pension liability for the Plan as of June 30, 2015 and 2016 was

as follows:

Plan

Proportion - June 30, 2015 0.16807%

Proportion - June 30, 2016 0.16786%

Change - increase (decrease) -0.00021%

For the year ended June 30, 2017, the City recognized pension expense of $1,659,990. At

June 30, 2017, the City reported deferred outflows of resources and deferred inflows of

resources related to pensions from the following sources:

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66

Deferred

Outflows of

Resources

Deferred

Inflows of

Resources

Pension contributions subsequent to measurement date 4,739,437$ -$

Changes in assumptions (1,215,159)

Differences between expected and actual experience 51,707 (178,350)

Changes in proportion and differences between the

City’s contributions and the City’s proportionate share

of contributions 6,523,788 (2,467,644)

Net differences between projected and actual earnings

on plan investments 6,112,726 -

Total 17,427,658$ (3,861,153)$

$4,739,437 reported as deferred outflows of resources related to legally required and

additional contributions subsequent to the measurement date will be recognized as a

reduction of the net pension liability in the year ended June 30, 2018. Other amounts

reported as deferred outflows of resources and deferred inflows of resources related to

pensions will be recognized as pension expense as follows:

Year Ended

June 30

2018 $ 2,647,132

2019 2,186,020

2020 2,405,949

2021 1,587,967

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67

Actuarial Assumptions

The total pension liabilities in the June 30, 2015 actuarial valuations were determined using

the following actuarial assumptions:

Valuation Date June 30, 2015

Measurement Date June 30, 2016

Actuarial Cost Method Entry-Age Normal

Actuarial Assumptions:

Discount Rate 7.65%

Inflation 2.75%

Salary Increases

Varies by Entry Age and

Service

Investment Rate of Return(1)

7.65%

Mortality Rate Table(2)

Derived using CalPERS’

Membership Data

(1)

Net of pension plan investment expenses, including inflation (2)

The mortality table used was developed based on CalPERS specific

data. The table includes 20 years of mortality improvements using Society

of Actuaries Scale BB. For more details on this table, see to the 2014

experience study on the CalPERS website.

Discount Rate

The discount rate used to measure the total pension liability was 7.65% for the Plan. To

determine whether the municipal bond rate should be used in the calculation of a discount

rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate

that would be different from the actuarially assumed discount rate. Based on the testing, none

of the tested plans run out of assets. Therefore, the current 7.65% discount rate is adequate

and the use of the municipal bond rate calculation is not necessary. The long term expected

discount rate of 7.65% will be applied to all plans in the Public Employees Retirement Fund

(PERF). The stress test results are presented in a detailed report that can be obtained from the

CalPERS website.

The long-term expected rate of return on pension plan investments was determined using a

building-block method in which best-estimate ranges of expected future real rates of return

(expected returns, net of pension plan investment expense and inflation) are developed for

each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-

term and long-term market return expectations as well as the expected pension fund cash

flows. Such cash flows were developed assuming that both members and employers will

make their required contributions on time and as scheduled in all future years. Using

historical returns of all the Plan’s asset classes, expected compound (geometric) returns were

calculated over the short-term (first 10 years) and the long-term (11-60 years) using a

building-block approach. Using the expected nominal returns for both short-term and long-

CITY OF ELK GROVE


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68

term, the present value of benefits was calculated. The expected rate of return was set by

calculating the single equivalent expected return that arrived at the same present value of

benefits for cash flows as the one calculated using both short-term and long-term returns. The

expected rate of return was then set equivalent to the single equivalent rate calculated above

and rounded down to the nearest one quarter of one percent.

The table below reflects the long-term expected real rate of return by asset class. The rate of

return was calculated using the capital market assumptions applied to determine the discount

rate and asset allocation. These geometric rates of return are net of administrative expenses.

Asset Class

New

Strategic

Allocation

Real Return

Years 1 –

10(a)

Real Return

Years 11+(b)

Global Equity 51.0% 5.25% 5.71%

Global Debt Securities 20.0% 0.99% 2.43%

Inflation Assets 6.0% 0.45% 3.36%

Private Equity 10.0% 6.83% 6.95%

Real Estate 10.0% 4.50% 5.13%

Infrastructure and Forestland 2.0% 4.50% 5.09%

Liquidity 1.0% (0.55)% (1.05)%

Total 100%

(a)

An expected inflation of 2.5% used for this period. (b)

An expected inflation of 3.0% used for this period.

Sensitivity of the City’s Proportionate Share of the Net Pension Liability to Changes in

the Discount Rate

The following presents the City’s proportionate share of the net pension liability for the Plan,

calculated using the discount rate for the Plan, as well as what the City’s proportionate share

of the net pension liability would be if it were calculated using a discount rate that is 1

percentage-point lower or 1 percentage-point higher than the current rate:

Discount Rate –1%

(6.65%)

Current

Discount Rate

(7.65%)

Discount Rate +1%

(8.65%)

City’s proportionate share’s net

pension liability $ 25,671,542

$ 14,525,447

$ 5,350,393

Pension Plan Fiduciary Net Position

Detailed information about the Plan’s fiduciary net position is available in the separately

issued CalPERS financial reports.

CITY OF ELK GROVE


June 30, 2017

69

Note 13: Deferred Compensation Plan

City employees may defer a portion of their compensation under a City sponsored deferred

compensation plan created in accordance with Internal Revenue Code Sections 457 and

414(h). Under these plans, participants are not taxed on the deferred portion of their

compensation until distributed; distributions may be made only at termination, retirement,

death or in an emergency as defined by the plan. The City will match up to 2%, 3%, 4% or

6% of the covered payroll as a benefit under Internal Revenue Code Section 401(a). For the

2016-17 fiscal year the City’s matching contribution was $663,606.

The laws governing deferred compensation plan assets dictate that they be held in a Trust for

the exclusive benefit of plan participants and their beneficiaries. Since the assets held under

this plan are not the City’s property and are not subject to claims by general creditors of the

City, they have been excluded from these financial statements.

Note 14: Risk Management

Insurance Coverage

General Liability, Property, Pollution Liability, and Cyber Liability Coverage:

The City is exposed to various risks of loss related to torts; theft of, damage to, and

destruction of assets; errors and omissions; injuries to employees; and natural disasters. The

City reports all insurance expense in the Risk Management internal service fund. The City

has had no settlements exceeding insurance coverage in the last three fiscal years.

The City participates in a joint venture under a Joint Powers Agreement (JPA) with the

California State Association of Counties – Excess Insurance Authority (CSAC-EIA).

Established in 1979, CSAC-EIA is a risk pooling authority comprised of 55 of 58 California

counties and provides viable and cost effective solutions for the entities’ insurance and risk

management needs. The purpose of CSAC-EIA is to spread the adverse effect of losses

among the member entities and to purchase excess insurance as a group, thereby reducing its

costs. The City is part of the General Liability I program (which includes Errors and

Omissions coverage and Employment Liability coverage). CSAC-EIA also provides the City

with property, pollution, cyber liability, and crime bond insurance.

CSAC-EIA is governed by a 65 member Board of Directors, composed of one representative

from each member county and ten members elected by the public entity membership. The

Board members actively participate in the development, oversight and future direction of the

EIA’s programs and services. The entire Board meets three times a year, on the first Friday of

March, June and October. Each member entity pays a contribution commensurate with the

level of coverage provided and shares surpluses and deficits proportionate to their

participation.

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70

Complete financial information for CSAC-EIA is available on their website www.csac-

eia.org and at the following address:

CSAC-Excess Insurance Authority

750 Iron Point Circle, Suite 200

Folsom, CA 95630

The City’s deductibles and maximum coverage follows:

Self-Insured

Retention

Limit Per

Occurrence Aggregate

General Liability Coverage $ 50,000 $25,000,000 $ 25,000,000

Property Coverage

All Risk 5,000 25,000,000 600,000,000

Auto 20,000 25,000,000 600,000,000

Buses 100,000 25,000,000 600,000,000

Crime Coverage 2,500 1,000,000 1,000,000

Pollution Coverage 100,000 10,000,000 100,000,000

Cyber Liability Coverage 50,000 2,000,000 20,000,000

General Liability claims and judgments, including a provision for claims incurred but not

reported, are recorded when a loss is deemed probable of assertion and the amount of the loss

is reasonably determinable. As discussed above, the City has coverage for such claims, but it

has retained the risk for the deductible or uninsured portion of these claims.

Changes in the reported liability resulted from the following:

General

Liability

Liability at June 30, 2015 92,100$

Claims and changes in estimates 391,000


Claims and changes in estimates (61,946)


Crime Coverage

Crime Insurance is secured through the Alliant Crime Insurance Program and provides the

City with $1,000,000 of per occurrence coverage and in the aggregate, and a deductible of

$2,500.

Fiduciary Coverage

Fiduciary Liability Insurance for the City’s 457, 401(a) and OPEB plans is secured through

Alliant Insurance Services and provides the City with $2,000,000 in the aggregate and a

retention of $10,000.

http://www.csac-eia.org/

http://www.csac-eia.org/

CITY OF ELK GROVE


June 30, 2017

71

Worker’s Compensation Coverage

The City participates in a joint venture under a Joint Powers Agreement with the Northern

California Cities Self-Insurance Fund (NCCSIF). Established in 1979, NCCSIF is a risk

pooling authority comprised of 22 northern California cities. The purpose of NCCSIF is to

spread the adverse effect of losses among the member entities and to purchase excess

insurance as a group, thereby reducing its costs. The City is part of NCCSIF Workers’

Compensation Program.

NCCSIF’s most recent financial information is available from:

Alliant Insurance Services

1892 Tribute Rd

Sacramento, CA 95815

The total limit of liability provided under the Workers’ Compensation Program is Statutory

for Workers’ Compensation and $5,000,000 for Employers’ Liability. The program is

divided into three separate coverage layers – Banking Fund, Shared Risk and Excess

Coverage – as noted below:

Banking Fund $0 - $100,000

Shared Risk $100,000 - $500,000

Excess Coverage $500,000 – Statutory / Workers’ Compensation

$500,000 - $5,000,000 / Employers’ Liability

The Banking Fund and the Shared Risk are self-insurance. The Excess Coverage is currently

provided through participation in an excess workers’ compensation joint powers authority,

CSAC-EIA. CSAC-EIA shares risk up to $5,000,000 and purchases excess and reinsurance

coverage over that amount.

Activity for the City’s banking layer administered by NCCSIF for the years ended June 30,

2017 is as follows:

Balance

6/30/2016

Deposits &

Other

Income

Investment

Income &

FMV

Change

Claims

Paid Net of

Refunds

Claims

Admin. &

Other Exp

Balance

6/30/2017

Worker's

Compensation 129,918$ 695,305$ 2,412$ (328,220)$ (41,439)$ 457,976$

CITY OF ELK GROVE


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72

Note 15: Commitments

Construction and Acquisition Commitment

The City has signed agreements for construction of various capital improvements and

acquisition of capital assets subsequent to June 30, 2017. The balances owed on the existing

construction and acquisition commitments were $45,419,765 million at June 30, 2017.

The City also contracts out its public works department for project management on the

construction agreements. The City pays the contractor based on hourly rates ranging from

$32 to $149 per hour for Federal/State funded project management services. For non-

Federal/State, the hourly rates range from $32 to $178 per hour.

Revenue Neutrality Agreement

The City and the County of Sacramento (County) entered into an agreement pursuant to

Government Code Section 56845. As a means of mitigating the financial impacts of the

incorporation upon the County’s general fund, the City shall share its secured and unsecured

ad valorem property taxes levied and collected pursuant to state law within the City’s

corporate limits. All costs and expenses associated with the collection, administration and

interest earning capabilities of the City property tax revenue shall be shared by the City and

the County in accordance with the same percentages as the underlying property taxes with the

exception of the Laguna West Annexation property tax allocation which is not subject to the

Revenue Neutrality Agreement.

The County’s share of the City’s property tax revenue shall be allocated by the County’s

Director of Finance directly to the County. The following table lists the remaining allocation

percentages for years June 30, 2018 through June 30, 2026:

County City

Year Fiscal Year Share Share

18 2017/2018 75% 25%

19 2018/2019 70% 30%

20 2019/2020 60% 40%

21 2020/2021 50% 50%

22 2021/2022 40% 60%

23 2022/2023 30% 70%

24 2023/2024 20% 80%

25 2024/2025 10% 90%

26 2025/2026 00% 100%

As part of the revenue neutrality agreement, the City paid to the County $6,768,126 during

the fiscal year ended June 30, 2017.

CITY OF ELK GROVE


June 30, 2017

73

Pledged Revenue

The City through agenda item 7.2 dated July 11, 2007 has pledged future sales tax revenue in

the amount of $3,011,206 to repay the Roadway Fee fund for credits granted by the City

Council to encourage and stimulate participation in the Promenade Mall project to be built

adjacent to the Grant Line Road /Highway 99 interchange. Project ownership has

subsequently changed and the new owner’s projected construction will begin next year. Sales

tax generation would follow after the project opening.

Note 16: Contingent Liabilities

Litigation

The City has various pending claims and lawsuits the outcome of which is not determinable at

the time of these financial statements. In the opinion of the legal counsel, there is no pending

litigation which is likely to have a material adverse effect on the financial position of the City.

Note 17: Restatements of Net Position and Fund Balance

During fiscal year 2017, the City adopted revised accounting policies and made other

corrections that resulted in restatements to beginning net position or fund balance. Below is a

summary of those restatements, which are described in detail following the table:

Governmental Governmental Agency

Activities Funds Funds

Beginning balances as previously reported $1,212,789,360 $235,015,664 $15,849,908

Restatements:

Reclassification of Debt Without City Commitment:

Cash and investments (10,323,840) (10,323,840) 10,323,840

Cash with fiscal agent (237) (237) 237

Accounts receivable (243,435) (243,435) 243,435

Due from other government agencies (78,101) (78,101) 78,101

Unavailable revenue - 336,030 -

Interest payable 1,680,380 - -

Deferred amount on refunding (3,339,624) - -

Long-term debt 100,076,895 - -

Future sales tax receivable (3,011,206) (3,011,206) -

Unavailable revenue - 3,011,206 -

Beginning balance, as restated $1,297,550,192 $224,706,081 $26,495,521

Reclassification of Debt Without City Commitment – As discussed in Note 6, the City

reviewed its responsibilities with respect to the various Community Facilities District special

tax assessment bonds and determined that the City has no legal or moral liability for the

special tax assessment debt issued by the districts. As a result, the balances related to assets

and liabilities of those districts are now reported as Agency Funds.

Future Sales Tax Receivable – During fiscal year 2017, City staff determined that the pledge

of future sales tax revenue that had been recorded as a receivable in the Roadway Fee Fund,

offset with unavailable revenue, in the amount of $3,011,206 was contingent upon the

CITY OF ELK GROVE


June 30, 2017

74

regional mall project that had not yet begun. As a result, the receivable and unavailable

balances have been reduced and restated in that amount.

Note 18: Subsequent Events

CalPERS Discount Rate

In December 2016, CalPERS Board of Directors voted to lower the discount rate used in its

actuarial valuations from 7.5% to 7.0% over three fiscal years, beginning in fiscal year 2018.

In addition, the impact of a lowered discount rate is further phased over a five year period.

Therefore, the full impact of the discount rate won’t be experienced until fiscal year 2024-25.

The change in the discount rate will affect the contribution rates for employers beginning in

fiscal year 2019, and result in increases to employers’ normal costs and unfunded actuarial

liabilities.

Governor Approved Wilton Rancheria

Governor Jerry Brown signed Assembly Bill 1606, giving the Wilton Rancheria Tribe the go-

ahead to build a $400 million entertainment and gaming facility in Elk Grove. The Wilton

Rancheria Casino will be built on 36 acres of land near Highway 99 and Kammerer Road. It

will include a 12-story resort and casino, complete with 300 rooms and 30,000 square-feet of

event space. The project will create more than 1,600 construction jobs, 1,750 full-time casino

and hotel jobs and 3,000 other direct and indirect jobs. There has been legal actions filed that

challenge the actions that placed the land in trust that resulted in the tribes ability to construct

and operate the casino.

Utility Billing Republic

Republic Services is the City’s franchisee for residential/solid waste hauler and during fiscal

year 2017 the City and Republic Services agreed to transition Utility Billing (solid waste and

drainage billing) to Republic Services on July 1, 2017. The bills will be issued by Republic

and payments can be made directly to Republic. The City will continue to be a payment

service option for customers who prefer to ‘walk in’ a payment in the City.

Purchase of Los Rios Land

On June 28, 2017 City Council approved the purchase of surplus real property from the Los

Rios Community College District. This property acquisition is planned to be a potential

solution for park land in Laguna Ridge. The cost to purchase the property is approximately

$3.25 million and a resolution authorizing reimbursement from a future debt issuance was

also approved. The proposed bond issuance to fund the Animal Shelter would be increased to

replenish the funding for the Los Rios land acquisition. The annual estimated debt service for

the land acquisition portion of the debt is estimated to be $235,000 and the expected term is

20 years. Because the acquisition is intended to satisfy Laguna Ridge park land needs, the

debt service will be eligible to be funded from the Laguna Ridge Supplemental Park Fee and

the Laguna Ridge Quimby In-Lieu Land Fee. Although the general fund is a secondary and

contingent funding source, it is expected that the general fund will be relied on in the early

years of the debt service schedule to advance funding for the parks fund until the park fund

CITY OF ELK GROVE


June 30, 2017

75

has accumulated sufficient fee activity to be the primary funding source.

Note 19: Future GASB Pronouncements

In June 2015, the GASB approved Statement No. 75, Accounting and Financial Reporting

for Postemployment Benefits Other Than Pensions. This Statement establishes standards for

measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of

resources, and expense/expenditures related to other postemployment benefits other than

pensions(OPEB). This Statement also addresses footnote disclosures and required

supplementary information requirements for defined benefit OPEB plans. The alternative

measurement method for OPEB plans will still be available under this Statement for

employers with fewer than 100 employees (active and inactive). The provisions of this

Statement are effective for periods beginning after June 15, 2017.

The City is currently evaluating the impact of other new GASB Statements issued or

effective subsequent to June 30, 2017.

76



REQUIRED SUPPLEMENTARY

INFORMATION

(UNAUDITED)

77

Variance with

Actual Final Budget

REVENUES Original Final Amounts Positive (Negative)

Taxes:

Property taxes 22,972,000$ 22,972,000$ 23,670,228$ 698,228$

Sales and use tax 23,625,000 25,000,000 25,535,498 535,498

Utility users' tax 6,171,600 6,171,600 5,681,559 (490,041)

Transient occupancy tax 2,028,000 2,028,000 2,130,201 102,201

Property transfer tax 798,000 798,000 844,471 46,471

Franchise tax 1,323,000 1,323,000 1,535,587 212,587

Licenses, fees and permits 519,300 519,300 607,404 88,104

Intergovernmental - - 442,673 442,673

Fines and forfeitures 391,330 391,330 354,504 (36,826)

Charges for services 125,000 125,000 100,675 (24,325)

Use of money and property 567,748 567,748 29,324 (538,424)

Other revenue 896,050 896,050 947,939 51,889

Total Revenues 59,417,028 60,792,028 61,880,063 1,088,035

EXPENDITURES

General Government:

City Council 740,145 740,145 290,311 449,834

Planning Commission 21,202 21,202 14,504 6,698

Economic Development 668,330 768,330 432,558 335,772

City Manager 3,494,586 3,606,357 3,244,994 361,363

City Attorney 1,070,449 1,070,449 1,090,699 (20,250)

City Clerk 612,240 612,240 574,829 37,411

Finance 2,107,948 2,107,950 1,920,787 187,163

Human Resources 776,981 776,981 674,644 102,337

Other - Non-Departmental 7,960,707 9,335,279 8,301,142 1,034,137

Revenue Neutrality 6,938,903 6,938,903 6,768,126 170,777

Total General Government 24,391,491 25,977,836 23,312,594 2,665,242

Public Safety:

Law Enforcement 38,289,061 37,383,208 35,218,555 2,164,653

Total Public Safety 38,289,061 37,383,208 35,218,555 2,164,653

Community Development

Code Enforcement 969,509 969,509 961,206 8,303

Community Grants 370,000 370,000 333,392 36,608

Total Community Development 1,339,509 1,339,509 1,294,598 44,911

Capital Outlay 319,395 488,306 488,306 -

Total Expenditures 64,339,456 65,188,859 60,314,053 4,874,806

Excess (Deficiency) of Revenues

Over (Under) Expenditures (4,922,428) (4,396,831) 1,566,010 5,962,841


Transfers in 7,464,888 8,813,136 6,902,636 (1,910,500)

Transfers out (3,041,457) (4,946,827) (2,093,362) 2,853,465

Total Other Financing Sources (Uses) 4,423,431 3,866,309 4,809,274 942,965

Net Change in Fund Balance (498,997) (530,522) 6,375,284 6,905,806

Fund Balance, Beginning 27,941,045 27,941,045 27,941,045 -

Fund Balance, Ending 27,442,048$ 27,410,523$ 34,316,329$ 6,905,806$

CITY OF ELK GROVE

Budgetary Comparison Schedule

General FundFor the Year Ended June 30, 2017

Budgeted Amounts

78


Affordable Housing Fund


Variance with

Original Final Final Budget

Budgeted Budgeted Actual Positive

Amounts Amounts Amounts (Negative)

Revenues:

Licenses, fees and permits 2,797,050$ 2,797,050$ 1,262,349$ (1,534,701)$

Use of money and property 365,000 365,000 551,234 186,234

Total Revenues 3,162,050 3,162,050 1,813,583 (1,348,467)

Expenditures:

Current:

Community development 7,354,936 7,354,936 13,467 7,341,469

Total Expenditures 7,354,936 7,354,936 13,467 7,341,469


Over (Under) Expenditures (4,192,886) (4,192,886) 1,800,116 5,993,002

Net Change in Fund Balance (4,192,886) (4,192,886) 1,800,116 5,993,002

Fund Balance, Beginning as restated 73,557,161 73,557,161 73,557,161 -

Fund Balance, Ending 69,364,275$ 69,364,275$ 75,357,277$ 5,993,002$

CITY OF ELK GROVE

Major Special Revenue Fund

79

CITY OF ELK GROVE

Notes to Budgetary Comparison Statements


BUDGETS AND BUDGETARY ACCOUNTING

The City follows these procedures in establishing the budgetary data reflected in the financial

statements:

1. The City manager submits to the City Council a proposed operating budget for the fiscal

year commencing the following July 1. The operating budget includes proposed

expenditures and the means of financing them.

2. Public hearings are conducted to obtain taxpayer comments.

3. The budget is legally enacted through passage of a minute order.

4. Budget adjustments from restricted and unrestricted fund balance and between funds are

approved by the City Council and budget transfers within fund or department are approved

by City Manager. Expenditures may not legally exceed budgeted appropriations.

5. Budgets are adopted for the General Fund, Special Revenue Funds, Capital Project Funds

and Debt Service Funds.

6. Formal budgetary integration is employed as a management control device during the year

in all funds except Agency Funds.

7. Budgets are adopted on a basis consistent with generally accepted accounting principles

(GAAP) for all funds, except capital projects reported in the Capital Project Funds, which

are budgeted on a project length basis.

8. Encumbrances represent commitments related to unperformed contracts for goods and

services. Encumbrances outstanding at year end are reported as assignment of fund balance

and do not constitute expenditures or liabilities because the commitment will be honored in

the subsequent year.

80

Actuarial

Actuarial Accrued Unfunded UAAL as a

Actuarial Value of Liability (AAL) AAL Funded Covered % of Covered

Valuation Assets Entry age (UAAL) ratio payroll Payroll

Date (a) (b) (b-a) (a/b) (c) ([b-a]/c)

4/1/2014 1,822,710$ 3,099,285$ 1,276,575$ 58.8% 2,936,545$ 43.5%

4/1/2016 2,412,211 4,474,443 2,062,232 53.9% 2,350,212 87.7%

11/1/2017 2,768,133 4,542,982 1,774,849 60.9% 1,495,962 118.6%

Actuarial

Actuarial Accrued Unfunded UAAL as a

Actuarial Value of Liability (AAL) AAL Funded Covered % of Covered

Valuation Assets Entry age (UAAL) ratio payroll Payroll

Date (a) (b) (b-a) (a/b) (c) ([b-a]/c)

4/1/2014 1,100,694$ 1,745,370$ 644,676$ 63.1% 25,034,414$ 2.6%

4/1/2016 2,140,904 2,293,291 152,387 93.4% 25,951,320 0.6%

11/1/2017 2,647,198 2,777,214 130,016 95.3% 27,743,749 0.5%

1 - The City amended the HRA plan in the year ended June 30, 2010 limiting the active plan members,

thereby reducing the AAL and the covered payroll. This plan is not available to full time employees

hired after June 30, 2010 per resolution No 2009-266, dated December 9, 2009. As of June 30, 2017,

there are 16 active plan members and 40 retirees.

Health Insurance Rate Subsidy Plan

CITY OF ELK GROVE

Required Supplementary Information

Schedule of Funding Progress for OPEB Plans

June 30, 2017

HRA Plan (1)

81

Schedule of Changes in the City's

Net OPEB Liabilities and Related Ratios

Last Ten Fiscal Years (1)

For the Measurement Period Ended June 30 2017

Rate Subsidy

HRA Plan Plan

Total OPEB Liability

Service Cost $73,770 $172,842

Interest 241,901 152,480

Changes of benefit terms - -

Differences between expected and actual experience - -

Changes of assumptions - -

Benefit Payments (266,052) (6,041)

Net change in Total OPEB Liability 49,619 319,281

Total OPEB Liability at beginning of year 4,493,363 2,457,933

Total OPEB Liability at end of year $4,542,982 $2,777,214

Plan Fiduciary Net Position

Contributions - employer $400,000 $200,000

Contributions - member - -

Net investment income 185,597 207,963

Benefit payments (266,052) (6,041)

Administrative expenses (5,627) (8,102)

Net change in Plan Fiduciary Net Position 313,918 393,820

Plan Fiduciary Net Position at beginning of year 2,454,215 2,253,378

Plan Fiduciary Net Position at end of year $2,768,133 $2,647,198

Net OPEB Liability (Asset) at end of year $1,774,849 $130,016

Plan's Fiduciary Net Position as percentage of Total OPEB Liability 60.9% 95.3%

Covered-employee payroll $1,495,962 $27,743,749

Net OPEB Liability as percentage of covered-employee payroll 118.64% 0.47%

Notes:

(1) Fiscal year 2017 was the first year of implementation

CITY OF ELK GROVE

82

Schedule of City Contributions


For the Fiscal Year Ended June 30 2017

Rate Subsidy

HRA Plan Plan

Actuarially Determined Contributions $344,299 $194,712

Employer Contributions 400,000 200,000

Contribution Deficiency (Excess) ($55,701) ($5,288)

Covered-Employee Payroll $1,495,962 $27,743,749

Contributions as percentage of

covered-employee payroll 26.74% 0.72%

Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Valuation date July 1, 2016 July 1, 2016

Actuarial cost method Entry age normal Entry age normal

Inflation 2.75% 2.75%

Salary Increases 2.75% 2.75%

Investment Rate of Return 5.5%, net of OPEB plan

investment expenses

6.0%, net of OPEB plan

investment expenses

Healthcare Cost Trend Rates 4.00% 4.00%

Mortality Tables 2014 CalPERS Mortality

for Active Safety

Employees and Active

Miscellaneous Employees

2014 CalPERS Mortality

for Active Safety

Employees and Active

Miscellaneous Employees


CITY OF ELK GROVE

83

Schedule of Investment Returns


For the Fiscal Year Ended June 30 2017

Rate Subsidy

HRA Plan Plan

Annual money-weighted rate of return,

net of investment expense 5.64% 4.70%

Notes:


CITY OF ELK GROVE

84

2016 2015 2014

City’s proportion of the net pension liability 0.16786% 0.16807% 0.17173%

City’s proportionate share of the net pension liability $14,525,447 $11,536,416 $10,686,132

City’s covered payroll $33,456,412 (a) $34,404,915 (a) $31,212,147 (a)

City’s proportionate share of the net pension liability as a percentage of its covered 52.17% 33.53% 34.24%

payroll

Plan fiduciary net position as a percentage of the total pension liability 74.06% 78.40% 79.82%

Notes to Schedule:

Change of benefit terms – In 2014 to 2016, there were no changes to the benefit terms.

Changes in assumptions – The discount rate changed from 7.50% (net of administrative expenses in 2014)

to 7.65% as of the June 30, 2015 measurement date to correct adjustment which previously reduced the

discount rate for administrative expenses. There were no changes in assumptions during the measurement

period ended June 30, 2014 or June 30, 2016.

(a)Amounts prior to 2017 include covered-employee payroll, not only pensionable compensation.

* Fiscal year 2015 was the first year of implementation, therefore only three years are shown.

Measurement Date

CalPERS Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan

CITY OF ELK GROVE

Schedule of the City’s Proportionate Share of the Net Pension Liability

As of June 30, 2017

Last 10 Years*

85

Fiscal Year Ended June 30 2017 2016 2015

Contractually required contribution (actuarially determined) 3,518,175$ 3,181,199$ 5,006,117

Contributions in relation to the contractually required contributions (3,518,175) (3,181,199) (5,006,117)

Contribution deficiency (excess) -$ -$ -$

City’s covered payroll27,840,009$ 33,456,312$ (a) 34,404,915$

(a)

Contributions as a percentage of covered payroll 12.64% 9.51% 14.55%

* Fiscal year 2015 was the first year of implementation, therefore only three years are shown.

(a)Amounts prior to 2017 include covered-employee payroll, not only pensionable compensation.

CalPERS Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan

CITY OF ELK GROVE

Schedule of the City’s Contributions

As of June 30, 2017

Last 10 Years*

86




COMBINING AND INDIVIDUAL

FUND STATEMENTS

AND SCHEDULES

87

Special Capital Debt

Revenue Projects Service

Funds Funds Funds Total

ASSETS

Cash and investments 37,141,433$ 47,433,716$ -$ 84,575,149$

Cash with fiscal agent - 2,632 19,680 22,312

Accounts receivable 4,003,007 21,777 154 4,024,938

Interest receivable 132,366 22,947 - 155,313

Due from other government agencies 331,514 1,181,592 - 1,513,106

Long-term loans receivable 601,147 - - 601,147

Long-term development fees receivable - 309,302 - 309,302

Total Assets 42,209,467$ 48,971,966$ 19,834$ 91,201,267$

LIABILITIES

Accounts payable 2,440,338$ 3,253,237$ 800$ 5,694,375$

Accrued salaries and benefits 58,171 1,222 - 59,393

Due to other funds 33,551 - 154 33,705

Retention payable 177,032 68,552 - 245,584

Advances from other funds 3,202,421 2,316,748 308,309 5,827,478

Refundable deposits 1,569,141 - - 1,569,141

Unearned revenue 57,034 - - 57,034

Total Liabilities 7,537,688 5,677,920 309,263 13,524,871


Unavailable revenue 3,206,962 933,883 - 4,140,845

FUND BALANCES

Restricted 34,892,118 43,288,298 (289,429) 77,890,987

Unassigned (3,427,301) (928,135) - (4,355,436)

Total Fund Balances 31,464,817 42,360,163 (289,429) 73,535,551

Total Liabilities, Deferred Inflow

of Resources and Fund Balances 42,209,467$ 48,971,966$ 19,834$ 91,201,267$

CITY OF ELK GROVE

Combining Balance Sheet

Nonmajor Governmental Funds

June 30, 2017

88

Special Capital Debt

Revenue Projects Service

Funds Funds Funds Total

Revenues:

Licenses, fees and permits 5,083,088$ 1,320,447$ -$ 6,403,535$

Intergovernmental 18,673,440 4,147,294 - 22,820,734

Charges for services 1,704,149 - - 1,704,149

Use of money and property 406,990 3,256,389 4,707 3,668,086

Contributions 30,000 - - 30,000

Total Revenues 25,897,667 8,724,130 4,707 34,626,504

Expenditures:

Current:

Public safety 849,348 - - 849,348

Public ways and facilities 13,989,504 12,072,885 - 26,062,389

Community development 7,885,128 - - 7,885,128

Debt Service:

Tax administration 49,054 12,291 2,667 64,012

Principal - - 2,335,000 2,335,000

Interest - - 613,069 613,069

Total Expenditures 22,773,034 12,085,176 3,055,314 37,913,524


(Under) Expenditures 3,124,633 (3,361,046) (3,050,607) (3,287,020)

Other Financing Sources (Uses):

Payment to refunded bond escrow agent - - (7,200,000) (7,200,000)

Transfers in 3,768,801 - 2,737,254 6,506,055

Transfers out (6,220,079) (2,063,477) - (8,283,556)

Total Other Financing Sources (Uses) (2,451,278) (2,063,477) 477,254 (4,037,501)

Net Change in Fund Balances 673,355 (5,424,523) (2,573,353) (7,324,521)

Fund Balances, Beginning 30,791,462 47,784,686 2,283,924 80,860,072

Fund Balances, End of Year 31,464,817$ 42,360,163$ (289,429)$ 73,535,551$


CITY OF ELK GROVE

Combining Statement of Revenues, Expenditures and


Nonmajor Governmental Funds

89

SPECIAL REVENUE FUNDS

DEFINITION

Special Revenue Funds are used to account for specific revenues that are legally restricted to

expenditures for particular purposes. Special Revenue Funds include:

Nonmajor Special Revenue Funds

Recycling Grant Fund – Established to account for funds provided by the recycling division of the State

Department of Conservation. Funds were made available through the 1986 California Beverage

Container Recycling and Litter Reduction Act for beverage container recycling and litter abatement

programs. Grants are funded by the California Refund Value (CRV) beverage container fees.

Used Oil Grant Fund – Established to account for funds received from the California Integrated Waste

Management Board to comply with waste diversion. Funds are used to educate the public on oil

recycling.

Household Hazardous Waste Fund – Established to account and track Household Hazardous Waste

Grant funds for the purpose of constructing a facility within the City.

Tire Collection and Disposal Grant – Established to account and track Tire Collection Disposal Grant

funds for the cost of cleanup, abatement, and remedial action related to the disposal of waste tires at

cleanup projects and amnesty events.

BSCC Local Police Grant – Established to account for funds received from the Board of State

Community Corrections (BSCC). Funds were made available for Cities in Sacramento County to create

mini-regional teams for the purpose of identifying, monitoring and closely supervising AB109 releases

that have a high probability of relapsing into criminal behavior.

COPS Universal Grant Fund – Established to account for the US Department of Justice Community

Oriented Policing Services Grant (COPS) which provides funding for six (6) police officers for three (3)

years with the provision that the City retains the officers for twelve (12) months following the grant

period.

OTS Grants Fund – Established to account for grants provided by the Office of Traffic Safety (OTS)

which include a mini-grant to be utilized to increase the level of seat belt enforcement hours; to conduct

DUI enforcement crackdowns on drinking drivers in Sacramento County and education activities for the

public concerning the problems associated with drinking and driving.

Local Police Grants Fund – Established to account for funds given by local businesses and organization

for police programs, and miscellaneous police grants.

California Law Enforcement Equipment Fund – Established to account for grants used to supplement

equipment needs of the Police Department.

State COPS Grant Fund – Established to account for the State’s program, Citizen’ Option for

Public Safety (COPS), which provides grants to eligible frontline law enforcement agencies. To be

eligible for allocation under the COPS program, the City must submit an expenditure report annually to

the Controller as required by current law and fully expend the allocation within 24 months of receipt.

90

Gas Tax Fund – Established to account for Gas Tax Street Maintenance funding which provides a

variety of transportation infrastructure maintenance services including implementation of the City’s

Pavement Management Program, construction of capital projects, and coordination with other entities as

needed. Financing is provided by the City’s share of State gasoline taxes, and is restricted to street

expenditures.

Agriculture Preservation Fund – Established to account for the fee imposed upon the development in

the East Franklin Specific Plan area and in other parts of the City. The fee revenue is used to provide and

preserve agricultural land.

Swainson’s Hawk Fund – Established to account for the mitigation fee which is used to purchase land

and/or easements to offset the loss of Swainson’s hawk habitat.

Tree Mitigation Fund – Established to account for the fee which is to be used for preservation of oak

trees.

Street Trench Cut Fee Fund – Established to account for funding for the associated cost of cutting

pavement and the future maintenance of roadways.

Community Development Block Grant Fund – Established to account for funds received and disbursed

under the U.S. Department of Housing and Urban Development Community Development Block Grant

programs.

Police Services CFD Funds – Established to account for the CFD 2003-1 and CFD 2003-2. Funds are

used to pay for a portion of the costs associated with providing police protection services in the City.

Maintenance Services CFD Funds – Established to account for CFD 2005-1 and CFD 2006-1. Funds

are used to provide Maintenance Services citywide.

Street Maintenance District Funds – Established to account for the multi-zonal assessment district

which funds a portion of street maintenance costs in development areas in the City.

Street Lighting Maintenance District Funds – Established to account for street lighting.

Asset Seizure Funds

State – Established to account for the funds received from the State for the equitable transfer of

forfeited property and cash in which the City directly participates in the law enforcement efforts

leading to the seizure and forfeiture of the property.

Federal – Established to account for the funds received from the Federal government for the

equitable transfer of forfeited property and cash in which the City directly participates in the law

enforcement efforts leading to the seizure and forfeiture of the property.

Library Ownership Fund – Established to account for revenue and expenditures directly related to the

Elk Grove Library, owned by the City and operated by the JPA.

HUD Home Grant – Established to account for funds received from the US Department of Housing and

Urban Development (via the California Department of Housing and Community Development) to

promote housing opportunities, including homeownership assistance and rental housing development, for

lower-income households.

Neighborhood Stabilization Program Fund – Established to account for funds received and disbursed

under the Federal Stimulus Neighborhood Stabilization Program.

91

Measure A Maintenance Fund – Established to account for the Measure A Transportation Expenditure

Agreement funding spent on street maintenance.

Development Services Fund – Established to record revenues and expenditures directly related to

development services, including public works, building services and planning. These services, previously

accounted for in the general fund, were segregated in 2008 to provide a clearer picture of the results of

this activity, and the impact of those results on the City’s financial picture.

92

Household Tire

Recycling Used Oil Hazardous Collection &

Grant Grant Waste Disposal

Fund Fund Fund Grant

ASSETS

Cash and investments 97,773$ 56,104$ 5,457$ -$

Accounts receivable - - - -

Interest receivable 44 31 - -

Due from other government agencies - - - -

Long term loans receivable - - - -

Total Assets 97,817$ 56,135$ 5,457$ -$

LIABILITIES

Accounts payable 30,168$ 229$ -$ -$

Accrued salaries and benefits - - - -

Due to other funds - - - -

Retention payable - - - -

Refundable deposits - - - -

Advance from other funds - - - 5,892

Unearned revenue - 45,050 - -

Total Liabilities 30,168 45,279 - 5,892


Unavailable revenue - - - -

FUND BALANCES

Restricted 67,649 10,856 5,457 -

Unassigned - - - (5,892)

Total Fund Balances 67,649 10,856 5,457 (5,892)

Total Liabilities, Deferred Inflows

of Resources and Fund Balances 97,817$ 56,135$ 5,457$ -$

CITY OF ELK GROVE



June 30, 2017

93

COPS Local CA Law State

BSCC Local Universal OTS Police Enforcement COPS Gas Agricultural

Police Grant Grants Grants Equipment Grant Tax Preservation

Grant Fund Fund Fund Fund Fund Fund Fund

308,037$ 10,516$ 16,225$ -$ 137,641$ 139,302$ 7,106,108$ 1,954,898$

- - - 42,047 - - - -

- - - - 61 67 3,375 949

- - 99,522 - - - - -

- - - - - - - -

308,037$ 10,516$ 115,747$ 42,047$ 137,702$ 139,369$ 7,109,483$ 1,955,847$

-$ -$ 4,274$ -$ 4$ -$ 522,170$ -$

- - 2,713 3,967 3,366 - 1,021 208

- - - 32,357 - - - -

- - - - - - 9,760 -

- - - - - - - -

- - - - - - - -

- - 11,984 - - - - -

- - 18,971 36,324 3,370 - 532,951 208

- - - 42,047 - - - -

308,037 10,516 96,776 - 134,332 139,369 6,576,532 1,955,639

- - - (36,324) - - - -

308,037 10,516 96,776 (36,324) 134,332 139,369 6,576,532 1,955,639

308,037$ 10,516$ 115,747$ 42,047$ 137,702$ 139,369$ 7,109,483$ 1,955,847$

continued

94

Street Community

Swainson's Tree Trench Development

Hawk Mitigation Cut Fee Block Grant

Fund Fund Fund Fund

ASSETS

Cash and investments 2,294,953$ 1,276,526$ 434,862$ -$

Accounts receivable 2,925,725 - 29,695 -

Interest receivable 1,087 587 215 38,022

Due from other government agencies - - - 140,815

Long term loans receivable - - - 227,359

Total Assets 5,221,765$ 1,277,113$ 464,772$ 406,196$

LIABILITIES

Accounts payable -$ -$ 10,773$ 92,746$

Accrued salaries and benefits 208 208 - 1,173

Due to other funds - - - 1,194

Retention payable - - - 8,893

Refundable deposits 460,508 219,400 - -

Advance from other funds - - - -

Unearned revenue - - - -

Total Liabilities 460,716 219,608 10,773 104,006


Unavailable revenue 2,925,725 - - 162,205

FUND BALANCES

Restricted 1,835,324 1,057,505 453,999 139,985

Unassigned - - - -

Total Fund Balances 1,835,324 1,057,505 453,999 139,985


of Resources and Fund Balances 5,221,765$ 1,277,113$ 464,772$ 406,196$

CITY OF ELK GROVE

Combining Balance Sheet (continued)


June 30, 2017

95

Street Asset

Maintenance Street Lighting Seizure Neighborhood

Services Maintenance Maintenance State Library HUD Stabilization

CFD District District and Federal Ownership Home Program

Funds Funds Funds Funds Fund Grant Fund

8,473,622$ 6,109,196$ 169,438$ 1,054,046$ 840,033$ -$ 381,594$

- - - 5,112 - - -

4,124 2,987 219 - 378 4,533 72,630

26,537 16,811 14,223 - - - -

- - - - - 40,000 333,788

8,504,283$ 6,128,994$ 183,880$ 1,059,158$ 840,411$ 44,533$ 788,012$

99,908$ 7,210$ 7,880$ 11,819$ 11,864$ -$ 950$

1,634 - - - - - 145

- - - - - - -

- 2,762 - 3,648 - - -

- - - - - - -

- - 3,196,529 - - - -

- - - - - - -

101,542 9,972 3,204,409 15,467 11,864 - 1,095

- - - - - 4,533 72,452

8,402,741 6,119,022 - 1,043,691 828,547 40,000 714,465

- - (3,020,529) - - - -

8,402,741 6,119,022 (3,020,529) 1,043,691 828,547 40,000 714,465

8,504,283$ 6,128,994$ 183,880$ 1,059,158$ 840,411$ 44,533$ 788,012$

continued

96

Measure A Development

Maintenance Services

Fund Fund Total

ASSETS

Cash and investments 4,694,067$ 754,794$ 37,141,433$

Accounts receivable 32,039 968,389 4,003,007

Interest receivable 2,201 454 132,366

Due from other government agencies - - 331,514

Long term loans receivable - - 601,147

Total Assets 4,728,307$ 1,723,637$ 42,209,467$

LIABILITIES

Accounts payable 634,735$ 1,005,608$ 2,440,338$

Accrued salaries and benefits 1,276 41,856 58,171

Due to other funds - - 33,551

Retention payable 473 151,496 177,032

Refundable deposits - 889,233 1,569,141

Advance from other funds - - 3,202,421

Unearned revenue - - 57,034

Total Liabilities 636,484 2,088,193 7,537,688


Unavailable revenue - - 3,206,962

FUND BALANCES

Restricted 4,091,823 - 34,892,118

Unassigned - (364,556) (3,427,301)

Total Fund Balances 4,091,823 (364,556) 31,464,817


of Resources and Fund Balances 4,728,307$ 1,723,637$ 42,209,467$

Combining Balance Sheet (continued)


CITY OF ELK GROVE

June 30, 2017

97


98

Household Tire

Recycling Used Oil Hazardous Collection & BSCC Local

Grant Grant Waste Disposal Police

Fund Fund Fund Grant Grant

Revenues:

Licenses, fees and permits -$ -$ -$ -$ -$

Intergovernmental 41,291 - 11,420 - 85,000

Charges for services - - - - -

Use of money and property 783 (10) - - -

Other revenue - - - - -

Total Revenues 42,074 (10) 11,420 - 85,000

Expenditures:

Current:

Public Safety - - - - 165

Public ways and facilities - - - - 50,386

Community development 35,231 44,792 141 - -

Debt Service:

Tax administration - - - - -

Total Expenditures 35,231 44,792 141 - 50,551


(Under) Expenditures 6,843 (44,802) 11,279 - 34,449


Transfers in - - - - -

Transfers out - - - - -

Total Other Financing Sources (Uses) - - - - -

Net Change in Fund Balance 6,843 (44,802) 11,279 - 34,449

Fund Balances, Beginning 60,806 55,658 (5,822) (5,892) 273,588

Fund Balances, End of Year 67,649$ 10,856$ 5,457$ (5,892)$ 308,037$




CITY OF ELK GROVE


99

COPS Local CA Law State

Universal OTS Police Enforcement COPS Gas Agricultural

Grant Grants Grants Equipment Grant Tax Preservation

Fund Fund Fund Fund Fund Fund Fund

-$ -$ -$ -$ -$ -$ -$

- 361,783 134,082 335,283 - 2,983,447 -

- - - - - - -

- 6,296 (178) 901 (4) 88,712 (6,429)

- - - - - 30,000 -

- 368,079 133,904 336,184 (4) 3,102,159 (6,429)

- 361,565 176,128 307,167 - - -

- - - - - 3,799,167 12,150

- - - - - - -

- - - - - - -

- 361,565 176,128 307,167 - 3,799,167 12,150

- 6,514 (42,224) 29,017 (4) (697,008) (18,579)

- - - - - - -

- - - - - (579,664) -

- - - - - (579,664) -

- 6,514 (42,224) 29,017 (4) (1,276,672) (18,579)

10,516 90,262 5,900 105,315 139,373 7,853,204 1,974,218

10,516$ 96,776$ (36,324)$ 134,332$ 139,369$ 6,576,532$ 1,955,639$

continued

100

Community

Street Development Police

Swainson's Tree Trench Block Services

Hawk Mitigation Cut Fees Grants CFD

Fund Fund Fund Fund Funds

Revenues:

Licenses, fees and permits 608,561$ 310,300$ 43,842$ -$ 7,300$

Intergovernmental - - - 1,004,900 3,107,651

Charges for services - - - - -

Use of money and property 7,564 2,186 1,457 - (4,839)

Other revenue - - - - -

Total Revenues 616,125 312,486 45,299 1,004,900 3,110,112

Expenditures:

Current:

Public safety - - - - 4,323

Public ways and facilities - - 133 - -

Community development 16,317 13,076 29,971 1,107,082 -

Debt Service:

Tax administration - - - - 5,469

Total Expenditures 16,317 13,076 30,104 1,107,082 9,792


(Under) Expenditures 599,808 299,410 15,195 (102,182) 3,100,320


Transfers in - - - - -

Transfers out - - (1,047) - (3,717,961)

Total Other Financing Sources (Uses) - - (1,047) - (3,717,961)

Net Change in Fund Balance 599,808 299,410 14,148 (102,182) (617,641)

Fund Balances, Beginning 1,235,516 758,095 439,851 242,167 1,477,494

Fund Balances, End of Year 1,835,324$ 1,057,505$ 453,999$ 139,985$ 859,853$





101

Street Asset

Maintenance Street Lighting Seizure Neighborhood

Services Maintenance Maintenance State Library HUD Stabilization

CFD District District and Federal Ownership Home Program

Funds Funds Funds Funds Fund Grant Fund

14,989$ 10,220$ -$ -$ -$ -$ -$

3,117,835 1,662,075 1,022,936 745,341 239,170 - -

- - - - - - -

29,201 20,736 159,802 - 6,941 - 18,528

- - - - - - -

3,162,025 1,693,031 1,182,738 745,341 246,111 - 18,528

- - - - - - -

1,605,191 924,416 881,515 500,937 16,233 - 122,357

- - - - - - -

2,759 9,234 31,592 - - - -

1,607,950 933,650 913,107 500,937 16,233 - 122,357

1,554,075 759,381 269,631 244,404 229,878 - (103,829)

- - - - - - -

(76,639) (99,433) (909,935) - (2,080) - -

(76,639) (99,433) (909,935) - (2,080) - -

1,477,436 659,948 (640,304) 244,404 227,798 - (103,829)

6,925,305 5,459,074 (2,380,225) 799,287 600,749 40,000 818,294

8,402,741$ 6,119,022$ (3,020,529)$ 1,043,691$ 828,547$ 40,000$ 714,465$

continued

102

Measure A Development

Maintenance Services

Fund Fund Total

Revenues:

Licenses, fees and permits -$ 4,087,876$ 5,083,088$

Intergovernmental 3,821,226 - 18,673,440

Charges for services - 1,704,149 1,704,149

Use of money and property 75,146 197 406,990

Other revenue - - 30,000

Total Revenues 3,896,372 5,792,222 25,897,667

Expenditures:

Current:

Public Safety - - 849,348

Public ways and facilities 3,007,074 3,069,945 13,989,504

Community development - 6,638,518 7,885,128

Debt Service:

Tax administration - - 49,054

Total Expenditures 3,007,074 9,708,463 22,773,034


(Under) Expenditures 889,298 (3,916,241) 3,124,633


Transfers in - 3,768,801 3,768,801

Transfers out (154,709) (678,611) (6,220,079)

Total Other Financing Sources (Uses) (154,709) 3,090,190 (2,451,278)

Net Change in Fund Balance 734,589 (826,051) 673,355

Fund Balances, Beginning 3,357,234 461,495 30,791,462

Fund Balances, End of Year 4,091,823$ (364,556)$ 31,464,817$





CITY OF ELK GROVE

103

CITY OF ELK GROVE


Recycling Grant Fund


Variance

Positive

Budget Actual (Negative)

Revenues:

Intergovernmental 41,291$ 41,291$ -$

Use of money and property - 783 783

Total Revenues 41,291 42,074 783

Expenditures:

Current:

Community development 31,228 35,231 (4,003)

Total Expenditures 31,228 35,231 (4,003)


Over (Under) Expenditures 10,063 6,843 (3,220)

Net Change in Fund Balance 10,063 6,843 (3,220)

Fund Balance, Beginning 60,806 60,806 -

Fund Balance, Ending 70,869$ 67,649$ (3,220)$

Special Revenue Fund

104

CITY OF ELK GROVE


Used Oil Grant Fund


Variance

Positive


Revenues:

Use of money and property -$ (10)$ (10)$

Total Revenues - (10) (10)

Expenditures:

Current:

Community development 44,792 44,792 -

Total Expenditures 44,792 44,792 -


Over (Under) Expenditures (44,792) (44,802) (10)

Net Change in Fund Balance (44,792) (44,802) (10)


Fund Balance, Ending 10,866$ 10,856$ (10)$


105

CITY OF ELK GROVE


Household Hazardous Waste Fund


Variance

Positive


Revenues:

Intergovernmental -$ 11,420$ 11,420$

Total Revenues - 11,420 11,420

Expenditures:

Current:

Community development 144 141 3

Total Expenditures 144 141 3


Over (Under) Expenditures (144) 11,279 11,417

Net Change in Fund Balance (144) 11,279 11,423

Fund Balance, Beginning (5,822) (5,822) -

Fund Balance, Ending (5,966)$ 5,457$ 11,423$


106


Tire Collection Disposal Grant


Variance

Positive


Revenues:

Intergovernmental -$ -$ -$

Use of money and property - - -

Total Revenues - - -

Expenditures:

Current:

Community development - - -

Total Expenditures - - -


Transfers in - - -

Transfers out - - -

Total Other Financing Sources (Uses) - - -


Net Change in Fund Balance - - -


Fund Balance, Ending (5,892)$ (5,892)$ -$


CITY OF ELK GROVE

107

CITY OF ELK GROVE


BSCC Local Police Grant


Variance

Positive


Revenues:

Intergovernmental 85,000$ 85,000$ -$

Total Revenues 85,000 85,000 -

Expenditures:

Current:

Public safety - 165 (165)

Public ways and facilities 50,551 50,386 165



Over (Under) Expenditures 34,449 34,449 -

Net Change in Fund Balance 34,449 34,449 -



Fund Balance, Ending 308,037$ 308,037$ -$


108

CITY OF ELK GROVE


COPS Universal Grant Fund


Variance

Positive


Revenues:

Intergovernmental -$ -$ -$

Total Revenues - - -

Expenditures:

Current:

Public ways and facilities - - -

Total Expenditures - - -


Transfers in - - -

Transfers out - - -

Total Other Financing Sources (Uses) - - -





109

CITY OF ELK GROVE


OTS Grants Fund


Variance

Positive


Revenues:

Intergovernmental 529,833$ 361,783$ (168,050)$

Use of money and property - 6,296 6,296

Total Revenues 529,833 368,079 (161,754)

Expenditures:

Current:

Public safety 538,196 361,565 176,631

Total Expenditures 538,196 361,565 176,631


Over (Under) Expenditures (8,363) 6,514 14,877

Net Change in Fund Balance (8,363) 6,514 14,877


Fund Balance, Ending 81,899$ 96,776$ 14,877$


110

CITY OF ELK GROVE


Local Police Grants Fund


Variance

Positive


Revenues:

Current:


Use of money and property - (178) (178)

Total Revenues 145,927 133,904 (12,023)

Expenditures:

Current:

Public safety 187,974 176,128 11,846



Over (Under) Expenditures (42,047) (42,224) (177)

Net Change in Fund Balance (42,047) (42,224) (177)


Fund Balance, Ending (36,147)$ (36,324)$ (177)$


111

CITY OF ELK GROVE


CA Law Enforcement Equipment Fund


Variance

Positive


Revenues:

Intergovernmental 335,279$ 335,283$ 4$


Total Revenues 335,279 336,184 905

Expenditures:

Current:

Public safety 298,934 307,167 (8,233)

Total Expenditures 298,934 307,167 (8,233)







112

CITY OF ELK GROVE


State COPS Grant Fund


Variance

Positive


Revenues:

Use of money and property -$ (4)$ (4)$

Total Revenues - (4) (4)


Over (Under) Expenditures - (4) (4)

Net Change in Fund Balance - (4) -




113

CITY OF ELK GROVE


Gas Tax Fund


Variance

Positive


Revenues:

Intergovernmental 3,325,800$ 2,983,447$ (342,353)$


Other revenue - 30,000 30,000

Total Revenues 3,325,800 3,102,159 (223,641)

Expenditures:

Current:

Public ways and facilities 4,406,307 3,799,167 607,140

Total Expenditures 4,406,307 3,799,167 607,140


Over (Under) Expenditures (1,080,507) (697,008) 383,499


Transfers out (579,664) (579,664) -

Total Other Financing Sources (Uses) (579,664) (579,664) -

Net Change in Fund Balance (1,660,171) (1,276,672) 383,499

Fund Balance, Beginning 7,853,204 7,853,204 -

Fund Balance, Ending 6,193,033$ 6,576,532$ 383,499$


114

CITY OF ELK GROVE


Agricultural Preservation Fund


Variance

Positive


Revenues:

Use of money and property 15,000$ (6,429)$ (21,429)$

Total Revenues 15,000 (6,429) (21,429)

Expenditures:

Current:

Public ways and facilities 1,912,687 12,150 1,900,537

Total Expenditures 1,912,687 12,150 1,900,537


Over (Under) Expenditures (1,897,687) (18,579) 1,879,108

Net Change in Fund Balance (1,897,687) (18,579) 1,879,108


Fund Balance, Ending 76,531$ 1,955,639$ 1,879,108$


115


Variance

Positive


Revenues:

Licenses, fees and permits 100,000$ 608,561$ 508,561$


Total Revenues 100,000 616,125 516,125

Expenditures:

Current:

Community development 1,194,822 16,317 1,178,505

Total Expenditures 1,194,822 16,317 1,178,505


Over (Under) Expenditures (1,094,822) 599,808 1,694,630

Net Change in Fund Balance (1,094,822) 599,808 1,694,630


Fund Balance, Ending 140,694$ 1,835,324$ 1,694,630$


Swainson's Hawk Fund


CITY OF ELK GROVE

116

CITY OF ELK GROVE


Tree Mitigation Fund


Variance

Positive


Revenues:



Total Revenues 80,000 312,486 232,486

Expenditures:

Current:

Community development 112,166 13,076 99,090






Fund Balance, Ending 725,929$ 1,057,505$ 331,576$


117

CITY OF ELK GROVE


Street Trench Cut Fee Fund


Variance

Positive


Revenues:



Total Revenues 35,000 45,299 10,299

Expenditures:

Current:

Public ways and facilities 173 133 40

Community development 100,000 29,971 70,029





Transfers out (1,047) (1,047) -






118

CITY OF ELK GROVE


Community Development Block Grants Fund


Variance

Positive


Revenues:


Total Revenues 2,000,000 1,004,900 (995,100)

Expenditures:

Current:

Community development 1,411,780 1,107,082 304,698



Over (Under) Expenditures 588,220 (102,182) (690,402)

Net Change in Fund Balance 588,220 (102,182) (690,402)




119

CITY OF ELK GROVE


Police Services CFD Funds


Variance

Positive


Revenues:


Intergovernmental 3,065,000 3,107,651 42,651

Use of money and property 1,750 (4,839) (6,589)

Total Revenues 3,070,750 3,110,112 39,362

Expenditures:

Current:

Public safety 8,945 4,323 4,622

Debt Service:

Tax administration 7,500 5,469 2,031



Over (Under) Expenditures 3,054,305 3,100,320 46,015


Transfers out (3,717,961) (3,717,961) -

Total Other Financing Sources (Uses) (3,717,961) (3,717,961) -

Net Change in Fund Balance (663,656) (617,641) 46,015


`



120

CITY OF ELK GROVE


Maintenance Services CFD Funds


Variance

Positive


Revenues:



Use of money and property 32,000 29,201 (2,799)

Total Revenues 2,947,000 3,162,025 215,025

Expenditures:

Current:


Debt Service:






Transfers out (76,640) (76,639) 1

Total Other Financing Sources (Uses) (76,640) (76,639) 1

Net Change in Fund Balance 1,196,726 1,477,436 280,710




121

CITY OF ELK GROVE


Street Maintenance District Funds


Variance

Positive


Revenues:




Total Revenues 1,633,959 1,693,031 59,072

Expenditures:

Current:

Public ways and facilities 1,019,755 924,416 95,339

Debt Service:

Tax administration 8,000 9,234 (1,234)

Total Expenditures 1,027,755 933,650 94,105


Over (Under) Expenditures 606,204 759,381 153,177


Transfers out (99,433) (99,433) -


Net Change in Fund Balance 506,771 659,948 153,177




122

CITY OF ELK GROVE


Street Lighting Maintenance District Funds


Variance

Positive


Revenues:


Use of money and property 10,000 159,802 149,802

Total Revenues 1,055,000 1,182,738 127,738

Expenditures:

Current:

Public ways and facilities 1,347,832 881,515 466,317

Debt Service:

Tax administration 30,000 31,592 (1,592)

Total Expenditures 1,377,832 913,107 464,725


Over (Under) Expenditures (322,832) 269,631 (336,987)


Transfers out (1,468,759) (909,935) 558,824

Total Other Financing Sources (Uses) (1,468,759) (909,935) 558,824

Net Change in Fund Balance (1,791,591) (640,304) 221,837

Fund Balance, Beginning (2,380,225) (2,380,225) -

Fund Balance, Ending (4,171,816)$ (3,020,529)$ 221,837$


123

CITY OF ELK GROVE


Asset Seizure State and Federal Funds


Variance

Positive


Revenues:

Intergovernmental 745,172$ 745,341$ 169$

Total Revenues 745,172 745,341 169

Expenditures:

Current:

Public ways and facilities 503,505 500,937 2,568








124

CITY OF ELK GROVE


Library Ownership Fund


Variance

Positive


Revenues:

Intergovernmental 110,000$ 239,170$ 129,170$


Total Revenues 110,000 246,111 136,111

Expenditures:

Current:

Public way and facilities 30,292 16,233 14,059





Transfers out (2,080) (2,080) -






125

CITY OF ELK GROVE


HUD Home Grant


Variance

Positive


Revenues:

Intergovernmental 656,000$ -$ (656,000)$

Total Revenues 656,000 - (656,000)

Expenditures:

Current:

Community Development 656,000 - 656,000

Total Expenditures 656,000 - 656,000





126

CITY OF ELK GROVE


Neighborhood Stabilization Program Fund


Variance

Positive


Revenues:

Licenses, fees and permits 70,000$ -$ (70,000)$


Total Revenues 70,000 18,528 (51,472)

Expenditures:

Current:




Over (Under) Expenditures (471,659) (103,829) 367,830

Net Change in Fund Balance (471,659) (103,829) 367,830




127

CITY OF ELK GROVE


Measure A Street & Road Maintenance Fund


Variance

Positive


Revenues:

Intergovernmental 3,654,808$ 3,821,226$ 166,418$


Total Revenues 3,654,808 3,896,372 241,564

Expenditures:

Current:






Transfers out (154,709) (154,709) -






128

CITY OF ELK GROVE


Development Services Fund


Variance

Positive


Revenues:

Licenses, fees and permits 5,006,367$ 4,087,876$ (918,491)$

Charges for services 2,086,592 1,704,149 (382,443)


Total Revenues 7,092,959 5,792,222 (1,300,737)

Expenditures:

Current:


Community development 7,505,738 6,638,518 867,220



Over (Under) Expenditures (3,755,677) (3,916,241) (160,564)


Transfers in 4,013,392 3,768,801 (244,591)

Transfers out (935,916) (678,611) 257,305

Total Other Financing Sources (Uses) 3,077,476 3,090,190 12,714

Net Change in Fund Balance (678,201) (826,051) (147,850)


Fund Balance, Ending (216,706)$ (364,556)$ (147,850)$


129

CAPITAL PROJECTS FUNDS

DEFINITION The Capital Projects Funds were established to account for financial resources for the acquisition or

construction of major capital facilities.

Nonmajor Capital Projects Funds

Federal Capital Grant Funds – Established to account for grants received from the federal government

to fund capital projects.

State Grant Funds – Established to account for money from the State of California to fund capital

projects.

Measure A Construction Funds – Established to account for monies received under the Measure A

Transportation Expenditure Agreement, approved by the voters in 1988, which pays for transportation

infrastructure projects such as the Highway 99 interchanges.

LTF (Local Transportation Fund) – Bikes & Pedestrians Fund – Established to account for the

bicycle/pedestrian allocation of TDA funding which is used for public transportation planning, public

transportation services, and community transit purposes.

Capital Facilities Funds – Established to account for new developments’ share of construction and

acquisition of a civic center, policy facility, corporation yard, intelligent transportation system, library,

railroad over crossing, facilities, and rapid transit.

Laguna West Service Area Fund – Established to account for fees that fund the ongoing operations and

maintenance costs for specialized services related to drainage, roadways, and street sweeping the Laguna

West area.

Lakeside Service Area Fund – Established to account for fees that fund the ongoing operations and

maintenance costs for specialized services related to drainage, roadways, and street sweeping the

Lakeside area.

In Lieu Funds – Established to account for the monies received in lieu of developer built infrastructure.

East Franklin CFD 2002-1 Fund – Established to account for the costs of infrastructure within the

boundaries of this finance district.

Poppy Ridge CFD 2003-1 Fund – Established to account for special taxes to fund the cost of

infrastructure and a portion of police protection operational costs within the boundaries of this finance

district.

Laguna CFD Fund – Fund the acquisition and construction of certain public facilities required in

connection with the development of the land within the district which consists of approximately 2,440

acres.

Laguna West CFD Fund – Established to fund the acquisition and construction of certain public

facilities within the boundaries of this finance district.

Lakeside CFD Fund – Established to fund the acquisition and construction of certain public facilities

within the boundaries of this finance district.

130

Variance

Positive


Revenues:

Licenses, fees and permits 5,193,175$ 2,664,578$ (2,528,597)$

Intergovernmental - 802,000 802,000


Total Revenues 5,584,175 3,576,038 (1,458,339)

Expenditures:

Current:

Public ways and facilities 8,451,970 4,611,709 3,840,261



Over (Under) Expenditures (2,867,795) (1,035,671) (5,298,600)


Transfers out (300,905) (300,905) -


Net Change in Fund Balance (3,168,700) (786,778) 2,381,922


Fund Balance, Ending 17,040,602$ 19,422,524$ 2,381,922$

CITY OF ELK GROVE

Major Capital Projects Fund

Supplemental Budgetary Comparison Schedule

Roadway Fee Fund


131

Variance with

Final Budget

Positive


Revenues:

Licenses, fees and permits 13,936,650$ 2,796,210$ (11,140,440)$


Total Revenues 14,768,218 2,942,748 (11,825,470)

Expenditures:

Current:




Over (Under) Expenditures 10,290,869 (635,021) (10,925,890)


Transfers In 163,399 - 163,399

Transfers out (496,660) (136,883) 359,777

Total Other Financing Sources (Uses) (333,261) (136,883) 196,378

Net Change in Fund Balance 9,957,608 (771,904) (10,729,512)


Fund Balance, Ending 27,040,584$ 16,311,072$ (10,729,512)$

CITY OF ELK GROVE



Mitigation and Fee Fund


132

Variance with

Final Budget

Positive


Revenues:


Intergovernmental 163,983 33,743 (130,240)

Contribution from property owners 72,700,000 72,700,000 -


Total Revenues 72,893,983 72,784,220 (109,763)

Expenditures:

Current:


Debt service:






Transfers out (12,391) (12,391) -


Net Change in Fund Balance 47,935,862 48,008,868 73,006



CITY OF ELK GROVE



Laguna Ridge CFD 2005-1 Fund


133

LTF

Federal Capital State Measure A Bikes & Capital

Grants Grants Construction Pedestrian Facilities

Fund Fund Funds Fund Funds

ASSETS

Cash and investments 1,314,282$ 5,824$ 2,456,025$ 349,689$ 11,045,454$

Accounts receivable - - - - 22

Interest receivable - - 1,176 185 5,578

Due from other government agencies 1,159,715 10,034 - 6,136 -

Long-term development fees receivable - - - - 309,302

Total Assets 2,473,997$ 15,858$ 2,457,201$ 356,010$ 11,360,356$

LIABILITIES

Accounts payable 459,272$ -$ 201,211$ 1,772$ 260,982$

Accrued salaries and benefits - - - - 628

Retention payable 7,299 5,636 - 663 -

Advances from other funds 2,312,000 - - - -

Fee credits - - - - 38,161

Total Liabilities 2,778,571 5,636 201,211 2,435 299,771


Unavailable revenue 615,522 10,034 - - 308,327

FUND BALANCES

Restricted - 188 2,255,990 353,575 10,752,258

Unassigned (920,096) - - - -

Total Fund Balances (920,096) 188 2,255,990 353,575 10,752,258


of Resources and Fund Balances 2,473,997$ 15,858$ 2,457,201$ 356,010$ 11,360,356$

continued

CITY OF ELK GROVE



June 30, 2017

134

Laguna

West Lakeside East Franklin Poppy Ridge

Service Area Service Area In Lieu CFD 2002-1 CFD 2003-1

Fund Fund Funds Fund Fund

ASSETS

Cash and investments 468,387$ 82,054$ 1,947,752$ 20,209,405$ 8,723,799$

Accounts receivable - - 21,755 - -

Interest receivable 226 40 958 9,776 4,606

Due from other government agencies 689 - - 2,318 2,700

Long-term development fees receivable - - - - -

Total Assets 469,302$ 82,094$ 1,970,465$ 20,224,131$ 8,731,105$

LIABILITIES

Accounts payable 145$ -$ 152,405$ 576,732$ 1,597,427$

Accrued salaries and benefits - - - 297 297

Retention payable - - - 42,484 -

Advances from other funds - - - - -

Fee credits - - - - -

Total Liabilities 145 - 152,405 619,513 1,597,724


Unavailable revenue - - - - -

FUND BALANCES

Restricted 469,157 82,094 1,818,060 19,604,618 7,133,381

Unassigned - - - - -

Total Fund Balances 469,157 82,094 1,818,060 19,604,618 7,133,381


of Resources and Fund Balances 469,302$ 82,094$ 1,970,465$ 20,224,131$ 8,731,105$

CITY OF ELK GROVE


Nonmajor Capital Projects Funds (continued)

June 30, 2017

135

Laguna Laguna Lakeside

CFD West CFD CFD

Fund Fund Fund Total

700,121$ 130,924$ -$ 47,433,716$

- - - 21,777

339 63 - 22,947

- - - 1,181,592

- - - 309,302

700,460$ 130,987$ -$ 48,971,966$

-$ -$ 3,291$ 3,253,237$

- - - 1,222

- 12,470 - 68,552

- - 4,748 2,316,748

- - - 38,161

- 12,470 8,039 5,677,920

- - - 933,883

700,460 118,517 - 43,288,298

- - (8,039) (928,135)

700,460 118,517 (8,039) 42,360,163$

700,460$ 130,987$ -$ 48,971,966$

136

Federal Capital State Measure A Bike & Capital

Grants Grants Construction Pedestrians Facilities

Fund Fund Funds Fund Funds

Revenues:

Licenses, fees and permits -$ -$ -$ -$ 851,409$

Intergovernmental 1,709,966 609,820 898,129 129,618 -

Use of money and property - - 13,428 2,925 28,133

Total Revenues 1,709,966 609,820 911,557 132,543 879,542

Expenditures:

Current:

Public ways and facilities 1,510,591 477,590 320,582 92,843 730,496

Debt Service:

Tax administration - - - - -

Total Expenditures 1,510,591 477,590 320,582 92,843 730,496


(Under) Expenditures 199,375 132,230 590,975 39,700 149,046


Transfers out - - (60,412) (2,309) (1,842,441)

Total Other Financing Sources (Uses) - - (60,412) (2,309) (1,842,441)

Net Change in Fund Balances 199,375 132,230 530,563 37,391 (1,693,395)

Fund Balances, Beginning (1,119,471) (132,042) 1,725,427 316,184 12,445,653

Fund Balances, End of Year (920,096)$ 188$ 2,255,990$ 353,575$ 10,752,258$


CITY OF ELK GROVE




137

Laguna West Lakeside East Franklin Poppy Ridge

Service Area Service Area In Lieu CFD 2002-1 CFD 2003-1

Fund Fund Funds Fund Fund

-$ -$ 469,038$ -$ -$

61,371 - 345,178 181,104 205,343

(29) (177) (342,182) 1,704,003 1,859,469

61,342 (177) 472,034 1,885,107 2,064,812

57,318 23 187,371 733,831 7,954,163

1,528 - - 5,621 5,142

58,846 23 187,371 739,452 7,959,305

2,496 (200) 284,663 1,145,655 (5,894,493)

(20,121) (993) (3,180) (16,555) (117,466)

(20,121) (993) (3,180) (16,555) (117,466)

(17,625) (1,193) 281,483 1,129,100 (6,011,959)

486,782 83,287 1,536,577 18,475,518 13,145,340

469,157$ 82,094$ 1,818,060$ 19,604,618$ 7,133,381$

continued

138

Laguna Laguna Lakeside

CFD West CFD CFD

Fund Fund Fund Total

Revenues:

Licenses, fees and permits -$ -$ -$ 1,320,447$

Intergovernmental 6,765 - - 4,147,294

Use of money and property - (9,181) - 3,256,389

Total Revenues 6,765 (9,181) - 8,724,130

Expenditures:

Current:

Public ways and facilities - 38 8,039 12,072,885

Debt Service:

Tax administration - - - 12,291

Total Expenditures - 38 8,039 12,085,176


(Under) Expenditures 6,765 (9,219) (8,039) (3,361,046)


Transfers out - - - (2,063,477)

Total Other Financing Sources (Uses) - - - (2,063,477)

Net Change in Fund Balances 6,765 (9,219) (8,039) (5,424,523)

Fund Balances, Beginning 693,695 127,736 - 47,784,686

Fund Balances, End of Year 700,460$ 118,517$ (8,039)$ 42,360,163$



Changes in Fund Balances (continued)


CITY OF ELK GROVE

139

CITY OF ELK GROVE

Capital Projects Fund


Federal Capital Grants Fund


Variance

Positive


Revenues:

Intergovernmental 2,742,000$ 1,709,966$ (1,032,034)$

Use of money and property 8,429,868 - (8,429,868)

Total Revenues 11,171,868 1,709,966 (9,461,902)

Expenditures:

Current:

Public ways and facilities 1,510,589 1,510,591 (2)

Total Expenditures 1,510,589 1,510,591 (2)


Over (Under) Expenditures 9,661,279 199,375 (9,461,904)

Net Change in Fund Balance 9,661,279 199,375 (9,461,904)

Fund Balance, Beginning (1,119,471) (1,119,471) -

Fund Balance, Ending 8,541,808$ (920,096)$ (9,461,904)$

140

CITY OF ELK GROVE


State Grants Fund


Variance

Positive


Revenues:

Intergovernmental 6,412,744$ 609,820$ (5,802,924)$

Total Revenues 6,412,744 609,820 (5,802,924)

Expenditures:

Current:

Public ways and facilities 477,590 477,590 -



Over (Under) Expenditures 5,935,154 132,230 5,802,924

Net Change in Fund Balance 5,935,154 132,230 5,802,924


Fund Balance, Ending 5,803,112$ 188$ (5,802,924)$


141

CITY OF ELK GROVE

Variance

Positive


Revenues:



Total Revenues 874,770 911,557 36,787

Expenditures:

Current:






Transfers out (60,412) (60,412) -







Measure A Construction Funds


142

CITY OF ELK GROVE


LTF Bike & Pedestrians Fund


Variance

Positive


Revenues:


Use of money and property 2,000 2,925 925

Total Revenues 128,144 132,543 4,399

Expenditures:

Current:


Total Expenditures 92,844 92,843 1




Transfers out (2,309) (2,309) -






143

CITY OF ELK GROVE


Capital Facilities Funds


Variance

Positive


Revenues:

Licenses, fees and permits 1,915,100$ 851,409$ (1,063,691)$


Total Revenues 1,988,100 879,542 (1,108,558)

Expenditures:

Current:




Over (Under) Expenditures 1,183,603 149,046 (1,034,557)


Transfers out (1,843,518) (1,842,441) 1,077

Total Other Financing Sources (Uses) (1,843,518) (1,842,441) 1,077

Net Change in Fund Balance (659,915) (1,693,395) (1,033,480)




144

CITY OF ELK GROVE


Laguna West Service Area Fund


Variance

Positive


Revenues:

Intergovernmental -$ 61,371$ 61,371$

Use of money and property 66,000 (29) (66,029)

Total Revenues 66,000 61,342 (4,658)

Expenditures:

Current:


Debt Service:

Tax administration 2,000 1,528 472





Transfers out (20,121) (20,121) -


Net Change in Fund Balance (14,408) (17,625) (3,217)




145

CITY OF ELK GROVE


Lakeside Service Area Fund


Variance

Positive


Revenues:

Use of money and property 500$ (177)$ (677)$

Total Revenues 500 (177) (677)

Expenditures:

Current:




Over (Under) Expenditures 458 (200) (658)


Transfers out (993) (993) -

Total Other Financing Sources (Uses) (993) (993) -

Net Change in Fund Balance (535) (1,193) (658)




146

CITY OF ELK GROVE


In Lieu Funds


Variance

Positive


Revenues:

Licenses, fees and permits 700,000$ 469,038$ (230,962)$

Use of money and property 2,500 2,996 496

Total Revenues 702,500 472,034 (230,466)

Expenditures:

Current:

Public ways and facilities 187,229 187,371 (142)

Total Expenditures 187,229 187,371 (142)




Transfers out (3,180) (3,180) -




Fund Balance, Ending 2,048,668$ 1,818,060$ (230,608)$


147

CITY OF ELK GROVE

Variance

Positive


Revenues:


Use of money and property 1,545,000 1,704,003 159,003

Total Revenues 2,305,000 1,885,107 (419,893)

Expenditures:

Current:

Public ways and facilities 733,050 733,831 (781)

Debt Service:


Total Expenditures 740,050 739,452 598


Over (Under) Expenditures 1,564,950 1,145,655 (419,295)


Transfers out (16,555) (16,555) -


Net Change in Fund Balance 1,548,395 1,129,100 (419,295)


Fund Balance, Ending 20,023,913$ 19,604,618$ (419,295)$


Capital Project Fund


East Franklin CFD 2002-1 Fund

148

CITY OF ELK GROVE

Variance

Positive


Revenues:

Intergovernmental 1,955,000$ 205,343$ (1,749,657)$

Use of money and property 15,000 1,859,469 1,844,469

Total Revenues 1,970,000 2,064,812 94,812

Expenditures:

Current:


Debt Service:




Over (Under) Expenditures (6,021,270) (5,894,493) 126,777


Transfers In 1,675,000 - (1,675,000)

Transfers out (117,466) (117,466) -

Total Other Financing Sources (Uses) 1,557,534 (117,466) (1,675,000)

Net Change in Fund Balance (4,463,736) (6,011,959) (1,548,223)





Poppy Ridge CFD 2003-1 Fund


149

CITY OF ELK GROVE


Laguna CFD Fund


Variance

Positive


Revenues:


Use of money and property 3,000 - (3,000)

Total Revenues 20,000 6,765 (13,235)







150

CITY OF ELK GROVE


Laguna West CFD Fund


Variance

Positive


Revenues:

Use of money and property 5,000$ (9,181)$ (14,181)$

Total Revenues 5,000 (9,181) (14,181)

Expenditures:

Current:









151

CITY OF ELK GROVE


Lakeside CFD Fund


Variance

Positive


Revenues:

Licenses, fees and permits 518,000$ -$ (518,000)$

Total Revenues 518,000 - (518,000)

Expenditures:

Public ways and facilities 8,039 8,039 -





Fund Balance, Beginning - - -

Fund Balance, Ending 509,961$ (8,039)$ (518,000)$


152


153

DEBT SERVICE FUNDS

DEFINITION

The Debt Service is used to account for the accumulation of resources for, and the payment of,

long-term debt principal and interest. Nonmajor debt service funds include:

Nonmajor Debt Service Funds

EG Finance Authority (EGFA) Fund – Established to account for EGFA debt service activity

which includes any debt financed through the EGFA, currently the fiscal agent activity for the

Elk Grove Finance Authority Series 2007 Lease Revenue Bonds.

154

EG Finance

Authority

Fund

ASSETS

Cash with fiscal agent 19,680$

Accounts receivable 154

Total Assets 19,834$

LIABILITIES

Accounts payable 800$

Due to other funds 154

Advances from other funds 308,309

Total Liabilities 309,263

FUND BALANCES

Restricted (289,429)

Total Fund Balances (289,429)

Total Liabilities. Deferred Inflow of

Resources and Fund Balances 19,834$

CITY OF ELK GROVE


Nonmajor Debt Service Fund

June 30, 2017

155

EG Finance

Authority

Fund

Revenues:

Use of money and property 4,707$

Total Revenues 4,707

Expenditures:

Debt Service:

Tax administration 2,667

Bond issuance costs 104,578

Principal 2,335,000

Interest 613,069

Total Expenditures 3,055,314


(Under) Expenditures (3,050,607)


Refunding bonds issued 4,940,000

Payment to refunded bond escrow agent (7,200,000)

Transfers in 2,737,254

Total Other Financing Sources (Uses) 477,254

Net Change in Fund Balances (2,573,353)

Fund Balances, Beginning 2,283,924

Fund Balances, Ending (289,429)$


CITY OF ELK GROVE



Nonmajor Debt Service Funds

156

Variance

Positive


Revenues:

Use of money and property -$ 4,707$ 4,707$

Total Revenues - 4,707 4,707

Expenditures:

Debt Service:


Bond issuance costs 123,230 104,578 18,652

Principal 1,271,000 2,335,000 (1,064,000)

Interest 419,338 613,069 (193,731)

Total Expenditures 1,819,568 3,055,314 (1,235,746)


Over (Under) Expenditures (1,819,568) (3,050,607) (1,231,039)


Refunding bonds issued - 4,940,000 4,940,000

Payment to refunded bond escrow agent (1,041,992) (7,200,000) (6,158,008)

Transfers in 2,738,331 2,737,254 (1,077)

Total Other Financing Sources (Uses) 1,696,339 477,254 (1,219,085)

Net Change in Fund Balance (123,229) (2,573,353) (2,450,124)


-

Fund Balance, End 2,160,695$ (289,429)$ (2,450,124)$

CITY OF ELK GROVE


Debt Service Fund

Elk Grove Finance Authority Fund


157

INTERNAL SERVICE FUNDS

DEFINITION

Internal Service Funds were established to finance and account for services and commodities

furnished by a designated agency of a governmental unit to other departments of the same

government unit. Since the services and commodities are supplied exclusively to other departments

of a governmental jurisdiction, they are distinguishable from those public services which are

rendered to the public in general and which are accounted for in General or Special Revenue Funds.

Self-Insurance Fund – Established to account for the self-insured position of the City’s workers

compensation and general liability insurance.

Facilities and Fleet Fund – Established to account for the operation, maintenance and repair of

City facilities and fleet.

IT and GIS Fund – Established to account for the operation, maintenance and repair of the City’s

Information Technology assets and Geographic Information Services.

State Unemployment Insurance Fund – Established to account for unemployment insurance

premiums collected from all departments with City employees and makes payments on their behalf

to the California Employment Development Department.

158

State

Facilities Unemployment

Self-Insurance and Fleet IT and GIS Insurance

Fund Fund Fund Fund Totals

ASSETS

Current Assets:

Cash and Investments 4,228,833$ 2,478,215$ 1,560,593$ 188,606$ 8,456,247$

Accounts receivable 69,298 - 7,792 83 77,173

Interest receivable 2,017 1,242 797 - 4,056

Total Assets 4,300,148$ 2,479,457$ 1,569,182$ 188,689$ 8,537,476$

LIABILITIES

Current Liabilities:

Accounts payable 70,163$ 95,890$ 64,715$ -$ 230,768$

Accrued salaries and benefits 28,743 8,444 15,404 83 52,674

Compensated absences - current 1,821 2,102 3,494 - 7,417

Total Current Liabilities 100,727 106,436 83,613 83 290,859

Noncurrent Liabilities:

Compensated absences - long term 20,936 24,167 40,181 - 85,284

Claims payable - long term 421,154 - - - 421,154

Total Noncurrent Liabilities 442,090 24,167 40,181 - 506,438

Total Liabilities 542,817 130,603 123,794 83 797,297

Net Position

Unrestricted 3,757,331 2,348,854 1,445,388 188,606 7,740,179

Total Net Position 3,757,331 2,348,854 1,445,388 188,606 7,740,179

Total Liabilities and Net Position 4,300,148$ 2,479,457$ 1,569,182$ 188,689$ 8,537,476$

CITY OF ELK GROVE

Balance Sheet

Internal Service Funds

June 30, 2017

159

State




Operating Revenues:

Charges for services 3,766,539$ 4,479,033$ 3,019,956$ 34,233$ 11,299,761$

Total Operating Revenues 3,766,539 4,479,033 3,019,956 34,233 11,299,761

Operating Expenses:

Salaries and benefits 240,805 448,853 688,622 - 1,378,280

Services and supplies 2,286,881 2,440,347 2,007,016 - 6,734,244

Claims expense 526,934 - - 39,765 566,699

Total Operating Expenses 3,054,620 2,889,200 2,695,638 39,847 8,679,305

Operating Income 711,919 1,589,833 324,318 (5,614) 2,620,456

Non-Operating Revenues (Expenses):

Interest income 34,842 92,411 5,381 - 132,634

Total Non-Operating

Revenues (Expenses) 34,842 92,411 5,381 - 132,634

Net Income Before Transfers 746,761 1,682,244 329,699 (5,614) 2,753,090

Transfers Out (191,391) (1,141,770) (150,259) - (1,483,420)

Total Other Financing Sources (Uses) (191,391) (1,141,770) (150,259) - (1,483,420)

Change in Net Position 555,370 540,474 179,440 (5,614) 1,269,670

Net Position - Beginning of Year 3,201,961 1,808,380 1,265,948 194,220 6,470,509

Net Position - End of Year 3,757,331$ 2,348,854$ 1,445,388$ 188,606$ 7,740,179$

CITY OF ELK GROVE

Combining Statement of Revenues, Expenses and Changes in Fund Net Position



160

State




CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from customers/ other funds 3,791,524$ 4,479,467$ 3,012,613$ 34,216$ 11,317,820$

Cash paid to suppliers for goods and services (2,882,202) (2,467,573) (2,117,687) (39,765) (7,507,227)

Cash paid to employees for services (206,048) (477,393) (699,210) 83 (1,382,568)

Net Cash Provided (Used) by Operating Activities 703,274 1,534,501 195,716 (5,466) 2,428,025

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers In (Out) (191,391) (1,141,770) (150,259) - (1,483,420)

Net Cash (Used) by Noncapital Financing

Activities (191,391) (1,141,770) (150,259) - (1,483,420)

CASH FLOWS FROM CAPITAL AND RELATED ACTIVITIES

Acquisition of capital assets - - - - -

CASH FLOWS FROM INVESTING ACTIVITIES

Investment income (loss) 32,392 91,275 4,500 - 128,167

Net Cash Provided by Investing Activities 32,392 91,275 4,500 - 128,167

Net Increase (Decrease) in Cash and Cash Equivalents 544,275 484,006 49,957 (5,466) 1,072,772

Cash and Cash Equivalents, Beginning of Year 3,684,558 1,994,209 1,510,636 194,072 7,383,475

Cash and Cash Equivalents, End of Year 4,228,833$ 2,478,215$ 1,560,593$ 188,606$ 8,456,247$

RECONCILLIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED (USED) BY OPERATING ACTIVITIES

Operating income (loss) 711,919$ 1,589,833$ 324,318$ (5,614)$ 2,620,456$

Adjustments to reconcile operating income

(loss) to net cash provided (used) by

operating activities:

Changes in assets and liabilities:

(Increase) decrease in:

Accounts receivable 23,643 - (7,792) 65 15,916

Increase (decrease) in:

Accounts payable (6,441) (27,226) (110,671) - (144,338)

Accrued salaries and benefits payable 23,965 (14,794) (14,337) 83 (5,083)

Compensated absences 12,134 (13,312) 4,198 - 3,020

Claims payable (61,946) - - - (61,946)

Net Cash Provided (Used) by Operating Activities 703,274$ 1,534,501$ 195,716$ (5,466)$ 2,428,025$

CITY OF ELK GROVE

Combining Statement of Cash Flows



161

AGENCY FUNDS

DEFINITION

Agency funds are used to account for assets held by the City as an agent for individuals, other

governments and other organizations.

Agency Funds

Planning Deposits Fund – Established to account for Developer deposits intended as payment

for future permits and fees.

Community Services District & Sac County Funds – Established to account for development

fees, which are collected and remitted to the Cosumnes Community Services District or to

Sacramento County for fire and recreation and transportation facilities as well as landscape

maintenance. The Funds established for this purpose are:

East Elk Grove Park Fee Fund STA Transportation Fee Fund

East Franklin Park Fee Fund Laguna West Park Fee Fund

Elk Grove Fire Fee Fund

Laguna Springs Open Space Preserve – Established to maintain the wetlands.

Laguna Ridge/Poppy Ridge Reclaimed Water Fund – Established to account for the

collection of fees for reclaimed water.

East Elk Grove Specific Plan Fund – Established to account for developer impact fees which

are collected for the East Elk Grove Specific Plan.

Elk Grove Employee Sunshine Fund – Established to account for the donation by payroll

deduction of Employee funds which are collected and used for Employee functions and

activities.

Donation Community Programs – Established to account for the donations by citizens for

various City programs.

Special Assessment/Community Facility District (CFDs) – Established to account for the

monies collected and disbursed for land-based debt, where the City is not obligated for the debt.

Laguna Ridge CFD 2005-1 Fund East Franklin CFD 2002-1 Fund

Poppy Ridge CFD 2003-1 Fund

Utility Billing Refund Fund – Established to account for the Utility bill refund checks which

have remained unclaimed by the property owner and have become stale dated. The City

publishes an itemized listing of these funds on the website which is kept current.

162

EGPD Property & Evidence Fund – Established to account for the collection for confiscated

funds which may become evidence or asset seizures.

163


164

Planning

Deposits

Fund

Community

Service District &

Sac County Funds

Laguna

Springs

Open Space

Preserve

Laguna

Ridge/Poppy

Ridge

Reclaimed

Water Fund

East Elk

Grove

Specific

Plan Fund

ASSETS:

Cash and cash equivalents 1,124,745$ 566,159$ 90,385$ 15,242$ 659$

Investments - - - - -

Accounts receivable - 78,329 - - -

Interest receivable - - - - -

Long-term receivables - - - - -

Total Assets 1,124,745$ 644,488$ 90,385$ 15,242$ 659$

LIABILITIES:

Accounts payable -$ 98,120$ -$ -$ -$

Interest payable 171,791 16,533 2,876 1,826 659

Due to member agencies - 529,835 - 13,416 -

Due to bondholders and others - - 87,509 - -

Deposits 952,954 - - - -

Total Liabilities 1,124,745$ 644,488$ 90,385$ 15,242$ 659$

CITY OF ELK GROVE

Combining Statement of Assets and Liabilities

Agency Funds

June 30, 2017

165

Elk Grove

Employee

Sunshine

Funds

Donation

Community

Programs

Laguna Ridge

CFD 2005-1

Fund

CFD 2002-1 E

Franklin

CFD 2003-1

Poppy Ridge

Utility

Billing

Refund

Fund

EGPD

Property &

Evidence

Fund Total

20,683$ 6,680$ 3,860,091$ 4,263,247$ 5,144,480$ 154,711$ 43,784$ 15,290,866$

- - 8,056,930 53 74 - - 8,057,057

- - 111,888 119,267 217,228 - - 526,712

250 - 2,385 2,078 2,484 - - 7,197

- - 58,375 - - 58,375

20,933$ 6,680$ 12,089,669$ 4,384,645$ 5,364,266$ 154,711$ 43,784$ 23,940,207$

-$ -$ -$ -$ -$ -$ -$ 98,120$

- - - - - 8,665 126 202,476

- - - - - - - 543,251

- - 12,089,669 4,384,645 5,364,266 - - 21,926,089

20,933 6,680 - - - 146,046 43,658 1,170,271

20,933$ 6,680$ 12,089,669$ 4,384,645$ 5,364,266$ 154,711$ 43,784$ 23,940,207$

166

Balance

July 1, 2016 Balance at

(As Restated) Additions Deductions June 30, 2017

PLANNING DEPOSITS FUND

ASSETS:

Cash and cash equivalents 1,118,107$ 354,280$ 347,642$ 1,124,745$

Total Assets 1,118,107$ 354,280$ 347,642$ 1,124,745$

LIABILITIES:

Interest payable 169,798$ 14,421$ 12,428$ 171,791$

Deposits 948,309 339,859 335,214 952,954

Total Liabilities 1,118,107$ 354,280$ 347,642$ 1,124,745$

Community Service District & Sac County Funds

EAST ELK GROVE PARK FEE FUND

Cash and cash equivalents 71,895$ 643,993$ 666,940$ 48,948$

Total Assets 71,895$ 643,993$ 666,940$ 48,948$

LIABILITIES:

Accounts Payable -$ 666,176$ 666,176$ -$

Interest payable 718 829 1,134 413

Due to member agencies 71,177 1,057,760 1,080,402 48,535

Total Liabilities 71,895$ 1,724,765$ 1,747,712$ 48,948$

EAST FRANKLIN PARK FEE FUND

ASSETS:


Total Assets 94,071$ 461,370$ 357,541$ 197,900$

LIABILITIES:

Accounts payable -$ 353,914$ 353,914$ -$

Due to member agencies 94,071 461,370 357,541 197,900

Total Liabilities 94,071$ 815,284$ 711,455$ 197,900$

CITY OF ELK GROVE

Combining Statement of Changes in Assets and Liabilities

Agency Funds


167

Balance



ELK GROVE FIRE FEE

ASSETS:


Accounts receivable 97,887 1,899 21,457 78,329

Total Assets 584,918$ 646,222$ 1,014,510$ 216,630$

LIABILITIES:

Accounts payable 1$ 990,164$ 990,165$ -$

Due to member agencies 584,917 668,275 1,036,562 216,630

Total Liabilities 584,918$ 1,658,439$ 2,026,727$ 216,630$

STA TRANSPORTATION FEE FUND

ASSETS:


Total Assets 491,673$ 392,479$ 703,555$ 180,597$

LIABILITIES:

Accounts payable 407,877$ 700,066$ 1,009,823$ 98,120$

Interest payable 17,435 2,520 3,839 16,116

Due to member agencies 66,361 - - 66,361

Total Liabilities 491,673$ 702,586$ 1,013,662$ 180,597$

LAGUNA WEST PARK FEE FUND

ASSETS:

Cash and cash equivalents 221$ 193$ 1$ 413$

Total Assets 221$ 193$ 1$ 413$

LIABILITIES:

Interest payable 1$ 4$ 1$ 4$

Due to member agencies 220 189 - 409

Total Liabilities 221$ 193$ 1$ 413$

continued

CITY OF ELK GROVE

Agency Funds



168

Balance



Total Community Service District & Sac County Funds

ASSETS:

Cash and cash equivalents 1,144,891$ 2,142,358$ 2,721,090$ 566,159$


Total Assets 1,242,778$ 2,144,257$ 2,742,547$ 644,488$

LIABILITIES:

Accounts payable 407,878$ 2,710,320$ 3,020,078$ 98,120$



Total Liabilities 1,242,778$ 4,901,267$ 5,499,557$ 644,488$

LAGUNA SPRINGS OPEN SPACE PRESERVE

ASSETS:


Total Assets 95,359$ 1,392$ 6,366$ 90,385$

LIABILITIES:

Accounts payable -$ 6,054$ 6,054$ -$

Interest payable 1,961 1,227 312 2,876

Due to bondholders and others 93,398 165 6,054 87,509


LAGUNA RIDGE/POPPY RIDGE RECLAIMED WATER FUND

ASSETS:

Cash and cash equivalents 15,243$ 195$ 196$ 15,242$

Total Assets 15,243$ 195$ 196$ 15,242$

LIABILITIES:

Interest payable 1,827$ 195$ 196$ 1,826$

Due to member agencies 13,416 - - 13,416

Total Liabilities 15,243$ 195$ 196$ 15,242$

CITY OF ELK GROVE

Combining Statement of Changes in Assets and Liabilities (continued)

Agency Funds


169

Balance



EAST ELK GROVE SPECIFIC PLAN FUND

ASSETS:

Cash and cash equivalents 657$ 11$ 9$ 659$

Total Assets 657$ 11$ 9$ 659$

LIABILITIES:

Interest payable 657$ 10$ 8$ 659$

Total Liabilities 657$ 10$ 8$ 659$

ELK GROVE EMPLOYEE SUNSHINE FUND

ASSETS:


Accounts receivable - 24,941 24,941 -

Interest receivable 494 250 494 250

Total Assets 20,065$ 51,541$ 50,673$ 20,933$

LIABILITIES:

Deposits 20,065$ 26,699$ 25,831$ 20,933$


DONATION - COMMUNITY PROGRAMS

ASSETS:

Cash and cash equivalents 6,396$ 284$ -$ 6,680$

Total Assets 6,396$ 284$ -$ 6,680$

LIABILITIES:

Deposits 6,396$ 284$ -$ 6,680$

Total Liabilities 6,396$ 284$ -$ 6,680$

continued

CITY OF ELK GROVE


Agency Funds


170

Balance



Special Assesment/Community Facility District Funds (CFDs)

LAGUNA RIDGE CFD 2005-1 FUND

ASSETS:

Cash and cash equivalents 6,680,660$ 16,442,671$ 19,263,240$ 3,860,091$

Investments 6,369,875 80,890,712 79,203,657 8,056,930


Interest receivable 1,890 2,385 1,890 2,385

Long-term receivables 29,973 58,375 29,973 58,375

Total Assets 13,194,285$ 97,506,031$ 98,610,647$ 12,089,669$

LIABILITIES:

Due to bondholders and others 13,194,285$ 155,142,938$ 156,247,554$ 12,089,669$

Total Liabilities 13,194,285$ 155,142,938$ 156,247,554$ 12,089,669$

CFD 2002-1 E FRANKLIN FUND

ASSETS:


Investments 128 - 75 53

Accounts receivable 51,028 68,239 - 119,267

Interest receivable 42,331 - 40,253 2,078

Total Assets 5,352,902$ 4,039,594$ 5,007,851$ 4,384,645$

LIABILITIES:




CITY OF ELK GROVE

Agency Funds


171

Balance



CFD 2003-1 POPPY RIDGE FUND

ASSETS:


Investments 109 - 35 74

Accounts receivable 192,407 24,821 - 217,228

Interest receivable 35,770 - 33,286 2,484

Total Assets 5,292,711$ 3,775,412$ 3,703,857$ 5,364,266$

LIABILITIES:



Total Special Assesment/Community Facility District Funds (CFDs)

ASSETS:


Investments 6,370,112 80,890,712 79,203,767 8,057,057




Total Assets 23,839,898$ 105,321,037$ 107,322,355$ 21,838,580$

LIABILITIES:

Due to bondholders and others 23,839,898 165,652,255 167,653,573 21,838,580


UTILITY BILLING REFUND FUND

ASSETS:


Total Assets 134,465$ 22,301$ 2,055$ 154,711$

LIABILITIES:

Accounts payable -$ 26$ 26$ -$


Deposits 126,147 20,520 621 146,046



CITY OF ELK GROVE


Agency Funds

172

Balance



EGPD PROPERTY & EVIDENCE FUND

ASSETS:


Total Assets 22,553$ 151,393$ 130,162$ 43,784$

LIABILITIES:

Interest payable 126$ -$ -$ 126$

Deposits 22,427 130,261 109,030 43,658


TOTAL ALL AGENCY FUNDS

ASSETS:


Investments 6,370,112 80,890,712 79,203,767 8,057,057




Total Assets 26,495,521$ 108,046,691$ 110,602,005$ 23,940,207$

LIABILITIES:

Accounts payable 407,878$ 2,716,400$ 3,026,158$ 98,120$



Due to bondholders 23,933,296 165,652,420 167,659,627 21,926,089

Deposits 1,123,344 517,623 470,696 1,170,271


CITY OF ELK GROVE


Agency Funds




STATISTICAL SECTION

(UNAUDITED)

173

STATISTICAL SECTION

This part of the City of Elk Grove’s comprehensive annual financial report presents detailed

information as a context for understanding what the information in the financial statements, note

disclosures, and required supplementary information says about the City’s overall financial

health.

Contents Page

Financial Trends.............................................................................................................................. 174

These schedules contain trend information to help the reader understand how the City’s

financial performance and well-being have changed over time.

Revenue Capacity ........................................................................................................................... 182

These schedules contain information to help the reader assess the City’s most significant

local revenue sources, property tax and sales tax.

Debt Capacity.................................................................................................................................. 189

These schedules present information to help the reader assess the affordability of the

City’s current levels of outstanding debt and the City’s ability to issue additional debt in

the future.

Demographic and Economic Information ....................................................................................... 194

These schedules offer demographic and economic indicators to help the reader

understand the environment within which the City’s financial activities take place.

Operating Information .................................................................................................................... 196

These schedules contain service and infrastructure data to help the reader understand how

the information in the City’s financial report relates to the services the City provides and

the activities it performs.

174

2008 2009 2010 2011

Governmental activities

Net investment in capital assets 1,173,145,326$ 1,180,796,733$ 1,158,959,596$ 1,140,771,925$

Restricted 180,450,661 176,745,807 174,395,146 185,275,736

Unrestricted 24,154,531 25,161,389 24,989,287 5,023,205

Total governmental activities net position 1,377,750,518 1,382,703,929 1,358,344,029 1,331,070,866

Business-type activities

Net investment in capital assets 1,900,580 8,025,637 7,953,478 18,645,141

Restricted 1,644,012 - - -

Unrestricted 5,984,096 8,632,285 14,257,180 8,508,066

Total business-type activities net position 9,528,688 16,657,922 22,210,658 27,153,207

Primary government

Net investment in capital assets 1,175,045,906 1,188,822,370 1,166,913,074 1,159,417,066

Restricted 182,094,673 176,745,807 174,395,146 185,275,736

Unrestricted 30,138,627 33,793,674 39,246,467 13,531,271

Total primary government net position 1,387,279,206$ 1,399,361,851$ 1,380,554,687$ 1,358,224,073$

Source: The City of Elk Grove CAFR

CITY OF ELK GROVE

Net Position by Component

Last Ten Fiscal Years

At June 30, 2017

175

2012 2013 2014 2015 2016 2017

1,111,694,296$ 1,078,400,474$ 1,039,981,256$ 1,022,527,119$ 976,664,371$ 1,053,280,603$

175,800,872 180,771,790 186,903,329 189,080,327 215,829,204 257,008,259

6,493,570 5,047,782 11,298,487 196,869 20,295,785 22,513,816

1,293,988,738 1,264,220,046 1,238,183,072 1,211,804,315 1,212,789,360 1,332,802,678

18,799,468 21,427,305 22,023,121 22,404,646 28,132,236 28,608,561

- - - 1,180,453 1,398,464 272,077

15,187,176 17,698,799 22,689,582 24,944,050 27,615,148 29,735,624

33,986,644 39,126,104 44,712,703 48,529,149 57,145,848 58,616,262

1,130,493,764 1,099,827,779 1,062,004,377 1,045,953,748 1,004,796,607 1,081,889,164

175,800,872 180,771,790 186,903,329 190,260,780 217,227,668 257,280,336

21,680,746 22,746,581 33,988,069 25,140,918 47,910,933 52,249,440

1,327,975,382$ 1,303,346,150$ 1,282,895,775$ 1,261,355,446$ 1,269,935,208$ 1,391,418,940$

176

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Expenses


General government 20,889,133$ 18,394,991$ 17,752,747$ 17,209,695$ 16,861,125$ 20,774,018$ 16,175,748$ 14,105,998$ 18,070,372$ 19,975,018$

Public safety 30,625,264 30,386,062 27,784,118 28,802,715 30,872,143 31,181,737 33,121,110 34,793,685 32,251,277 33,957,641

Public ways and facilities 68,269,896 49,714,393 52,543,091 52,292,021 74,520,124 52,655,196 58,379,175 57,464,510 60,661,733 79,170,655

Community development 9,893,645 6,642,917 6,260,318 6,944,808 6,510,594 6,636,749 7,810,427 7,375,422 9,688,271 9,373,576

Interest on long-term debt 6,411,536 5,862,295 5,792,696 5,645,665 5,478,761 5,285,258 4,845,038 4,875,918 6,364,518 501,705

Total governmental activities expenses 136,089,474 111,000,658 110,132,970 110,894,904 134,242,747 116,532,958 120,331,498 118,615,533 127,036,171 142,978,595


Solid Waste 9,994,339 10,214,472 10,655,859 10,748,028 12,035,454 11,881,280 13,106,912 14,142,088 15,688,146 16,025,115

Transit 9,937,640 10,777,366 8,390,331 8,871,403 9,175,116 9,515,572 9,589,073 9,030,560 10,827,002 11,549,568

Drainage 2,960,972 3,309,437 3,100,355 3,260,816 3,170,283 3,261,545 3,087,492 3,374,484 3,427,573 4,195,296

Other activities 86,465 - - - - - - - - -

Total business-type activities expenses 22,979,416 24,301,275 22,146,545 22,880,247 24,380,853 24,658,397 25,783,477 26,547,132 29,942,721 31,769,979

Total primary government expenses 159,068,890 135,301,933 132,279,515 133,775,151 158,623,600 141,191,355 146,114,975 145,162,665 156,978,892 174,748,574

Program Revenues


Charges for services

General government 729,110 420,599 347,152 312,771 - - - - - 1,062,583

Public safety 1,427,067 3,447,719 3,542,004 2,142,992 2,650,254 2,608,338 1,585,802 1,203,963 1,152,599 7,300

Public ways and facilities 29,900,567 12,963,097 14,717,080 4,050,967 11,816,787 6,162,251 8,745,249 12,932,599 15,141,731 13,173,695

Other activities 15,412,097 5,823,019 3,532,440 3,909,310 7,430,163 7,954,482 9,174,547 8,831,340 9,963,980 2,206,419

Operating grants, interest, and contributions 25,414,265 18,444,630 17,378,788 29,380,039 32,863,969 30,507,890 34,884,138 35,982,947 27,881,745 15,651,340

Capital grants, interest and contributions 92,880,450 32,558,622 13,472,830 7,889,875 3,420,832 2,502,248 10,639,110 4,724,172 16,286,252 79,906,262

Total governmental activities program revenues 165,763,556 73,657,686 52,990,294 47,685,954 58,182,005 49,735,209 65,028,846 63,675,021 70,426,307 112,007,599


Charges for services

Solid Waste 11,864,291 12,797,192 12,432,532 12,622,145 13,547,383 14,586,613 15,261,474 15,139,025 17,080,638 16,863,927

Transit 1,420,604 1,623,818 1,384,883 1,271,734 1,567,661 1,560,881 1,583,621 1,618,573 1,454,582 1,430,071

Drainage 5,000,824 4,818,476 4,735,185 4,423,385 4,992,891 5,163,800 5,257,252 5,359,836 5,448,108 5,632,309

Other activities 107,395 - - - - - - - - -

Operating grants, interest, and contributions 4,564,704 5,298,271 6,394,112 4,570,588 9,705,378 6,261,715 8,803,329 8,737,006 12,468,916 8,869,845

Capital grants, interest and contributions 752,390 5,717,972 234,416 3,975,118 1,080,600 - - - - -

Total business-type activities program revenues 23,710,208 30,255,729 25,181,128 26,862,970 30,893,913 27,573,009 30,905,676 30,854,440 36,452,244 32,796,152

Total primary government program revenues 189,473,764 103,913,415 78,171,422 74,548,924 89,075,918 77,308,218 95,934,522 94,529,461 106,878,551 144,803,751

17

6


Changes in Net Position, Last Ten Fiscal Years (accrual basis)

For The Years Ended June 30, 2017

177

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Net (Expense) Revenue

Governmental activities 29,674,082 (37,342,972) (57,142,676) (63,208,950) (76,060,742) (66,797,749) (55,302,652) (54,940,512) (56,609,864) (30,970,996)

Business-type activities 730,792 5,954,454 3,034,583 3,982,723 6,513,060 2,914,612 5,122,199 4,307,308 6,509,523 1,026,173

Total primary government net revenue (expense) 30,404,874$ (31,388,518)$ (54,108,093)$ (59,226,227)$ (69,547,682)$ (63,883,137)$ (50,180,453)$ (50,633,204)$ (50,100,341)$ (29,944,823)$

General Revenues and Other Changes in Net Position


Property taxes 12,057,091$ 11,430,115$ 8,315,364$ 9,242,320$ 9,089,959$ 10,174,450$ 9,680,843$ 10,748,517$ 11,443,260$ 23,670,228$

Sales & Use tax 14,430,375 11,411,206 10,942,740 11,797,182 13,169,204 13,708,848 15,365,390 16,567,321 20,504,422 25,535,498

In-Lieu sales tax 4,688,688 4,869,854 2,965,668 3,785,803 3,955,955 4,710,293 4,845,534 5,583,730 4,704,053 5,681,559

Other taxes 5,803,532 6,002,418 5,883,338 7,254,112 8,829,483 8,591,465 8,905,914 9,319,299 10,174,956 4,510,259

Unrestricted interest income 11,646,009 7,476,681 3,591,288 3,393,386 3,098,231 3,611,324 3,933,612 7,107,416 4,671,926 -

Miscellaneous 62,690 34,132 5,500 - - - - - - 5,727,764

Special items - - - - - - - - - -

Transfers 575,000 1,071,977 1,078,878 463,014 835,752 (479,287) 908,351 868,712 1,096,291 1,098,174

Total governmental activities 49,263,385 42,296,383 32,782,776 35,935,817 38,978,584 40,317,093 43,639,644 50,194,995 52,594,908 66,223,482


Other taxes 1,423,478 1,336,599 1,177,304 1,125,885 1,073,091 1,014,591 1,129,497 1,235,074 1,301,708 1,379,717

Unrestricted interest income 424,042 398,770 341,028 196,955 83,038 165,275 243,254 164,758 879,777 -

Other 7,998 511,388 2,078,699 100,000 - - - - - 162,698

Transfers (575,000) (1,071,977) (1,078,878) (463,014) (835,752) 479,287 (908,351) (868,712) (1,096,291) (1,098,174)

Total business-type activities 1,280,518 1,174,780 2,518,153 959,826 320,377 1,659,153 464,400 531,120 1,085,194 444,241

Total primary government 50,543,903 43,471,163 35,300,929 36,895,643 39,298,961 41,976,246 44,104,044 50,726,115 53,680,102 66,667,723

Change in governmental activities

net position before special item 78,937,467 4,953,411 (24,359,900) (27,273,133) (37,082,158) (26,480,656) (11,663,008) (4,745,517) (4,014,956) 35,252,486

Special item:

Loss on sale of Vineyard Property - - - - - - (14,373,966) - - -

Bad debt expense - - - - - - - (12,141,141) - -

Change in Net Position:

Governmental activities 78,937,467 4,953,411 (24,359,900) (27,273,133) (37,082,158) (26,480,656) (26,036,974) (16,886,658) (4,014,956) 35,252,486

Business-type activities 2,011,310 7,129,234 5,552,736 4,942,549 6,833,437 4,573,765 5,586,599 4,838,428 7,594,717 1,470,414

Total primary government 80,948,777$ 12,082,645$ (18,807,164)$ (22,330,584)$ (30,248,721)$ (21,906,891)$ (20,450,375)$ (12,048,230)$ 3,579,761$ 36,722,900$

Note: Information is available since GASB Statement No. 34 was implemented in 2003.

* These numbers include Property Tax in Leiu of Vehicle License Fee (VLF). Beginning in 2008 the Property Tax in Leiu VLF was moved to intergovernmental, and in 2017 it was moved to property taxes.


177


Changes in Net Position, Last Ten Fiscal Years (accrual basis)


178

2008 2009 2010 2011 2012

General Fund

Reserved 380,990$ 162,111$ 67,455$ -$ -$

Unreserved 16,644,326 17,441,295 23,525,761 - -

Nonspendable 13,869 -

Committed 19,363,473 19,151,034

Assigned 287,779 -

Unassigned 4,772,737 7,369,071 Total General Fund 17,025,316$ 17,603,406$ 23,593,216$ 24,437,858$ 26,520,105$

All Other Governmental Funds

Reserved 71,405,808$ 47,110,463$ 38,554,055$ -$ 1

-$

Unreserved reported in,

Special revenue funds 11,908,157 15,753,853 19,615,909 - -

Capital projects funds 74,179,272 74,372,879 69,294,665 - -

Nonspendable - - - - -

Restricted - - - 123,223,457 107,450,983

Committed - - - 501,453 -

Assigned - - - - -

Unassigned - - - (10,077,779) (8,379,471)

Total All Other Governmental Funds 157,493,237$ 137,237,195$ 127,464,629$ 113,647,131$ 99,071,512$

Source: The City of Elk Grove CAFR1The change in All Other Governmental Funds in 2011 is due to the implementation of GASB No. 54, Fund Balance

Reporting and Governmental Fund Type Definitions.


Fund Balances, Governmental Funds


(modified accrual basis of accounting)


179

2013 2014 2015 2016 2017

-$ -$ -$ -$ -$

- - - - -

- - - - 3,510,730

18,950,057 18,604,618 19,227,947 20,096,678 21,000,138

- - 1,649,271 346,141 357,858

4,876,432 5,995,555 1,381,845 7,498,226 9,447,603 23,826,489$ 24,600,173$ 22,259,063$ 27,941,045$ 34,316,329$

-$ -$ -$ -$ -$

- - - - -

- - - - -

- - 65,738,124 66,458,363 -

109,716,431 113,819,244 124,249,316 151,376,738 242,335,680

- - - 20,096,678 -

- - - 346,141 -

(5,952,761) (14,415,146) (14,415,146) (3,262,256) (4,644,863)

103,763,670$ 99,404,098$ 175,572,294$ 235,015,664$ 237,690,817$

180

2008 2009 2010 2011

REVENUES

Taxes 36,979,686$ 33,713,593$ 28,107,110$ 32,079,417$

Licenses, fees and permits 24,162,076 9,350,921 7,226,695 7,699,245

Intergovernmental 49,839,138 49,411,918 27,951,148 38,799,953

Fines and forfeitures 1,205,108 1,820,664 1,643,163 1,709,371

Charges for services 16,288,659 17,399,190 15,472,824 1,768,835

Investment earnings 10,052,105 6,367,847 2,197,050 1,687,347

Contributions from property owners 58,535,624 50 - -

Contributions and donations - - - -

Other Revenue 62,690 282,898 201,394 193,731

Total revenues 197,125,086 118,347,081 82,799,384 83,937,899

EXPENDITURES:

General government 20,493,094 18,586,453 17,438,537 16,331,869

Public safety 28,891,996 29,187,057 26,501,367 27,594,225

Public ways and facilities 31,533,670 9,622,316 11,080,202 11,101,470

Community development 20,301,734 14,405,841 9,567,413 16,627,411

Capital outlay 116,418,642 58,482,065 23,340,145 17,768,992

Debt service:

Principal retirement 1,791,624 2,985,314 2,885,000 3,000,000

Interest and fiscal charges 5,640,375 5,827,964 5,604,871 5,512,967

Bond issue costs - - - -

Refunding bond issue costs - - - -

Total expenditures225,071,135 139,097,010 96,417,535 97,936,934

EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER)

EXPENDITURES (27,946,049) (20,749,929) (13,618,151) (13,999,035)


Long-term liabilities issued - - - -

Premium (discount) on debt issued - - - -

Refunding bonds issued - - - -

Payments to refunded bond escrow agent - - - -

Use of escrow funds to pay-off capital leases (6,652,617) - - -

Transfers from other funds 11,508,109 7,949,621 30,529,279 13,375,223

Transfers to other funds (10,933,109) (6,877,644) (20,693,884) (12,349,044)

Total other financing sources (uses) (6,077,617) 1,071,977 9,835,395 1,026,179

Net Change in Fund Balances before

special item (34,023,666) (19,677,952) (3,782,756) (12,972,856)

Special Item:

Sale of Vineyard Property - - - -

NET CHANGE IN FUND BALANCES (34,023,666)$ (19,677,952)$ (3,782,756)$ (12,972,856)$

Debt service as a percentage of noncapital expenditures.

6.84% 10.93% 11.62% 10.62%

(1) On April 9, 2014, the City sold Vineyard land for $3,347,156.



Changes in Fund Balances, Governmental Funds

Last Ten Fiscal Years Ending June 30, 2017

(modified accrual basis of accounting)

181

2012 2013 2014 2015 2016 2017

35,044,601$ 37,185,056$ 38,797,684$ 42,218,867$ 46,826,691$ 59,397,544$

17,066,136 12,925,467 15,574,986 19,444,219 23,521,281 13,741,076

36,944,835 33,646,054 44,698,377 40,589,946 42,849,356 24,099,150

1,748,945 1,525,078 1,319,758 488,299 387,185 354,504

1,920,769 2,234,212 3,083,121 3,308,827 2,481,403 1,804,824

2,568,929 1,294,280 1,985,204 3,122,257 4,040,144 5,097,917

- - - - - 72,700,000

- - - - - 30,000

360,233 459,128 356,980 1,352,612 970,243 947,939

95,654,448 89,269,275 105,816,110 110,525,027 121,076,303 178,172,954

16,379,380 19,017,525 18,789,272 19,891,965 19,971,477 23,312,594

30,040,279 30,592,175 32,537,512 34,796,247 35,356,689 36,067,903

31,766,320 9,277,761 15,306,831 15,453,017 15,331,077 59,011,979

10,151,471 7,868,412 8,433,339 7,329,328 9,444,746 9,193,193

13,179,940 12,525,633 20,853,268 22,636,496 19,170,128 488,306

3,145,000 3,290,000 3,460,000 3,620,000 1,315,000 2,335,000

5,353,597 5,290,067 4,968,805 4,803,957 5,121,900 679,930

- - - - 1,356,411 104,578

- - - - - -

110,015,987 87,861,573 104,349,027 108,531,010 107,067,428 131,193,483

(14,361,539) 1,407,702 1,467,083 1,994,017 14,008,875 46,979,471

- - - - 90,630,000 -

- - - - 9,594,496 -

- - - - - 4,940,000

- - - - (89,402,398) (7,200,000)

- - - - - -

8,504,158 11,008,485 11,695,534 17,862,895 35,802,601 13,408,691

(6,635,991) (10,417,645) (9,423,825) (15,470,054) (33,280,777) (10,827,097)

1,868,167 590,840 2,271,709 2,392,841 13,343,922 321,594

(12,493,372) 1,998,542 3,738,792 4,386,858 27,352,797 47,301,065

- - 3,347,156 (1)

- - -

(12,493,372)$ 1,998,542$ 7,085,948$ 4,386,858$ 27,352,797$ 47,301,065$

8.78% 11.39% 10.09% 9.81% 7.32% 2.31%

182

Fiscal

Year Less Total Taxable Total

Ended Residential Commercial Industrial Tax Exempt Assessed Direct

June 30 Property Property Property Other Property Value Tax Rate

2008 12,812,158,709 1,307,482,859 331,711,302 3,269,371,490 234,786,725 17,485,937,635 0.05699

2009 14,318,680,324 1,748,262,504 418,427,479 918,496,180 270,921,680 17,132,944,807 0.06444

2010 12,008,553,550 1,848,882,546 464,328,201 846,991,020 324,208,752 14,844,546,565 0.06348

2011 12,094,994,805 1,909,454,205 439,941,669 776,945,046 296,152,644 14,925,183,081 0.06474

2012 11,825,574,057 1,692,436,063 431,092,987 675,131,790 333,570,758 14,290,664,139 0.64360

2013 11,029,428,330 1,532,669,836 385,075,524 608,914,724 346,233,652 13,209,854,762 0.06453

2014 12,146,070,163 1,500,346,050 392,460,053 567,434,705 359,424,853 14,246,886,118 0.06480

2015 13,492,526,952 1,587,754,482 419,089,413 619,856,390 398,318,801 15,720,908,436 0.06460

2016 14,087,121,936 1,687,253,176 442,986,037 675,804,195 430,877,261 16,462,288,083 0.06451

2017 14,979,885,692 1,836,489,273 465,865,942 725,782,693 426,240,108 17,581,783,492 0.06443

Source: HdL from the Sacramento County Assessor 2007/08-2016/17 Combined Tax Rolls


Assessed Value and Estimated Actual Value of Taxable Property


183

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

City's Share of 1% Levy Per Prop 13/

City of Elk Grove Direct Rate3

0.05740 0.05740 0.05740 0.05740 0.05740 0.05740 0.05740 0.05740 0.05740 0.05740

Overlapping Rates:

Sacramento County General 0.38220 0.38220 0.38220 0.38220 0.38220 0.38220 0.38220 0.38220 0.38220 0.38220

Elk Grove Unified School District 0.25490 0.25490 0.25490 0.25490 0.25490 0.25490 0.25490 0.25490 0.25490 0.25490

Cosumnes CSD - Fire District 0.22140 0.22140 0.22140 0.22140 0.22140 0.22140 0.22140 0.22140 0.22140 0.22140

Los Rios Community College District 0.03640 0.03640 0.03640 0.03640 0.03640 0.03640 0.03640 0.03640 0.03640 0.03640

Sacramento County Library 0.02040 0.02040 0.02040 0.02040 0.02040 0.02040 0.02040 0.02040 0.02040 0.02040

Sacramento -Yolo Mosquito 0.00866 0.00866 0.00866 0.00866 0.00866 0.00866 0.00866 0.00866 0.00866 0.00866

Physically Handicapped-unified 0.00459 0.00459 0.00459 0.00459 0.00459 0.00459 0.00459 0.00459 0.00459 0.00459

Childrens Institution 0.00447 0.00447 0.00447 0.00447 0.00447 0.00447 0.00447 0.00447 0.00447 0.00447

Elk Grove - Cosumnes Cemetery 0.00275 0.00275 0.00275 0.00275 0.00275 0.00275 0.00275 0.00275 0.00275 0.00275

Sacramento County Superintendent Admin. 0.00259 0.00259 0.00259 0.00259 0.00259 0.00259 0.00259 0.00259 0.00259 0.00259

Development Center Handicapped 0.00145 0.00145 0.00145 0.00145 0.00145 0.00145 0.00145 0.00145 0.00145 0.00145

Sacramento County Wide Equalization 0.00131 0.00131 0.00131 0.00131 0.00131 0.00131 0.00131 0.00131 0.00131 0.00131

Sacramento County Regional Occupational Center 0.00096 0.00096 0.00096 0.00096 0.00096 0.00096 0.00096 0.00096 0.00096 0.00096

Sacramento County Juvenile Hall 0.00055 0.00055 0.00055 0.00055 0.00055 0.00055 0.00055 0.00055 0.00055 0.00055

Infant Developmentally-physically Handicapped 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006

Infant Developmentally Retarded 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006 0.00006

Total Proposition 13 Rate (Basic Levy)1

1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000

Los Rios College Bond 0.00000 0.00000 0.00000 0.00000 0.01920 0.00000 0.00000 0.00000 0.00000 0.00000

Los Rios College Gob 0.00660 0.00740 0.01240 0.00900 0.00000 0.01930 0.01810 0.01130 0.00910 0.01410

Regional Sanitation Bonds 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000

Sacramento Unified Bond 0.00000 0.00000 0.00000 0.00000 0.09820 0.00000 0.00000 0.00000 0.00000 0.00000

Sacramento Unified Gob 0.08900 0.09380 0.09110 0.09790 0.00000 0.09990 0.00000 0.00000 0.00000 0.00000

Sacto City Unified Gob 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.12250 0.12120 0.13350 0.12770

Total Direct & Overlapping2

Tax Rates 1.09560 1.10120 1.10350 1.10690 1.11740 1.11920 1.14060 1.13250 1.14260 1.14180

General Obligation Debt Rate

Redevelopment Rate4

Total Direct Rate 5

0.05699 0.06444 0.06348 0.06474 0.06436 0.64530 0.64530 0.06460 0.06451 0.06443

Source: Prepared by HdL, Coren & Cone

Data source: Sacramento County Assessor 2007/08 - 2016/17 Tax Rate Table

Notes:1In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within.

In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.

2Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.

3City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figures.

4RDA rate is based on the largest RDA tax rate area (TRA) and includes only rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are

applied only to the incremental property values.

5Because basic and debt rates vary by tax rate area individual rates cannot be summed.

Total Direct Rate is the weighted average of all individual direct rates applied by the government

preparing the statistical section information. GASB S44 Q&A 9.19.1


Direct and Overlapping Property Tax Rates


(Per $100 of Assessed Value)

184

Taxpayer Rank

Taxable Assessed

Value

Approximate

Percentage of

Taxable Assessed

Valuation Rank

Taxable

Assessed

Value

Approximate

Percentage of Taxable

Assessed Valuation

Apple Computer Inc 1 191,571,799$ 1.06% 2 88,600,511$ 0.86%

Donahue Schriber Realty Group LP 2 145,892,248 0.81% 1 168,675,406 0.87%

Pappas Laguna 2 LP 3 96,678,753 0.54% 6 69,753,269 0.36%

Laguna Springs Corporation Center 4 73,131,965 0.41%

Kaiser Foundation Health Plan Inc 5 59,583,713 0.36%

Oakmont Properties II LP 6 60,183,131 0.33% 3 62,362,800 0.60%

WSI Poppy Ridge LLC 7 49,330,418 0.27%

9130 Nolan Street LLC 8 46,642,723 0.26% 5 44,880,000 0.43%

Jackson II LLC 9 44,472,231 0.25% 9 57,470,024 0.26%

Norwalk Flallon LLC 10 43,148,118 0.24%

Reynen Bardis LLC 4 89,590,259 0.46%

Somerfield North LLC 7 36,675,284 0.36%

Lv Apartments LLC 8 30,438,683 0.29%

SB RBLI Land Company Arbor Ranch LLC 10 43,619,400 0.23%

810,635,099$ 4.53% 692,065,636$ 4.72%

Source: HDL, Coren & Cone, Sacramento County Assessor 2016-17 Combined Tax Rolls and the SBE Non Unitary Tax Roll

2008


Principal Property Taxpayers

Current Year and Ten Years Ago

2017

185

Fiscal

Year Taxes Levied Collection

Ended for the Percent in Subsequent Percent

June 30 Fiscal Year Amount of Levy Years Amount of Levy

2008 17,212,060 13,704,266 79.62% 3,507,794 17,212,060 100.00%

2009 17,175,938 15,490,267 90.19% 1,685,671 17,175,938 100.00%

2010 16,778,257 15,878,410 94.64% 899,847 16,778,257 100.00%

2011 16,576,394 15,809,653 95.37% 766,741 16,576,394 100.00%

2012 15,904,472 15,102,178 94.96% 802,294 15,904,472 100.00%

2013 17,065,239 16,808,942 98.50% 256,297 17,065,239 100.00%

2014 17,910,846 17,842,391 99.62% 68,455 17,910,846 100.00%

2015 20,085,162 20,021,250 99.68% 63,912 20,085,162 100.00%

2016 22,492,684 22,421,589 99.68% 71,095 22,492,684 100.00%

2017 24,198,311 24,000,095 99.18% 198,216 24,198,311 100.00%

Source: Sacramento county Department of Finance, Auditor-Controller Division

Collected within the

Fiscal Year of the Levy Total Collection to Date


Property Tax Levies and Collections


186

2008 2009 2010 2011 2012

Apparel Stores 73,209$ 72,422$ 79,557$ 89,645$ 59,538$

General Merchandise 156,384 149,138 128,368 117,273 148,476

Food Stores 67,734 66,521 66,056 64,494 68,344

Eating and Drinking Places 158,479 155,642 148,566 152,904 159,341

Building Materials 107,062 95,965 73,912 71,202 70,740

Auto Dealers and Supplies 505,683 381,275 303,211 327,681 414,609

Service Stations 183,184 187,529 145,276 161,876 184,353

Other Retail Stores 296,186 271,616 276,191 280,758 308,742

All Other Outlets 401,928 358,048 254,990 259,804 279,687

Total 1,949,849$ 1,738,156$ 1,476,127$ 1,525,637$ 1,693,830$

Source: State of California Board of Equalization and The HdL Companies

Note: Due to confidentiality issues, the names of the ten largest revenue payers are not available.

The categories presented are intended to provide alternative information regarding the sources of

the City's revenue. Total is taxable sales, not sales tax revenue received. Does not include Use

tax or County pool allocation.


Taxable Sales by Category


(in thousands of dollars)

187

2013 2014 2015 2016 2017

65,521$ 72,656$ 76,039$ 79,512$ 80,587$

157,202 178,709 184,822 187,807 185,515

64,032 60,816 64,028 65,466 66,083

175,995 187,234 201,084 228,559 250,348

63,726 67,783 63,315 76,102 86,754

492,184 576,870 637,312 736,551 850,020

201,937 202,295 202,900 175,264 165,039

318,666 276,132 285,513 294,492 318,251

297,654 377,509 441,461 474,317 514,399

1,836,917$ 2,000,004$ 2,156,474$ 2,318,070$ 2,516,996$

188

CITY OF ELK GROVE

Direct and Overlapping Sales Tax Rates


Fiscal

Year

City Direct

Rate

Sacramento

County

STA Measure

A

State of

California

2008 1.00 0.25 0.50 6.00

2009 1.00 0.25 0.50 7.00 (a)

2010 1.00 0.25 0.50 7.00

2011 1.00 0.25 0.50 7.00

2012 1.00 0.25 0.50 6.00 (b)

2013 1.00 0.25 0.50 6.25 (c)

2014 1.00 0.25 0.50 6.25

2015 1.00 0.25 0.50 6.25

2016 1.00 0.25 0.50 6.25

2017 1.00 0.25 0.50 6.00 (d)

Sources: California State Board of Equalization, Sacramento Transportation Authority,

California Legislative Analyst's Office, California Department of Tax and Fee

Administration

(a) April 1, 2009 the State increased the State Rate 1%

(b) July 1, 2011 the State decreased the State Rate 1%

(c) January 1, 2013 the State increased the State Rate 0.25%

(d) January 1, 2017, the State decreased the State rate 0.25%

Note: In 2004, the State issued Economic Recovery Bonds (ERB). To repay the

ERBs, the State pledged one-quarter cent of the local Bradley-Burns sales

tax, which cities and counties use for general purposes, and replaced it with

one-quarter cent State special fund sales tax for repayment of the bonds. The

State replaced the one-quarter cent local tax with equal dollars from the

property tax allocation, and described it as "in lieu" sales tax. In 2016. the

ERBs were fully paid and the sales tax rates were restored. For CAFR

reporting purposes, the full 1% was classified as sales tax during this entire

period. To avoid confusion, the City Direct Rate for practical purposes, was

unchanged and has not been adjusted between the local and State rates as

expressed in the above table.

189

CITY OF ELK GROVE

Ratios of Outstanding Debt by Type


Business-Type

Activities

Fiscal

Year

Special

Assessment

Bonds (1)

Capital Leases

Economic

Development

Bonds

Total Primary

Government

Percentage of

Personal

Income (2)

Per Capita (2)

2008 122,010,000$ 20,314$ -$ 122,030,314$ 2.24% 875

2009 119,045,000 - - 119,045,000 2.82% 842

2010 116,160,000 - - 116,160,000 2.99% 807

2011 113,160,000 - 10,715,000 123,875,000 3.06% 810

2012 110,015,000 - 10,510,000 120,525,000 2.93% 773

2013 108,376,624 - 10,300,000 118,676,624 2.77% 746

2014 104,833,363 - 10,090,000 114,923,363 2.58% 715

2015 101,130,102 - 9,870,000 111,000,102 2.44% 681

2016 109,611,895 (3)

- 9,645,000 119,256,895 2.53% 710

2017 4,940,000 - 9,410,000 14,350,000 0.30% 84

Notes: City incorporated July 1, 2000. U.S. Census and subsequent estimates has area

approximately 2/3 of City's actual size.

Source: (1)

City of Elk Grove CAFR(2)

See Schedule of Demographic and Economic Statistics for personal and population data(3)

In fiscal year 2017, the City determined that bonds in the amount of $107,076,895 should be reported as debt without city commitment.

Amounts prior to 2017 have not been restated.


190

2016-17 Assessed Valuation: $18,080,720,336

Total Debt City’s Share of

OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2017 % Applicable (1) Debt 6/30/17

Los Rios Community College District $340,100,000 10.464% $35,588,064

Elk Grove Unified School District 82,100,000 56.434 $46,332,314

Sacramento Unified School District 528,757,966 0.163 861,875

City of Elk Grove Community Facilities District No. 2005-1 113,500,000 100 113,500,000

Elk Grove Unified School District Community Facilities District No. 1 205,377,561 56.434 115,902,773

Sacramento County Community Facilities Districts 6,726,017 100 6,726,017

California Statewide Community Development Authority 1915 Act Bonds 6,539,580 100 6,539,580

TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $325,450,623

DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Sacramento County General Fund Obligations $235,694,277 12.749% $30,048,663

Sacramento County Pension Obligation Bonds 944,016,200 12.749 120,352,625

Sacramento County Board of Education Certificates of Participation 5,675,000 12.749 723,506

Los Rios Community College District Certificates of Participation 700,000 10.464 73,248

Sacramento Unified School District Certificates of Participation 67,920,000 0.163 110,710

Cosumnes Community Services District Certificates of Participation 23,935,000 87.476 20,937,381

City of Elk Grove Community Facilities District No. 2002-1 47,985,000 100 47,985,000 (2)

City of Elk Grove Community Facilities District No. 2003-1 41,510,000 100 41,510,000 (2)

City of Elk Grove Lease Revenue Bonds 4,940,000 100 4,940,000 (3)

TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT $266,681,133

TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT $266,681,133

TOTAL GROSS DIRECT DEBT $4,940,000

TOTAL OVERLAPPING DEBT $587,191,756

GROSS COMBINED TOTAL DEBT $592,131,756 (4)

NET COMBINED TOTAL DEBT $592,131,756

(1)

(2) Debt is responsibility of theblended component unit

(3) General Fund is only obligated for this amount, not any of the blended components.

(4)

Ratios to Assessed Valuation:

Total Overlapping Tax and Assessment Debt 1.80%

Total Gross Direct Debt ($4,940,000) 0.03%

Total General Fund Obligated Debt ($4,940,000) 0.03%

Gross Combined Total Debt 3.27%

Source: California Municipal Statistics, Inc., Oakland, CA

Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease

obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.

CITY OF ELK GROVE

Direct and Overlapping Governmental Activities Debt

June 30, 2017

The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value.

Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is

within the boundaries of the city divided by the district's total taxable assessed value.

191


192

2008 2009 2010 2011

Assessed value (1)

17,720,724,360$ 17,403,866,487$ 15,168,755,317$ 15,221,335,725$

Less: Exemptions (1)

(234,786,725) (270,921,680) (324,208,752) (296,152,644)

17,485,937,635 17,132,944,807 14,844,546,565 14,925,183,081

Legal debt margin

Debt Limit (15% of Assessed Value) 2,622,890,645 2,569,941,721 2,226,681,985 2,238,777,462

Debt applicable to limit:

Total Bonded Debt (including Special

Assessment Bonds) 122,010,000 119,045,000 116,160,000 123,875,000

Less:

Special Assessment Bonds - - - -

Tax Allocation Bonds - - - -

Total Amount of Debt Applicable to Debt

Limit 122,010,000 119,045,000 116,160,000 123,875,000

Legal Debt Margin 2,500,880,645$ 2,450,896,721$ 2,110,521,985$ 2,114,902,462$

Total debt applicable to limit as a percentage of

debt limit 4.88% 4.86% 5.50% 5.86%

Source: (1)

HdL from the Sacramento County Assessor 2007/08-2016/17 Combined Tax Rolls


Legal Debt Margin

For the Last Ten Years Ended June 30, 2017

193

2012 2013 2014 2015 2016 2017

14,624,234,897$ 13,556,088,414$ 14,606,310,971$ 16,119,227,237$ 16,893,165,344$ 18,008,023,600$

(333,570,758) (346,233,652) (359,424,853) (398,318,801) (430,877,261) (426,240,108)

14,290,664,139 13,209,854,762 14,246,886,118 15,720,908,436 16,462,288,083 17,581,783,492

2,143,599,621 1,981,478,214 2,137,032,918 2,358,136,265 2,469,343,212 2,637,267,524

120,525,000 118,676,624 114,923,363 111,000,102 119,256,895 14,350,000

- - - - - -

- - - - - -

120,525,000 118,676,624 114,923,363 111,000,102 119,256,895 14,350,000

2,023,074,621$ 1,862,801,590$ 2,022,109,555$ 2,247,136,163$ 2,350,086,317$ 2,622,917,524$

5.96% 6.37% 5.68% 4.94% 5.07% 0.55%

194

Year Population (1)

County

Population (1)

Personal Income

Per Capita

Personal

Income (2)

Public School

Enrollment (3)

Median

Age(4)

Unemployment

Rate (5)

2008 139,542 1,424,415 5,442,417,084 39,002 62,294 32.00 6.20%

2009 141,430 1,433,187 4,214,189,710 29,797 62,172 32.60 9.80%

2010 143,885 1,445,327 3,891,082,055 27,043 62,172 32.80 10.50%

2011 153,015 1,428,355 4,051,684,185 26,479 62,483 34.50 10.40%

2012 155,937 1,435,153 4,117,828,359 26,407 62,126 33.00 9.80%

2013 159,074 1,450,121 4,277,022,638 26,887 62,137 33.30 6.70%

2014 160,688 1,454,406 4,447,843,840 27,680 62,499 33.90 5.00%

2015 162,899 1,470,912 4,550,094,868 27,932 62,888 33.80 4.50%

2016 167,965 1,495,297 4,705,371,510 28,014 62,767 34.50 4.20%

2017 171,059 1,514,770 4,838,916,992 28,288 63,061 35.10 4.10%

Sources:(1)

California Department of Finance

(2) HdL, Coren & Cone, US Census Bureau

(3) California Department of Education

(4) U.S. Census Bureau, American FactFinder, 2011 American Community Survey

(5) www.labormarketinfo.edd.ca.gov


Demographic and Economic Statistics


195

Business Name

Number of

Employees

Percent of

Total

Employment

(%)

Number of

Employees

Percent of

Total

Employment

(%)

Elk Grove Unified School District 5,830 7.28% 5,000 6.71%

Apple Computer Distribution Center 2,500 3.12% 1,800 2.42%

CA Correctional Health Care Services (1) 1,036 1.29%

Cosumnes Community Services District 775 0.97%

Walmart (3 locations) 615 0.77% 273 0.37%

Kaiser Permanente (2 locations) 471 0.59% 1,468 1.97%

Raley's/Bel Air Markets 425 0.53%

City of Elk Grove 314 0.39% 289 0.39%

Alldata LLC 310 0.39% 400 0.54%

Nissan of Elk Grove 289 0.36%

Methodist Hospital of Sacramento 550 0.74%

Cosumnes River College 330 0.44%

Bimbo Bakeries Inc. 265 0.36%

Elk Grove Bank of Stockton 237 0.32%

Total Top 10 Employers 12,565 15.69% 10,612 14.24%

Total City Labor Force (2) 80,100 74,500

Note: Pricipal employers for fiscal year 2008 are not available, therefore the earliest available information for the fiscal year 2011

has been included.

(2) Total City Labor Force is provided by EDD Labor Force Data and includes all employable adult residents of the City of Elk

Grove

*Includes full time and part time

(1) State of CA employees

City of Elk Grove

Principal Employers

Last Fiscal Year & Six Years Ago

2017 2011

Source: MuniServices, LLC

196

Function/Program 2008 2009 2010 2011 2012

City Council 5 5 5 5 5

City Manager 3 4 5 8 8

City Attorney 4 5 5 5 4

Administrative Services 2 2 0 0 0

City Clerk 4 4 4 3 3

Development Services 3 7 5 9 9

Finance 17 16 13 13 14

Code Enforcement - Community Development 7 8 8 8 8

Animal Services 5 5 5 6 7

Human Resources 4 2 4 4 4

Police Department 192 199 195 202 207

Public Works 0 1 1 5 5

Utilities 4 4 5 5 4

Solid Waste 2 4 4 4 3

Transit 2 4 4 4 2

Risk Management 3 1 1 1 1

Information Technology 0 0 0 1 1

Facilities/Fleet 1 0 4 4 4

Total employees 258 271 268 287 289

Source: Human Resources Department, City of Elk Grove

Note: The City contracts for public works, planning, building, trash hauling and transit departments as well as key

positions in other departments.

CITY OF ELK GROVE

Government Employment Information


197

2013 2014 2015 2016 2017

5 5 5 5 5

9 11 13 13 20

4 4 4 5 5

0 0 0 0 0

3 3 3 3 3

10 11 7 9 9

14 14 16 19 18

9 9 9 9 8

7 7 7 7 7

4 4 3 5 4

200 211 205 211 221

5 6 6 10 12

5 5 5 0 0

4 3 3 3 4

4 4 5 5 5

1 1 1 1 2

5 4 4 4 6

4 4 4 5 4

293 306 300 314 333

Note: The City contracts for public works, planning, building, trash hauling and transit departments as well as key

198

Function/Program 2008 2009 2010 2011 2012 2013

General Government

Residential Building Permits Issued 427 346 284 247 322 441

Commercial Building Permits Issued 40 24 7 48 77 13

Refuse Collection

Total Tons Disposed* 89,769 95,700 83,399 83,057 82,720 80,597

Total Tons Diverted* 112,600 110,323 89,139 92,478 61,590 72,580

Transit

Total Route Miles 1,361,695 1,229,769 1,057,390 1,069,648 967,546 1,009,437

Total Passengers 1,181,474 1,348,029 988,022 958,643 966,906 1,049,584

Police

Calls for service 98,470 101,401 94,288 95,267 96,242 96,089

Average Emergency Response Time 5.1 5.8 4.9 6.4 5.8 6.0

Clearance Rate of all Part I Crimes 20% 22% 23% 24% 22% 28%

Utility Billing

Residential Customers 46,075 45,356 45,204 46,084 46,506 46,879

Community Enhancement

Calls for Service 2,858 4,177 2,815 5,520 4,019 4,318

Average Emergency Response Time 24 Hours 24 Hours 24 Hours 24 Hours 24 Hours 24 Hours

Number of Inspectors 6 6 7 6 5 6

Average Number of Cases Per Inspector 476 696 563 1,104 804 720

Source: City of Elk Grove

* Based on calendar year. State switched to per pound/person tracking and no longer track tons diverted. Data is all that

was available.

CITY OF ELK GROVE

Operating Indicators by Function/Program


199

2014 2015 2016 2017

378 568 625 315

11 14 9 9

82,795 88,053 78,473 76,577

73,540 48,305 50,151 53,182

1,032,906 1,080,819 1,073,588 1,085,711

1,043,906 1,032,039 945,262 860,773

95,107 98,098 95,677 94,677

6.1 5.8 5.2 4.9

35% 30% 28% 26%

47,161 47,985 49,845 50,332

2,664 3,236 4,258 2,880

24 Hours 24 Hours 24 Hours 24 Hours

6 6 6 6

444 539 710 480

200

Function/Program 2008 2009 2010 2011 2012 2013

Public Safety

Police:

Stations 1 1 1 1 1 1

Patrol units 76 85 98 72 73 75

Highways and Streets

Streets (miles) 517 506 501 502 550 574

Streetlights 11,148 11,133 11,122 11,133 11,706 11,706

Traffic signals 114 122 125 126 128 130

Traffic signs 1,463 3,333 9,909 9,909 9,987 10,000

Bridges 26 50 70 64 65 67

Sidewalk (miles) 993 993 993 995 996 997

Drainage

Manholes 7,736 7,526 7,339 7,630 8,315 8,315

Feet of pipe 2,140,120 2,140,120 2,043,418 2,076,428 2,336,038 2,336,043

Storm drain inlets 13,194 12,450 11,842 11,915 14,574 14,588

The City incorporated in July 2000. City has limited services as the County of Sacramento and the

Community Services District is responsible for other services.

Source: Departments within the City of Elk Grove

CITY OF ELK GROVE

Capital Asset and Infrastructure Statistics by Function/Program


201

2014 2015 2016 2017

1 1 1 1

74 74 75 63

555 555 560 545

13,830 14,082 14,195 14,195

167 161 168 151

10,057 10,465 10,873 25,000

67 81 89 89

794 800 829 829

8,490 8,686 9,027 9,147

2,361,500 2,404,418 2,063,846 2,537,539

14,907 15,180 15,836 15,903

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