CITY OF SAN MATEO
City Council Regular Meeting
December 5, 2022
7:00 PM
City Hall Council Chamber
Entrance is on O’Farrell Street
COUNCIL MEMBERS
Rick Bonilla, Mayor
Vacant
Joe Goethals
Amourence Lee
Eric Rodriguez
AGENDA
THIS MEETING IS BEING HELD PURSUANT TO THE GOVERNOR’S EXECUTIVE ORDERS WHICH SUSPEND CERTAIN REQUIREMENTS OF THE BROWN ACT.
THIS MEETING CAN BE ATTENDED IN PERSON OR REMOTE BY JOINING ZOOM – SEE CODES BELOW.
PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND REMOTEL Y.
SEE END OF AGENDA FOR OPTIONS AND INSTRUCTIONS ON HOW TO PARTICIPATE IN THE MEETING.
To join via Zoom – click here:
December 5, 2022
To join via telephone: (408) 638-0968
Webinar ID: 835 1675 4619 Passcode: 556253
The City Council meeting will conclude by 11:00 p.m. unless otherwise extended by council vote.
Any unheard items will automatically move forward to the next regular meeting.
CALL TO ORDER
Pledge of Allegiance – led by Council Member Lee’s family Roll Call
CONSENT CALENDAR
All matters listed under the Consent Calendar are considered by the Council to be routine and will be enacted by one motion without discussion. If discussion is desired, that item may be removed and considered separately.
1. City Council Meeting Minutes - Approval
Approve the minutes of the City Council special and regular meetings of November 21, 2022.
CEQA: This approval is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b) (5).)
2. General Municipal Election November 8, 2022 - Certification of Results Adopt a Resolution to declare the results of the General Municipal Election held on November 8, 2022 as presented in the Certificate and Statement of Results of Votes Cast for the City of San Mateo.
CEQA: This resolution of adoption of the election results is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
3. Excess Workers' Compensation Insurance Policy for Calendar Year 2023 – Purchase Approve the purchase of excess workers’ compensation insurance from Safety National in an amount projected to be $226,224 for the one-year period commending January 1, 2023 and ending December 31, 2023.
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CEQA: This agreement is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b) (5).))
4. Objective Design Standards for Multi-Family Dwellings – Contract Amendment Approve Amendment No. 2 to the agreement with MIG, Inc. for the preparation of Objective Design & Development Standards for Multi-Family Dwellings to extend the term of the agreement through December 31, 2023 and authorize the City Manager to execute the amendment.
CEQA: This amendment is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b) (5).)
5. Kiku Public Downtown Garage Electric Vehicle Charger Fund Reservation – Agreement Adopt a Resolution to authorize the City Manager to enter into a Fund Reservation Agreement with Peninsula Clean Energy for the City to receive $54,000 to offset the expenses of the electric vehicle chargers that will be installed in the Kiku Public Downtown Garage at 400 E. 5th Avenue and appropriate the funds to the Transportation Cost Center of the Downtown Services Fund.
CEQA: Entering into a fund reservation agreement is not a project subject to CEQA, because it is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (CEQA Guidelines Section 15378(b)(4).)
6. Year-end Financial Reports for the Fiscal Year Ended June 30, 2022 - Acceptance Formally accept and approve the year-end financial reports for the fiscal year ended June 30, 2022.
CEQA: These year-end financial reports are not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
7. Receipt and Use of Development Impact Fees and In-Lieu Fees – Annual Report Adopt a Resolution to make findings and accept the annual report on the receipt and use of development impact fees and in-lieu fees for the year ended June 30, 2022.
CEQA: This report is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
8. Enterprise Resource Planning System Replacement Project – Change Order CO2 Approve Change Order C02 to the agreement with Collaborative Solutions for providing an additional 12 weeks of post-production support for the enterprise resource planning system replacement in the amount of $64,800, for a new total of $1,363,520 for Phase I, and a new agreement total of $2,606,660.
CEQA: This change order is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b) (5).)
9. Enterprise Resource Planning System Replacement Project – Change Order C03 Approve Change Order C03 to the agreement with Collaborative Solutions for extending the Phase II timeline by an additional 14 weeks for the enterprise resource planning system replacement project in the amount of
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$260,235, for a new Phase II total of $1,503,375 and a new agreement total of $2,866,895.
CEQA: This change order is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b) (5).)
10. Building Inspections, Permit Technician, Off-Site Plan Review, and Code Enforcement Inspection Services – Amendment
Approve Amendment No. 1 to the agreement with 4LEAF, Inc. for professional consultant services for building Inspections, permit technician, off-site plan review, and code enforcement inspection services to extend the term through January 31, 2023, and increase the agreement amount by $161,000 for a new agreement total of $260,000.
CEQA: This contract amendment is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
11. Marina Branch Library Improvement Project – Grant Funding Adopt a Resolution to authorize an application for and accept funding in the amount of $458,600 from the Building Forward Library Infrastructure Grant Program for the Marina Branch Library Improvement Project with a commitment of local matching funds in the same amount; and authorize the City Manager to execute all required documents.
CEQA: This application for grant funding and acceptance of grant funds is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
PUBLIC COMMENT
Members of the public wishing to comment on any item not appearing on the agenda may address the City Council at this time. State law prevents Council from taking action on any matter not on the agenda; your comments may be referred to staff for follow up.
Public comment is limited to a total of 15 minutes; however, an opportunity for additional public comment may be provided later in the agenda.
CEREMONIAL
12. Recognition of Outgoing Council Members
A) Adopt Commendatory Resolution No. C-8 for Council Member Eric Rodriguez for his five years of service as a Council Member and as Mayor in 2021.
B) Adopt Commendatory Resolution No. C-9 for Council Member Joe Goethals for his nine years of service as a Council Member and as Mayor in 2016 and 2020.
C) Adopt Commendatory Resolution No. C-10 for Council Member Rick Bonilla for his eight years of service as a Council Member and as Mayor in 2018 and 2022.
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13. Oath of Office for Newly Elected Council Members
Administer the oath of office to each newly elected Council Member.
A) Adam Loraine
B) Lisa Diaz Nash
C) Robert J. Newsom, Jr.
14. City Council Reorganization
Nominations and selection of the Mayor followed by the drawing of lots to establish the Deputy Mayor rotation from the newly elected for the future and then installation of officers.
REPORTS AND ANNOUNCEMENTS
City Manager, City Attorney and Council Members report on their various assignments and liaison roles and Council requests for scheduling future items.
ADJOURNMENT
----------------------------------------------------------------------------------------------------------------------------- AGENDAS:
Agendas and material are posted on the City’s website on the Friday preceding each Council Meeting and can be viewed on the City's website at
www.cityofsanmateo.org
. Any supplemental material distributed to the Council after the posting of the agenda will be made part of the official record.
WATCHING A MEETING ON TV:
City Council meetings are broadcast live on Comcast/channel 27, Wave/channel 26, or AT&T/channel 99.
For transmission problems during the broadcast, please call (650) 522-7099. For all other broadcast comments, call (650) 522-7040, Monday-Friday, 8 a.m. - 5 p.m.
WATCHING A MEETING ON A COMPUTER:
There are three ways to stream.
1) Public Meeting Portal
www.cityofsanmateo.org/publicmeetings
2) City YouTube channel and stream it on YouTube:
http://youtube.com/CityofSanMateo
3) Watch TV live stream:
https://www.cityofsanmateo.org/193/Channel-San-Mateo-Live-Stream
PUBLIC COMMENTS/REQUEST TO SPEAK
Prior to the Meeting
Send comments to:
[email protected]
until 4 p.m. the day of the meeting.
During the meeting
By Zoom:
Click the link at the top of the agenda and you’ll be added to the meeting. All attendees are muted by default. When the item of interest is open for consideration, select the “Raise Your Hand” icon and you will be called on at the appropriate time.
By telephone:
Call (408) 638-0968 and enter the conference ID found at the top of the meeting agenda. When the item of interest is open for consideration, select *9 to raise your hand. When called upon, press *6 to unmute, state your name and provide your comments.
In Person:
At the meeting complete a “Request to Speak” form, submit a request at the speaker kiosk or scan the QR code.
ACCESSIBILITY:
In compliance with the Americans with Disabilities Act, those with disabilities requiring special accommodations to participate in this meeting may contact the City Clerk’s Office at (650) 522-7040 or [email protected]
. Notification 48 hours prior to the meeting will
enable the City to make reasonable arrangements to ensure accessibility to this meeting.
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CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 1 Section Name: CONSENT CALENDAR Account Number: 10-1111 File ID: 22-6878 TO: City Council
FROM: Drew Corbett, City Manager
PREPARED BY: City Clerk's Office
MEETING DATE: December 05, 2022
SUBJECT:
City Council Meeting Minutes - Approval
RECOMMENDATION:
Approve the minutes of the City Council special and regular meetings of November 21, 2022.
BUDGET IMPACT:
There is no budget impact associated with this administrative item.
ENVIRONMENTAL DETERMINATION:
This approval is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - Minutes 2022-11-21 Special
Att 2 - Minutes 2022-11-21 Regular
STAFF CONTACT
Patrice Olds, City Clerk
[email protected]
(650) 522-7042
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COUNCIL MEMBERS
Rick Bonilla, Mayor
Diane Papan, Deputy Mayor
Amourence Lee
Joe Goethals
Eric Rodriguez
CITY OF SAN MATEO
Special Meeting Minutes
City Council
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
November 21, 2022
City Hall Council Chambers 6:00 PM
Special Meeting
CALL TO ORDER
Roll Call
Present: Mayor Bonilla, Deputy Mayor Papan, Council Members: Goethals and Rodriguez Excused: Council Member Lee
STUDY SESSION
1. Process for Filling a City Council Vacancy
City Clerk Patrice Olds provided a brief overview of the history of Council vacancies and outlined the process options available for the City Council to choose from. Council asked questions of staff.
Public Comment – Asking for the District of the applicant to be listed on the application: Marena Godfrey; Stu Bruins; Elian Dumitru; Peter Yeatrakas; Karen Moen; Tom Barrett; Rick Sakuda; and Sandy Backman.
Michael Ragan requested Rod Linhares be considered for City Council. Michele Brown urged District 4 representation.
Council asked additional questions and provided direction to do an application and presentation process.
ADJOURNMENT – The meeting adjourned at 6:30 p.m.
APPROVED BY: SUBMITTED BY:
Rick Bonilla, Mayor Patrice Olds, City Clerk
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City Council Regular Meeting Minutes – 11/21/2022 Page 1 7 6
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COUNCIL MEMBERS
Rick Bonilla, Mayor
Diane Papan, Deputy Mayor
Amourence Lee
Joe Goethals
Eric Rodriguez
CITY OF SAN MATEO
Regular Meeting Minutes
City Council
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
November 21, 2022
City Hall Council Chambers 7:00 PM
Regular Meeting
CALL TO ORDER
Pledge of Allegiance
Roll Call
Present: Mayor Bonilla, Deputy Mayor Papan, Council Members: Goethals and Rodriguez Excused: Council Member Lee
CEREMONIAL
1. Commendatory Resolution – Deputy Mayor Diane Papan – Following a slideshow presentation and comments from the Council, Charles Stone, Gina Papan, Alexa Latini, Dan Latini, Jen Hermesmeyer and Rich Hedges; motion passed 4-0. Diane Papan received Commendatory Resolution C-7.
Moved: Goethals, Seconded: Rodriguez
Ayes: Bonilla, Papan, Goethals, and Rodriguez
Noes: None
2. Cheryl Angeles – Proclamation – Cheryl Angeles, President/CEO, San Mateo Area Chamber of Commerce, received the proclamation
CONSENT CALENDAR
The following items, 3 through 12, were considered to be routine by the City Council. After the titles of the items were read by the Deputy City Clerk, the public was invited to comment and there were no speakers. Motion passed 4-0.
Moved: Goethals, Seconded: Rodriguez
Ayes: Bonilla, Papan, Goethals, and Rodriguez
Noes: None
3. City Council Meeting Minutes - Approval
Approve the minutes of the City Council special and regular meetings of November 7, 2022.
4. San Mateo Consolidated Fire Department Board – Appointment Appoint Councilmember Lee as the alternate to the San Mateo Consolidated Fire Department Board of Directors.
5. Police Activities League – Reorganization and Appropriation Adopt a Resolution to reorganize the structure of the Police Activities League and authorize the appropriation of funds in the amount of $95,688 from the Police Activities League to reallocate a vacant
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Community Services Supervisor to a Community Services Section Manager and to add one additional Full Time Equivalent (FTE) Community Services Coordinator position.
Enactment: Resolution No. 131 (2022)
6. Downtown Business Improvement Area - Ordinance Adoption Adopt an Ordinance to modify the basis and method of levy for the Downtown Business Improvement Area (DBIA).
Enactment: Ordinance No. 2022-14
7. San Mateo Public Library Main Branch Café Operating Lease – Agreement Approve a Property Lease and Operating Agreement with Rafat Haddad for operation of the 3 Bees Café at the Main Library Branch for two years commencing on November 22, 2022 through November 21, 2024 in accordance with Municipal Code Section 3.62.030(b); and authorize its execution by the City Librarian.
8. Downtown San Mateo Grade Separation Consolidated Railroad Infrastructure and Safety Improvements Program – Application
Adopt a Resolution to authorize an application for the Federal Railroad Administration Railroad (CRISI) Program in the amount of $6,000,000 to fund the development of a project study report, preliminary engineering plans, and environmental planning documents to assess the Reconnecting San Mateo Grade Separations Project; commit $2,000,000 in local matching funds; and authorize the City Manager, to execute a funding agreement with the Federal Railroad Administration.
Enactment: Resolution No. 132 (2022)
9. Marina Lagoon Vegetation and Water Quality Management – Appropriation and Amendment Adopt a Resolution to appropriate $316,300 to the Marina Lagoon Management budget from the City’s General Fund; approve Amendment No. 5 to the agreement with Waterworks Industries, Inc. to add scope, extend the term until March 15, 2024, and add compensation for Marina Lagoon vegetation and water quality management in the amount of $830,000 for a new agreement total of $1,738,980; establish a contingency reserve of $82,000; and authorize the Public Works Director to execute the amendment in substantially the form presented and issue any change orders within the contingency amount.
Enactment: Resolution No. 133 (2022)
10. Gasoline Fuel Procurement and Delivery Services – Amendment Approve Amendment No. 3 to the agreement with Pinnacle Petroleum, Inc. for gasoline fuel procurement and delivery services in the amount of $250,000, for a new overall potential agreement total of $1,625,000, inclusive of the City’s remaining options to extend the agreement; establish a contingency reserve in the amount of $100,000; and authorize the Public Works Director to execute the agreement in substantially the form presented and issue any change orders within the contingency amount.
11. Renewable Diesel Fuel Procurement and Delivery Services – Amendment Approve Amendment No. 3 to the agreement with Bosco Oil, Inc. dba Valley Oil Company for procurement and delivery of red and clear renewable diesel services in the amount of $150,000, for a new overall potential agreement total of $975,000, inclusive of the City’s remaining options to extend
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the agreement; establish a contingency reserve in the amount of $60,000; and authorize the Public Works Director to execute the amendment in substantially the form presented and issue any change orders as allowed by the agreement within the contingency amount.
12. Transfer of Property Rights from County of San Mateo to City of San Mateo – Amendment Adopt a Resolution to approve the amendment to the agreement for transfer of property rights from the County of San Mateo to the City of San Mateo with regard to the North Shoreview Flood Improvement project and authorize the City Manager to execute the amendment in substantially the form presented.
Enactment: Resolution No. 134 (2022)
PUBLIC COMMENT
Public Comment – Bradd Silver spoke of the gun buy back.
PUBLIC HEARING
13. 2023 Solid Waste Collection Rates – Increase
Jack Johnson, Waste Management Supervisor, provided a presentation on the history of the rate increase needs and the City Council’s prior direction. Council had no questions. There were no public comments.
Motion to Adopt a Resolution to establish maximum rates for solid waste, recycling, and organic collection for Rate Year 2023. Motion passed 4-0.
Moved: Papan, Seconded: Goethals
Ayes: Bonilla, Papan, Goethals, and Rodriguez
Noes: None
Enactment: Resolution No. 135 (2022)
OLD BUSINESS
14. Transit-Oriented Development Pedestrian Access Plan – Adoption Nicolette Chan, Assistant Transportation Planner, and Sue-Ellen Atkinson, Principal Transportation Planner, provided a presentation on the City’s Transient Oriented Development (TOD) Pedestrian Access plan and outlined potential improvements. Council asked questions of staff.
Public Comment - Rich Hedges spoke in favor of amenities near TOD including daycare and grocery stores. Raayan Mohtashemi encouraged adoption of the plan.
Motion to Adopt a Resolution to adopt the City of San Mateo Transit-Oriented Development Pedestrian Access Plan. Motion passed 4-0.
Moved: Papan, Seconded: Rodriguez
Ayes: Bonilla, Papan, Goethals, and Rodriguez
Noes: None
Enactment: Resolution No. 136 (2022)
REPORTS AND ANNOUNCEMENTS
City Manager, City Attorney and Council Members reported on their various assignments and liaison roles.
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ADJOURNMENT –The meeting adjourned at 8:41 p.m.
APPROVED BY: SUBMITTED BY:
Rick Bonilla, Mayor Patrice Olds, City Clerk
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 2 Section Name: CONSENT CALENDAR Account Number: 10-1511 File ID: 22-6882 TO: City Council
FROM: Drew Corbett, City Manager
PREPARED BY: City Clerk's Office
MEETING DATE: December 05, 2022
SUBJECT:
General Municipal Election November 8, 2022 - Certification of Results RECOMMENDATION:
Adopt a resolution to declare the results of the General Municipal Election held on November 8, 2022 as presented in the Certificate and Statement of Results of Votes Cast for the City of San Mateo.
BACKGROUND:
The City of San Mateo held its first candidate by-district election for Districts 1, 3, and 5 on November 8, 2022; and for submitting to the voters Measure CC - to Increase Existing Real Property Transfer Tax Rate for Properties Sold for $10 Million or More.
The semi-official results show the following for the three candidate races as of Monday, November 28, 2022:
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The number of ballots cast for each district as of 11/28/2022 are:
District 1 .......................................8,945 District 3 .......................................6,690 District 5 .......................................8,409 The semi-official results show the following for Measure CC:
The number of ballots cast citywide for the ballot measure were 34,576. The ordinance approving Measure CC was therefore adopted by the voters on November 8, 2022 and will go into effect ten days after certification of election results.
The official results showing the Statement of Votes Cast will be contained in Exhibit A to the resolution (Attachment 1) upon receipt from the County of San Mateo. The County has 30 days, until December 8, 2022, to provide the certification.
If the final results are not received in time for this December 5, 2022 meeting, the City Council will be asked to pass the semi-official results and will take action at the special December 12, 2022 meeting to adopt a revised resolution with final results.
BUDGET IMPACT:
The City Clerk has budget of $213,500 to cover costs of this election. It is not anticipated that additional funding will be necessary.
ENVIRONMENTAL DETERMINATION:
This resolution of adoption of the election results is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - Proposed Resolution
Exhibit A – Statement of Votes Cast (forthcoming)
STAFF CONTACT
Patrice Olds, City Clerk
[email protected]
(650) 522-7042
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CITY OF SAN MATEO
RESOLUTION NO. ___ (2022)
DECLARING SEMI-OFFICIAL RESULTS OF THE GENERAL MUNICIPAL ELECTION HELD IN THE CITY OF SAN MATEO ON NOVEMBER 8, 2022
WHEREAS, a general municipal election was held and conducted in the City of San Mateo (City) on Tuesday, November 8, 2022, as required by law and the City Charter; and WHEREAS, a general municipal election was held for the purpose of electing three (3) persons as City Council members for four-year terms, one each from Districts 1, 3, and 5; and for the purpose of submitting Measure CC to the qualified electors; and
WHEREAS, notice of said election was duly and legally given, voting precincts were properly established, and election officers were appointed and election supplies furnished. In all respects said election was held and conducted, and the votes cast at the election were received and canvassed, and the returns thereof were made, determined and declared in time, form and manner as required by the City Charter and the general laws of the State providing for and regulating municipal elections in the City; and WHEREAS, the County of San Mateo has not yet completed its canvass of the election but has provided an Unofficial Results Report and semi-official results thereof are as hereinafter set forth; and WHEREAS, the City Council met at the Council Chambers thereof on Monday, December 5, 2022, as required by Charter to canvass the returns of said election, install the newly elected Council members, and to choose the Mayor and Deputy Mayor pending the County’s completion of its canvass; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN MATEO, CALIFORNIA, HEREBY DETERMINES and RESOLVES that:
1. The municipal election was held and conducted in the City of San Mateo, County of San Mateo, State of California, on Tuesday, November 8, 2022, in the time and in the form and manner as required by law.
2. A canvass of the returns of the votes cast in the City of San Mateo for the office of City Council members and with regard to Measure CC will be provided to the City Council at its December 12, 2022, meeting in accordance with the Charter and state law, after certification by the Clerk of the County of San Mateo, and Patrice M. Olds, City Clerk of San Mateo.
3. Pursuant to the County’s Unofficial Results Report and semi-official results, copies of which are attached as Exhibit A, a canvass of the semi-official returns of the votes cast in the City of San Mateo for the office of City Council members and Measure CC was duly held on December 5, 2022, in accordance with the order of the Council in accordance with the Charter and law.
4. The total number of votes cast regarding MEASURE CC, which was a Ballot Measure to Increase Existing Real Property Transfer Tax Rate for Properties Sold for $10 Million or More. At said election with 32,656 ballots cast with 23,448 voting “yes”, and 9,221 voting “no” as set forth in the Certificate attached hereto as Exhibit A and incorporated herein by reference. The ordinance approving Measure CC was therefore adopted by the voters on November 8, 2022, and Measure CC is accordingly enacted.
5. The total number of votes cast for Council members in the City of San Mateo at said election was 7,550 in District 1; 5,571 in District 3; and 6,983 in District 5.
Item 2 – Substitute
Resolution
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Resolution No. ___ (2022) Page 2 of 3
Certification of Semi-Official Election Results 2022
a. The names of the persons voted for, the offices for which they were voted, the number of votes received by each of the persons in each of said precincts, together with the whole number of votes, which they received by District, are shown on Exhibit A, and incorporated herein by reference. b. At said general municipal election held in the City of San Mateo on November 8, 2022, the following persons were elected to the following offices:
LISA DIAZ NASH was elected a member of the City Council for District 1 for a term commencing Monday, December 5, 2022, and until the general municipal election the fourth year thereafter and the election and qualification of a successor.
ROBERT NEWSOM, JR. was elected a member of the City Council for District 3 for a term commencing Monday, December 5, 2022, and until the general municipal election the fourth year thereafter and the election and qualification of a successor.
ADAM LORAINE was elected a member of the City Council for District 5 for a term commencing Monday, December 5, 2022, and until the general municipal election the fourth year thereafter and the election and qualification of a successor.
6. As soon as the County has completed its canvass, the City Clerk is hereby directed to produce and deliver to each of the persons elected a certificate of election signed by her and duly authenticated.
7. As soon as the County has completed its canvass, the City Clerk is hereby directed to enter into the records of the City of San Mateo a statement of the results of said general municipal election.
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Resolution No. ___ (2022) Page 3 of 3
Certification of Semi-Official Election Results 2022
Exhibit A
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 3 Section Name: CONSENT CALENDAR Account Number: 87-2314 File ID: 22-6851 TO: City Council
FROM: Drew Corbett, City Manager
PREPARED BY: Human Resources Department
MEETING DATE: December 05, 2022
SUBJECT:
Excess Workers' Compensation Insurance Policy for Calendar Year 2023 – Purchase RECOMMENDATION:
Approve the purchase of excess workers' compensation insurance from Safety National in an amount projected to be $226,224 for the one-year period commencing January 1, 2023 and ending December 31, 2023.
BACKGROUND:
The City has been insured for excess workers' compensation coverage with Safety National since 2009. In 2021, we requested that our benefits broker, Newfront (formerly ABD Insurance & Financial Services), issue a bid request for coverage. The market for excess coverage in California is quite limited. Of the carriers contacted during the renewal process last year, only Safety National submitted a quote. Another carrier, Arch Insurance Co., indicated that they might be interested, but the premium they mentioned is significantly higher ($299,399) for the same level of self-insured retention.
According to Newfront, this year there are even fewer carriers due to some mergers that took place this year. Municipal Code 3.60.050(c) provides that the City can forgo the competitive bidding process related to the placement of insurance coverage.
Based on the information provided by Newfront, Safety National is not offering a two-year policy this year. Our current policy provides workers' compensation liability limits of $25 million with a $2 million employer liability limit and a self- insured retention (SIR) of $1 million for each occurrence. It was our plan to continue to be insured with the same limits and retention for 2023. However, Safety National is not offering the same SIR option for the City in 2023. One reason is that in 2021 there was one claim that pierced (exceeded) the City’s SIR level, and as a result Safety National is now fully financially responsible for this case. This case involved an injury qualified as "presumptive" under Labor Code Sections 3212 through 3213.
Initially, Safety National proposed to raise SIR for “presumptive” cases to $2,000,000 and keep the premium at a flat rate of $217,567. Because we were able to provide additional information regarding our investigation process for “presumptive” injuries, they agreed to provide two additional quotes. Option 2 is with SIR at the current level of $1,000,000 for all cases, including “presumptive” ones. This option will include Corridor Deductible (see attached endorsement), and the premium is $226,224 (4% rate increase). Option 3 is with SIR for “presumptive” cases at $1,500,000 and premium at $235,802 (8% rate increase).
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1/1/2023-1/1/2024 Option 1: flat rate Option 2: + 4% Option 3: +8% Payroll $62,880,626 $62,880,626 $62,880,626
SIR: Presumptive Loss $2,000,000 $1,000,000 $1,500,000
SIR: All Other $1,000,000 $1,000,000 $1,000,000
Corridor Deductible: 1x N/A $500,000 N/A
Premium $217,567 $226,224 $235,802
Option 2 allows the City to project the financial outcome of the worst-case scenario, where regardless of the number of “presumptive” cases that exceed $1,000,000.00 SIR level during the policy period, the City will only be liable for up to $500,000 in addition to the liability within SIR level. With Option 3, the City would be liable for up to $1,500,000 SIR level on every “presumptive” case during the policy period. In Option 1, the City would be liable for up to $2,000,000 SIR level on every “presumptive” case during the policy period. Therefore, it is our recommendation, with the agreement of our broker Newfront, that we select Option 2 for 2023.
BUDGET IMPACT:
The premium quoted by Safety National for 2023 for Option 2 is calculated at a rate of $0.3598 per $100 of covered estimated payroll, which results in an expected expenditure of $226,224 over the next year. This rate is a 4% increase from our 2022 annual premium of $217,567 at a rate of $0.3460 per $100 of covered estimated payroll.
According to our broker, it would be most beneficial for the City to utilize Option 2, and it is recommended that the City remain at the current SIR level of $1,000,000 for all cases because this option has a predictable worst outcome with a very modest rate increase of 4% ($8,657). There are sufficient funds budgeted in the Workers' Compensation Fund for this expense.
ENVIRONMENTAL DETERMINATION:
This agreement is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Insurance Quotation
STAFF CONTACT
Yuliya Shukhat, Senior Risk Management Analyst
[email protected]
(650) 522-7263
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Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 4 Section Name: CONSENT CALENDAR Account Number: 25-3112 File ID: 22-6858 TO: City Council
FROM: Drew Corbett, City Manager
PREPARED BY: Community Development Department
MEETING DATE: December 05, 2022
SUBJECT:
Objective Design Standards for Multi-Family Dwellings – Contract Amendment RECOMMENDATION:
Approve Amendment No. 2 to the agreement with MIG, Inc. for the preparation of Objective Design & Development Standards for Multi-Family Dwellings to extend the term of the agreement through December 31, 2023 and authorize the City Manager to execute the amendment.
BACKGROUND:
On April 7, 2021, the City engaged MIG, Inc., an urban planning and architectural design firm, to assist with the preparation of Objective Design and Development Standards for Multi-Family Dwellings. By developing these standards, the City intends to establish clear, objective criteria when evaluating housing projects proposed in the City, as required by State legislation, including Senate Bill (SB) 35. The objective standards, once established, would apply to housing projects of two units or larger, as well as mixed-use projects that include a residential component.
On March 7, 2022, Council authorized an amendment (Amendment No. 1) to the original agreement, expanding the scope of work to include all multi-family housing projects in the new Objective Design Standards and to incorporate additional community engagement to allow the public to provide feedback and stay informed throughout the process.
In addition, Amendment No. 1 extended the term of the agreement through December 31, 2022.
However, given the significant staff resources that the Community Development Department has needed to dedicate to other more time-sensitive long-range planning efforts over the past year, including the General Plan Update and Housing Element Update, additional time will be necessary to complete the preparation of the Objective Design Standards. Based on discussions with the consultant and an assessment of CDD initiatives for the upcoming year, staff is recommending that the term of the agreement be extended through December 31, 2023. This will allow the new Objective Design Standards to be better informed by the policy direction included in the General Plan Update and Housing Element and ensure that the Community Development Department is able to allocate the staff resources necessary to manage this initiative and support the associated community outreach.
BUDGET IMPACT:
The proposed amendment does not include any change to the total compensation of the agreement and will not have any budget impact.
ENVIRONMENTAL DETERMINATION:
This amendment is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
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NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - Proposed Amendment No. 2
STAFF CONTACT
Wendy Lao, AICP, Associate Planner
[email protected]
(650) 522-7219
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AMENDMENT NO. 2 TO THE AGREEMENT
BETWEEN THE CITY OF SAN MATEO AND
MIG, INC. FOR
THE PREPARATION OF OBJECTIVE DESIGN & DEVELOPMENT STANDARDS
FOR MULTI-FAMILY DWELLINGS
WHEREAS, the City of San Mateo (“City”), a municipal corporation of the State of California, and MIG, Inc. (“Consultant”), entered into an Agreement for the preparation of Objective Design and Development Standards for Multi-Family Dwellings (“Agreement”) on April 7, 2021; and WHEREAS, on March 7, 2022, the City Council approved and authorized the execution of Amendment No. 1 to increase the scope of services and compensation and extend the term of the Agreement through December 31, 2022; and
WHEREAS, City and Consultant wish to amend the Agreement again effective December 5, 2022, to extend the term of the Agreement through December 31, 2023.
NOW, THEREFORE, the parties agree as follows:
1. Section 4 of the Agreement is amended to read:
“The services to be performed under this Agreement shall commence on April 1, 2021 and be completed on December 31, 2023.”
2. The remaining terms of the Agreement remain in full force and effect. [SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, CITY OF SAN MATEO and MIG, Inc. have executed this Amendment No. 2 on December 6, 2022.
CITY OF SAN MATEO CONTRACTOR
Drew Corbett
City Manager
Date Daniel Iacofano
Its Authorized Agent
President/Chief Executive Officer
MIG, Inc.
Date
APPROVED AS TO FORM
Mazarin Vakharia
Assistant City Attorney
Date
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Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 5 Section Name: CONSENT CALENDAR Account Number: 10-1311 File ID: 22-6857 TO: City Council
FROM: Drew Corbett, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: December 5, 2022
SUBJECT:
Kiku Public Downtown Garage Electric Vehicle Charger Fund Reservation – Agreement RECOMMENDATION:
Adopt a Resolution to authorize the City Manager to enter into a Fund Reservation Agreement with Peninsula Clean Energy for the City to receive $54,000 to offset the expenses of the electric vehicle chargers that will be installed in the Kiku Public Downtown Garage at 400 E. 5th Avenue and appropriate the funds to the Transportation Cost Center of the Downtown Services Fund.
BACKGROUND:
The Kiku Public Downtown Garage is currently under construction in Downtown San Mateo and is anticipated to be completed in spring 2023. The garage is being constructed by MidPen Housing as part of a public-private partnership that includes the construction of the 225-unit Kiku Crossing affordable housing project. Per the City’s sustainability reach codes, the garage will include 27 Level 2 Electric Vehicle (EV) Chargers, which will be available for public use.
Peninsula Clean Energy (PCE) offers financial assistance for EV Charger installations for new public parking facilities through their EV Ready program. The program offers $2,000 per EV Charging port, which totals to $54,000 in financial support for this property. To obtain the funds, the City must enter into the Fund Reservation Agreement (included as Attachment 2), which serves as the grant agreement for the program. The terms of the program are outlined in the Program Standards and Requirements, which is included as Attachment 3 to this report.
Staff had mistakenly executed a Fund Reservation Agreement with PCE in January 2022 believing it to be just a placeholder request for future funding. PCE has since clarified that it is the sole grant agreement governing the funds. As a result, staff is now seeking City Council authority for the City Manager to execute the agreement and to appropriate the funds to the Transportation Cost Center of the Downtown Services sub-fund.
The EV Chargers are being purchased and installed by MidPen Housing per the terms of the Disposition, Development, and Loan Agreement for the project. These funds are not accounted for in that agreement and therefore will be appropriated directly to the City. Staff intends to use the funds to cover the operating costs, including the service charges and maintenance fees, for the EV Chargers.
BUDGET IMPACT:
The $54,000 from Peninsula Clean Energy will be used to offset the initial installation and operating expense of the 27 electric vehicle chargers that will be installed in the new Kiku Public Downtown Garage. The funds will be credited in the Transportation Cost Center of the Downtown Services sub-fund per the resolution included as Attachment 1.
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ENVIRONMENTAL DETERMINATION:
Entering into a fund reservation agreement is not a project subject to CEQA, because it is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (CEQA Guidelines Section 15378(b)(4).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Proposed Resolution
Att 2 - Fund Reservation Agreement
Att 3 - EV Ready Program Standards and Requirements
STAFF CONTACT
Kathy Kleinbaum, Assistant City Manager
[email protected]
(650) 522-7153
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RESOLUTION NO. ____ (2022)
AUTHORIZE THE CITY MANAGER TO ENTER INTO A FUND RESERVATION AGREEMENT WITH PENINSULA CLEAN ENERGY FOR THE CITY TO RECEIVE $54,000 TO OFFSET THE EXPENSES OF THE ELECTRIC VEHICLE CHARGERS THAT WILL BE INSTALLED IN THE KIKU PUBLIC DOWNTOWN GARAGE AT 400 E. 5TH AVENUE AND APPROPRIATE
THE FUNDS TO THE TRANSPORTATION COST CENTER OF THE DOWNTOWN SERVICES SUB FUND WHEREAS, the City has entered into a public private partnership with MidPen Housing, Inc. to construct the Kiku Public Downtown Garage at 400 E. 5th Avenue; and WHEREAS, the Kiku Public Downtown Garage will include 27 Level 2 electric vehicle chargers; and WHEREAS, Peninsula Clean Energy is providing funding assistance in the form of $2,000 per Level 2 electric vehicle charging port for publicly available electric vehicle chargers through a Fund Reservation Agreement under their EV Ready Program; and
WHEREAS, the $54,000 of funding from Peninsula Clean Energy will be appropriated to the Transportation Cost Center in the Downtown Services sub fund to cover the costs of the Electric Vehicle Charger operations and maintenance.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN MATEO, CALIFORNIA, HEREBY RESOLVES that:
1. Appropriation of $54,000 of funding from Peninsula Clean Energy to the Transportation Cost Center of the Downtown Services sub fund is approved.
2. The City Manager is authorized to enter into a Fund Reservation Agreement with Peninsula Clean Energy for the City to receive $54,000 to offset the expenses of the electric vehicle chargers that will be installed in the Kiku public downtown garage.
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2075 Woodside Road | Redwood City, CA | 94061 | 650.260.0005 | PenCleanEnergy.com V 8.10.22 Peninsula Clean Energy Electric Vehicle Ready Program Fund Reservation Agreement Applicant First Name Applicant Last Name Title Organization Email Phone Number Proposed Site Address City Zip Code Service Agreement ID Project ID EV Charging Infrastructure Project Description: Project Type Level 1 Outlets Level 2 Outlets Level 2 Charge Ports Make Ready Ports Submitted # Ports Reserved Funds $ $ $ $ Panel Upgrade $ Total Reserved Funds Peninsula Clean Energy Authority (“PCEA”) cannot guarantee rebate funds beyond what was reserved nor can rebate funds exceed 100% of the total project costs. Final projects with less ports than projected will only receive rebates for installed ports, up to the amount reserved. By signing below, the site owner (“Site Owner”) or, if the property is owned by a commercial or corporate entity, the representative of the ownership entity (“Owner Representative”) agrees to the “Electric Vehicle (EV) Ready Program” (“Program”) Terms & Conditions. If neither Site Owner nor Owner Representative executes the Agreement, the applicant (“Applicant”) certifies that a Designated Applicant Assignment form was completed and submitted to PCEA to verify that the Site Owner or Owner Representative has designated the applicant (“Designated Applicant”) authority to represent the Site Owner in the Program and execute all legal agreements as required by the Program.
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The undersigned here is the: Site Owner or Owner Representative OR Designated Applicant [DocuSign]
Peninsula Clean Energy EV Ready Program Terms and Conditions 1. ELIGIBILITY: Peninsula Clean Energy Authority offers a rebate to eligible PCEA customers or their designees (Applicant) installing EV Charging Infrastructure through the EV Ready Program. Applicants eligible to receive rebates under the Program must (1) abide by the terms and conditions listed herein; (2) have the EV charging port(s) metered through a PCEA account number; (3) comply with Program Standards and Requirements (“Program Requirements”) in Appendix A; (4) provide PCEA with Required Installation Verification Documents as specified in the Program Requirements upon completion of the project. 2. REBATE RESERVATION TERM AND AMOUNT: The amounts of the rebates for which qualifying projects are eligible are outlined in Program Requirements. Rebate funds are reserved upon execution of this Agreement up to the maximum amount identified in the Program Requirements based on the “EV Charging Infrastructure Project Description” (hereinafter, the Project, see page 1 above). The funds are reserved according to the Fund Reservation Period timelines outlined in the Program Requirements and any modifications to the timelines are at the discretion of PCEA. Rebates will be paid to eligible Rebate Recipient once installation is verified as complete by PCEA. The final amount of the rebates will be the actual eligible costs of verified EV Charging Infrastructure installed or the maximum amount reserved, whichever is less. 3. DISCRETION ON VERIFICATION: Determinations regarding verification pursuant to paragraph (1) and paragraph (2) of these Terms and Conditions, shall be determined at PCEA’s complete and exclusive discretion. 4. REBATE RECIPIENT: The Applicant may direct the rebate funds to any Rebate Recipient, who is a single vendor or service provider incurring costs for the Project up to the amount of documented costs incurred by that Rebate Recipient. The Rebate Recipient shall be identified in the Installation Verification Form submitted upon project completion to request disbursement of the rebate. 5. NO GUARANTEES: PCEA makes no guarantee, representations or warranties, expressed or implied, regarding the implementation or use of EV Charging Infrastructure and equipment purchased or installed pursuant to this PCEA Program. Customer is solely responsible for any liability, legal or otherwise, arising from the installation, operation, and maintenance of its selected EV Charging Infrastructure. 6. EVSE PACKAGE: Upon approval of the Funds Reservation Agreement by PCEA, for Level 2 EV Charging Ports, as defined in Appendix A, Program Requirements, the Customer shall select and procure EV Supply Equipment (EVSE), software, and network services as required and in compliance with the Equipment Requirements outlined in the Program Requirements. Customer shall install, operate and maintain the number and type of the EVSE unit(s) (defined in Program Requirements), associated equipment, and signage as selected by Customer and approved by PCEA. Customer acknowledges that: a. For all Level 2 EV charging port(s) included in the project, the Customer agrees to purchase a) a minimum 2-year software and networking service agreement and b) a maintenance contract or a 3-year warranty with the Electric Vehicle Servicer Provider (EVSP) or Original Equipment Manufacturer (OEM) providing the EVSE to the Customer. 7. ADDITIONAL SERVICES FROM ELECTRIC VEHICLE SERVICE PROVIDER (EVSP): Separate and apart from the Funds Reservation Agreement and PCEA’s obligations under the Program, the EVSP may offer and contract directly with the Customer to provide any additional or complementary services, as long as these services do not interfere with the objectives of the Program. PCEA is not responsible for the costs of additional EVSP services or any cost related to operations Applicant Signature Date
Peninsula Clean Energy Representative Signature Title Date
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and maintenance of any additional EVSP services. 8. INSTALLATION OF EV CHARGING INFRASTRUCTURE: Customer is responsible for covering all upfront costs of the installation of the EV Charging Infrastructure. Upon completion of installation of the EV Charging Infrastructure, Site Owner understands it is responsible for the operation and maintenance of the EV charging port(s) installed. 9. CONTRACTOR REQUIREMENTS: All work performed on projects under this agreement shall be done by contractors who hold a valid California C-10 license. PCEA reserves the right to amend and change contractor requirements at any point during the program. 10. EV DRIVERS RIGHT TO ACCESS: Customer may limit the availability of the EV Charging Infrastructure to its employees or tenants. Under the Program, Customer may elect to make the EV Charging Infrastructure available for use by the general public. Customer shall not restrict access to use of the EV Charging Infrastructure for reasons including, but not limited to, race, color, religion, age, sex, national origin, ancestry, physical or mental disability, or any basis prohibited by applicable law. 11. APPLICABLE LAWS: Customer is solely responsible for ensuring that the EV Charging Infrastructure is installed and operated in compliance with all applicable local, state, and federal laws. 12. EV CHARGING PORT(S) OPERATION AND MAINTENANCE: Customer will pay all ongoing costs associated with the EV Charging Infrastructure. Customer shall maintain a consistent uptime for the EV Charging Port(s) installed. Customer shall maintain the common area immediately surrounding the EV Charging Infrastructure in good condition, ordinary wear and tear accepted, and will promptly notify PCEA of any problems it is aware of related to the EV Charging Infrastructure. Such maintenance by Customer of the immediately surrounding common areas shall include, but not be limited to, pavement maintenance. Customer shall promptly notify PCEA if Customer will no longer maintain the installed EV Charging Infrastructure and/or the installed EV Charging Infrastructure is being removed from Customer’s site. Uninterrupted service is not guaranteed, and Pacific Gas & Electric (PG&E) may interrupt service and access to the EV Charging Infrastructure when necessary to ensure safety or to perform maintenance as dictated by utility easement agreements and requirements. 13. PERMISSION TO USE DATA: For all EV Charging Infrastructure installed that are capable of collecting and reporting usage and utilization data, Site Owner agrees to allow PCEA and its authorized Contractors to access, collect, use, and report EV Charging Infrastructure usage and utilization data gathered as a part of the Program for use in regulatory reporting, ordinary business use, industry forums, case studies, or other similar activities, in accordance with applicable laws and regulations. PCEA and its authorized Contractors shall have access to the EV Charging Infrastructure usage and utilization data indefinitely and in accordance with all applicable laws, including but not limited to PCEA privacy guidelines and relevant regulatory decisions. 14. DEMAND RESPONSE and LOAD SHAPING PROGRAMS: Customer agrees that PCEA may, at its discretion enroll all networked EV charging port(s) units installed under the Program in any future demand response, grid optimization, and/ or load shaping programs implemented by PCEA. Future load shaping program will, by design, not incur any additional costs or expenses to Customer. The load shaping program will aim to curtail energy usage for each charging port during a predefined period established by PCEA. These curtailments will be designed to minimally impact EV drivers that are charging during these times whenever possible. Customers will be provided an appropriate mechanism to opt-out before the program is implemented. 15. TAX LIABILITY and CREDITS: PCEA is not responsible for any taxes which may be imposed on Customer as a result of the rebates provided within the Program. Site Owners receiving incentives from either the Program and/or other regional organizations, including, but not limited to, the Bay Area Air Quality Management District, that have been facilitated through assistance from PCEA are required to designate their Low Carbon Fuel Standard (LCFS) credits to PCEA. Customer attests they are releasing their rights to report and claim credits in the LCFS and are designating credits in the LCFS to PCEA (FEIN 81-2708786) on an ongoing basis. Customer will inform third-party entities when necessary, including CARB, that the LCFS credits generated by their installed EVSE are designated to PCEA on an ongoing basis. Customer will provide the EVSE usage and electricity data to PCEA for LCFS reporting pursuant to CARB sections 95483.2(b)(8), 95491 and 95491.1. Customer will provide PCEA with ongoing access to EV charging data through the use of a login to the online account and/or an application program interface (API), a dashboard with exportable data files, or other means to access the charging data.
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16. DISPUTES: Except where otherwise limited by law, PCEA reserves the right, at its sole discretion, to make final determinations regarding any disputed issues about the Program, including but not limited to eligibility and rebate amounts. In the event of a dispute that cannot be remedied by the parties, any court filings and/or proceedings shall be venued in San Mateo County, California. PCEA shall in no case be responsible for the legal costs of Site Owner and/or Designated Applicant. 17. PROGRAM CHANGES: PCEA reserves the right to change, modify, or terminate the Program at any time without any liability except as expressly stated herein. PCEA will honor all written commitments made in the Funds Reservation Agreement provided to Customers prior to the date of any change, modification or termination of this program, provided that project installations are fully completed within the timeframe specified within the Program Requirements. 18. PROGRAM EXPIRATION: The Program will expire upon the earliest to occur: (i) December 31st, 2024, (ii) when funds are depleted, or (iii) when the program is terminated by PCEA. 19. INDEMNIFICATION: Applicant agrees to indemnify, defend, and hold PCEA, its employees, officers, and agents, harmless from any and all liabilities including, but not limited to, litigation costs and attorney's fees arising from any and all claims and losses to anyone who may be injured or damaged by reason of Customer's negligence, recklessness or willful misconduct while participating in the PCEA Program. 20. ACKNOWLEDGEMENTS: Customer shall acknowledge PCEA as a funding source of the installed EV Charging Infrastructure each time Customer’s activities related to the EV Charging Infrastructure are published in any news media, press release, brochures, or other type of public communication or promotional material. The acknowledgement of PCEA’s support as a funding source, whether in whole or in part, shall include language such as: “Funding for [Customer Site Name]’s charging station(s) provided by Peninsula Clean Energy.” If Customer is receiving funding from multiple organizations, Customer may use one statement conforming to the format listed above and include all organizations from which funding is received. PCEA also reverses the right to install stickers, signage, or other advertisement mechanism on the EV charging port(s) funded or facilitated by PCEA. 21. CUSTOMER DISCLOSURE AUTHORIZATION: By signing the Funds Reservation Agreement, Applicant confirms they are the authorized representative for the electric account holder identified in the Funds Reservation Agreement and authorized PCEA to disclose Customer’s account status and participation in the PCEA Program. If Applicant is not the authorized representative for the electric account holder identified in the Funds Reservation Agreement, the Applicant certifies that they have submitted a Third Party Designated Applicant Assignment Form to verify that the Site Owner has delegated authority to the Applicant to represent the Site Owner and execute the Funds Reservation Agreement.
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2075 Woodside Road | Redwood City, CA | 94061 | 650.260.0005 | PenCleanEnergy.com V 11.3.22 Peninsula Clean Energy EV Ready Program Standards & Requirements Overview Peninsula Clean Energy Electric Vehicle (EV) Ready is an EV charging infrastructure program to support multi-family, workplace, and public charging in San Mateo County and the City of Los Banos by providing incentives for the installation of Level 1, Level 2, and Make Ready charging infrastructure. Approximately $8 million in incentives funding is available. In addition to the incentives outlined in this document, Peninsula Clean Energy is providing free technical assistance to sites to help design their projects. 1. Definitions a. Affordable Housing – Residential buildings that entirely consist of units below market rate and whose rents or sales prices are governed by local agencies to be affordable based on area median income. b. EVSE – Electric vehicle supply equipment. Conductors, including ungrounded, grounded, and equipment grounding conductors, and the EV connectors, attachment plugs, and all other fittings, devices, power outlets, or apparatus installed specifically for the purpose of transferring energy between the premises wiring and the EV (NFPA 70-2017, Article 625). c. Electric vehicle (EV) charging Port – a 120V – 240V AC outlet or J1772 connector on an EVSE which charges one vehicle at a time. d. Electric vehicle (EV) charging infrastructure – refers to all electrical infrastructure, including, electrical panels, circuits, wire, conduit, raceway, and other materials required to bring power from a panel to an EV charging port, and the EV charging port, or electric vehicle supply equipment. e. Level 1 (L1) Outlet – Level 1 outlets offer charging through a 120V AC circuit, providing about 50 - 60 miles of range over a 12-hour overnight charge. EV drivers bring their own charging cord. f. Level 2 (L2) Outlet – Level 2 outlets offer charging through a 208 – 240V AC circuit, providing about 12 - 24 miles of range per hour. EV drivers bring their own charging cord. g. L2 Charging Stations, L2 EVSE, or L2 Charge Ports – charging stations that offer charging on a 208V - 240V AC circuit, providing about 12-24 miles of range per hour. EV drivers plug the charger’s cord into their vehicle. h. Make Ready Projects or Ports – Projects that build, construct, and install the electrical infrastructure, including transformers, panels, wire, conduit, breakers, required for a L2 EVSE, but do not install the EVSE. i. Multi-Unit Dwelling (MUD) – Multi-family residential buildings with four or more residential units. j. Electric Vehicle Service Provider (EVSP) – An EVSP provides the connectivity across a network of charging stations. Connecting to a central server, they manage the software, database, and communication interfaces that enable operation of the station. k. Employee Parking – Parking that is assigned or dedicated to employee parking only and not accessible by the general public.
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2. Program Segments & Funding a. Eligibility Summary of Eligible Property and Project Types Measure Type Multi-Unit Dwellings Non-Residential L1 or L2 Outlet Eligible Eligible L2 EVSE Eligible Eligible Main Panel Upgrade Eligible Not Eligible Make Ready Project Eligible Eligible Eligible Residential Locations • All multi-family housing (apartments, condos, etc.) with 4 or more housing units. Installations must be in open parking areas or garages. Assigned parking spaces are eligible, as long as they are not located inside private, dedicated, garages with access to only a single residential unit (see “Parking Type” below for more details and exceptions). Eligible Non-Residential Locations • Employee Parking, including light-duty fleet • All Publicly Accessible Non-Residential Locations o Retail, hotels, malls, parking garages, curbside charging, etc., must be open to the general public. o Government locations such as parks, libraries, government offices, city/county-owned garages, etc., must be open to the general public. To be eligible for program funding, all projects must comply with the following requirements: 1. Location: Property is located within San Mateo County or the City of Los Banos. 2. Customer Type: EVSE or circuit will be electrically connected to a meter associated with a Peninsula Clean Energy customer account. a. EXCEPTION: If the site is a MUD, then the stations may be installed on a non-Peninsula Clean Energy meter, provided the main or primary building meter is associated with a Peninsula Clean Energy account. 3. Contractor Requirements: All work performed on projects under this agreement must be performed by contractor companies that hold a valid California C-10 license. PCEA reserves the right to amend and change contractor requirements at any point during the program. 4. Installation Requirements: Installations must comply with all federal, state, and municipal laws, ordinances, rules, codes, standards, and regulations. 5. Funding Requirements: Funds are not retroactively available to projects where the equipment was already purchased, or installation costs have been incurred, prior to approval by Peninsula Clean Energy. 6. Local Codes & Regulations: Installations must be voluntary and surplus—charging stations that are required to be installed by a regulation, local ordinance, building code, or other legal obligations (e.g., legal settlement, condition of lease agreement or use permit, EV-readiness ordinance) are NOT eligible, except for installations at Affordable Housing and public agencies. 7. Parking Type: Installations must be in parking areas or garages that are open to residents, employees, public visitors, etc. Installations cannot be located inside private garages with access to only a single residential unit.
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a. Assigned parking spaces are eligible. b. Garages that are only accessible by a single residential unit are not eligible, unless electricity to this area is provided by a common/shared electrical meter. b. Affordable Housing Funds Reservation The program will reserve $1 million towards Affordable Housing charging installation projects, including at both existing Affordable Housing and new construction projects. Funding will be protected for up to 2 program years after which the allocation of funds will be re-assessed and any unreserved funds may be reallocated to the program funding pool and be eligible to fund other projects. Peninsula Clean Energy will notify applicants with incomplete projects of pending fund re-allocation 90 days before the expiration date. c. Multi-Unit Dwellings Funds Reservation The program will reserve $3.5 million towards charging installation projects at MUD properties, inclusive of the $1 million reserved for Affordable Housing projects. Funding will be protected for up to 2 program years after which the allocation of funds will be re-assessed and any unreserved funds may be reallocated to the program funding pool and be eligible to fund other projects. Peninsula Clean Energy will notify applicants with incomplete projects of pending fund re-allocation 90 days before the expiration date. d. Public Agency Funds Reservation The program will reserve $1.5 million toward charging installation projects at public agency properties. Funding will be protected for up to the beginning of Q4 2023 after which the allocation of funds will be re-assessed and any unreserved funds may be reallocated to the program funding pool and be eligible to fund other projects. Peninsula Clean Energy will notify applicants with incomplete projects of pending fund re-allocation 90 days before the expiration date. e. Combining Incentives Installations may be eligible for additional funding programs such as CALeVIP, BAAQMD Charge! Program, etc. When customers combine incentives from multiple sources, Peninsula Clean Energy Incentives may be reduced so total incentives do not exceed the applicable caps indicated in the incentive table below. The site eligibility, as outlined in the eligibility section, applies to all program segments unless otherwise designated or outlined within the program segment descriptions below.
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3. Installation Requirements Please review each section for more details on charging hardware requirements, and property qualifications and site eligibility. a. Level 1 (L1) or Level 2 (L2) Outlet (110/120V or 208 – 240V, 15A – 50A circuit) i. Hardware Requirements 1. Power Supply: 1.4 kW minimum 2. NEMA 110/120V or 208 – 240V receptable, heavy duty, commercial, or industry grade 3. Ground Fault Circuit Interrupter (GFCI) receptacle 4. Must meet indoor or outdoor NEC requirements per installation location ii. Software Requirement 1. N/A iii. Operational Requirements 1. Operating Period: a. Mandatory 3-year operation period b. Level 2 (L2) EVSE (208 - 240V, 20A – 80A circuit) i. Hardware Requirements 1. J-1772 standard commercial grade charging receptacle 2. NEMA 3R rated (outdoor rated hardware) minimum 3. 6.2 kW minimum capable power supply. Actual operating draw may be lower when controlled by power management 4. Must be Energy Star Certified 5. Hardware must be new; no refurnished or repurposed equipment can be installed (e.g., equipment previously used as display) ii. Software Requirements 1. Communication Protocols: a. Must use an open standard protocol, such as Open Charge Point Protocol (OCPP) 2. Billing a. Must accept some form of credit card and at least one additional form of payment (if payment is required) iii. Installation & Operational Requirements 1. EVSE Procurement: a. Vendors must have installed and/or operated chargers in the United States for at least three years 2. Operating Period: a. Mandatory 3-year operation period with standardized data reporting frequency established in the Program Terms & Conditions 3. Networking Agreement a. Mandatory 2-year networking agreement with EVSP network c. ‘Make Ready’ Retrofit Projects EV Charger Incentives provides funding to create Make Ready Spaces by installing infrastructure for future EVSE installation. Make Ready Spaces: Installations with complete 20A – 80A circuits, but does not install the EV charging port(s) or outlets.
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4. Incentive Amounts $3.5 million in program funding is reserved for multi-unit dwelling property types, including $1 million in reserved funding for Affordable Housing projects and $1.5 million in program funding is reserved for public agency properties (outlined in Program Segments & Funding, (a) Eligibility). Property Category Property Type Measure Type Port Incentive Applicable Cap1 Existing Building
Multi-Unit Dwelling
L1 or L2 outlet $2,000 No cap L2 EVSE port $5,500 Up to 75% of project cost, maximum $90,000 per property Main panel upgrade2 $5,000 Up to $5,000 per property Affordable Housing Multi-Unit Dwelling
L1 or L2 outlet $2,500 No cap L2 EVSE port $5,500 Up to 100% of project cost, maximum $90,000 per property Main panel upgrade2 $5,000 Up to $5,000 per property Employee Parking L1 or L2 outlet $2,000 No cap L2 EVSE port $5,000 Up to 75% of project cost, maximum $90,000 per property All Publicly Accessible Non-Residential Locations3 L1 or L2 outlet $2,000 No cap L2 EVSE port $5,000 Up to 75% of project cost, no maximum Any Make ready circuit4 $2,000 Up to $20,000 per property New Construction6
Market Rate Multi-Unit Dwelling (Above Code5)
L1 or L2 outlet $1,000 No cap L2 EVSE port $2,000 Up to $40,000 per property Affordable Housing Multi-Unit Dwelling L1 or L2 outlet $1,500 No cap L2 EVSE port $2,500 Up to $100,000 per property Public Agency L1 or L2 outlet $1,000 No cap L2 EVSE port $2,000 Up to $250,000 per property 1 Maximum incentive award is up to 100% of project cost – maximum port incentive or applicable cost, whichever is less, unless otherwise stated 2 Must install 4 or more ports to be eligible for the main panel upgrade incentive. 3 Publicly-Accessible Non-residential locations are defined in Section 2 Program Segments & Funding. 4 Can not be layered with L2 incentives from other programs to fund the same port. 5 Market rate above code incentive covers voluntary and surplus charging stations from those required to be installed by a regulation, local ordinance, building code, or other legal obligations. 6 If a new construction project is a multi-use site and is eligible for multiple incentive categories, the site owner must select which property type category and corresponding incentive structure to apply for.
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5. Eligible Project Costs All incentives are capped at a percentage of project costs. Project costs can only include the monetary cost required to install the EVSE included within the project scope. Peninsula Clean Energy requires itemized invoices fully documenting the project costs prior to issuing the incentive payment. The following costs are considered eligible project costs when determining the incentive cap: • Utility service upgrades, net of any utility service allowance • Design & engineering services • EVSE (EV charging ports and outlets) • EVSE service, warranty, and O&M agreements • Installation costs § Materials (conduit, panels, wire, etc.) § Labor § Civil (trenching, backfill, curb cutting, etc.) • Project signage • Required ADA upgrades due to charging project • Load management, or ‘power sharing’ equipment • Adder Hardware o ‘Networked’ L1 charging management systems; for example, networked energy monitors, energy controllers, or outlets added to the project to create a ‘networked’ L1 charging station must enable: § Wi-Fi or cellular connectivity and the ability to interface with third party API § Data collection of charging events and sessions (including total kWh delivered per session, start and stop time of session, location of session, and unique station identifying serial number) and wireless transmission of those data
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6. Funds Reservation Period The Funds Reservation Period begins when Peninsula Clean Energy approves an incentives application. All project applications approved for an incentive rebate must submit a preliminary site plan within 60 days from the beginning of the Funds Reservation Period. For project application that are a designated Applicant, the applicant must show evidence that the preliminary site plan has been approved by the property owner or site host. Applicants that do not provide a preliminary site plan within 60 days of the Funds Reservation period will be cancelled at Peninsula Clean Energy’s discretion. All project applications approved for an incentive rebate must also be completed and required verification submitted to Peninsula Clean Energy within the timeline outlined below. Peninsula Clean Energy reserves the right to extend the Funds Reservation Period or progress milestones at its discretion. Property Category Property Type Unit Type Funds Reservation Period Existing
Multi-Unit Dwelling L1 outlet 270 days L2 EVSE port Affordable Housing Multi-Unit Dwelling L1 outlet 365 days (12 months) L2 EVSE port Employee Parking & All Publicly Accessible Non-Residential Locations L1 outlet 270 days L2 EVSE port
Any Make Ready circuit
New
Market Rate Multi-Unit Dwelling (Above Code)
L1 outlet Reservation period: 2 years (up to 9 months prior to program termination) Required progress milestones to maintain the reservation: • Design drawing showing scope of EV charging by 6 months, and • Copy of approved building permit by 12 months L2 EVSE port Affordable Housing Multi-Unit Dwelling L1 outlet Reservation Period: 3 years (up to 9 months prior to program termination) Required progress milestones to maintain reservation: • Submit confirmation of “Notice to Proceed” documentation L2 EVSE port Public Agency L1 Outlet 365 days (12 months) L2 EVSE Port
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7. Required Installation Verification Documents 1. Purchase invoice for equipment. Invoice must be marked as paid. 2. Purchase invoice for all installation costs. Invoice must be marked as paid i. If the project required a panel upgrade, the invoice must explicitly list this cost in a separate line item and only include those hardware or installation costs associated with the panel 3. Design invoice for engineering and design costs 4. Copy of permits: local agency, and (if applicable) utility permits/service orders 5. Pictures of the following: i. At least 2 photos of installed and operational EV Charging ports, which also clearly displays PCEA labeling (to be provided by PCEA to the site) ii. Photos of equipment serial numbers iii. If the project required a panel upgrade, please provide a picture of the new panel displaying all the circuits 6. Copy of a network agreement (2 years for L2) 7. Copy of an operation and maintenance contract or minimum 3-year warranty with EVSE vendor 8. Authority Having Jurisdiction on electrical inspections Inspection Card, including inspector sign-off 9. PCE reserves the right to request additional documentation as needed for demonstration of compliance with program requirements and audit Customer documents and attestations at its sole discretion.
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CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 6 Section Name: CONSENT CALENDAR Account Number: 10-2011 File ID: 22-6859 TO: City Council
FROM: Drew Corbett, City Manager
PREPARED BY: Finance Department
MEETING DATE: December 05, 2022
SUBJECT:
Year-end Financial Reports for the Fiscal Year Ended June 30, 2022 - Acceptance RECOMMENDATION:
Formally accept and approve the year-end financial reports for the fiscal year ended June 30, 2022 BACKGROUND:
It is the City of San Mateo's long-standing practice to issue its fiscal-year end financial statements within six months after the end of each fiscal year. The City's fiscal year begins on July 1 and ends on June 30. The primary fiscal year-end report is the Annual Comprehensive Financial Report (ACFR), which reflects the cumulative efforts of the year-end process, led by Accounting Division staff, and the completion of the independent audit of the City's financial information. In addition, the Measure S Oversight Committee formally accepted the Independent Accountants’ Report on Agreed-Upon Procedures Applied to Schedule of Measure S Revenues and Expenditures for the year ended June 30, 2022 at its meeting on November 15, 2022.
The City’s practice is to have the year-end financial reports presented to the Audit Committee, which is comprised of the mayor and deputy mayor, and ask that the Audit Committee recommend that the City Council formally accept and approve the year-end financial reports. However, the Audit Committee meeting that was scheduled for December 2, 2022, was cancelled due to lack of a quorum. In lieu of a formal meeting, Finance Department staff presented the year-end financial reports to Mayor Rick Bonilla, who then recommended that the City Council formally accept and approve the year-end financial reports for the fiscal year ended June 30, 2022.
The purpose of this report is to provide a high level summary of the ACFR, including notable highlights and changes from the prior fiscal year. The City's independent auditor, The Pun Group, a firm of licensed certified public accountants, has rendered an unmodified opinion on the City's basic financial statements for the fiscal year ended June 30, 2022.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements aggregate the City's financial data into Governmental and Business-Type activities. The latter reflects the City's Sewer Enterprise, and the former accounts for the remainder; most notably, the General Fund.
Statement of Net Position
The Statement of Net Position primarily presents the City's balance sheet-type accounts: assets and deferred outflows of resources (expenditures that apply to a future period), liabilities and deferred inflows of resources (revenues that apply to a future period), and the net of the former and latter categories, reported as net position. The City's total net position for the year ended June 30, 2022 was $727.9 million, an increase of $80.6 million or 12.4% compared to the prior fiscal year.
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Much of the favorable change in net position reflected the reduction of the City’s net pension liability, which decreased from $247.9 million to $177.2 million or 28.5%. The $70.7 million decrease in net pension liability is primarily attributable to the 21.3% investment return by the California Public Employees Retirement System (CalPERS) for the fiscal year ended June 30, 2021. However, the favorable results and the resultant impact on the City’s net pension liability will be short lived, as CalPERS’ investment return for the fiscal year ended June 30, 2022 was negative 7.5%. The deviations in investment returns from the discount rate for the fiscal year ended June 30, 2021 and June 30, 2022 will be amortized over 20 years, with a five year ramping period, where each year folds in 20% of one year of the amortized value. At its peak, the negative
7.5% investment loss will increase the City’s net pension liability by nearly $100 million.
Statement of Activities
The Statement of Activities, which reports government-wide revenues and expenses, accounted for $204.4 million in total expenses, which was a decrease of $12.8 million or 5.9% compared to the prior fiscal year. The primary driver behind the decrease was the decrease in pension liability due to the favorable deviation of CalPERS’ investment returns noted above.
FUND FINANCIAL STATEMENTS
Governmental Funds
The Fund Financial Statements section of the ACFR presents financial data for the City's major funds, most notably the General Fund. The table below compares the adopted budget, estimate from April 2022, and actual General Fund total revenues and expenditures:
Account Type 2021-22
Adopted
2021-22
April 2022 Estimate
2021-22
Actual
Variance
Actual vs. Estimate
Total Revenues $144.5 $160.2 $159.9 ($0.3)
Total Expenditures 146.9 146.6 140.4 6.2
Net Gain / (Loss) ($2.4) $13.6 $19.5 $5.9
General Fund Revenues
General Fund total revenues were $159.9 million, which had a nominal difference of $0.3 million from the year-end estimate from April 2022.
Property tax revenues accounted for $2.7 million more than estimated, primarily due to a favorable outcome regarding a dispute between the State Controller’s Office (SCO) and the five counties in the State of California that generate Excess Education Revenue Augmentation Fund (ERAF) revenues, which includes San Mateo County. The adopted 2021-22 budget assumed that the funds that were in dispute (and as a result, were withheld by the San Mateo County Controller) would not be distributed. However, resolution with the SCO resulted in the funds being released and Excess ERAF revenues driving the favorable budget variance for property tax revenues. In addition, the property tax in-lieu of vehicle license fees (VLF) shortfall was less than anticipated, so the San Mateo County Controller’s Office distributed an additional $1.4 million in VLF that the City accrued for fiscal year 2021-22.
Sales tax revenues were $1.2 million more than the April 2022 estimate, affirming the accelerated recovery of the City’s sales tax revenues back to the pre-pandemic baseline from fiscal year 2018-19. The recovery was primarily buoyed by the general retail, food products, and transportation sectors. While the recovery of the general retail and food products sectors were driven by a mix of inflation and increasing consumer demand, transportation-related sales tax revenues were predominantly attributable to the escalating cost of gas.
The revenue projections from April 2022 did not factor in the year-end adjusting entry for Governmental Accounting Standards Board (GASB) Statement No. 31, which requires the City to adjust the value of its investment portfolio to fair market value. As a result of the Federal Reserve System’s actions to increase the Federal Funds Rate, which is the rate that commercial banks borrow and lend their excess reserves overnight to each other, as shown in the graph below, to address historically high and sustained inflation.
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As such, the City accounted for a GASB 31 fair market value adjustment of negative $11.4 million, of which the General Fund was allocated negative $4.2 million. If the City sold all its investments as of June 30, 2022, it would recognize the loss.
However, the City’s investment policy prioritizes, in order, safety, liquidity, and yield. As such, with the high credit quality of its investments, and its practice is to hold most of its investments to maturity, the GASB 31 year-end adjustment is effectively a paper loss and an accounting exercise. The GASB 31 year-end adjustment was not factored into the April 2022 year-end estimate due to the rapidly escalating Federal Funds Rate and the uncertainty as to when it would begin to recede.
GENERAL FUND EXPENDITURES
Total General Fund expenditures, including transfer out, were $140.4 million, which is a favorable variance of $6.2 million compared to the April 2022 year-end estimates. Most of the favorable variance is in transfers out. There were $1.9 million in transfers out from Measure S to the Capital Improvement Projects (CIP) Fund that did not occur in the fiscal year ended June 30, 2022. In accordance with generally accepted accounting principles, the remaining appropriations, the amount remaining of transfers out have been reserved for CIP in the Measure S sub-fund, and the related budget appropriations have been rolled over to fiscal year 2022-23. This practice is to ensure that fund balance is properly dispositioned between available resources (unassigned) and assigned (reserve for CIP) to avoid overcommitting the fund’s available resources.
OTHER MAJOR FUNDS
The Construction Service Special Revenue Fund, which accounts for revenue and expenditures of activities related to building permits, decreased its total fund balances by $5.0 million to $36.3 million, which illustrated the City’s efforts to align the cost of services with its fees. Over time, these efforts will gradually reduce reserves down to policy levels, which is 12 months of budgeted operating expenditures.
The General Capital Projects Fund (CIP Fund) accounted for $32.5 million in expenditures, reflecting the City Council’s vision of having well-maintained infrastructure through its investment of $8.3 million for city-wide street rehabilitation and sidewalk repair, $5.1 million for downtown parking, and $9.3 million for North Shoreview flood control improvements.
Completion of the flood control capital improvements is expected in 2023, which will remove approximately 1,500 homes from the Federal Emergency Management Agency (FEMA) flood zone. The city-wide street rehabilitation will repair streets that were identified as failed in 2013 and ensure that the City will be able to maintain its Pavement Condition Index score of 70.
Statement of Revenues, Expenditures, and Changes in Fund Balances The Statement of Revenues, Expenditures, and Changes in Fund Balances presents revenues by type and expenditures by department for each of the major funds and non-major funds (in aggregate). Total revenues for the General Fund increased from $137.6 million in the prior fiscal year to $159.7 million (excluding transfers in) for the year ended June 30,
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2022. This $22.1 million increase in revenues is largely from year-over-year increases in the City’s tax revenues – property tax, sales tax, and other taxes.
Property Taxes increased by $8.2 million compared to the prior fiscal year. The largest drivers were current year secured ($1.9 million), Excess ERAF ($1.9 million), and property tax in lieu of vehicle license fees ($4.8 million). The increase in current year secured property taxes reflected the growth in assessed value, while the increase in Excess ERAF is largely due to the favorable outcome to the dispute between the SCO and the five counties in the state that generate Excess ERAF. In fiscal year 2020-21, the County of San Mateo experienced a property tax in lieu of vehicle license fees (VLF) shortfall of $96 million. The City’s share of the 2020-21 VLF shortfall was $5.7 million. The County of San Mateo submitted a claim to the State of California for the 2020-21 VLF shortfall in August 2021, which the State considered and appropriated for inclusion in its 2022-23 adopted budget. The VLF shortfall for 2021-22 was $33 million, or roughly one-third the amount of the shortfall from 2020-21. The City was owed $13.6 million in VLF in 2021-22 and accounted for $11.7 million. As such, the City’s share of the county-wide VLF shortfall of $33 million was $1.9 million. The County submitted the claim for the 2021- 22 VLF shortfall to the State for consideration in August 2022.
Sales tax revenues, including the Local 1% (Bradley Burns) and Local 0.25% (Measure S), were $4.6 million more than the prior fiscal year. As noted earlier, sales tax revenues recovered from the pandemic-driven recession faster than anticipated, and returned to the pre-pandemic baseline from 2018-19, largely buoyed by the general retail, food products, and transportation sectors.
Other tax revenues, including RPTT and TOT, increased by $6.2 million or 28.2% compared to the prior fiscal year. RPTT represented over 40% of the increase in other taxes, reflecting the continued demand for real estate in San Mateo, though the impact of the trend in escalating interest rates is expected to dampen RPTT revenues in subsequent fiscal years. While TOT revenues have not yet recovered back to the pre-pandemic 2018-19 baseline, they increased from $0.9 million in the prior fiscal year to $3.9 million in 2021-22. Staff will continue to monitor the recovery and adjust its long-term assumptions accordingly.
The General Fund accounted for $135.7 million in total expenditures, which was an increase of $9.0 million compared to the prior fiscal year. Approximately half of the year-over-year increase was attributable to public safety. Police Department expenditures increased by $3.7 million, largely due to negotiated increases in employee compensation. The City’s operating contribution to the San Mateo Consolidated Fire Department increased by $1.4 million, also primarily reflecting negotiated increases in employee compensation. Parks and recreation expenditures increased by $1.9 million, which represented a return of recreational programs and classes that were cancelled in 2020-21 due to the pandemic.
Proprietary Funds
The Sewer Fund’s total net position increased from $228.1 to $278.6 million, an increase of $50.5 million or 22.1%, largely driven by the rate payer-approved increase of 13%. The rate increase in 2021-22 was the fourth year of a five year rate plan that began in fiscal year 2018-19. In addition to shifting the rate to be 50% volumetric and 50% fixed cost to provide greater revenue stability, the significant rate increases also provide a critical funding source for the Clean Water Program and ensures that the Sewer Enterprise Fund has the cash position and debt service coverage ratio that is consistent with a viable and sustainable enterprise and commensurate with its high credit rating, as well as compliant with its debt indenture requirements. Cash and investments increased from $62.7 million to $103.3 million as a result of the rate increase, while restricted cash and investments increased from $97.2 million to $252.6 million reflecting the closing of the 2021 Wastewater Notes Series B, which took advantage of the interest rate spread between the loans from the Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act (WIFIA) and interest rates that were available for short-term notes at the time. Total capital assets increased from $403.7 million to $552.0 million, a $148.3 million (36.7%) increase, representing the addition of new capital assets from the Clean Water Program.
ADDITIONAL FINANCIAL STATEMENTS
The other financial statements included as attachments to this report are required for compliance with state law (Gann Limit – Att 2 and Transportation Development Act – Att 5), agreements with the San Mateo County Transportation Authority (Measure A – Att 3 and Measure W – Att 7), San Mateo Municipal Code (Measure S – Att 6), and generally
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accepted auditing standards (Auditor’s Communication – Att 4). In all the additional financial statements, the independent auditor found the City to be in compliance with the statutory requirements.
BUDGET IMPACT:
Excluding transfers in, the amended 2021-22 budget assumed that the City would account for $141.7 million in General Fund total revenues. Actual total revenues were $159.7 million; a favorable variance of $17.9 million or 12.7%.
Excluding transfers out, the amended 2021-22 budget assumed $141.5 million in General Fund total expenditures. Actual total expenditures were $135.7 million; a favorable variance of $5.8 million or 4.1%.
ENVIRONMENTAL DETERMINATION:
These year-end financial reports are not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - Annual Comprehensive Financial Report for the year ended June 30, 2022 Att 2 – Independent Accountants’ Report on Agreed-upon Procedures Applied to Appropriations Limit Schedule For the year ending June 30, 2023
Att 3 – Measure A Fund Schedule of Receipts and Disbursements and Independent Accountants’ Report for the year ended June 30, 2022
Att 4 – Auditors’ Communication with Those Charged with Governance For the year ended June 30, 2022 Att 5 – Transportation Development Act Financial Statements and Independent Auditors’ Reports for the years ended June 30, 2022 and 2021
Att 6 – Measure S Independent Accountant’s Report on Agreed-Upon Procedures Applied to Schedule of Measure S Revenues and Expenditures For the year ended June 30, 2022 Att 7 – Measure W Schedule of Receipts and Disbursements and Independent Accountants’ Report For the year ended June 30, 2022
STAFF CONTACT
Rich Lee, Director, Finance
[email protected]
(650) 522-7102
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City of San Mateo
San Mateo, California
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Prepared by
Finance Department
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City of San Mateo
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
i
Page
INTRODUCTORY SECTION (Unaudited)
Table of Contents ........................................................................................................................................................ i Letter of Transmittal ................................................................................................................................................... v Directory of City Officials ................................................................................................... .....................................xxii Map of City’s Location .............................................................................................................................................xxiv Organizational Chart .................................................................................................................................................xxv GFOA Certificate of Excellence in Financial Reporting ...........................................................................................xxvi
FINANCIAL SECTION
Independent Auditors’ Report ................................................................................................................................ 1
Management’s Discussion and Analysis – Required Supplementary Information (Unaudited) ...................... 5
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ..................................................................................................... ....................... 30 Statement of Activities a nd Changes in Net Position .................................................................................. 32
Fund Financial Statements:
Governmental Funds Financial Statements:
Balance Sheet .............................................................................................................. .......................... 38 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ...................................................................... 41 Statement of Revenues, Expenditures, and Changes in Fund Balances ............................................... 42 Reconciliation of the Government al Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities a nd Changes in Net Position ..................................................................... 44 Proprietary Funds Financial Statements:
Statement of Net Position .................................................................................................. ................... 46 Statement of Revenues, Expen ses and Changes in Net Position .......................................................... 47 Statement of Cash Flows .................................................................................................... .................. 48 Fiduciary Funds Financial Statements:
Statement of Fiduciary Net Position ........................................................................................ ............. 53 Statement of Changes in Fiduciary Net Position .................................................................................. 54
Notes to the Basic Financial Statements ........................................................................................................ 61
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Table of Contents (Continued)
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Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited):
Budgetary Information ........................................................................................................ ............................. 127 Budgetary Comparison Schedules:
General Fund ................................................................................................................ ............................. 128 Construction Services Special Revenue Fund ........................................................................................... 131 Schedule of Changes in the Net Pe nsion Liability and Related Ratios ............................................................ 132 Schedules of Contributions - Pension ......................................................................................... ..................... 134 Schedule of Changes in Total O PEB Liability and Related Ratios ................................................................. 136 Schedule of Contributions – OPEB ............................................................................................. .................... 137
Supplementary Information:
Non-Major Governmental Funds:
Combining Balance Sheet ..................................................................................................... .................... 142 Combining Statement of Reve nues, Expenditures and Changes in Fund Balances ........................................................................................................... ...................... 147
Schedule of Revenues, Expenditures and Changes in
Fund Balances – Budget and Actual Schedules:
General Projects Capital Projects Fund .............................................................................................. 152 Police Grants Special Revenue Fund ......................................................................................... ......... 153 Community Development Block Grant Special Revenue Fund ......................................................... 154 HOME Special Revenue Fund .................................................................................................. .......... 155 City Housing Special Revenue Fund .......................................................................................... ........ 156 Low and Moderate Income H ousing Special Revenue Fund .............................................................. 157 Permanent Local Housing Allo cation Special Revenue Fund ............................................................ 158 Gas Tax Special Revenue Fund .......................................................................................................... 159 Road Maintenance and Rehab ilitation Special Revenue Fund ........................................................... 160 Advance Planning Special Revenue Fund ...................................................................................... .... 161 Solid Waste Special Revenue Fund ........................................................................................... ......... 162 Park and Recreation Special Revenue Fund ....................................................................................... 163 Traffic Impact Fee Special Revenue Fund .......................................................................................... 164 Commercial Linkage Fee Special Revenue Fund ............................................................................... 165 Landfill Bonds Debt Service Fund ........................................................................................... .......... 166 General Obligation Bo nds Debt Service Fund .................................................................................... 167 2% Hotel Tax Capital Projects Fund ......................................................................................... ......... 168
Internal Service Funds:
Combining Statement of Net Position ......................................................................................... .............. 170 Combining Statement of Revenues, Expe nses, and Changes in Net Position ........................................... 172 Combining Statement of Cash Flows ........................................................................................... ............. 174
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Table of Contents (Continued)
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FINANCIAL SECTION (Continued)
Supplementary Information (Continued):
Fiduciary Funds:
Custodial Funds - Combining Stat ement of Fiduciary Net Position ......................................................... 180 Custodial Funds - Combining Statement of Changes in Fiduciary Net Position ...................................... 181 Private Purpose Trust Funds - Combining Statement of Fiduciary Net Position ...................................... 185 Private Purpose Trust Funds - Combining Statem ent of Changes in Fiduciary Net Position ................... 186
General Capital Projects Fund:
Schedule of Assessments and Impact Fees and Related Expenditures ..................................................... 189
STATISTICAL SECTION (Unaudited)
Table of Contents ................................................................................................................................................... 193
Financial Trends:
Net Position by Component – Last Ten Fiscal Years ............................................................................ .......... 194 Changes in Net Position – Last Ten Fiscal Years .............................................................................. .............. 196 Governmental Activities Tax Revenues by Source – Last Ten Fiscal Years .................................................. 201 Fund Balances of Governmental Funds – Last Ten Fiscal Years .................................................................. .. 202 Changes in Fund Balances of Government al Funds – Last Ten Fiscal Years ................................................. 204
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ........................... 206 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ............................................................ . 207 Principal Sales Tax Producers – Current Year and Nine Years Ago .............................................................. . 208 Principal Property Taxpayers – Cu rrent Year and Nine Years Ago ................................................................ 209 Property Tax Levies and Collecti ons – Last Ten Fiscal Years ........................................................................ 211
Debt Capacity:
Ratios of Outstanding Debt by Ty pe – Last Ten Fiscal Years ......................................................................... 212 Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ............................................................ 214 Direct and Overlapping Governmental Activities Debt .......................................................................... ......... 215 Legal Debt Margin Information – Last Ten Fiscal Years ........................................................................ ........ 216 Pledged Revenue Coverage – Last Ten Fiscal Years ...................................................................................... 218
Demographic and Economic Information:
Demographic and Economic Statis tics – Last Ten Fiscal Years ..................................................................... 219 Principal Employers – Current Year and Nine Years Ago ........................................................................ ...... 220
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Table of Contents (Continued)
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Page
STATISTICAL SECTION (Unaudited) (Continued)
Operating Information:
Full Time Equivalent City Government Empl oyees by Function – Last Ten Fiscal Years ............................. 221 Operating Indicators by Functi on – Last Ten Fiscal Years ............................................................................. 222 Capital Asset Statistics by Func tion – Last Ten Fiscal Years .......................................................................... 223
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LETTER OF TRANSMITTAL
v
Finance Department
330 West 20th Avenue
San Mateo, California 94403
p: 650.522.7100
f: 650.522.7101
http://www.cityofsanmateo.org
December 2, 2022
Residents of the City of San Mateo,
Honorable Mayor, and
Honorable Members of the City Council
The City of San Mateo follows the b est management prac tice of publishing a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants within six months of the close of the fiscal year. This report is prepared by the City of San Mateo’s Finance Department in accordance with Section 5.26 of the City’s Charter.
Pursuant to the requirements, we hereby issue the Annual Comprehensive Financial Report (ACFR) of the City for the fiscal year ended June 30, 2022.
This report consists of management’s representations concerning the finances of the City and its bl ended component unit. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the management of the City. To provide a reasonable basis for making those representations, management of the City has established a comprehensive internal control framework that is designed to both protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with U.S.
GAAP. The first note in the Notes to the Financial Statements provides a detail ed explanation of the City’s significant accounting policies. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
The Pun Group, a firm of licensed certified public accountants, has audited the City’s financial statements.
The goal of the independent audit is to provide reasonable assurance that the financial statements of the City and its blended component unit for the fiscal year ended June 30, 2022, are free of material misstatement. The audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by m anagement; and evalu ating the overall financial statement presentati on. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion on the City’s basic financial statements as of and for the year ended June 30, 2022. The independent auditors’ report is presented as the first component of the financial section of this report.
The analysis of the financial condition and the result of operations are in the Management’s Discussion and Analysis (MD&A) section immediately following the auditor’s report. This transmittal letter is designed to complement the MD&A and should be read in conjunction with the MD&A.
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THE REPORT
The ACFR is presented in three sections:
• The Introduction section includes this letter of transmittal, City Council introduction, the City’s organizational chart, and certificates of achievement.
• The Financial section includes the rep ort of the independent auditors; Management’s Discussion and Analysis (MD&A); the basic financial statements, including the government -wide financial statements; and the accompanying notes to the financial statements. The Financial Section also includes the fund financial statements , including the governmental funds financial statements, the proprietary funds financial statements, the fiduciary funds financial statements, and the combining individual funds financial statements for the non-major governmental funds and the internal service funds. Required supplementary information other than the MD&A is also included in the financial section.
• The Statistical section includes selected financial and demographic information, presented on a multi-year basis.
ACFR Organization
This ACFR includes all funds of the City and the City’s component unit, which is a le gally separate organization for which the City is financially accountable or whose relationship with the City is of a nature and significance that would cause the City’s financial statements to be incomplete were it not included.
In addition to the financial audit, the City typically undertakes a single audit in conformance with the Single Audit Act Amendments of 1996 and the Uniform Guidance.
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CITY PROFILE
The City of San Mateo is in San Mateo County and is situated 19 miles south of San Francisco and 30 miles north of San Jose. The City covers an area of 15.4 square miles and includes tidelands from the Bay to the east and coastal mountains to the west. With its Mediterranean climate, residents enjoy warm, sunny summers and mild damp winters, ideal for various recreational activities in the City’s many neighborhoods and regional parks.
One of the larger suburbs of the San Francisco Peninsula, San Mateo is bordered by the cities of Burlingame to the north, Foster City to the east, Belmont to the south, and H illsborough to the west.
Based on the 2020 Census, the City of San Mateo had an estimated 2020 population of 105,661, making it the largest city in San Mateo County.
CITY HISTORY
The first inhabitants of what is now the City of San Mateo were members of a tribe of the Ohlone Indians (called Coastanoans by Spanish explorers). This Tribe lived in the area from South San Francisco to Belmont for at least 4,000 years before explorers f irst arrived on the Peninsula. In 1776, Spanish explorers came to today's San Mateo. During a scouting trip to locate a place to start a colony on the Peninsula, Lieutenant Colonel Juan Bautista de Anza, Padre Pedro Font, Lieutenant Jose Joaquin Moraga, and eleven soldiers set up camp in San Mateo. Father Font named the creek that they slept by "San Mateo Creek." In 1793, the mission fathers in San Francisco created an outpost of the mission on the Peninsula. The outpost was the first building built in San Mateo by non-natives.
In 1822, California received word of Mexico's independence from Spanish rule. The Mexican Land Grants (1835) would leave a few residents owning vast expanses of land in the area. These ranches were so large that what is now the City of San Mateo is comprised of only two land grants - Rancho San Mateo and Rancho de las Pulgas. The year 1889 saw many important events in the developing San Mateo community. Under head engineer, Herman Schussler, the Crystal Springs dam was completed.
The completion of this project assured that the people of San Mateo would have quality drinking water, allowing for further growth in the area.
In the same year , William Howard had part of his estate opened for subdivision, the first successful attempt at selling smaller plots of land. With this, the middle class moved to San Mateo. In this same year, Richard H. Jury and Charles N. Kirkbride established the “Leade r”, San Mateo's first successful newspaper and one of the earliest proponents of the incorporation of San Mateo. On September 3, 1894, with a vote of 150 in favor and 25 against incorporation, San Mateo became a town.
CITY ORGANIZATION
The City was inco rporated in 1894 and was originally chartered in 1922. The current charter was adopted in 1971 and revised in 2002. Since 2002, there have been three other voter -approved amendments to the charter. San Mateo has a Council -Manager form of government. F ive Council members serve at -large for four -year terms. The City recently completed a transition to district elections. The Council selects a Mayor from among its members each December for a o ne-year term.
The City Manager is appointed by the Council and serves as chief executive officer responsible for the day-to-day administration of City affairs. The City Council also appoints a City Attorney. There are twelve Advisory Boards and Commissions, nine of which are appointed by the City Council.
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The City provides a wide range of municipal services, i ncluding police, public works, parks and recreation, library, planning and zoning, building, sewer enterprise, street maintenance, economic development, and general administrative s ervices. The City is part of a joint powers agreement with the cities of Belmont and Foster City that provides fire services to all three cities through the San Mateo Consolidated Fire Department. The City offers 35 parks, six recreation centers, an 18-hole golf course, and three libraries , including a state -of-the-art main lib rary. California Water Service, a private company, provides water to City residents.
The City's management has adopted a set of "organizational principles" that reflect the City’s management philosophy. These principles are:
• Engaged and accountable workforce;
• Working as one organization;
• Maintaining long-term perspective;
• Seeking constant improvement; and
• Leading through informed risk-taking.
These principles, which were adopted in 2016, are intended to guide management actions throughout the City organization. The goals of City management are to see that necessary and desired services are provided in an efficient and effective manner, and that planning and continued improvement take place to provide for the community's future.
The City operates o n a two -year budget cyc le. The two -year budget process requires that each department submit two one -year expenditure plans and revenue estimates to the City Council for approval. In each alte rnate year, the department directors present mid-cycle performance reports to the City Manager and City Council summarizing budget status to date and seeking approval for year- two funding. The City utilizes a five -year plan for capital improvements. Th e plan serves as a guide for allocation of future resources . In response to the economic volatility from COVID -19, the City temporarily shifted to a one-year budget process, and returned back to a two-year budget cycle for the 2022-24 Business Plan.
The City maintains budgetary controls that have the objective o f ensuring compliance with legal provisions embodied in the annual appropriated budget submitted by the City Manager and adopted by the City Council. The annual operating budget and the long -term capital improvement plan are adopted on or before June 30 th by City Council . All budget amendments require City C ouncil approval. The two-year business plan for operations is adopted in June of every even-numbered year and is amended in the second year of the plan as part of the annual budget development process.
Budgetary control (the level at which expenditures and encumbrances cannot legally exceed the appropriated amount) is established at the department level within individual funds . Departmental operating budgets may be reallocated among programs within a department and within the same fund, but expenditures may not exceed annually budgeted appropriations at the department /fund level without Council approval. Project -length budgets are adopted f or the General Fund, some special revenue funds , and all capital project funds. Capital improvement expenditures may not exceed budgeted amounts without Council approval.
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The City has an Audit Committee consisting of the Mayor and Deputy Mayor. The Audit Committee is responsible for the selection and management of the external auditor. The Audit Committee discusses any matters related to the audit with the external auditor and accepts the results of the annual financial audit.
LOCAL AND REGIONAL ECONOMY
The information presented in the financial statements is perhaps best understood when it is considered from a broader perspective of the specific environment in which the City operates. The City is one of the major centers of economic activity in San Mateo County, serving as a business, recreational, educational, and cultural hub. Employment in San Mateo is concentrated in three sectors: professional and financial services; retail; and health, educational, and recreational services.
The City boasts a diversity of businesses , including sole proprietorships, supporting its employment and retail base. Key examples include:
• Franklin Templeton Investments - world headquarters, a global investment firm; • Sony PlayStation – national headquarters, an interactive and digital entertainment company; • Apple Stores, Macy's, Nordstrom, and Target - national retailers in the electronic, high-end, and value-oriented segments of the retail spectrum; and
• GoPro – maker of the world’s most versatile cameras.
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COVID-19 and Recovery of the Local Economy
In the wake of the COVID -19 pandemic, General Fund transient occupancy tax (TOT) and sales tax revenues took the brunt of the financial impact. The graphs below illustrate the historical trends over the past 20 years, and highlight the disparity in recovery between the two tax revenues
Sales tax revenues took 4.5 years to recover from the Great Recession. Earlier projections anticipated that it would take about the same amount of time to recover from the pandemic -driven recession, but the return to the 2018 -19 pre-pandemic baseline happened in two years , largely due to inflation and the resilience of the general retail and food services business sectors.
While the recovery of sales tax was accelerated, the pre -pandemic trend of not ke eping pace with inflation remains true. The primary contributing factors include:
1. Gradual shift of consumer behavior from purchasing taxable goods at physical stores to purchasing through online retailers. While the City receives 95% of the Local 1% (Bradley Burns Uniform Sales and Use Tax) from a taxable sale at a location based in the City, it only receives approximately 10% of the Bradley Burns with online transactions.
2. The antiquated sales tax laws of the State of California, and the lack of political will to change them to align with modern commerce/technology.
3. Retailers entering into sales tax rebate agreements with specific municipalities that agree to set the point of sale in their city in exchange for “returning” a percentage of use tax back to the retailer.
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The graph below illustrates the annual impact of the difference between point of sale-based allocation of the Bradley Burns compared to destination-based allocation:
In contrast to the accelerated recovery of sales tax revenues, through the fiscal year ended June 30, 2022, General Fund TOT revenues have only recovered back to 55% of the 2018-19 pre-pandemic baseline:
In the short -term, TOT revenues were more than expected in 2021 -22, but the long-term trends are uncertain given the City’s reliance upon business travel to drive its TOT revenues. $11 $12 $13 $13 $14
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As shown in the graph below, real property transfer tax (RPTT) revenues have historically been one of the City’s most volatile revenue sources, as they reflect the state of the real estate market, and are susceptible to economic ebbs and flows:
However, there have been four major economic cycles over the past 20 years that illustrate a periodicity to the data . As such, the City reset the baseline for the RPTT from $8.5 million (which was the long - term average) to $11.1 million, which is the average of the current and previous economic cycles:
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Due to sustained high inflation and the Federal Reserve’s efforts to mitigate by raising the Federal Funds Rate to levels not seen since the Great Recession, the cost to borrow money for prospective home buyers has increased to approximately 7.0% as of tod ay. The higher interest rates will likely have a dampening effect on RPTT . The chart below shows the Federal Funds Rate since 1955, and the subsequent dot plot chart illustrates where the members of the Federal Open Market Committee believe the Federal Funds Rate will be heading over the next couple of years:
Real Estate Sales Metrics – Single Family Residential Homes
Property tax revenue continues to be the primary source of revenue for the General Fund. Pursuant to Article XIII A of the California Constitution, the annual increase in assessed value is limited to the lesser of 2% or the California Consumer Price Index (CCPI). For the January 1, 2022 lien date, the change in CCPI between October 2020 to October 2021 of 5.56% was applied to the assessed value for 2022-23.
With the current trend of sustained high inflation, CCPI will be greater than 2% for the foreseeable future.
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As shown in the chart below, secured current year property tax comprises the majority of property tax revenue, followed by property tax in-lieu of VLF, and Excess ERAF:
While property tax revenues have historically been the City’s most stable revenue source, the ongoing escalation of the county -wide property tax in -lieu of VLF shortfall will continue to pose a risk to the City’s long-term fiscal sustainability and ability to maintain its core services. The significant increase in VLF in 2023 is comprised of the am ount due and the projected shortfall for the current year as well as funds from the State of California for the VLF shortfall from fiscal year 2020 -21, when the county experienced a shortfall of nearly $100 million.
The VLF shortfall is due to the dearth of non-basic aid school districts in San Mateo County, as the VLF owed to cities and the county can only be backfilled by Educational Revenue Augmentation Fund (ERAF) or property tax from non -basic aid school districts. This issue is unique to San Mateo County and Napa County due to the high value of real estate. For 2020-21, the City was owed $13.2 million in VLF, but only received $7.5 due to the shortfall. The cities’ and county’s sole remedy is to file a claim with the State of California in the fall of each year for consideration in the state’s subsequent fiscal year.
As such, there is a two year gap between the year that the cities and the county experience the shortfall and the year in which the state appropriate s the funds . Over the next six to seven years, all school districts are expected to reach basic aid status , which will gradually increase the VLF shortfall from $100 million to over $250 million. Despite the cities’ and the county’s efforts to garner enough support for a legislative amendment to address the escalating VLF county -wide shortfall, the political will has not yet materialized.
In the years that followed the Great Recession, u nemployment rates in the state, county, and city improved on an annual basis, and approached historical lows, nearing full employment. The instantaneous impact of COVID-19 on the labor market pushed unemployment rates over 10%, 11%, and 16% for the City of San Mateo, County of San Mateo, and State of California, respectively, in April 2020. Unemployment rates have continued to decline from the peak of the onset of the pandemic. As of October 2022, unemployment rates are 1.9%, 2.0%, and 3.8%, respectively, and have returned to the lows of the pre-pandemic period.
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Unemployment Rates
Source: State of California Employment Development Department
CITY FINANCIAL POLICIES & PLAN
Formal financial policies and prudent operating practices have enabled the City to maintain core services and minimize the impact of economic fluctuations on residents as much as possible. Formal policies exist in areas such as balanced budgets, revenue diversification , operating expenditures, reserves, investments, and debt.
Trust has been built over the years between the City and the community through establishing and following formal financial policies, as well as maintaining prudent operating practices. This trust and confidence were demonstrated by the voters in San Mateo, who in November 2009 approved a ¼ cent general sales tax on purchases made in the City. This measure generated $6.1 million in additional revenue for FY 2018-19 to support General Fund operations. With this tax set to expire April 2018, the voters again demonstrated their confidence in the City’s financial management by voting in November 2015 to extend the tax until 2048 to fund critical infrastructure and enhancement s to public safety services. San Mateo voters further demonstrated the trust in the City by approving Measure CC in November 2022 to increase the real property transfer tax from 0.5% to 1.5% for properties sold or transferred that are valued at $10 million or more.
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REVENUE ADMINISTRATION
The City’s two main sources of revenue to fund operating expenditures are property and sales taxes, which make up over 68 percent of total General Fund revenues. In addition, the City ’s revenue administration includes a review of all fees, fines, and charges for services to ensure the charges are meeting cost -recovery goals. One -time and unpredictable revenues are spent on one -time expenditures, such as equipment replacement, or transferred to capital improvement funds for repair and rehabilitation projects.
EXPENDITURE ADMINISTRATION
City departments and the Finance Department carefully review expenditure budgets. The department directors are responsible for containing ex penditures within their Council -approved budget appropriations. The City maintains an encumbrance accounting system as an additional means of budgetary control. Encumbered amounts in the operating budget lapse one year after the end of the fiscal year.
RESERVES
The City Council ’s budget policy for the use of reserves varies depending on the reserve type , but generally limits the use of reserves to respond to revenue shortfalls, unanticipated expenditures, severe economic downturns, or natural disasters. The policy further states that use of reserves should be combined with structural changes to bring the budget back int o balance if it is out of balance . The General Fund reserve policy adopted by the City Council seeks to reflect three months of General Fund budgeted operating expenditures, or 25 percent.
As of the fiscal year ended June 30, 2022, the General Fund increased its fund balance from $92.0 million to 111.5 million, of which $16.3 million was committed for a specific purpose, and $93.7 million was unassigned. The unassigned fund balance includes the 25% operating reserve, the Rainy Day Reserve, and the housing set aside . Based on adopted 2021-22 budget, General Fund total expenditures, excluding transfers out, were $138.8 million. As such, the 25% operating reserve for 2021-22 was $34.7 million.
In April 2022, the City Council adopted a resolution to commit $10 million of unassigned fund balance for 1) $5.5 million of negotiated increases in employee compensation with bargaining units that partnered with the City as a part of the Fiscal Sustainability Plan in 2020 to provide the General Fund with fiscal relief by agreeing to the equivalent of two years of no cost of living adjustment ; and 2) $4.5 million in support for capital improvements, primarily comprised of:
• $1.6 million to complete the conversion of streetlights from high voltage to LED; • $1.8 million to provide structural improvements to the Marina Branch Library; and • $0.6 million for the downtown pedestrian mall.
As such, if General Fund revenues and expenditures from the adopted 2022-23 budget come to fruition, the $4.7 million in net loss will come from the General Fund committed fund balance rather than unassigned fund balance.
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The Sewer Fund’s total operating revenues for the fiscal year ended June 30, 2022, were $71.7 million – an increase of $3.5 million or 5.1% compared to the prior fiscal year , driven by the approved sewer service rate increase of 13%. Total operating expenses were $30.0 million, an increase of 1.9% compared to the prior year, primarily in depreciation and amortization. The Sewer Fund generated $41.7 million in operating income, which was the primary factor in cash and investments increasing to $103.1 million – a 64.4% increase compared to the prior fiscal year, and 343% of the fund’s operating expenses, well above the enterprise’s reserve policy target of 33%. The strong available cash position of the sewer enterprise ensures liquidity during the active construction period of the Clean Water Program , a 1 0 year, $1.0 billion capital improvement program to upgrade and expand the jointly owned wastewater treatment plant with the Estero Municipal Improvement District /City of Foster City, and improvements to the City of San Mateo’s collection facilities. In addition to maintaining a strong cash position, the favorable operating surplus also maintains the Sewer Enterprise Fund’s continued high debt service coverage ratio of 2.17X. Both the cash position and debt service coverage affirm the high- quality credit rating the Sewer Enterprise received of AA - from S&P Global Ratings (formerly known as Standard & Poor’s) and AA rating from Kroll Bond Rating Agency.
There are additional reserve s established in the City’s other funds for vehicle and equipment replacement, general liability, and capital improvements.
DEBT ADMINISTRATION
The City manages the issuance of new debt and proactively communicates with the investment community in the administration of its outstanding debt. In doing so, the City seeks to ensure that debt is issued prudently and affordably, and bondholders are provided all the information required by the Municipal Securities Rulemaking Board as governed by the Securities and Exchange Commission.
Proposition 13 amended the State Constitution by requiring California cities to obtain voter approval prior to issuing general obligation bonds. State statutes further limit general obligation bonded debt to 15% of the assessed value of all real and personal property within the City. At June 30, 2022, the City’s general obliga tion bonded debt remaining balance of $17.4 million , including unamortized bond premium, amounted to 0.34% of the $5.1 billion legal debt limit.
According to standard measures used by the primary credit rating agencies to assess debt (e.g. fund balance as a percent of operating expenses, debt-to-assessed valuation ratios, debt per capita, etc.), the City’s level of direct debt obligatio ns is considered low in comparison to similarly-sized cities. Rating agencies cite the City’s strong financial management and prudent fiscal policies as credit strengths. As of June 30, 2022, the City’s rating for general obligation bonds is AA+ by Standard & Poor’s and Aaa from Moody’s Investor Service . The City of San Mateo Joint Powers Public Financing Authority manages two bond issues that have $18 million in balance outstanding.
CASH MANAGEMENT
The State Government Code regulates the securities in which the City may invest its funds. Leg ally permissible investments include, but are not limited to , obligations of the United States Government, its agenc ies, and sponsored corporations; prime bankers’ acce ptances; prime commercial paper; certificates of deposit issued by banks and savings and loan institutions; highly rated municipal securities; and money market funds that purchase only the types of securities specified herein.
The objectives of the City Council -adopted investment policy, in order of priority, are to maintain principal, to ensure the availability of funds to meet obligations promptly, and to maximize yield on the investment portfolio. Bank deposits are either insured by federal deposit insurance or collateralized according to state law. Investments are held at a third-party bank in a safekeeping account in the City’s name. The City had a total cas h and investments portfolio of $766.2 million at the fiscal year ended June 30, 2022.
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LONG-TERM FINANCIAL PLANNING
The City of San Mateo has a long tradition of disciplined and prudent fiscal management. To address the significant impacts of the Great Recession, the City Council adopted various strategies for financial sustainability that have been successfully impleme nted to achieve not only a balanced General Fund budget, but also create a mechanism for the City to accumulate sufficient resources to better position its General Fund to be prepared for economic retraction or disaster. The City’s prudent efforts to adopt a reserves policy and accumulate additional reserves during the years of economic prosperity have proven prescient within context of the immediate and severe financial impact of COVID-19.
The City continues to adhere to a planning process that focuses on financial sustainability. To this end, the City annually updates a long -term General Fund financial projection model designed to inform decision makers of the long -term impacts of near -term financial proposals. The City also maintains a five-year long-range capital planning process and capital improvement plan that is annually updated.
This plan drives capital project funding decisions and periodic new bonded debt issuances for larger capital infrastructure investments. For General Fund operations, revenu es and expenditures are forecasted out for ten years to continually assess the long -term structural balance of that fund and allow adequate time for thoughtful course correction if a structural imbalance occurs.
MAJOR INITIATIVES
GENERAL PLAN UPDATE
The General Plan is the City’s long-range vision for how the City will look, feel, and grow over the next 20 years. The General Plan is required to comply with certain state laws and requirements as well as address local community needs and issues. The San Mateo General Plan includes a Vision Statement and Introduction and eight Elements (chapters): Land Use; Circulation; Housing; Community Design and Historic Preservation ; Conservation, Open Space and Recreation; Public Services and Facilities; Safety; and Noise.
The City’s General Plan Update (GPU) process was initiated in fall 2018 and began with a series of visioning workshops and community m eetings. Subsequent activities included establishment of General Plan study areas where growth and change would be focused, creating alternative design and growth scenarios for community consideration, and selection of the land use and circulation alternative that was most aligned with community input and City growth needs. Once the preferred land use and circulation scenarios were selected by the City Council in spring of 2022, preparation of the General Plan’s goals, polices and actions began, with a draft published in July 2022.
The next round of community engagement began in August and ran through the beginning of October, and included a city-wide mailed newsletter, pop-up events, an online survey, workshops and an open house to gather community input on what should be priorit ized in each element of the General Plan .
This phase wrapped up with public hearings before the Planning Commission and City Council in October and November. The next step in the process is to prepare the Draft General Plan and Draft Environmental Impact Report, with a target to publish in the spring of 2023. The goal is to have a final General Plan that is ready for City Council adoption by the end of 2023.
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HOUSING ELEMENT UPDATE
To plan for the next statewide housing cycle (2023 -2031), the City is in the process of updating its Housing Element. The Housing Element, which is a chapter in the City’s General Plan, is required by state law to be updated every eight years, meet specific requirements for content, and must be submitted to the state for approval. The City’s Regional Housing Needs Allocation (RHNA) for this housing cycle is 7,015 new housing units. The updated Housing Element must show that there is enough land zoned with sufficient density to accommodate the RHNA. In addition, it needs to include policies and strategies that promote a mix of housing types in an equitable manner, infill development, and greenhouse gas emission reductions, among other things, and affirmatively further fair housing practices.
The Housing Element update process included a robust community engagement process in fall of 2021 and winter of 2022, including a joint study session with the Planning Commission and City Council in February 2022. The draft Housing Element w as published in April 2022, with public hearings before the Planning Commission and City Council in April and May. Based on community input and direction from the City Council, the draft Housing Element was updated and submitted to the State beginning of July. Comments from the State were received at the end of September and staff is in the process of updating the draft Housing Element to address these comments, with a goal of having the Housing Element adopted by the City Council in January 2023. Once adopted, the City will then need to proceed with implementation of over 75 housing related policies and programs contained in the Housing Element in order to remain in compliance with State law.
OBJECTIVE DESIGN STANDARDS
In response to state legislation, includin g Senate Bill (SB) 35 and Senate Bill (SB) 330, and to support the streamlining of new housing development, the City is in the process of developing objective designs standards for multi-family residential projects to replace existing discretionary design review guidelines. To support the development of the objective design standards, the City retained MIG, Inc., an urban design consulting firm, in March 2020. Following a delay due to the pandemic, work on the project resumed in 2021. A virtual workshop was held in June 2021 to gather community input and a study session with the Planning Commission was held in August. Subsequently, the scope for MIG was expanded to prepared standards for specific areas in addition to citywide standards. City staff is currently reviewing draft documents, which will be followed by public outreach and community meetings before the Planning Commission and City Council anticipated in summer and fall 2023.
BAY MEADOWS PHASE II DEVELOPMENT
Bay Meadows Phase II is an 83 -acre transit-oriented mixed-use redevelopment project at the former Bay Meadows Racetrack. The development, which is adjacent to the Hillsdale Caltrain Station, includes 1,048 residential units, 68 of which are affordable units, 1.2M square feet of office space, 67,000 square feet of retail and restaurant space, a 450 -student private high school, Nueva School, and three public parks. Infrastructure construction of the project began in 2009 and construction of the first townhomes began in 2013. Over 75 percent of the project has now been completed or is currently under construction. Office block STA 1 at the north end of the development was completed this past fall , construction of office block STA 5 should be completed in spring 2023 and construction of residential block RES 6 (54 apartment units) started in fall 2022. The final two mixed -use blocks, MU2 and MU3, which includes 67 apartment units, are anticipated to start construction first half of 2023 , with full development of the project anticipated for completion by 2025.
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CONCAR PASSAGE
Concar Passage is a five-story mixed-use project located on the 14.5-acre Concar Shopping Center site on Concar Drive between South Grant Street and South Delaware Street. Current shopping center tenants include Trader Joe’s, Peninsula Ballet Theatre, Ross Dress for Less, The Pantry, Rite -Aid, T.J.
Maxx, Shane Co., and 7 -Eleven. The pro ject will demolish the existing commercial buildings and construct 961 apartment units and approximately 40,000 square feet of commercial/retail space. The project includes 73 affordable housing units, associated parking , and three acres of community open space. The project was approved by the City in August 2020 . H owever, due to existing leases for shopping center tenants, construction is not anticipated to start until 2023 or 2024.
PENINSULA HEIGHTS
Peninsula Heights is a mixed residential project located on a 15.5 -acre former office park site along Campus Drive to the west of the Peninsula Golf and Country Club. The project includes 290 single - family, townhouse, and condominium units, with 30 units designated as affordable. The project was approved by the City in December 2020, and site work started in fall 2021. Construction is anticipated to be completed by 2025.
OTHER HOUSING PROJECTS
In addition to the housing being added as part of the larger Bay Meadows, Concar Passage, and Peninsula Heights projects, there are a number of other significant housing projects in various stages of the development process that will be adding new housing units around the City:
Projects Under Construction
• Kiku Crossing Affordable Housing Project (225 affordable apartment units) • 1, 2, & 3 Waters Park Dr. “One 90” (190 single-family and townhome units) • 1650 S. Delaware Street Apartments (73 apartment units) • 303 Baldwin Avenue (mixed-use retail, office, and 64 apartment units)
Approved Projects Not Yet Under Construction
• Hayward Park Station Residences (189 apartment units) • Block 21 (mixed-use office and 111 apartment units)
• Hillsdale Terrace (mixed-use commercial and 68 condominium units) • 1919 O’Farrell (49 apartment units)
• 222 E. 4th Ave., Draeger’s Grocery (mixed-use office, grocery, and 10 affordable units)
Projects Under Review Not Yet Approved
• 477 E. Hillsdale Boulevard (152 apartment units)
• 477 9th Ave. (mixed-use office and 120 apartment units) • Block 20 (mixed-use office and 86 apartment units)
• 616 S. B Street, Nazareth Vista (mixed-use commercial and 48 apartment units) • 222 S. Fremont St (41 condominium units)
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LETTER OF TRANSMITTAL
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SEWER UTILITY INFRASTRUCTURE NEEDS
The Clean Water Program is a major City initiative and 10-year capital improvement program for the rehabilitation and upgrade of the sewer utility that began in 2015 and involves approximately $1 billion in improvements to the wastewater treatment and collection systems in order to comply with the State of California Water Quality Control Board’s cease and desist order and wastewater treatment discharge permit. The program is expected to be funded with a combination of operating surpluses, sewer charge rate increases, capital contributions from the utility’s regional customers, bond financing , and loans through the Water Infrastructure Finance and Innovation Act from the Environmental Protection Agency. In addition, the City closed state loans through the State Revolving Fund to complement the funding approach. Long -range capital improvement plans and an updated Integrated Sewer Master Plan to meet the cease and desist order and discharge permit requirements have been developed and projects within the overall Clean Water Program are underway.
SAN MATEO CONSOLIDATED FIRE DEPARTMENT
For nearly the past decade, the City of San Mateo, the City of Belmont/Belmont Fire Protection District, and the City of Foster City/Estero Municipal Improvement District have been working diligently to bring together fire services with the goal of providing a high level of shared fire, rescue, and emergency medical services to all three communities, while also achieving a c ost-efficient service delivery. The diligence culminated into the formation of a Joint Powers Authority (JPA) that was created on November 22, 2017, to form the San Mateo Consolidated Fire Department (SMC Fire). SMC Fire commenced operations on January 13, 2019, and continues to provide integrated and comprehensive emergency response services to all three communities. The City transferred its fire operations, including fire protection activities, to SMC Fire concurrent with commencement of operations. SMC Fire contracts with the City of San Mateo for financial and human resources services.
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LETTER OF TRANSMITTAL
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AWARDS AND ACKNOWLEDGEMENTS
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 for its ACFR for the year ended June 30, 2021. The Certificate of Achievement is a national award recognizing conformance with the highest standards for preparation of state and local government financial reports. To be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized ACFR.
This report must satisfy both U .S. GAAP and applicable legal requirements. This was the thirtieth consecutive year that the City has received this award. A Certificate of Achievement is valid for one year only. We believe this FY 2021-22 ACFR continues to conform to the Certificate of Achievement program requirements , and we will submit it to the GFOA to determine its eligibility for another certificate.
The preparation of this ACFR could not have been accomplished without the efficient and dedicated service of the highly qualified staff in the Finance Department. The dedication and cooperation of staff in all City departments in the administration of financial policies throughout the year is also appreciated. We also acknowledge the thorough and professio nal manner in which our independent auditors, The Pun Group, conducted their audit.
In closing, City staff wishes to express deep appreciation to the City Council for their leadership, support, and responsiveness to the financial concerns of the City.
Respectfully submitted,
Drew Corbett, City Manager
Rich Lee, Finance Director
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CityofSanMateoCityCouncilMembers
2022
RickBonilla
Mayor
DianePapan
DeputyMayor
AmourenceLee
CouncilMember
EricRodriguez
CouncilMember
JoeGoethals
CouncilMember
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City Organizational Chart
COMMUNITY
DEVELOPMENT
PUBLIC
WORKSPOLICE PARKS &
RECREATION LIBRARY INFORMATION
TECHNOLOGYFINANCE HUMAN
RESOURCES
OPERATING DEPARTMENTS
CITY MANAGER CITY CLERK
CITY ATTORNEY
CITY COUNCIL
COMMUNITY OF SAN MATEO
BOARDS & COMMISSIONS
Civic Arts Committee
Community Relations Commission
Investment Advisory Committee
Library Board
Measure S Oversight Committee
Mosquito & Vector Control District
Parks & Recreation Commission
Personnel Board
Planning Commission
Senior Citizens Commission
Sustainability & Infrastructure Commission
Youth Activities Council
Mayor
Deputy Mayor
Council Member
Council Member
Council Member
City Manager
City Attorney
City Council
Rick Bonilla
Diane Papan
Joe Goethals
Amourence Lee
Eric Rodriguez
Drew Corbett
Prasanna Rasiah
Assistant City Manager
City Clerk
City Librarian
Community Development Director
Finance Director
Human Resources Director
Information Technology Director
Parks and Recreation Director
Police Chief
Public Works Director
Department Heads
Kathy Kleinbaum
Patrice Olds
James Moore
Christina Horrisberger
Rich Lee
Teresa Abrahamsohn
Pete Owen
Joanne Magrini
Ed Barberini
Azalea Mitch
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of San Mateo
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
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2121 North California, Suite 290
Walnut Creek, California 94596
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members
of the City Council of the City of San Mateo
San Mateo, California
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remain ing fund information of the City of Sa n Mateo, California (the “City”), as of and for the year ended June 30, 20 22, and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each majo r fund, and the aggregate remaining fund information of the City, as of June 30, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fi nancial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States. Our responsibilities under tho se standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements secti on of our report. We are requi red to be independent of the City, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
Implementation of New GASB Pronouncements
As discussed in Note 1 to the basic fi nancial statements, the City implemented Governmental Accounting Standards Board (“GASB”) Statement No. 87, Leases during the year. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the prep aration and fair presentation of the fi nancial statements in accordance with accounting principles generally accepted in the United Stat es of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate wh ether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ab ility to continue as a going concern for twelve months beyond the financial st atement date, including any currently known information that may raise substantial doubt shortly thereafter.
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To the Honorable Mayor and Members
of the City Council of the City of San Mateo
San Mateo, California
2 Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whet her the financial statements as a whole are free from material misstatement, whether due to fraud or error, a nd to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards ge nerally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the ove rride of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal c ontrol relevant to the audit 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, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal cont rol-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Comparison Sche dules, Schedule of City’s Proportionate Share of the Net Pension Liability and Related Ratios, Schedules of Contri butions – Pension, and Schedule of Changes in Total OPEB Liability and Related Ratios, as listed in the accompa nying 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 es sential 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 acco rdance with auditing standards generally accepted in the United States of America, which consisted of inquiri es of management about the methods of preparing the information and comparing the informa tion 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.
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To the Honorable Mayor and Members
of the City Council of the City of San Mateo
San Mateo, California
3 Supplementary 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 Combining and Individual Fund Financial Statements and Budgetary Comparison Schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such 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 stat ements. The information has been subjected to the auditing procedures applied in the a udit of the basic financial statements and certain additional procedures, including comparing and reconciling such in formation 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 genera lly accepted in the United States of America . In our opinion, the Combining and Individual Fund Financial Statem ents are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the othe r information included in the annual report. The other information comprises the Introductory and Statistical Sections but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basi c financial statements, our responsibilit y is to read the other information and consider whether a material inconsistenc y exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated December 2, 2022, on our consideration of the City’s internal control over financia l reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreemen ts and other matters. The purpose of that report is solely to describe the scope of our testing of internal control ove r financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s 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.
Walnut Creek, California
December 2, 2022
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MANAGEMENT’S DISCUSSION & ANALYSIS
5 Management of the City of San Mateo (City) offers readers of the financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2022. Readers are encouraged to consider the information presented here in conjunction with additional information that is furnished in our letter of transmittal, the financial statements, and notes. The focus of the information herein is on the primary government.
FINANCIAL HIGHLIGHTS
• At the close of the fiscal year, the City’s total net position increased by $80.6 million or 12.4% from the prior fiscal year. The increase in net position largely reflects an increase in Business-Type Activities program revenues, stemming from the fourth year of an approved five-year sewer service charge rate increase, as well as capital contributions from the sewer enterprise’s regional customers.
• The City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $727.9 million (net position). The total net position includes $533.0 million in net investment in capital assets, $78.7 million in restricted net position, and $116.2 million in unrestricted net position.
• Total revenues from governmental activities, including general revenues and transfers, were $192.6 million, which was an increase of $14.5 million or 8.2% compared to the prior year . The result was primarily attributable to an increase of $20.3 million in tax revenues that was offset by an investment loss of $6.3 million stemming from the year -end fair market value adjustment required by Governmental Accounting Standards Board (GASB) Statement No . 31 . The significant fair market value year-end adjustment reflects escalation of the Federal Funds Rate by the Federal Reserve to address historic and ongoing inflation.
• Total revenues from business -type activities increased from $74.7 million in the prior year to $92.3 million in the fiscal year ended June 30, 2022, largely driven by an increase in capital contributions to the Clean Water Program, which reflected the Interim Capital Cost Agreement between the City of San Mateo and Town of Hills borough. Since the Sewer Fund , business-type activities, and government - wide financial statements are on the full accrual basis, the full amount to be paid by the Town of Hillsborough over the life of the 30 year payment agreement was recognized as revenue.
• The City implemented GASB Statement No. 87 in the fiscal year ended June 30, 2022, which requires government entities to account for agreements to which it is a lessor and lessee. Compliance with GASB 87 added $3.0 million in leases receivable and $3.4M in deferred inflows related to leases.
• The City’s net pension liability decreased from $247.9 million to $17 7.2 million , which was a $70.7 million or 28.5% decrease compared to the prior fiscal year . The primary contributing factor to the decrease in the City’s net pension liability was the 21.3% investment return by the California Public Employees’ Retirement System (CalPERS) for the fiscal year ended June 30, 2021. The favorable outcome is the result of the juxtaposition of CalPERS’ discount rate (at the time) of 7.0% and investment return of 21.3% . The reduction in net pension liability was the primary factor in the reductio n of governmental activities expenses from $176.2 million in the prior year to $162.6 million in the fiscal year ended June 30, 2022. However, the favorable results will be fleeting, as CalPERS’ investment return for the fiscal year ended June 30, 2022 was negative 7.5%, which will increase the net pension liability to over $286.8 million in the annual comprehensive financial report for the fiscal year ended June 30, 2023.
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MANAGEMENT’S DISCUSSION & ANALYSIS
6 OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements.
The basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. In addition to the basic financial statements, this report also contains the required supplementary information.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to private-sector businesses.
The Statement of Net Position presents information on all of the City’s assets, liabilities, and deferred outflows and inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the City’s financial position is improving or deteriorating.
The Statement of Activities reports how the City's 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 only result in cash flows in future fiscal periods (e.g., uncollected taxes, loan receivables, and earned but unused compensated leaves).
The governmental activities reflect the City’s basic services, including general government, community development, public safety, public works, parks and recreation, and library. These services are principally financed by property, sales, and other taxes.
The business-type activities reflect private-sector-type operations where fees for services typically cover all or most of the cost of operations, including depreciation expenses. The City’s sewer enterprise is the activity reported in this category.
The government-wide financial statements include not only the City itself (referred to as the primary government), but also other legally separate entities for which the City is financially accountable. Financial information for the City’s one component unit, which is the San Mateo Joint Powers Financing Authority, is reported separately from the financial information presented for the primary government itself. The component unit, although legally separate, functions essentially as an agency of the City, and therefore is included as an integral part of the City. The government-wide financial statements can be found on pages 30- 33 of this report.
FUND FINANCIAL STATEMENTS
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. 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. Governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances left at year-end that are available for spending. Consequently, the governmental fund financial statements provide a detailed short- term view that helps the readers determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the long-term focus of the government-wide statements, additional information is provided that reconciles the governmental fund financial statements to the government-wide statements explaining the relationship (or differences) between them.
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MANAGEMENT’S DISCUSSION & ANALYSIS
7 The governmental funds comprise 25 individual 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 of the General, Capital Projects, and Construction Services funds, each of which is considered to be a major fund. Data for the other 18 governmental funds are combined into a single aggregated presentation. Individual fund data for these non-major governmental funds is provided in the form of combining statements, beginning on page 142 of this report. The basic governmental fund financial statements can be found on pages 38-44 of this report.
Since July 1, 1986, the City has employed a two-year budget cycle. The two-year budget process includes preparation of two one-year expenditure plans and revenue estimates that are presented to the City Council for consideration. The focus of the first year of the business plan is the City’s operating budget, while the focus of the second year of the business plan is the City’s Capital Improvement Plan. In any budget cycle, to remain adaptable to changing economic and/or operational conditions, the City may choose to develop one- year instead of two-year budget plans. As such, in response to the economic volatility brought on by COVID- 19, the City temporarily shifted to a one-year budget for fiscal year 2020-21 and returned to a two-year budget cycle for the 2022-24 business plan.
Budgetary comparison schedules, beginning on page 136, have been provided to demonstrate compliance with these budgets in accordance with accounting principles generally accepted in the United States (U.S. GAAP).
The City maintains two types of proprietary funds: enterprise and internal service. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements.
The City uses an enterprise fund to account for its Sewer Fund. 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 general liability, fleet and building maintenance, vehicle and equipment replacement, workers’ compensation, dental, and other employee benefit programs. The internal service funds provide services that predominantly benefit governmental rather than business-type functions. They have been included within governmental activities to reflect the consolidation for internal services fund activities in the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Sewer Fund. Data for the enterprise fund and all the internal service funds are combined into their respective single aggregated presentations. Individual fund data for the non-major internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 46-49 of this report.
Fiduciary funds are used to account for resources held on behalf of outside parties, including other governments. When these assets are held under the terms of formal trust agreement, a private-purpose trust is used. The City maintains a private-purpose trust fund for the Successor Agency of the City of San Mateo Redevelopment Agency (Successor Agency). In addition, the City uses custodial funds for assets that the City are holding for San Mateo Consolidated Fire Department, the Community Facilities District No. 2008-01 (Bay Meadows), and other entities. Fiduciary funds generally are used to account for assets that the City holds on behalf of others as their agent. Fiduciary funds are not reported in the government-wide financial statements because the resources of these funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on pages 53-54 of this report.
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MANAGEMENT’S DISCUSSION & ANALYSIS
8 Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 61-124 of this report.
Other information in addition to the basic financial statements and accompanying notes is presented in the form of certain required supplementary information concerning the City’s budgetary comparison schedules for all major governmental funds and the City’s progress in funding its obligation for the provision of pension and other post-employment benefits to its employees. The combining statements supplementary information referred to earlier in connection with non-major funds and internal services funds are also presented in this section. Required supplementary information can be found on pages 127-137 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial performance. At the close of the fiscal year, the City’s assets and deferred outflows exceeded liabilities and deferred inflows of resources by $727.9 million.
As of June 30, 2022, the City reported $533.0 million in net position for its net investment in capital assets (e.g., land, buildings, infrastructure, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to the community; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
The City also reported $78.7 million in restricted net position. These are resources subject to external restrictions as to how they may be used, such as housing and economic development, capital projects, debt service, and other purposes.
The remaining $116.2 million of net position is unrestricted. The unrestricted net position includes the City’s total net pension liability of $177.2 million, which is not a claim on current financial assets. The total net pension liability decreased by $70.7 million or 28.5% from the prior fiscal year. The City has two agent multiple- employer defined benefit pension plans with CalPERS.
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MANAGEMENT’S DISCUSSION & ANALYSIS
9 The tables on the following pages present a summary and net changes of the City’s net position as of June 30, 2021 and June 30, 2022.
2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
Current and other assets 354.0$ 357.5$ 390.5$ 179.9$ 744.5$ 537.4$ Capital assets 466.2 454.7 552.0 403.7 1,018.2$ 858.4 Total assets 820.2 812.2 942.5 583.6 1,762.7 1,395.8 Deferred outflows - deferred loss on refunding 0.9 1.1 - - 1.1 1.2 Deferred outflows - OPEB related amounts 1.8 1.6 0.2 0.2 2.0 1.8 Deferred outflows - related to pensions 24.2 28.1 1.9 2.5 26.1 30.6 - Total deferred outflows of resources 26.9 30.8 2.1 2.7 29.2 33.6 Current liabilities 59.9 64.4 15.0 9.6 74.9 74.0 Non-current liabilities 282.2 356.8 645.5 348.3 927.7 705.1 Total liabilities 342.1 421.2 660.5 357.9 1,002.6 779.1 Deferred gain on refunding - - 0.6 - 0.6 - Deferred inflows - related to leases 3.4 0.2 - - 3.4 0.2 Deferred inflows - related to pensions 49.0 0.2 4.5 - 53.5 0.2 Deferred inflows - OPEB related amounts 3.2 2.2 0.5 0.3 3.7 2.5 Total deferred inflows of resources 55.6 2.6 5.6 0.3 61.2 2.9 Net position:
Net investment in capital assets 397.8 392.0 135.2 168.1 533.0 560.1 Restricted 45.3 38.6 33.4 1.1 78.7 39.7 Unrestricted 6.2 (11.4) 110.0 58.8 116.2 47.4 Total net position 449.3$ 419.2$ 278.6$ 228.0$ 727.9$ 647.2$ Activities Activities Primary Government
STATEMENT OF NET POSITION
(Amounts in millions)
Governmental Business-Type Total
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MANAGEMENT’S DISCUSSION & ANALYSIS
10 2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
Revenues:
Program revenues:
Charges for services 36.0$ 31.5$ 71.5$ 68.0$ 107.5$ 99.5$ Operating grants and contributions 16.4 19.0 - - 16.4 19.0 Capital grants and contributions 9.1 9.4 21.4 5.9 30.5 15.3 General revenues:
Property taxes 74.8 66.6 - - 74.8 66.6 Sales taxes 33.4 28.0 - - 33.4 28.0 Property transfer taxes 14.3 11.8 - - 14.3 11.8 Business, hotel & other taxes 11.3 7.4 - - 11.3 7.4 Franchise taxes 3.1 3.0 - - 3.1 3.0 Investment earnings & other revenue (5.9) 1.4 (0.5) 0.8 (6.4) 2.2 Total revenues 192.5 178.1 92.4 74.7 284.9 252.8 Expenses:
General government 23.4 22.5 - - 23.4 22.5 Community development 20.4 11.3 - - 20.4 11.3 Public safety 67.0 88.3 - - 67.0 88.3 Public works 21.7 22.6 - - 21.7 22.6 Parks and recreation 16.5 17.6 - - 16.5 17.6 Library 8.7 8.8 - - 8.7 8.8 Interest on long term debt 2.4 2.7 - - 2.4 2.7 Sewer - - 41.9 41.0 41.9 41.0 Golf 2.4 2.4 - - 2.4 2.4 Total expenses 162.5 176.2 41.9 41.0 204.4 217.2 Increase (decrease) in net position before
special items and transfers 30.0 1.9 50.5 33.7 80.5 35.6 Transfers - - - - - - Transfers of fire activities - - - - - - Total transfers - - - - - - Change in net position 30.0 1.9 50.5 33.7 80.5 35.6 Net position - Beginning of Year 419.3 417.4 228.0 194.3 647.3 611.7 Net position - End of year 449.3$ 419.3$ 278.5$ 228.0$ 727.8$ 647.3$
STATEMENT OF ACTIVITIES
(Amounts in millions)
Activities Activities
Governmental Business-Type
Primary Government
Total
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MANAGEMENT’S DISCUSSION & ANALYSIS
11 GOVERNMENTAL ACTIVITIES
Governmental activities increased the City’s total net position by $30.0 million. Key elements contributing to the increase are described below.
• Overall, total revenues from governmental activities were $192.6 million, a $14.5 million increase compared to the prior fiscal year, largely reflecting the strength and resiliency of the City’s tax revenues, and moreover, the accelerated recovery of the City’s sales tax. For the same period, expenses totaled $162.5 million, a decrease of $ 13.7 million, principally reflecting CalPERS’ 21.3% investment return and the resultant reduction of the City’s unfunded pension liability.
• Property tax revenues, recorded in the governmental funds, totaled $74.8 million, an increase of $8.2 million or 12.3%, and were largely comprised of secured current year property taxes, property tax in- lieu of vehicle license fees (VLF), and Excess Educational Revenue Augmentation Fund (ERAF).
Secured current year property tax represented 59.5% of all property tax revenues and increased by $1.9 million compared to the prior fiscal year as a result of the increase in assessed value, which reflected new developments being added to the City’s property tax roll and properties being sold and reassessed at market value. Property tax in-lieu of VLF constituted 17% of total property taxes, and increased by $4.9 million from the prior year, as the 2020-21 county-wide shortfall was nearly $100 million; the City’s share of which was $5.7 million. In 2021-22, the county-wide shortfall was less than anticipated, and of the $13.7 million that was due to be remitted to the City, it received $11.7 million, hence a shortfall of $1.9 million for which the County of San Mateo filed a claim with the State of California in August 2022 for consideration and appropriation in the State’s 2023-24 budget.
• Real property transfer tax revenues reached an all-time high of $14.3 million, illustrating the mettle of local real estate and the continued demand and high value for property, as indicated in the chart below which provides sales metrics for single family residential properties through the quarter ended June 30, 2022, including the median sales price and average days on market.
$-
$0.5
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$2.5
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 Millions
Median Sales Price Inventory Sold Average Days on Market
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MANAGEMENT’S DISCUSSION & ANALYSIS
12 • The City accounted for $33.4 million in sales tax revenues, which was a $5.5 million or 19.5% increase compared to the prior fiscal year , and marked an accelerated recovery from the pandemic -driven recession back to the baseline from fiscal year 2018-19. The recovery was largely manifest in the City’s food services and general retail business sector..
• While transient occupancy tax (TOT) revenues increased from $1.1 million in the prior year to $4.6 million in 2021-22, TOT revenues have not fully recovered from the pandemic. TOT 2018-19 baseline revenues were $8.4 million. As such, excluding inflation, 2021-22 TOT revenues were only 54% of the 2018-19 baseline. The City’s primary TOT base is from business travel, which is expected to be one of the last industries to recover, if at all, to pre-pandemic levels.
• The City accounted for $107.5 million in charges for services revenue, which was an increase of $8.0 million or 8.0% compared to the prior fiscal year. Governmental activities charges for services revenues increased by $ 4.5 million, primarily in parks and recreation , reflecting a return of programming and activities that were either cancelled or moved to the virtual space during the pandemic. Business-type activities charges for services increased from $68.0 million in the prior year to $71.5 million in 2021-22, reflecting the increase in the City’s sewer service rate – the fourth year of a five-year rate plan. Beginning in fiscal year 2018-19, the City changed its sewer service rate to be 50% volumetric and 50% fixed cost.
• Revenue from capital grants and contributions increased from 15.3 million to $30.4 million. The increase was principally evident in business-type activities due to the Interim Capital Cost Agreement between the City of San Mateo and the Town of Hillsborough for the latter’s share of costs for the Clean Water Program as noted earlier.
The following charts of governmental activities revenue by source, expense, and program revenue were derived from the Statement of Activities.
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MANAGEMENT’S DISCUSSION & ANALYSIS
13 The cost of all governmental activities for the fiscal year ended June 30, 2022, was $162.6 million. Some of the costs were paid by those directly benefiting from the programs ($36.0 million), by other governments and organizations which subsidized programs with operating grants and contributions ($16.4 million), or capital grants and contributions ($9.1 million). The City paid for the remaining “public benefit” portion of governmental activities with $137.1 million in taxes (some of which could only be used for certain programs) that were offset by and investment losses of negative $6.3 million (due to the GASB 31 fair market value adjustment of the City’s investment portfolio), and other miscellaneous revenue of $0.4 million.
BUSINESS-TYPE ACTIVITIES
Business-type activities increased the City’s net position by $50.5 million. Key elements contributing to the increase are described below.
• Total program revenues of $92.8 million were $17.6 million higher or 23.6% more than the prior year.
While the primary component behind the increase was the Interim Capital Cost Agreement between the City of San Mateo and the Town of Hillsborough for the latter’s share of costs for the Clean Water Program as noted earlier , because the Government-Wide Financial Statements (as well as the Sewer Enterprise Fund ) are accounted on a full accrual basis, the full amount du e from the Town of Hillsborough that is to be paid over the next 30 years (discounted by the percentage of project completion) is recognized as revenue. With respect to program revenues that increased business-type activities cash, the 13% increase in sewer service charges, with was the fourth year of an approved five-year sewer service rate increase to fund the Clean Water Program’s capital needs and to better stabilize revenue recovery by changing the sewer service charge from being solely based on volume to being half fixed cost and half volumetric. Furthermore, the rate increase was the driver behind the $3.5 million increase in revenue from charges for services for business-type activities, while the Interim Capital Cost Agreement with the Town of Hillsborough was the principal element driving the $15.2 million increase in revenues from Capital Grants and Contributions.
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MANAGEMENT’S DISCUSSION & ANALYSIS
14 The following charts of business-type activities revenue by source, expense, and program revenues were derived from the Statement of Activities.
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MANAGEMENT’S DISCUSSION & ANALYSIS
15 Total business-type activities expenses for the fiscal year ended June 30, 2022 were $41.9 million, an increase of $0.9 million or 2.2%, compared to the prior year. The increase was primarily due to an increase of $0.7 million in allocated costs through the City’s updated Cost Allocation Plan as a result of the increase in the proportional sewer-related activities, reflecting the expansiveness of the Clean Water Program – the City’s 10 -year $1.0 billion CIP program.
Cash and investments of business-type activities totaled $103.1 million, an increase of $40.4 million compared to the prior year. Similar to the increase in business-type activities charges for services, the increase in the sewer service rate was the primary driver behind the healthy cash position, which is intentional in order to provide strong liquidity during the construction phase of the Clean Water Program, as well as a robust debt coverage ratio consistent with the Sewer enterprise’s AA credit rating. Non-depreciable assets increased by $146.8 million to $382.2 million, reflecting increased Sewer capital projects construction activities for the sewer collection and treatment systems during the fiscal year.
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 focus of the City’s governmental funds is to provide information on current year revenues, expenditures, and balances of spendable resources. Such information is useful in assessing the City’s near-term financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
As of June 30, 2022, the City’s governmental funds combined ending fund balance was $253.1 million, which was largely unchanged from the prior fiscal year. Of the total fund balances, $92.3 million is unassigned fund balance, which is available for spending at the City’s discretion.
The General Fund is the primary operating fund of the City, as it accounts for nearly all tax revenues and the cost of core services. The unassigned fund balance of the General Fund was $93.7 million, while the total fund balance was $111.5 million. As a measure of liquidity, both unassigned fund balance and total fund balance can be compared to total fund expenditures. Unassigned fund balance and total fund balance represents
69.0% and 82.1% of total General Fund expenditures of $135.7 million, respectively. The City Council policy goal is to have reserves of at least three months of budgeted operating expenditures. The adopted 2021-22 budget for General Fund expenditures (excluding transfers out) was $138.8 million, therefore the minimum amount of General Fund reserves required for compliance with the reserves policy in 2021 -22 was $ 34.7 million.
While the City’s unassigned fund balance is above the policy goal, the uncertainty of the future trends of the TOT recovery, and the impact of CalPERS investment performance on the City’s pension contributions will likely result in a significant draw down on the General Fund’s Rainy Day Reserve, which is included as part of the unassigned fund balance.
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MANAGEMENT’S DISCUSSION & ANALYSIS
16 The City will continue to monitor economic indicators that impact the City’s tax revenues and expenditures, including:
• Ongoing elevated inflation, increasing the cost to purchase goods and services; • The Federal Reserve’s efforts to mitigate inflation by increasing the Federal Funds Rate , which ultimately increases the City’s investment earnings, but as interest rates climb higher, the GASB 31 fair market value adjustment will continue to be negative. Conversely, if the City issues debt during this time, it will incur greater interest expense;
• The increased cost to borrow money, which places pressure on the prospective home buyers, which will likely dampen the City’s real property transfer tax.
General Fund total revenues increased by $22.1 million or 16% to $159.7 million. Absent the second (and final) tranche of $9.6 million in federal assistance via the American Rescue Plan Act (ARPA), General Fund revenues increased by $12.4 million compared to the prior fiscal year, and by $19.8 million compared to the 2018-19 pre- pandemic baseline.
The City accounted for $72.3 million in property tax revenues in 2021-22, which were $8.2 million more than the prior fiscal year. The primary components of the increase were secured current year property taxes due to the increase in assessed value, Excess ERAF as a result of a favorable outcome to a dispute with the State of California, and a lesser property tax in-lieu of VLF shortfall than anticipated.
General Fund sales tax revenues increased from $24.5 million in the prior year to $29.1 million in the fiscal year ended June 30, 2022, marking a n accelerated recovery back to the 2018 -19 pre -pandemic baseline , reflecting the resiliency of the food services and general retail business sectors.
Despite the favorable outcome in the short-term, the City’s use tax base has been gradually eroding due to tax rebate agreements between local municipalities and retail companies that establish the point of sa le in their municipality, which increases the use tax for the municipality, and in exchange, the retail company receives a percentage of the use tax back. Prior to the advent of online commerce, the City’s regional malls served as a major component of the sales tax base. The convenience and accessibility of online retailers combined with the antiquated provisions of the State of California’s sales tax laws result in the City only receiving a small fraction of sales tax that is generated from online commerce (otherwise known as use tax) because the local 1% sales tax, also known as the Bradley Burns Uniform Sales and Use Tax is allocated based on point of sale. Although online retailers have the point of sale information, and there have been many legislative efforts to modernize the State’s sales tax allocation methods, at present, there is insufficient political support to change. As such, for every dollar that the City would have received in sales tax if a consumer purchased a taxable good at a physical retailer, it receives only $0.10, or 10% of the local 1%. of tax rebate agreements being in place, the City received a proportional share of this use tax through the county pool based on its proportional share of the local 1% sales tax, which is the Bradley. A t a broader level, consumer behaviors have shifted from buying goods to buying services. The latter is not subject to sales tax in the State of California. In order for the City’s sales tax base to keep pace with inflation, there will need to be substantiv e changes to state law, including destination-based sales tax allocation and broadening of the tax base to include services. To date, the political will to do so has not come to fruition.
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17 With the exception of investment income and other revenues, all other General Fund revenue categories increased, including $14.3 million in real property transfer tax revenues, which broke an all time high. Due to sustained high inflation and the Federal Reserve’s efforts to mitigate inflation by increasing the Federal Funds Rate, the fair market value year-end adjustment resulted in a significant adjustment of negative $11.4 million.
However, given the City’s Investment Policy priorities of safety, liquidity, and yield (in that order), the year- end adjustment is only an accounting entry and paper loss. While General Fund TOT revenues increased by $3.0 million compared to the prior year, they are still only 55% of the pre-pandemic baseline from 2018-19. The near-term recovery is faster than what was previously assumed, the long-term recovery is uncertain, and largely dependent on changes in business travel, which is the primary base for TOT.
General Fund non-tax revenues increased by $3.1 million or 11.5% compared to the prior year in every category. The largest categorical increase was in the $3.0 million increase in charges for services , which primarily reflected the return of Recreation programming from restrictions of the pandemic over the past two years of the prior two years.
The General Fund accounted for $135.7 million in total expenditures, which was an increase of $9.0 million compared to the prior fiscal year, reflecting the cost of negotiated increased in employee compensation, largely with public safety employees.
For the year, the General Fund’s total revenues exceeded expenditures by $23.9 million, before other financing uses of $4.4 million. The net other financing uses amount was primarily transfers out for capital projects. As such, the net change in fund balance for the General Fund was an increase of $19.5 million, increasing fund balance to $111.5 million. In April 2022, the City Council adopted a resolution to commit $10.0 million of unassigned fund balance; $5.5 million for the additional negotiated cost of employee compensation with the bargaining units that partnered with the City as a part of its Fiscal Sustainability Plan in May 2020 to address the financial impact of COVID-19 by agreeing to the equivalent of two years of no cost of living adjustment .
The remaining $4.5 million was committed to fund capital improvement projects , which were prim arily comprised of 1) $1.6 million to complete the upgrade of the City’s high voltage streetlights to light-emitting diode (LED); 2) $1.8 million to provide structural improvements for the Marina Branch Library; and 3) $0.6 million for the downtown pedestrian mall.
The General Capital Projects Fund was established to account for the City’s major infrastructure improvement needs and other capital projects. At the end of the fiscal year, the total fund balance was $ 55.5 million, decreasing by $8.3 million or 13.0% from the prior fiscal year. Total expenditures were $32.5 million and were spent on completion of various capital projects, such as $ 8.3 million for city -wide street rehabilitation/reconstruction and sidewalk repair, $5.1 million for downtown parking, and and $9.3 million for North Shoreview flood control improvements . Completion of the flood control capital improvements is expected in 2023, which will remove approximately 1,500 homes from the Federal Emergency Management Agency (FEMA) flood zone. The city -wide street rehabilitation will repair streets that had been identified as failed in 2013 and ensure that the City will be able to maintain its Pavement Condition Index score of 70.
The Construction Services Fund was established to account for building permit revenue and expenditures for activities relating to the review of private development projects to achieve long-term economic growth in the City. At the end of the fiscal year, the total fund balance was $36.3 million, a decrease of $5.0 million from the prior fiscal year, which reflected the City’s objective of aligning the cost of services with fees and draw down on the existing fund balance.
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MANAGEMENT’S DISCUSSION & ANALYSIS
18 The fund balance in the Non-Major Governmental Funds totaled $49.8 million, a decrease of $9.1 million or
15.5% from the prior fiscal year. Revenues and transfers in totaling $17.9 million decreased by $11.6 million or
39.4%, while total expenditures and transfers out of $27.0 million decreased by $0.3 million, or 1.1%. The primary factor for the drawdown in fund balance was the Kiku Crossing project, which will provide 225 affordable homes for , including 22 units for formerly homeless households , 8 units for individuals with intellectual and developmental disabilities, and 57 units for public employees. Construction began in January 2022 and is expected to be complete in the Spring of 2024. The project is largely supported by funds from the City’s Low to Moderate Income Housing Fund, the Parking Fund, and the Commercial Linkage Fee Fund.
PROPRIETARY FUNDS
Proprietary Funds are comprised of enterprise and internal service funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but with some additional details.
The City has a sewer enterprise operation. Total enterprise fund net position was $278.6 million, an increase of $50.5 million, or 22.1%, over the prior fiscal year.
The unrestricted net position of the Sewer Enterprise Fund at the end of the fiscal year was $110.0 million, an increase of $51.1 million in unrestricted net position from the prior fiscal year. This is due primarily to the rate increase that took effect in the fiscal year ended June 30, 2022, which was the fourth year of an overall five-year rate plan that was approved by the City Council that began in the prior fiscal year. In addition to shifting the rate to be 50% volumetric and 50% fixed cost to provide greater revenue stability, the significant rate increases also provide a critical funding source for the Clean Water Program and ensures that the Sewer Enterprise Fund has the cash position and debt service coverage ratio that is consistent with a viable and sustainable enterprise and commensurate with its high credit rating and in compliance with its debt coverage requirements pursuant to debt indentures.
The internal service funds’ total net position of $24.3 million increased $2.6 million or 11.8% from the prior year. The Vehicle & Equipment Replacement Fund’s net position of $19.2 million comprised 78.7% of the total internal service funds’ net position. The current year decrease in net position of the internal service funds is due to a variety of factors that are discussed in more detail below.
The Workers’ Compensation Insurance Fund’s net position of $5.1 million was an increase of $5.3 million decrease of $0.4 million due to favorable year-end adjustments for the City’s workers’ compensation liability.
Revenue from charges for services is set based on budget assumptions, largely the magnitude of claims. The City will balance the workers’ compensation collection rate charged to operating departments with promoting programs to reduce the magnitude and frequency of workers’ compensation claims.
The Dental Fund ended the fiscal year with a net position of $1.1 million; an increase of $0.3 million compared to the prior year. The Benefits Fund’s ending net position was negative $0.3 million, a decrease of $0.4 million.
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MANAGEMENT’S DISCUSSION & ANALYSIS
19 The Comprehensive Liability Insurance Fund’s ending net position was n e g a t i v e $ 1 . 5 m i l l i o n, a decrease of $2.1 million. This was due to insurance premiums being greater than anticipated during the budget development process, which is when internal service charge rates are developed. Over the past couple of years, the insurance industry has sustained significant losses due to a plethora of natural disasters, which has resulted in considerable increases in insurance premiums. In addition, the City settled a few claims that were significant that exceeded the budgeted claims expense. The City will need to adjust collection rates on a prospective basis to account for these trends.
The Vehicle and Equipment Replacement Fund ended fiscal year 2021 -22 with $19.1 million in net position, which was a decrease of $0.9 million or 4.4% compared to the prior fiscal year. This nominal change largely represents vehicles and equipment that were replaced in fiscal year 2021-22.
The Fleet and Building Maintenance Fund ended the year with a net position of $0.8 million, which was an increase of $0.3 million compared to the prior fiscal year, which reflected the adjustment of collection rates to bring the net position of the Fleet and Building Maintenance Fund back to positive.
GENERAL FUND BUDGETARY HIGHLIGHTS
The City’s final budget differs from the original adopted budget in that expenditures were adjusted upward by $1.1 million. In total, the final 20 21-22 budget for the General Fund reflected a net loss of $5.9 million, as revenue/transfer in estimates of $143.5 million were less than amended appropriations and transfer out of $149.4 million. On the following page is a summary of General Fund budgetary comparison schedule (amounts in millions).
SUMMARY OF GENERAL FUND BUDGETARY COMPARISON SCHEDULE
Variance from
Final Budget
Original Final Actual Favorable
Budget Budget Results (Unfavorable)
Resources:
Revenues 141. 7 141. 7 159. 6 17.9 Transfers in 1.7 1.7 0.3 (1.4) Total resources 143. 4 143. 4 159. 9 16.5 Charges to appropriations:
Expenditures 140. 4 141. 5 135. 7 5.8 Transfers out 7.7 7.9 4.7 3.2 Total charges 148. 1 149. 4 140. 4 9.0 Net change in fund balance (4.7) (6.0) 19.5 25.5 Beginning fund balance 92.0
Ending fund balance 111. 5$
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20 General Fund total resources - actual revenues and transfers in were $16.5 million more than the final budgeted estimate, while total charges – actual expenditures and transfers out were $9.0 million under the final budget.
At the end of the fiscal year, the total fund balance of the General Fund was $111.5 million, which was an increase of $19.5 million compared to the prior fiscal year.
The following schedule shows differences between the final estimated revenues and actual revenues of greater than $1.0 million in value (amounts in millions).
Of the notable budget variances for revenues noted above, the primary drivers for the variance in property taxes were secured current year, Excess ERAF, and property tax in -lieu of VLF as previously explained. The accelerated recovery of sales tax revenue back to the 2018 -19 pre -pandemic baseline were reflected the resiliency of the general retail and food service business sectors . Other taxes reflected TOT revenues faring better than expected, but still only 55% of the pre-pandemic baseline. The City accounted for $14.3 million in real property transfer tax (RPTT), which is also included in the other taxes category. The investment loss of $4.4 million was due to the GASB 31 fair market value adjustment, which represented the impact of the Federal Reserve’s efforts to mitigate sustained high inflation by increasing the Federal Funds Rate. Parking Meter and Lease revenues, which are accounted for in the Downtown Services sub-fund of the General Fund, performed better than anticipated in 2021-22.
Actual expenditures were $5.8 million less than the final budget. The largest favorable budget variance was $3.3 million in Public Works as a result of vacancy savings.
CAPITAL ASSETS AND LONG-TERM DEBT ADMINISTRATION
CAPITAL ASSETS
The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2022, amounts to $1.0 billion, which is $0.1 billion more than the prior year. This investment in capital assets includes land, buildings, improvements, machinery and equipment, construction in progress, and infrastructure - park facilities, roads, highways, bridges, lighting systems, sewer and storm systems, and the golf course.
Major capital asset activity during the current fiscal year included city-wide sanitary sewer and storm improvements, and city-wide street rehabilitation and reconstruction. Additional information on the City’s capital assets can be found in Note 6 on pages 92-93 of this report.
Estimated Actual
Revenue Source Revenues Revenues Difference
Property taxes 66.2$ 72.3$ 6.1$
Sales taxes 25.5 29.1 3.6
Other taxes 18.7 28.3 9.6
Charges for services 10.4 11.8 1.4 Investment income 1.2 (4.4) (5.6) Parking Meter and Lease Revenue 2.5 4.3 1.8
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21 LONG-TERM DEBT
At the end of the current fiscal year, the City had total long-term debt outstanding of $672.4 million. Of this amount, $15.9 million comprises debt backed by the full faith and credit of the City. The remainder of outstanding debt is primarily composed of bonds secured by specified revenue sources; e.g., sewer charges, and loans.
The City’s rating for General Obligation Bonds is AA+ from Standard & Poor’s and Aaa from Moody’s.
Standard & Poor’s has assigned a rating of Aa2 for the City’s revenue bonds. The Redevelopment Successor Agency’s underlying rating for its series 2017A is AA-, 2015A and 2015B merged area and housing Tax Allocation Bonds are rated A by Standard & Poor’s.
State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its total assessed valuation. The current debt limitation for the City is approximately $5.3 billion, and at June 30, 2022, the City was only at 0.27% of its legal debt limit. Additional information on the City of San Mateo’s long-term debt can be found in Note 7 on pages 94-105 of this report.
2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
Non-depreciable assets:
Land 52.1$ 52.1$ 4.0$ 4.0$ 56.1$ 56.1$ Construction in progress 76.7 57.7 378.1 231.4 454.8 289.1 Total non-depreciable assets 128.8 109.8 382.1 235.4 510.9 345.2 Depreciable assets (net of depreciation):
Building and improvements 192.8 122.2 - - 192.8 122.2 Treatment plant & transmission lines - - 279.2 167.3 279.2 167.3 Machinery and equipment 34.0 9.2 2.0 1.0 36.0 10.2 Infrastructure 519.1 213.5 - - 519.1 213.5 Total depreciable assets (net) 745.9 344.9 281.2 168.3 1,027.1 513.2 Total capital assets 874.7$ 454.7$ 663.3$ 403.7$ 1,538.0$ 858.4$
CAPITAL ASSETS
(Amounts in millions)
Governmental Business-Type Total
Activities Activities Primary Government
2021-22 2020-21 2021-22 2020-21 2021-22 2020-21
General Obligation Bonds 15.9$ 19.0$ -$ -$ 15.9$ 19.0$ Revenue Bonds 17.6 72.4 633.6 331.3 651.2 403.7 Loans payable 4.3 5.5 - - 4.3 5.5 Leases payable 1.0 - 1.0 - Total outstanding debt 38.8 96.9 633.6 331.3 672.4 428.2 Activities Activities Primary Government
OUTSTANDING DEBT
General Obligation and Revenue Bonds
(Amounts in millions)
Governmental Business-Type Total
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22 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The narratives below discuss the City’s major tax revenues and the assumptions included in the adopted 2022- 23 budget.
Property Tax
The adopted 2022-23 budget assumed an increase of 7.07% in assessed value for property tax revenues, which includes the inflationary factor from the California Consumer Price Index (CCPI). Pursuant to Article XIII of the California Constitution, the inflationary increase in assessed value is capped at 2%. With sustained high inflation, CCPI from October 2020 through October 2021 was more than 2% The remainder of the increase in property tax assessed value comes from turnover of properties that were sold, changed ownership, and re - assessed at fair market value. In addition, the accretion in assessed value reflects new developments that have been completed and added to the City’s property tax roll.
The ongoing property tax in lieu of vehicle license fees (VLF) shortfall is not an economic factor, but rather, a structural flaw in state law, and unique to San Mateo County and Napa County. As a result of the high value of real estate, most scho ol districts are basic aid , in that they meet the state -defined minimum funding requirement through property taxes. VLF can only be backfilled by the ERAF or property tax from non-basic aid school districts. Due to the dearth of non-basic aid school districts in San Mateo County, the county-wide VLF shortfall has been growing in magnitude as more school districts shift from non-basic aid to basic aid status. It is expected that every school district will reach basic aid status some time over the next six to seven years. The county-wide VLF shortfall for 2020-21 was $96.2 million . With the anticipated shift of all school districts to basic aid status, the county-wide VLF shortfall will likely grow to be in excess of a $300 million in ten years. The impact to the City’s property tax for 2020-21 was $5.7 million; it was owed $13.2 million , but only received $7.5 million due to the VLF shortfall. While the county-wide 2021-22 VLF shortfall of $32.9 million was less than anticipated , the long-term projected trend of the VLF shortfall growing exponentially holds true unless there is a legislative fix. At present, the cities’ and the county’s only remedy is to file a claim with the State of California in the subsequent fall to be considered for appropriation in the State’s subsequent fiscal year budget. The State’s adopted 2022-23 budget included a $96.2 appropriation for San Mateo County’s 2020-21 VLF shortfall. The City’s concern is that while the State has historically addressed the county-wide VLF shortfall claims, as the shortfall grows in magnitude fold, the State may not have the political will or resources to address this issue in the near future.
Sales Tax
While sales tax revenues recovered back to the pre -pandemic baseline in fiscal year 2021 -22, the long -term trend of the City’s sales tax revenues not keeping pace with inflation continues. This trend was largely driven by changes in consumer behaviors and the juxtaposition against the State of California’s antiquated sales tax laws and allocation methodologies . Since the advent of online commerce , consumer habits have shifted to purchase more goods from online retailers and less from physical stores. In addition, consumers spend more disposable income purchasing experiences , which are exempt from sales tax in California. To compound this erosion of the sales tax base, a handful of local municipalities have entered into sales tax rebate agreeme nts with retailers, which places the point of sale for online transitions in the local municipality, and a percentage of use tax is rebated back to the retailer. These agreements erode the use tax that was being allocated proportionately based on each muni cipality’s share of the local 1% sales tax via the Bradley Burns Uniform Sales and Use Tax through the local county pool. While there have been legislative efforts to provide for destination-based sales tax allocation and to broaden the sales tax base to include services, the political climate has not been conducive to these modifications to date. The adopted 2022-23 budget assumes modest growth in sales tax revenues compared.
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23 The chart below illustrates a what -if scenario where the local 1% sales tax (Bradley Burns) is allocated based on destination rather than point of sale:
$11 $12 $13 $13 $14
$16
$18 $18 $20
$18 $18
$21 $22 $23 $24 $25 $26 $27
$15
$18 $18 $19 $20
$21 $21 $20
$24
$22 $23
$27 $28 $29 $30 $31 $32 $33
$-
$5
$10
$15
$20
$25
$30
$35
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
Millions
Bradley Burns Modernized Bradley Burns
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24 Real Property Transfer Tax
As a charter city, San Mateo has a 0.5% Real Property Transfer Tax (RPTT). While RPTT is one of the General Fund’s top tax revenue sources, it is also its most volatile . During the Great Recession, RPTT went from $10.4 million in 2006-07 to $3.3 million in 2008-09 and did not recover to the pre-Great Recession baseline until 2014-
15. In response to the pandemic-driven recession, RPTT dropped significantly from the record $13.9 million in 2018-19 to $9.1 million.
However, as a part of the budget development for 2022 -23, the City reset its RPTT baseline by re-evaluating the historical data within the context of major economic cycles that occurred over the past 20 years . Prior long-term plans assumed RPTT of $8.5 million. However, based on the average of the current and previous economic cycles, the RPTT assu mption was reset to $11.1 million and will b e monitored each year, but certainly in the current cycle due high interest rates, the impact on prospective home buyers, and by extension, the City’s RPTT.
$4.6
$5.9
$6.7
$7.3
$9.0
$10.4
$5.7
$3.3
$3.8 $4.2 $4.4
$6.3
$9.5
$10.6
$9.9
$12.2
$11.8
$13.9
$9.1
$11.8
$14.4
$-
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Millions
Real Property Transfer Tax
101 of 417
MANAGEMENT’S DISCUSSION & ANALYSIS
25 Transient Occupancy Tax
Prior to the pandemic, t he City’s General Fund Transient Occupancy Tax (TOT) revenues increased an average of 8.4% per year from 2001 -02 to 2018-19. Given the TOT base’s reliance upon business travel, TOT was the tax revenue most susceptible to the pandemic due to the impact on the travel industry. The City’s TOT assumptions over the General Fund Long Term Forecast anticipate a prolonged recovery , as business travel is expected to be one of the last industries to recover, if at all, to pre -pandemic levels. General Fund TOT revenues for 2021-22 were still only 55% of the 2018-19 baseline TOT revenues. Even with the passage of Measure W in November 2020 to increase the City’s TOT rate from 12% to 14%, the long-term TOT trend is uncertain and will be continually monitored for performance.
The adopted 2022-23 budget anticipates $159.5 million in total revenues and $164.2 million in expenditures, resulting in a projected $4.7 million net loss for the General Fund. In April 2022, as a result of the projected favorable results of the General Fund for 2021 -22, the City Council adopted a resolution to commit $10.0 million of unassigned fund balance for 1) $5.5 million in addition cost for negotiated increases to employee compensation, and 2) $4.5 million in capital improvements, namely:
• $1.6 million in support to complete the conversion of high voltage streetlights to LED • $1.8 million to provide structural improvements to the Marina Branch Library; and • $0.6 million for the downtown pedestrian mall.
As such, if the projected $4.7 million net loss comes to fruition, the General Fund committed fund balance will be consumed first.
$7.3
$4.6
$11.3
$10.5
$- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0
Dot Com Boom/Bust
Great Recession
Recovery & Growth
COVID-19
Millions
RPTT & Major Economic Cycles
102 of 417
MANAGEMENT’S DISCUSSION & ANALYSIS
26 Pension Contributions and Unfunded Liability
While the City’s net pension liability decreased to $177.2 million, primarily due to CalPERS investment return of 21.3% in the fiscal year ended June 30, 2021, the investment return for the subsequent year was negative
7.5%, which is expected to add approximately $100 million back to the City’s net pension liability and cost the City $10 million more in pension contributions each year in order to amortize the investment loss . The escalating cost of pension contributions continues to apply pressure on the City’s limited funding sources and its ability to maintain core service levels.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of San Mateo’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 the Finance Director, 330 West 20th Avenue, San Mateo, California, 94403.
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ROI Discount Rate
103 of 417
BASIC FINANCIAL STATEMENTS
27 104 of 417
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28 105 of 417
GOVERNMENT-WIDE FINANCIAL STATEMENTS
29 106 of 417
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments 295,485,042 $ 103,120,131 $ 398,605,173 $ Accounts receivable, net 3,648,545 7,184,515 10,833,060 Interest receivable 672,248 609,408 1,281,656 Taxes receivable 7,559,933 - 7,559,933 Grants receivable 1,572,789 - 1,572,789 Leases receivable - current 722,867 - 722,867 Prepaid items, inventory, and deposits 970,419 646 971,065 Total current assets 310,631,843 110,914,700 421,546,543 Noncurrent assets:
Restricted cash and investments 22,873,394 252,607,134 275,480,528 Investment in JPA (Note 14) 13,174,277 - 13,174,277 Leases receivable 2,964,496 - 2,964,496 Loans and notes receivable, net (Note 3) 4,337,414 27,046,216 31,383,630 Capital assets:
Non-depreciable 128,815,632 382,174,470 510,990,102 Depreciable, net 337,367,897 169,812,362 507,180,259 Total capital assets 466,183,529 551,986,832 1,018,170,361 Total noncurrent assets 509,533,110 831,640,182 1,341,173,292 Total assets 820,164,953 942,554,882 1,762,719,835
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 943,977 - 943,977 Related to OPEB 1,790,683 265,919 2,056,602 Related to pensions 24,215,572 1,929,376 26,144,948 Total deferred outflows of resources 26,950,232 2,195,295 29,145,527 June 30, 2022
Statement of Net Position
City of San Mateo
Primary Government
See accompanying Notes to the Basic Financial Statements. 30 107 of 417
Governmental Business-Type
Activities Activities Total
LIABILITIES
Current liabilities:
Accounts payable 30,642,813 1,165,728 31,808,541 Retention payable 4,535,273 - 4,535,273 Accrued payroll 2,633,123 - 2,633,123 Deposits payable 9,775,779 1,057,257 10,833,036 Interest payable 611,926 10,961,527 11,573,453 Unearned revenue 2,595,241 - 2,595,241 Compensated absences - due within one year 891,418 117,948 1,009,366 Claims payable - due within one year 3,300,000 - 3,300,000 Landfill postclosure cost payable - due within one year 103,980 - 103,980 Long-term debt - due within one year 4,849,305 1,740,000 6,589,305 Total current liabilities 59,938,858 15,042,460 74,981,318 Noncurrent liabilities:
Net OPEB liability 6,541,578 971,430 7,513,008 Net pension liability 167,222,537 9,949,575 177,172,112 Compensated absences - due in more than one year 7,212,381 954,311 8,166,692 Claims payable - due in more than one year 10,769,000 - 10,769,000 Landfill postclosure cost payable - due in more than one year 1,455,715 - 1,455,715 Long-term debt - due in more than one year 88,957,076 633,639,651 722,596,727 Total noncurrent liabilities 282,158,287 645,514,967 927,673,254 Total liabilities 342,097,145 660,557,427 1,002,654,572
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding - 603,823 603,823 Related to leases 3,394,304 - 3,394,304 Related to OPEB 3,246,801 482,156 3,728,957 Related to pensions 49,039,073 4,520,361 53,559,434 Total deferred inflows of resources 55,680,178 5,606,340 61,286,518
NET POSITION
Net investment in capital assets 397,780,546 135,235,423 533,015,969 Restricted:
Housing and economic development 10,446,108 - 10,446,108 Capital projects 28,445,068 - 28,445,068 Debt service 5,929,315 33,375,069 39,304,384 Other purposes 503,267 - 503,267 Total restricted 45,323,758 33,375,069 78,698,827 Unrestricted 6,233,558 109,975,918 116,209,476 449,337,862$ 278,586,410$ 727,924,272$ Total net position Primary Government
City of San Mateo
Statement of Net Position (Continued)
June 30, 2022
See accompanying Notes to the Basic Financial Statements. 31 108 of 417
Operating Capital
Charges for Grants an d Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary government:
Governmental activities:
General government 23,459,894$ 7,754,336 $ 9,695,656 $ 266,878 $ 17,716,870 $ Community development 20,402,608 10,420,500 705,562 386,989 11,513,051 Public safety 66,993,033 2,179,473 1,242,182 37,577 3,459,232 Public works 21,712,677 8,860,490 4,275,930 8,025,154 21,161,574 Parks and recreation 16,497,215 2,921,700 167,345 368,659 3,457,704 Golf 2,368,719 3,529,967 - - 3,529,967 Library 8,678,548 314,628 310,865 - 625,493 Interest on long-term debt 2,447,923 - - - - Total governmental activities 162,560,617 35,981,094 16,397,540 9,085,257 61,463,891 Business-type activities:
Sewer 41,868,215 71,491,119 - 21,355,870 92,846,989 Total business-type activities 41,868,215 71,491,119 - 21,355,870 92,846,989 Total primary government 204,428,832$ 107,472,213 $ 16,397,540 $ 30,441,127 $ 154,310,880 $
City of San Mateo
Statement of Activities and Changes in Net Position
For the Year Ended June 30, 2022
Program Revenues
See accompanying Notes to the Basic Financial Statements. 32 109 of 417
Governmental Business-Type
Functions/Programs Activities Activities Total
Primary government:
Governmental activities:
General government (5,743,024)$ - $ (5,743,024)$ Community development (8,889,557) - (8,889,557) Public safety (63,533,801) - (63,533,801) Public works (551,103) - (551,103) Parks and recreation (13,039,511) - (13,039,511) Golf 1,161,248 - 1,161,248 Library (8,053,055) - (8,053,055) Interest on long-term debt (2,447,923) - (2,447,923) Total governmental activities (101,096,726) - (101,096,726) Business-type activities:
Sewer - 50,978,774 50,978,774 Total business-type activities - 50,978,774 50,978,774 Total primary government (101,096,726) 50,978,774 (50,117,952) General Revenues and Transfers:
General revenues:
Taxes:
Property taxes 74,796,572 - 74,796,572 Sales taxes 33,408,980 - 33,408,980 Property transfer taxes 14,344,715 - 14,344,715 Transient occupancy taxes 4,552,323 - 4,552,323 Business license taxes 6,686,804 - 6,686,804 Franchise taxes 3,117,140 - 3,117,140 Other taxes 206,251 - 206,251 Total taxes 137,112,785 - 137,112,785 Investment (loss) (6,317,294) (602,477) (6,919,771) Miscellaneous revenue 383,384 98,330 481,714 Total general revenues and transfers 131,178,875 (504,147) 130,674,728 Change in net position 30,082,149 50,474,627 80,556,776 Net Position:
Beginning of year 419,255,713 228,111,783 647,367,496 End of year 449,337,862$ 278,586,410 $ 727,924,272 $
For the Year Ended June 30, 2022
Statement of Activities and Changes in Net Position (Continued) City of San Mateo
Net (Expense) Revenue
and Changes in Net Position
See accompanying Notes to the Basic Financial Statements. 33 110 of 417
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34 111 of 417
FUND FINANCIAL STATEMENTS
35 112 of 417
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36 113 of 417
Governmental Funds Financial Statements
General Fund - This fund accounts for all revenues an d expenditures used to finance the traditional services associated with a municipal government which are not accounted for in the other funds. In San Mateo, these services include general government, community development, public safety, public works, parks and recreation, golf, and library services.
Construction Services Special Revenue Fund - This fund accounts for revenue and expenditures of activities relating to building permits.
General Capital Projects Fund - This fund accounts for the expenditures for capital improvements for the City, including equipment, acquisition and construction of parks, recreation areas, public safety facilities or other public works. The primary sources of funding are intergovernmental revenues, Measure A (half cent sales tax), developer im
pact fees and transfers from other governmental funds.
37 114 of 417
Construction Services General
General Special Revenue Capital Projects
Fund Fund Fund
ASSETS
Cash and investments 115,397,361 $ 38,275,065 $ 61,694,786 $ Restricted cash and investments held by fiscal agents - - 22,787,895 Accounts receivable, net 2,273,021 - 1,353,136 Interest receivable 672,248 - - Taxes receivable 6,414,901 - 119,290 Grants receivable - - 725,906 Leases receivable 3,687,363 - - Prepaid items, inventory, and deposits 357,245 - 9,000 Due from other funds 1,871,935 - - Loans and notes receivable, net - - 263,319 Total assets 130,674,074$ 38,275,065$ 86,953,332$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable 2,728,211$ 374,159$ 26,199,746$ Retention payable - - 4,535,273 Accrued payroll 2,633,123 - - Due to other funds - - - Deposits payable 9,065,436 592,572 - Unearned revenues 1,400,990 994,208 - Total liabilities 15,827,760 1,960,939 30,735,019
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - 736,666 Related to leases 3,394,304 - - Total deferred inflows of resources 3,394,304 - 736,666
Fund Balances:
Nonspendable 357,245
- 9,000
Restricted - - 41,981,046 Committed 16,294,331 36,314,126 13,491,601 Assigned 1,097,978 - - Unassigned (deficit) 93,702,456 - - Total fund balances 111,452,010 36,314,126 55,481,647 Total liabilities, deferred inflows of
resources, and fund balances 130,674,074$ 38,275,065$ 86,953,332$ Major Funds
City of San Mateo
Balance Sheet
Governmental Funds
June 30, 2022
See accompanying Notes to the Basic Financial Statements. 38 115 of 417
Non-major Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments 47,109,729$ 262,476,941 $
Restricted cash and investments held by fiscal agents 85,499 22,873,394 Accounts receivable, net 14,293 3,640,450 Interest receivable - 672,248 Taxes receivable 1,025,742 7,559,933
Grants receivable 846,883 1,572,789
Leases receivable - 3,687,363 Prepaid items, inventory, and deposits - 366,245 Due from other funds - 1,871,935 Loans and notes receivable, net 4,074,095 4,337,414 Total assets 53,156,241$ 309,058,712 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable 692,964$ 29,995,080 $
Retention payable - 4,535,273 Accrued payroll - 2,633,123
Due to other funds 1,871,935 1,871,935
Deposits payable - 9,658,008
Unearned revenues 200,043 2,595,241
Total liabilities 2,764,942 51,288,660
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 553,774 1,290,440
Related to leases - 3,394,304 Total deferred inflows of resources 553,774 4,684,744
Fund Balances:
Nonspendable - 366,245
Restricted 35,163,673 77,144,719
Committed 16,075,762 82,175,820
Assigned - 1,097,978
Unassigned (deficit) (1,401,910) 92,300,546
Total fund balances 49,837,525 253,085,308
Total liabilities, deferred inflows of
resources, and fund balances 53,156,241$ 309,058,712$ City of San Mateo
Balance Sheet (Continued)
Governmental Funds
June 30, 2022
See accompanying Notes to the Basic Financial Statements. 39 116 of 417
This page intentionally left blank.
40 117 of 417
Total Fund Balances - Total Governmental Funds 253,085,308$ Unavailable revenue recorded in the fund financial statements resulting from activities in which revenues were earned but funds were not available are reclassified as revenues in the Government-Wide Financial Statements. 1,290,440 Capital Assets used in the governmental activities were not financial resources and therefore were not reported in the Governmental Funds Balance Sheet.
Government-Wide Statement of Net Position 466,183,529
Less: ca
pital assets reported in Internal Service Funds (5,550,896) Total capital assets 460,632,633
Long-term liabilities are not due and payable in the current period and therefore were not reported in the Governmental Funds Balance Sheet.
Amount reported in Government-Wide Statement of Net Position Compensated absences - due within one year (891,418)
Compensated absences - due in more than one year (7,212,381) Long-term debt - due within one year (4,849,305)
Long-term debt - due in more than one year (88,957,076) Landfill postclosure cost payable - due within one year (103,980) Landfill postclosure cost payable - due in more than one year (1,455,715) Total long-term liabilities (103,469,875)
Deferred amounts related to the refunding o f long-term debt were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. This amount is to be amortized over the life of the long-term debt. 943,977
Investmen
t in joint ventures are not current financial resources. Therefore, the y were not reported in the Governmental Funds Balance Sheet. 13,174,277
Interest payable on long-ter m debt did not require current financial resources. Therefore, interest payable was not reported as a liability in the governmental funds. (611,926) Aggregate net pension liability and total OPEB liability used in the governmental activities were not financial resources and therefore were not reported in the Governmental Funds Balance Sheet.
Net pension liability (167,222,537)
Net OPEB liability (6,541,578)
(173,764,115)
Deferred outflows of resources related to OPEB and pensions are not available for current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds.
Amount reported in Government-Wide Statement of Net Position Deferred outflows of resources related to OPEB 1,790,683 Deferred outflows of resources related to pensions 24,215,572 Total deferred outflows of resources 26,006,255
Deferred inflows of resources related to OPEB and pensions are not available fo r current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds.
Amount reported in Government-Wide Statement of Net Position Deferred inflows of resources related to OPEB (3,246,801) Deferred inflows of resources related to pensions (49,039,073) Total deferred inflows of resources (52,285,874)
Internal service funds are used by management to charge the cost of fleet management, risk management, information technology, and building maintenance to individual funds. The assets and liabilities of the internal service funds are included in the
governmental activities in the statement of net position. 24,336,762 Net Position of Governmental Activities 449,337,862$
Amounts reported for Governmental Activities in the Statement of Net Position were different because:
City of San Mateo
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2022
See accompanying Notes to the Basic Financial Statements. 41 118 of 417
Construction Services General
General Special Revenue Capital Projects
Fund Fund Fund
REVENUES:
Property taxes 72,348,402$ - $ - $ Sales taxes 29,123,009 - 4,285,971 Other taxes 28,256,902 - - Licenses, building and other permits 48,351 6,346,921 - Fines, forfeitures and penalties 1,454,845 - - Intergovernmental 12,233,722 - 4,343,806 Charges for services 11,797,192 2,453,808 399,223 Investment income (loss) (3,243,002) (1,059,345) 105,689 Assessments and garbage collection - - 539,889 Parking meter and lease revenue 4,281,255 - 1,526,038 Impact fees - - 588,823 Capital contributions - - - Other revenues 3,370,229 - 829,021 Total revenues 159,670,905 7,741,384 12,618,460 EXPENDITURES:
Current:
General government:
City Council 304,993 - - City Manager 2,203,029 99,736 - City Clerk 896,186 - - City Attorney 1,106,200 185,434 - Finance 3,904,497 - - Information technology 3,902,047
118,351 -
Human Resources 2,104,302 - - Community development 1,618,051 9,193,684 - Public safety:
Police 51,417,279 - - Fire 25,222,796 - - Public works 6,892,686 806,410 - Parks and recreation 16,243,201 - - Golf 2,368,719 - - Library 7,645,003 - - Non-departmental 8,244,606 - - Capital outlay - - 31,859,240 Debt service:
Principal 1,421,086 - 545,938 Interest and fiscal charges 251,603 - 85,512 Total expenditures 135,746,284 10,403,615 32,490,690 REVENUES OVER (UNDER) EXPENDITURES 23,924,621 (2,662,231) (19,872,230) OTHER FINANCING SOURCES (USES):
Transfers in 312,896 - 11,554,194 Transfers out (4,743,762) (2,387,568) - Total other financing sources (uses) (4,430,866) (2,387,568) 11,554,194 NET CHANGE IN FUND BALANCES 19,493,755 (5,049,799) (8,318,036) FUND BALANCES:
Beginning of year 91,958,255 41,363,925 63,799,683 End of year 111,452,010$ 36,314,126$ 55,481,647$ Major Funds
For the Year Ended June 30, 2022
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances City of San Mateo
See accompanying Notes to the Basic Financial Statements. 42 119 of 417
Non-major Total
Governmental Governmental
Funds Funds
REVENUES:
Property taxes 2,448,170$ 74,796,572$
Sales taxes - 33,408,980
Other taxes 650,331 28,907,233
Licenses, building and other permits 132,980 6,528,252 Fines, forfeitures and penalties 746,327 2,201,172 Intergovernmental 6,708,669 23,286,197
Charges for services 2,107,813 16,758,036 Investment income (loss) (1,297,406) (5,494,064) Assessments and garbage collection 1,708,414 2,248,303 Parking meter and lease revenue - 5,807,293 Impact fees 25,067 613,890
Capital contributions 750,000 750,000 Other revenues 831,580 5,030,830
Total revenues 14,811,945 194,842,694
EXPENDITURES:
Current:
General government:
City Council - 304,993
City Manager - 2,302,765
City Clerk - 896,186
City Attorney - 1,291,634 Finance - 3,904,497
Information technology - 4,020,398 Human resources - 2,104,302 Community development 10,119,895 20,931,630 Public safety:
Police 336,968 51,754,247
Fire - 25,222,796
Public works 3,711,144 11,410,240
Parks and recreation - 16,243,201 Golf - 2,368,719
Library - 7,645,003
Non-departmental 16,866 8,261,472
Capital outlay 89,551 31,948,791
Debt service:
Principal 2,724,700 4,691,724
Interest and fiscal charges 2,613,731 2,950,846 Total expenditures 19,612,855 198,253,444
REVENUES OVER (UNDER) EXPENDITURES (4,800,910) (3,410,750) OTHER FINANCING SOURCES (USES):
Transfers in 3,052,125 14,919,215
Transfers out (7,368,898) (14,500,228)
Total other financing sources (uses) (4,316,773) 418,987 NET CHANGE IN FUND BALANCES (9,117,683) (2,991,763) FUND BALANCES:
Beginning of year 58,955,208 256,077,071
End of year 49,837,525$ 253,085,308$
City of San Mateo
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2022
See accompanying Notes to the Basic Financial Statements. 43 120 of 417
Total Fund Balances - Total Governmental Funds (2,991,763)$ Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities and Changes in Net Position the cost of those assets was allocated over their estimated useful lives as depreciation expenses. This is the amount of capital assets recorded in the current period (net of $567,390 added in internal service funds) includes repairs and maintenance costs of $55,072. 31,893,719 Depreciation expense on capital assets was reported in the Government-Wide Statement of Activities and Changes in Net Position, but they did not require the use of current financial resources. Therefore, depreciation expense, net of internal service funds of $1,274,482, was not reported as expenditures in the Governmental Funds. (19,392,404) The net effect of various miscellaneous transactions involving capital assets (i.e. sales, trade-ins, and donations) decreased net position. (2,504,882)
Repayment of long-term liabilities was an expenditures in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position Principal payment of long-term debt 4,691,724
Amortization of bond premium 582,691
Deferred amounts related to the refunding of long-term debt were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. This amount is to be amortized over the life of the long-term debt. (122,345)
Interest expense on long-ter
m debt was reported in the Government-Wid e Statement of Activities, but it did not require the use of current financial resources. This amount represented the changes in accrued interest from prior year. 42,577 Payment of landfill closure and postclosure cost payable was an expenditure in governmental funds, but the payment reduced landfill closure and postclosure cost liabilities in the Government-Wide Statement of Net Position. Increases in the liability were reflected as expenses in the Government-Wide Statement of Activities, however, no expenditures are reported in the governmental funds. (61,430)
Compensate
d absences expenses reported in the Government-Wid e Statement of Activities do not require the use o f current financial resources and, therefore, are not reported as expenditures in the governmental funds. 978,813 Revenues that are not considered to be available are reported as unavailable revenues in the governmental funds, however, these amounts are recognized in the Government-Wide Statement of Activities. This amount represents the change in unavailable revenues. (1,376,697)
Investmen
t in joint ventures are not current financial resources. Therefore, the y were not reported in the Governmenta l Funds Balance Sheet. 2,319,471
Certain pension expenses reported in the Government-Wid e Statement of Activities do not require the use o f current financial resources and therefore, are not reported as expenditures in governmental funds.
Changes in pension related deferred outflows of resources (3,876,062) Changes in net pension liabilities 64,378,328
Changes in pension related deferred inflows of resources (48,878,676) Certain OPEB expenses reported in the Government-Wid e Statement of Activities do not require the use o f current financial resources and therefore, are not reported as expenditures in governmental funds.
Changes in OPEB related deferred outflows of resources 176,577 Changes in total OPEB liabilities 2,667,780
Changes in OPEB related deferred inflows of resources (1,007,362) The internal service funds are used by management to charge the costs of fleet maintenance, facilities maintenance, and technology to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. 2,562,090
Change in Net Position of Governmental Activities 30,082,149$ Amounts reported for Governmental Activities in the Statement of Net Position were different because:
City of San Mateo
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position For the Year Ended June 30, 2022
See accompanying Notes to the Basic Financial Statements. 44 121 of 417
Proprietary Funds Financial Statements
Sewer Fund - This fund is used to account for the activities of the City's wastewater collection and treatment operations.
Internal Service Funds - These funds are used to provide goods and services by one department or agency to other departments or agencies of the City on a cost reimbursement basis. 45 122 of 417
Major Fund Governmental
Activities
Sewer Internal
Fund Service Funds
ASSETS
Current assets:
Cash and investments 103,120,131$ 33,008,101 $
Accounts receivable, net 7,184,515 8,095
Interest receivable 609,408 -
Due from other funds - 110,898 Prepaid items, inventory, and deposits 646 604,174 Total current assets 110,914,700 33,731,268
Noncurrent assets:
Restricted cash and investments 252,607,134 -
Loans and notes receivable, net 27,046,216 - Capital assets:
Non-depreciable 382,174,470 -
Depreciable, net 169,812,362 5,550,896
Total capital assets 551,986,832 5,550,896
Total noncurrent assets 831,640,182 5,550,896
Total assets 942,554,882 39,282,164
DEFERRED OUTFLOW OF RESOURCES
Related to OPEB 265,919 -
Related to pensions 1,929,376 -
Total deferred outflow of resources 2,195,295 -
LIABILITIES
Current liabilities:
Accounts payable 1,165,728 647,733
Due to other funds - 110,898 Deposits payable 1,057,257 117,771
Interest payable 10,961,527 -
Compensated absences - due within one year 117,948 - Claims payable - due within one year - 3,300,000 Long-term debt - due within one year 1,740,000 - Total current liabilities 15,042,460 4,176,402 Noncurrent liabilities:
Net OPEB liability 971,430 -
Net pension liability 9,949,575 -
Compensated absences - due in more than one year 954,311 - Claims payable - due in more than one year - 10,769,000 Long term debt - due in more than one year 633,639,651 - Total noncurrent liabilities 645,514,967 10,769,000 Total liabilities 660,557,427 14,945,402
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding 603,823 -
Related to OPEB 482,156 -
Related to pensions 4,520,361 -
Total deferred inflows of resources 5,606,340 -
NET POSITION
Net investment in capital assets 135,235,423 5,550,896 Restricted for debt service 33,375,069 -
Unrestricted 109,975,918 18,785,866
Total net position 278,586,410$ 24,336,762 $
June 30, 2022
Proprietary Funds
Statement of Net Position
City of San Mateo
See accompanying Notes to the Basic Financial Statements. 46 123 of 417
Major Fund Governmental
Activities
Sewer Internal
Fund Service Funds
OPERATING REVENUES:
Charges for services 71,355,379$ 53,396,864$
Connection fees 135,740 -
Impact fees 73,908 -
Other 98,330 32,784
Total operating revenues 71,663,357 53,429,648 OPERATING EXPENSES:
Costs of sales and services 21,071,196 16,880,063 Administration 3,337,533 31,513,794
Depreciation and amortization 5,596,291 1,274,482 Total operating expenses 30,005,020 49,668,339
OPERATING INCOME 41,658,337 3,761,309
NONOPERATING REVENUES (EXPENSES):
Investment income (602,477) (823,231)
Gain on sale of capital assets - 42,999 Interest expense (11,863,195) -
Total nonoperating revenues (expenses) (12,465,672) (780,232)
INCOME BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 29,192,665 2,981,077
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions 21,281,962 -
Transfers in - 410,000
Transfers out - (828,987)
Total capital contributions and transfers 21,281,962 (418,987) Changes in net position 50,474,627 2,562,090 NET POSITION:
Beginning of year 228,111,783 21,774,672
End of year 278,586,410$ 24,336,762$
For the Year Ended June 30, 2022
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Net Position City of San Mateo
See accompanying Notes to the Basic Financial Statements. 47 124 of 417
Major Fund Governmental
Activities
Sewer Internal
Fund Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers 83,887,316$ 54,118,867$ Cash payments to suppliers for goods and services (2,868,803) (35,217,374) Cash payments to employees for services (22,782,823) (16,880,063) Cash received from others 98,330 788,784 Net cash provided by operating activities 58,334,020 2,810,214 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Interfund borrowing (lending) - 337,056 Repayment of interfund borrowing (lending) - (337,056) Transfers in - 410,000
Transfers out - (828,987)
Net cash (used in) noncapital financing activities - (418,987)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Proceeds from sale of capital assets - 57,656 Acquisition of capital assets, net (153,895,919) (567,390) Proceeds from issuance of debt 340,041,533 -
Principal payment of long-term debt (20,820,000) - Interest paid on debt and fiscal charges (26,680,106) - Net cash (used in) capital and related financing activities 138,645,508 (509,734) CASH FLOWS FROM INVESTING ACTIVITIES:
Interest from investments (1,211,885) (823,231) Net cash provided by investing activities (1,211,885) (823,231) Net change in cash and cash equivalents 195,767,643 1,058,262 CASH AND CASH EQUIVALENTS:
Beginning of year 159,959,622 31,949,839
End of year 355,727,265$ 33,008,101 $
RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO STATEMENT OF NET POSITION:
Cash and cash investments 103,120,131$ 33,008,101 $ Restricted cash and investments 252,607,134 - Total cash and cash equivalents 355,727,265$ 33,008,101 $ For the Year Ended June 30, 2022
Proprietary Funds
Statement of Cash Flows
City of San Mateo
See accompanying Notes to the Basic Financial Statements. 48 125 of 417
Major Fund Governmenta l
Activities
Sewer Internal
Fund Service Funds
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income (loss) 41,658,337$ 3,761,309$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:
Depreciation 5,596,291 1,274,482
Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:
Accounts receivable, net 12,751,434 722,003
Prepaid items, inventory, and deposits (11) - Deferred outflows - OPEB related (26,222) - Deferred outflows - pension related 573,958 - Accounts payable 470,491 16,919
Retention payable (1,750) -
Deposits payable (429,145) 18,501
Compensated absences (161,370) -
Claims payable - (2,983,000) Net OPEB liability (396,169) -
Net pension liability (6,371,780) -
Deferred inflows - OPEB related 149,595 - Deferred inflows - pension related 4,520,361 - Total adjustments 16,675,683 (951,095)
Net cash provided by operating activities 58,334,020$ 2,810,214$ For the Year Ended June 30, 2022
City of San Mateo
Statement of Cash Flows (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 49 126 of 417
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50 127 of 417
Fiduciary Funds Financial Statements
Custodial funds - These funds are used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private purpose trust funds. This includes the San Mateo Consolidated Fire Department Custodial Fund, CFD 2008-1 Custodial Fund, and Other Custodial Fund.
Private Purpose Funds - These funds account for resources of all other trust arrangements in which principal and income benefit individuals, private organizations, or other governments (i.e. unclaimed property/escheat property). This includes the Successor Agency Private Purpose Trust Fund. 51 128 of 417
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Custodial Private Purpose
Funds Trust Funds
ASSETS
Cash and investments 188,471$ 4,990,852 $
Restricted cash and investments with fiscal agent 88,946,410 - Total assets 89,134,881 4,990,852
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding - 420,532 Total deferred outflows of resources - 420,532
LIABILITIES
Accounts payable 150,652 -
Interest payable - 865,690
Long-term debt - due within one year - 3,900,000 Long-term debt - due in more than one year - 42,645,627 Total liabilities 150,652 47,411,317
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding - 43,377 Total deferred inflows of resources - 43,377
NET POSITION (DEFICIT)
Restricted for:
Individuals, organizations, and other governments 88,984,229 - Held in trust for dissolution of RDA - (42,043,310) Total net position (deficit) 88,984,229$ (42,043,310)$ City of San Mateo
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2022
See accompanying Notes to the Basic Financial Statements. 53 130 of 417
Custodial Private Purpose
Funds Trust Funds
ADDITIONS:
Fee collections for other governments 521,269 $ - $ Special assessments for other governments 5,630,130 - Investment income 7,310 40
RDA property tax trust fund distribution - 5,994,710 Proceeds from conduit debt issuance 78,183,627 - Total additions 84,342,336 5,994,750
DEDUCTIONS:
Administration 15,371 20,000
Payments on conduit bonds - principal 835,000 - Payments on conduit bonds - interest 4,498,226 - Project payments 1,462,147 -
Payments to other governments 422,155 - Other 1,751,211 -
Interest expense - 1,624,067 Total deductions 8,984,110 1,644,067
Change in net position 75,358,226 4,350,683 NET POSITION (DEFICIT):
Beginning of year 13,626,003 (46,393,993)
End of period 88,984,229$ (42,043,310) $
City of San Mateo
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2022
See accompanying Notes to the Basic Financial Statements. 54 131 of 417
55 NOTES TO THE BASIC FINANCIAL STATEMENTS
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City of San Mateo
Index of Notes to the Basic Financial Statements
For the Year Ended June 30, 2022
57 Page
Note 1 – Summary of Significant Accounting Policies ............................................................................................. 61
A. Financial Reporting Entity .................................................................................................... .................... 61 B. Basis of Presentation, Accounting and Measurement Focus ..................................................................... 62 C. Deferred Outflows and Inflows of Resources ........................................................................................... 65 D. Cash, Cash Equivalents and Investments .................................................................................................. 66 E. Restricted Cash and Investments ............................................................................................................... 67 F. Receivables ................................................................................................................................................ 67 G. Interfund Transactions ............................................................................................................................... 67 H. Inventories and prepaid items .................................................................................................................... 67 I. Leases ........................................................................................................................................................ 67 J. Capital Assets ............................................................................................................................................ 69 K. Long Term Debt ........................................................................................................................................ 70 L. Compensated Absences ............................................................................................................................. 70 M. Claims and Judgements Payable ................................................................................................................ 70 N. Pension Plans ............................................................................................................................................. 71 O. Other Postemployment Benefits (OPEB) .................................................................................................. 71 P. Fund Balances ................................................................................................................. .......................... 72 Q. Net Position ............................................................................................................................................... 72 R. Property Taxes ........................................................................................................................................... 73 S. Use of Accounting Estimates ................................................................................................... ................. 73 T. Implementation of New GASB Pronouncements for the Year Ended June 30, 2022 ............................... 73 U. Upcoming Government Accounting Standards Implementations ............................................................. 74
Note 2 – Cash and Investments .................................................................................................................................. 76
A. Demand Deposits ....................................................................................................................................... 76 B. Investments Authorized b y the California Government Code and the City’s Investment Policy ............................................................................................... 77 C. Fair Value Measurement ........................................................................................................................... 78 D. Risk Disclosure .......................................................................................................................................... 79 E. Investment in State Investment Pool ......................................................................................................... 82 F. Investment in California Asset Management Program (CAMP) ............................................................... 83 G. Investment in San Mateo County Investment Pool ................................................................................... 83
Note 3 – Loans and Notes Receivable ........................................................................................................................ 84
Note 4 – Leases Receivable ......................................................................................................................................... 90
Note 5 – Interfund Receivables, Payables, and Transfers ....................................................................................... 91
A. Due To / From Other Funds ...................................................................................................................... 91 B. Transfers .................................................................................................................................................... 91
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City of San Mateo
Index of Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2022
58 Page
Note 6 – Capital Assets ............................................................................................................................................... 92
A. Governmental Activities ............................................................................................................................ 92 B. Business-Type Activities ........................................................................................................................... 93
Note 7 – Long-Term Liabilities .................................................................................................................................. 94
A. Summary ................................................................................................................................................... 94 B. Governmental Activities ............................................................................................................................ 95 C. Business-Type Activities ......................................................................................................................... 100 D. Fiduciary Funds Private Purpose Trust Funds - Successor Agency to the Redevelopment Agency of the City of San Mateo ...................................................................................................... ................... 103
Note 8 – Special Assessment Debt with No City Commitment ...................................................................... ....... 105
Note 9 – Compensated Absences .............................................................................................................................. 106
A. Governmental Activities .......................................................................................................................... 106 B. Business-Type Activities ......................................................................................................................... 106
Note 10 – Landfill Closure ........................................................................................................................................ 107
Note 11 – Pension Plans ............................................................................................................................................ 107
A. Summary ................................................................................................................................................. 107 B. General Information about Pension ......................................................................................................... 108 C. Social Security ......................................................................................................................................... 114
Note 12 – Other Postemployment Benefits ............................................................................................................. 115
A. Summary ................................................................................................................................................. 115 B. General Information about OPEB ........................................................................................................... 115 C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB ...................................................................................................... 116
Note 13 – Risk Management ..................................................................................................................................... 119
A. Coverage .................................................................................................................................................. 119 B. Claims Activity ........................................................................................................................................ 119
Note 14 – Joint Ventures ...................................................................................................... .................................... 119
Note 15 – Other Required Disclosures .................................................................................................................... 121
A. Deficit Fund Balances/Net Pension ......................................................................................................... 121 B. Expenditures Exceeding Appropriations ................................................................................................. 121
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City of San Mateo
Index of Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2022
59 Page
Note 16 – Fund Balance Classification .................................................................................................................... 122
Note 17 – Successor Agency Private Purpose Trust For Assets of Former Redevelopment .............................. 122
Note 18 – Commitments and Contingencies ........................................................................................................... 124
A. Litigation ................................................................................................................................................. 124 B. Contingent Liabilities .............................................................................................................................. 124 C. Federal and State Grants .......................................................................................................................... 124 D. Contractual Commitments ....................................................................................................................... 124
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City of San Mateo
Notes to the Basic Financial Statements
For the Year Ended June 30, 2022
61 Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the City of San Mateo, California (City) have been prepared in conformity with Generally Accepted Accounting Principles of the United St ates of America (U.S. GAAP) as applied to governmental agencies. The Governmental Accounting Standards Boar d (GASB) is the accepted standard-setting body for establishing governmental accounting and fi nancial reporting standards in the United States. The more significant of the City’s accounting policies are described below.
A. Financial Reporting Entity
The City of San Mateo (City) was incorporated as a char ter city on September 4, 1894; the current charter was adopted in 1971 and revised in 2002. The City opera tes under the Council-Manager form of government and provides the following services: police; building inspection; parks and streets; sanitation; leisure services; planning and zoning; general administration services; and redevelopment.
Blended Component Units
The financial reporting entity consists of the primary government, the City , and its component units. Component units are legally separate entities for which the elected officials of the primary government are financially accountable. In addition, component units can be othe r organizations for which the primary government is accountable and their exclusion would cause the reporting en tity’s financial statements to be misleading or incomplete.
Blended component units, although legally separate entities, are, in subs tance part of the government’s operation and so data from these units are 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 government.
Although the following are legally separate from the City, they have been “blended” as though they are part of the City because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclus ively, benefits the City, even though it does not provide services directly to it.
San Mateo Joint Powers Financing Authority (JPFA)
The San Mateo Joint Powers Financing Authority (JPFA) was created in 1993. The Financing Authority is a joint exercise of joint powers. The City Council serves as directors of the JPFA. The purpose of the JPFA is to act as a financing/lending type of entity only. No separate annual financial statements are prepared for the JPFA. Since the City Council previously served as the government board for this component unit, the City’s component unit was considered to be a blended component unit. Blended co mponent units, although lega lly separate entities, are in substance, part of the City’s operations and financial information was reported with the primary government.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
62 Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Presentation, Accounting and Measurement Focus
The accounts of the City are organized on the basis of fu nds, each of which is cons idered a separate accounting entity. The operations of each fund are accounted for by pr oviding a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Fund acc ounting segregates funds according to their intended purpose and is used to aid management in demonstrati ng compliance with finance-re lated legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.
Government-Wide Financial Statements
The City’s Government-Wide Financial Statements incl ude a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.
These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and lia bilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accomp anying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expe nses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from non-exchange transactions are recognized in accordance with the requirements of U.S. GAAP.
Program revenues include charges for services, special ass essments, and payments made by parties outside of the reporting government's citizenry if that money is restri cted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Program revenues for the City are classified in three categories:
Charges for services
Operating grants and contributions
Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities and Changes in Net Position, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
Due to/from other funds
Transfers in/out
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
63 Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Presentation, Accounting and Measurement Focus (Continued)
Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances. An accompanying schedule is presented to reconcile and explain the differences in Net Position as presented in these statements to the Net Position presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria.
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expend itures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.
Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expend itures of the current period. Measurable means that the amounts can be estimated, or otherwise determined. Ava ilable means that the amounts were collected during the reporting period or soon enough thereafter to be availa ble to finance the expenditures accrued for the reporting period. The City uses an availability period of 60 days for all revenues except grants, which use a six-month availability period.
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in-lieu, transient occupancy taxes, grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected with in the availability period.
Other revenue items are considered to be measurable and available when cash is received by the government.
Revenue recognition is subject to the measurable and av ailable criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place.
Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as re venues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions have been recognized as revenues when all applicable eligibility requirements have been met.
The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.
The City reports the following major governmental funds:
General Fund accounts for resources traditionally associated with governmental activities that are not required legally or by sound financial management to be accounted for in another fund.
Construction Services Special Revenue Fund accounts for revenue and expenditures of activities relating to building permits. These revenues have been committed by City Council for construction service activities.
General Capital Projects Fund accounts for the expenditu res for capital improvements for the City, including equipment, acquisition, and construc tion of parks, recreation areas, public safety facilities or other public works. The primary sources of funding are intergovernmental revenues, Measure A (half cent sales tax), developer impact fees, and transfers from other governmental funds.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
64 Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Presentation, Accounting and Measurement Focus (Continued)
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Fund Net Position, and a Statement of Cash Flows for each major Proprietary Fund.
A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. The City’s internal service funds include funds which provide services directly to other City funds. These areas of service include fleet maintenance, facilities maintenance, and comprehensive liability.
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses a nd Changes in Fund Net Po sition presents increases (revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been r ecorded as revenue and provisions have been made for uncollectible amounts.
Operating revenues in the proprietary funds are those re venues that are generated fro m the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.
The City reports the following major proprietary funds:
Sewer Fund accounts for the activities of the wastewater collection and treatment system, which provides service to residents and the businesses of the City and some neighboring cities.
Internal service fund balances and activities have been combined with governmental activities in the Government- Wide Financial Statements, and are comprised of the following funds:
Workers’ Compensation Insurance Fund accounts for all workers’ compensation self-insurance activities.
Dental Self-Insurance Fund accounts for the City’s self-insurance activities related to the dental plan it provides to its employees.
Benefits Fund accounts for charges for other funds and e xpenditures relating to employee benefits other than those accounted for in the Workers’ Compensation and Dental Self-Insurance Funds.
Comprehensive Liability Insurance Fund accounts for general liability self-insurance transactions.
Vehicle and Equipment Replacement Fund accounts for ch arges to the City departments for funding and acquisition of replacement vehicles and equipment.
Fleet and Building Maintenance Fund accounts for the char ges to user departments and the expenses related to the maintenance of City vehicles and buildings.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
65 Note 1 – Summary of Significant Accounting Policies (Continued)
B. Basis of Presentation, Accounting and Measurement Focus (Continued)
Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent custodial funds and private purpose trust funds. Both custodial funds and the private purpose trust funds are accounted for on the full accrual basis of accounting.
Fiduciary fund types are accounted for according to the na ture of the fund. Custodial funds are used to report fiduciary activities that are not required to be reporte d in pension (and other empl oyee benefit) trust funds, investment trust funds, or private-purpose trust funds. Private-purpose trust funds account for resources of all other trust arrangements in which principal and income benefit individuals, private organizations, or other governments (i.e. unclaimed property/escheat property). They are al so used to account for vari ous assessment districts for which the City acts as an agent for debt service activity, as the City is prohibited from levying additional taxes for these districts. Such funds incl ude Community Facilities Districts.
The City’s private purpose trust fund is a fiduciary fund type used by the City to report assets, liabilities and activities of the Successor Agency to th e Redevelopment Agency (Successor Agency) for the City of San Mateo.
Its results of operations are presented on the Statement of Changes of Fiduciary Net Position.
Successor Agency of the Redevelopment Agency for the City of San Mateo
The Redevelopment Obligation Retirement Fund was created to serve as a custodian for the assets and to wind down the affairs of the RDA on February 1, 2012, pursuant to Assembly Bill x1 26. Its purpose is to expeditiously wind down the affairs of the dissolved Redevelopment Agency (RDA). The Successor Agency is a separate public entity from the City, subject to the direction of an oversight board. The City Council serves as the governing board of the Successor Agency. In gene ral, the Successor Agency’s assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contract ual commitments). In future fiscal years, the Successor Agency will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of th e former RDA until all enfor ceable obligations of the fo rmer RDA have been paid in full and all assets have been liquidated. Based upon the nature of the Su ccessor Agency’s custodial role, the Successor Agency has been included in the accompanying basic financial statements as a private purpose trust fund. In February 2015, the California Department of Finance (Finance) approved the City’s revised Long-Range Property Management Plan (LRPMP), with the assets deemed for governmental use and future development. The Department of Finance approved the amendment to the Last and Final ROPS, and its confirmation that this entire transaction would be considered the first of two allowed amendments to the Last and Final ROPS in a letter dated December 13, 2017. Refer to Note 17 for additional information relating the Successor Agency.
C. Deferred Outflows and Inflows of Resources
The Statement of Net Position reports separate sectio ns for Deferred Outflows of Resources, and Deferred Inflows of Resources, when applicable.
Deferred Outflows of Resources represent a consumption of net assets th at applies to future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then.
Deferred Inflows of Resources represent an acquisition of net assets th at applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
66 Note 1 – Summary of Significant Accounting Policies (Continued)
D. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City considers pooled cash and investment amounts, with original maturities of three months or less, to be cash equivalents.
Investments are reported in the accompa nying financial statements at fair value, except for certain investment contracts that are reported at cost because they are not tran sferable and they have terms that are not affected by changes in market interest rates. Changes in fair value that occur du ring a fiscal year are recognized as investment income reported for that fiscal year, a nd may result in negative investment income in the accompanying financial statements. Investment income includes interest ear nings, changes in fair value, and any gains or losses realized up on the liquidation, maturity, or sale of investments.
Investment income earned by the pooled investments is allocated to the various funds b ased on each fund's average cash and investment balance, except for investme nt income associated with funds not legally required to receive pooled investment income which has been assigned to and recorded as revenue of the general fund, as provided by California Government Code Section 53647.
For purposes of the statemen t of cash flows, amounts reported as cash and cash equivalents, include amounts on deposit in the City pool and any short-term, highly liqui d investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
Certain disclosure requirements, if applicable, for deposits and investment risks in the following areas:
Interest rate risk
Credit risk
- Overall
- Custodial credit risk
- Concentration of credit risk
Foreign currency risk
In addition, other disclosures are speci fied including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures.
U.S. GAAP establishes a framework for measuring fair value, and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the Statements of Net Position, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.
Levels of inputs are as follows:
Level 1 – Inputs are unadjusted, quoted prices for iden tical assets or liabilities in active markets at the measurement date.
Level 2 – Inputs, other than quoted prices included in Level 1, which are observable for the assets or liabilities through corroboration with market data at the measurement date.
Level 3 – Unobservable inputs that refl ect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
67 Note 1 – Summary of Significant Accounting Policies (Continued)
E. Restricted Cash and Investments
Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt, for acquisition and construction of capital projects, and to meet bond indenture debt reserve requirements.
F. Receivables
Customer or trade receivables are re ported as “accounts receivable” and ar e shown net of an allowance for uncollectible accounts based on hist orical and management estimates.
Noncurrent portions of long-term receivables (e.g., “notes receivable”) due to governmental fund types are reported in their respective balance sheets despite their spendi ng measurement focus. Recogn ition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables.
Noncurrent portions of long-term notes receivable are offset by restricted fund balance in the special revenue funds.
G. Interfund Transactions
Activity between funds that are representative of lending/ borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from othe r funds” or “advances to/from other funds” (i.e., the current portion of interfund loans). Any residual balances outst anding between the governmental activities and business- type activities are reported in the Governmental-Wide Financial Statements as “internal balances.”
H. Inventories and prepaid items
Inventory, consisting of expendable supplies, is valued at first in first out basis. The cost of governmental funds inventory is recorded as expenditure at the time the indi vidual inventory is consumed. Prepaid items are recorded at cost. Using the consumption method, prepaid items ar e recorded as expenditures over the period that service is provided. Reported inventory and prepai d items are equally offset by a fund balance reservation, which indicates that they do not constitute “available spendable resources” even though they are a component of current assets.
I. Leases
Lessee
The City has a policy to recognize a lease liability and a right ‐to‐use lease asset (lease as set) in the government‐ wide financial statements. The City recognizes lease liab ilities with an initial, individual value of $100,000 or more.
At the commencement of a lease, the C ity initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently , the lease liability is reduced by the principal portion of lease payments made.
Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease asse ts into service. Lease assets are amor tized using the straight-line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
68 Note 1 – Summary of Significant Accounting Policies (Continued)
I. Leases (Continued)
Lessee (Continued)
Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.
The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
The lease term includes the noncancellable period of the lease. Lease paymen ts included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.
The City monitors changes in circum stances that would require a remeasureme nt of its lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.
Lease assets are reported as right to use along with other capital assets and lease liabilities are reported with long- term debt on the Statement of net position.
Lessor
The City is a lessor for leases of special purpose facilities, office and commercial space, and land. The City recognizes leases receivable and deferred inflows of resources in the financial Statements.
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of r esources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.
The City uses its estimated incremental borrowing rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.
The City monitors changes in circum stances that would require a remeasureme nt of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that ar e expected to significantly affect the amount of the lease receivable.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
69 Note 1 – Summary of Significant Accounting Policies (Continued)
J. Capital Assets
Capital assets, which include property, plant, equipment, the right to use leased equipment, and infrastructure assets, are reported in the applicable governmental or business- type activities columns in the government-wide financial statements. Such assets are reco rded at historical cost (except for intangible right‐to‐use lease assets, the measurement of which is discussed in note 1.I. above) or estimated historical cost if purchased or constructed. Donated assets are valued at the fair value of the assets on the date on which they were contributed. Donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value rather than fair value. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. The City utilizes a capitalization threshold of $5,000 - $25,000 depending on asset type.
Depreciation is charged to operations using the straight-line method over the estimated useful lives of the assets as follows:
Capitalization
Asset Type Threshold
General capital assets $10,000
Infrastructure capital assets $100,000
Intangible assets $1,000,000
Depreciation is charged to operations using the straight-line method over the estimated useful lives of the assets as follows:
Asset Type Years
Sewer treatment plant
and transmission lines up to 60
Buildings and improvements 20 - 40
M achinery and equipment 2 - 30
Infrastructure 25 - 60
For all infrastructure systems, the City elected to use the Basic Approach as defined by GASB Statement No. 34 for infrastructure reporting. The City defines infrastruct ure as the basic physical asset s that allow the City to function. The assets include the streets, water purification and distribution system, sewer collection and treatment system, parks and recreation, lands and improvement system, storm water conveyance system, and buildings combined with the site amenities such as parking and la ndscaped areas used by the City in the conduct of its business. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals and pavement markings), landscaping and land. These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.
For all other infrastructure systems, the City elected to use the Basic Approach as defined by GASB Statement No.
34. The City appraised its own infrastructure as of July 1, 2002. The 2002 appraisal determined the original cost, which is defined as the actual cost to acquire new propert y in accordance with market prices at the time of first construction/acquisition. Original costs were developed in one of three ways:
1. Historical records;
2. Standard unit costs appropriate for the construction/acquisition date;
3. Present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
70 Note 1 – Summary of Significant Accounting Policies (Continued)
J. Capital Assets (Continued)
The accumulated depreciation from the date of constructi on/acquisition to the current date was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the original cost.
K. Long-Term Debt
Government-Wide Financial Statements and Proprietary Fund Financial Statements
Long-term debt and other financial obligations are reported as liabilities in the appropriate funds. Bond premiums and discounts are deferred and amortized over the life of the bonds using straight line method. Bonds payable are reported net of the applicable premium or discount. Issuance costs are expensed when incurred. Gains or losses on bond refunding are reported as either deferred outflows of resources or deferred inflows of resources and amortized over the term of the related debt.
Governmental Fund Financial Statements
The governmental fund financial statements do not present long-term debt but are shown in the Reconciliation of the Governmental Funds Balance Shee t to the Government-Wide Statement of Net Position. Governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Debt issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
L. Compensated Absences
The City’s policy permits employees to accumulate earned but unused vacation benefits, which are eligible for payment upon separation from government service. The liability for such le ave is reported as incurred in the government-wide and proprietary fund financial statements. A liability for those amounts is recorded in the governmental funds only if the liability has matured as a result of employee resignations or retirements. The liability for compensated absences includes salary-related benefits, where applicable.
Government-Wide Financial Statements
For governmental and business-type activities, compensated absences are recorded as expenses when earned.
Fund Financial Statements
For governmental funds, compensated absences are recorded as expenditures in the year paid. The General Fund is typically used to liquidate compensated absences. In proprietary funds, compensated absences are expensed to the various funds in the period they are earned, and such fund’s share of the unpaid liability is recorded as a long- term liability of the fund.
M. Claims and Judgments Payable
The short-term and long-term workers’ compensation clai ms liability is reported in the Workers’ Compensation Insurance Internal Service Fund. The short-term and long-term general claims liability is reported in the Comprehensive Liability Insurance Intern al Service Fund. The short-term liability which will be liquidated with current financial resources is the amount of settlement reached, but unpaid, related to claims and judgments entered.
Under the modified accrual basis, the following revenue sources are considered to be susceptible to accrual property taxes, sales taxes, federal and state grants.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
71 Note 1 – Summary of Significant Accounting Policies (Continued)
N. Pension Plans
For purposes of measuring the net pension liability, de ferred outflows of resources and deferred inflows of resources related to pensions, and pens ion expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans (Note 11). For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. The General Fund and Internal Service Funds are typically used to liquidate the pension liability related to the City's governmental activities while the pension liability for Bu siness-type activities is liquidated from the respective Enterprise Funds.
The following timeframes are used for pension reporting:
Pension
Valuation date June 30, 2020
Measurement date June 30, 2021
Measurement period July 1, 2020 to June 30, 2021
Gains and losses related to changes in total pension lia bility and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inac tive, and retired) as of the beginning of the measurement period.
O. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB plan, the assets of which are held in an irrevocable trust, and additions to/deductions from the OPEB pl an’s fiduciary net position have been determined by an independent actuary (Note 11). For this purpose, benefit payments are recognized when currently due and payable in accordance with the bene fit terms. Investments are reported at fair value. The Enterprise Funds are used to liquidate the OPEB liability.
Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net position information within certain defined timeframes. For this report, the following timeframes are used:
OPEB
Valuation date June 30, 2021
Measurement date June 30, 2021
Measurement period July 1, 2020 to June 30, 2021
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
72 Note 1 – Summary of Significant Accounting Policies (Continued)
P. Fund Balances
In the Governmental Fund Financial Statements, fund balances are classified in the following categories:
Nonspendable – Items cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually requi red to be maintained intact, such as principal of an endowment or revolving loan funds.
Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.
Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making (normally the governing body) and that remain bi nding unless removed in the same manner. The County Council is considered the highest auth ority for the City. A City Council resolution is required to have fund balance committed.
Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has not delegated the authority to assign fund balance to management.
Unassigned – This category is for any balances that have no restrictions placed upon them. The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for speci fic purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.
Q. Net Position
For the Government-Wide Financial Statements, net position is classified in the following categories:
Net Investment in Capital Assets component of net position consists of capital assets, net of accumulated depreciation and reduced by any debt outstanding and any deferred outflow s/inflows of resources related to such borrowings that are attributable to the acquisition, construction or improvement of those assets. If there are significant unspent related debt pr oceeds at year-end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of net investme nt in capital assets. Rather, that portion of the debt is offset by unspent proceeds.
Restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.
Unrestricted component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.
When both restricted and unrestricted resources are available for use, the City’s policy is to use restricted resources first, then unrestricted resources that are needed.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
73 Note 1 – Summary of Significant Accounting Policies (Continued)
R. Property Taxes
San Mateo County (County) assesses properties and it bills , collects, and distributes property taxes to all taxing entities within its jurisdiction including the City. Under State law, known as the Teeter Plan, the County remits the entire secure amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are assessed on January 1. Secured property tax is due in two insta llments, on November 1 and March 1. It becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is due on July 1, and becomes delinquent on August 31. Collection of delinquent accounts is the responsibility of the County, which retains all penalties.
The term “unsecured” refers to taxes on personal property other than real estate, land and buildings. These taxes are secured by liens on the property being taxed. Property tax revenues are recognized by the City in the fiscal year they are levied provided they become available as defined above.
S. Use of Accounting Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and as sumptions, in some cases when applicable, that affect the amounts in the financial statements and the accompanying notes. Actual results could differ from the estimates.
T. Implementation of New GASB Pronouncements for the Year Ended June 30, 2022
The requirements of the following accounting standards are effective for the purpose of implementation, if applicable to the City, for the year ended June 30, 2022. The financial statements included herein apply the requirements and provisions of these statements, including necessary retroactive adjustments to financial statement classifications and presentations.
GASB Statement No. 87
In June 2017, GASB issued Statement No. 87, Leases (GASB Statement No. 87), to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This statement increases the usefulness of go vernments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were cl assified as operating leases and recognized as inflows of resources or outflows of resources based on the payment pr ovisions of the contract. It also establishes a single model for lease accounting based on the foundational principl e that leases are financings of the right to use an underlying asset. Implementation of this Statement had a signi ficant effect on the City’s financial statements for the year ended June 30, 2022.
GASB Statement No. 89
In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. This Statement establishes accounting requirements for interest cost incurred before the end of a construction period. Such interest cost includes all interest that previously was accounted for in accordance with the requirements of paragr aphs 5–22 of Statement No. 62, Codification of Acc ounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, which are superseded by this Statement. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for fina ncial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. Application of this statement did not have a material effect on the City’s financial statements for the fiscal year ending June 30, 2022.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
74 Note 1 – Summary of Significant Accounting Policies (Continued)
T. Implementation of New GASB Pronouncements for the Year Ended June 30, 2022 (Continued)
GASB Statement No. 92
In January 2020, GASB issued Statement No. 92, Omnibus 2020. The primary objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve consistency of authoritative literature by addressing practice issues that have been identified during implementation and a pplication of certain GASB Statements. Application of this statement did not have a ma terial effect on the City’s financial statements for the fiscal year ending June 30, 2022.
GASB Statement No. 93
In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. Some governments have entered into agreements in which variable payments made or received depend on an interbank offered rate (IBOR)—most notably, the London Interbank Offered Rate (LIBOR). As a result of global reference rate reform, LIBOR is expected to cease to exist in its current form at the end of 2021, prompting governments to amend or replace financial instruments for the purpose of replacing LIBOR with other reference rates, by either changing the reference rate or adding or cha nging fallback provisions related to the reference rate. The objective of this Statement is to address those and other accounting and financial reporting implications that result from the replacement of an IBOR. Application of this statement did not have a material eff ect on the City’s financial statements for the fiscal year ending June 30, 2022.
GASB Statement No. 97
In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Defe rred Compensation Plans – An Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32 . The primary objectives of this Statement are to (1) increase consistenc y and comparability related to the re porting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statemen ts; and (3) enhance the rele vance, consistency, and comparability of the accounting and financial reporting for Internal Re venue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. Application of this statement did not have a material effect on the City’s financial statements for the fiscal year ending June 30, 2022.
U. Upcoming Government Accounting Standards Implementations
The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the following GASB statements:
GASB Statement No. 91
In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are to provide a single method of reporting conduit debt ob ligations by issuers and eliminate diversity in practice associated with (1) commitments extend ed by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt ob ligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures.
Application of this statement is effective for the City’s fiscal year ending June 30, 2023.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
75 Note 1 – Summary of Significant Accounting Policies (Continued)
U. Upcoming Government Accounting Standards Implementations (Continued)
GASB Statement No. 94
In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and publ ic-public partnership arra ngements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructur e or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. Application of this statement is effective for the City’s fiscal year ending June 30, 2023.
GASB Statement No. 96
In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements . This Statement provides guidance on the accounting and fina ncial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. Application of this statement is effective for the City’s fiscal year ending June 30, 2023.
GASB Statement No. 99
In April 2022, GASB issued Statement No. 99, Omnibus 2022 . The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and a pplication of certain GASB Statements and (2) accounting and financial reporting for fi nancial guarantees. Application of this statement is effective for the City’s fiscal year ending June 30, 2023.
GASB Statement No. 100
In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understanda ble, reliable, relevant, consistent, and comparable information for making d ecisions or assessing accountability. Application of this statement is effective for the City’s fiscal year ending June 30, 2024.
GASB Statement No. 101
In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain pr eviously required disclosures. Application of this statement is effective for the City’s fiscal year ending June 30, 2025.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
76 Note 2 – Cash and Investments
Cash and investments are presented in the accompanying financial statements at June 30, 2022 as follows:
Fiduciary
Governmental Business-Type Fund Financial
Activities Activities Total Statements Total
Cash and investments
Held by City Treasury 295,485,042 $ 103,120,131 $ 398,605,173 $ 5,179,323 $ 403,784,496 $ Restricted cash and investments: Held by fiscal agents 22,873,394 252,607,134 275,480,528 88,946,410 364,426,938 Total cash and inv estments 318,358,436$ 355,727,265 $ 674,085,701 $ 94,125,733 $ 768,211,434 $ Government -Wide Statement of Net Position
Cash and investments at June 30, 2022, consisted of the following:
Cash on hand and deposits:
Cash on hand 21,751$
Deposits with financial institution 15,416,162
Total cash on hand and deposits 15,437,913
Investments:
Local Area Investment Funds (LAIF) 63,818,048
CAMP 68,352,236
San Mateo County Pool 63,035,689
Investments 193,140,610
Total inv estments 388,346,583
Cash and investments with fiscal agent 364,426,938
Total cash and investments 768,211,434$
The City maintains a cash and investment pool for all funds. Certai n restricted funds that are held an invested by independent outside custodians throug h contractual agreements are not pooled. These restricted funds include cash and investment held by trustees.
A. Demand Deposits
The carrying amounts of the City’s demand deposits were $15,416,162 at June 30, 2022. Bank balances were $15,366,154 at that date, the total amount of which w as collateralized or insured with securities held by the pledging financial institutions in the City’s name as discussed below.
The California Government Code requires California ba nks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a se curity interest in such collateral su perior to those of a general creditor.
Thus, collateral for cash deposits is considered to be held in the City's name.
The market value of pledged securities mu st equal at least 110% of the City's cash deposits. California law also allows institutions to secure City’s deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requiremen ts for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The City, however, has not waived the collateralization requirements.
The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. In terest income earned on pooled cash and investments is allocated to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
77 Note 2 – Cash and Investments (Continued)
B. 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 and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk and concentration of credit risk.
This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.
Ma x i m um Ma x i m um
Maximum Percentage Investment in
Authorized Investment Types Maturity of Portfolio One Issuer* Securities issued by the U.S. Treasury 5 years None None U.S. Agency Securities and Instrumentalies 5 years 70% 40% Mortgage-Backed Securities 5 years 20% 20%
Banker's acceptance 180 days 10% 5%
Repurchase agreements 90 days 10% 10%
Local Agency Investment Fund N/A 65% 65%
San Mateo County Pool N/A 30% 30%
California Asset Management Program N/A 20% 20%
Money Market/Mutual Funds N/A 20% 10%
Prime Commercial Paper 270 days 10% 5%
Medium-term Corporate Notes 5 years 30% 5%
Obligations of State of California or Other
California Local Agency 5 years 20% 5%
Non-negotiable Certificates of Deposit 3 years 30% 5%
Negotiable Certificates of Deposit 5 years 30% 5%
Asset-Backed Securities 5 years 10% 5%
Non-Agency M ort gage Securit ies 5 years 10% 5%
* Based on state law requirements or City investment policy requirements, whichever is more restrictive.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
78 Note 2 – Cash and Investments (Continued)
C. Fair Value Measurement
At June 30, 2022, investments, excluding restricted cash a nd investments held by fiscal agent, are reported at fair value based on quoted market prices. The following tabl e presents the fair value measurements of investments recognized in the accompanying Statement of Net Position measured at fair value on a recurring basis and the level within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2022:
Percentage of
Investm ent Type Fair V alue Investments Level 1 Level 2 Level 3 Investments measured by fair v alue lev el:
U.S. G overnm ent Treasury and Agencies:
Federal Farm Credit Bank Bonds (FFCB) 15,232,805$ 3.92% -$ 15,232,805$ - $ Federal Hom e Loan Bank Bonds (FHLB) 54,877,008 14.13% - 54,877,008 - Federal Home Loan Mortg. Corp. (FHLMC) 5,852,365 1.51% - 5,852,365 - Federal Natl. Mortg. Assn. Notes (FNMA) 6,414,157 1.65% - 6,414,157 - US Treasuries 36,877,722 9.50% - 36,877,722 - Corporate Notes:
Amazon.com Inc 1,055,853 0.27% - 1,055,853 - Apple Inc 707,054 0.18% - 707,054 - Bank of America Corp 1,361,396 0.35% - 1,361,396 - Bank of Montreal 665,273 0.17% - 665,273 - Bank of NY Mellon Corp 742,194 0.19% - 742,194 - Berkshire Hathaway 813,492 0.21% - 813,492 - Caterpillar Financial Service 743,751 0.19% - 743,751 - Charles Schwab Corp 1,085,331 0.28% - 1,085,331 - Chubb INA Holdings Inc 983,266 0.25% - 983,266 - Honeywell Intl 678,309 0.17% - 678,309 - John Deere Capital Corp 978,590 0.25% - 978,590 - JP Morgan Chase & Co 1,266,515 0.33% - 1,266,515 - Metlife 1,905,668 0.49% - 1,905,668 - Morgan Stanley 843,293 0.22% - 843,293 - National Rural Utilities 976,348 0.25% - 976,348 - New York Life Global 691,628 0.18% - 691,628 - Paccar Financial Corp 563,256 0.15% - 563,256 - Royal Bank of Canada 1,508,148 0.39% - 1,508,148 - Sales force.com Inc 700,864 0.18% - 700,864 - Target Corp 394,797 0.10% - 394,797 - Toronto-Dom inion Bank 2,919,292 0.75% - 2,919,292 - Toyota Motor Credit Corp 837,229 0.22% - 837,229 - Truis t Financial Corp 401,863 0.10% - 401,863 - United Health G roup Inc 1,607,052 0.41% - 1,607,052 - US Bank NA 1,009,495 0.26% - 1,009,495 - Wal-Mart Stores 1,138,444 0.29% - 1,138,444 - Negotiable CD 3,448,947 0.89% - 3,448,947 - Supranationa l 4,179,716 1.08% - 4,179,716 - Asset-Backed Securities 10,761,798 2.77% - 10,761,798 - Collateralized Mortgage Obligations 6,035,300 1.55% - 6,035,300 - Municipal Bonds 659,295 0.17% - 659,295 - Total investm ents subject to fair value 170,917,514 - $ 170,917,514$ - $ Investments not subject to the fair value hierarch y:
Money Market 22,223,096 5.72%
Local Agency Investment Fund 63,818,048 16.43% California Asset Managem ent Program 68,352,236 17.60% San Mateo County Pool 63,035,689 16.23%
Total investments 388,346,583$ 100.00%
Fair V alue Measurement Using
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
79 Note 2 – Cash and Investments (Continued)
C. Fair Value Measurement (Continued)
Treasury Securities, Federal Farm Credit Bank Bonds, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation Notes and Mortgage-Backed Securities, Federal National Mortgage Association Notes, and Corporate Notes categorized as Level 2 are valued based on matrix pricing which use observable market inputs such as yield curves and market indices that are derived principa lly from or corroborated by observable market data by correlation to other means. Property held for investment was categorized as Level 3 and was valued by a sale comparison appraisal approach, which was deri ved by using quoted prices of similar assets in active markets adjusted for differences betw een the City’s investment property and assets for which quotes were obtained. Investments included in restricted cash and in vestments included money ma rket accounts, guaranteed investment contracts, are not su bject to fair value hierarchy.
D. Risk Disclosure
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rate 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 tim ing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity even ly over time as necessary to provide the cash flow and liquidity needed for operations.
As a means of maintaining liquidity, the City’s investment policy limits are as follows:
Maturity % of Portfolio
Up to six months 25% (Minimum)
Six months to five years 75% (Maximum)
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provide d by the following table that shows the distribution of the City’s investments by maturity. For purposes of the sche dule shown on the next page , any callable securities are assumed to be held to maturity.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
80 Note 2 – Cash and Investments (Continued)
D. Risk Disclosure (Continued)
Disclosures Relating to Int erest Rate Risk (Continued)
Investment Type Fair Value 1 year or less 1-2 years 2-3 years 3-4 years 4 years or more Investments:
U.S. G overnm ent Treasury and Agencies:
Federal Farm Credit Bank Bonds (FFCB) 15,232,805$ - $ - $ 7,963,794$ - $ 7,269,011$ Federal Hom e Loan Bank Bonds (FHLB) 54,877,008 - - 12,524,825 20,948,518 21,403,665 Federal Home Loan Mortg. Corp. (FHLMC) 5,852,365 - 725,113 970,280 1,394,990 2,761,982 Federal Natl. Mortg. Assn. Notes (FNMA) 6,414,157 - 982,135 808,021 1,866,288 2,757,713 US Treasuries 36,877,722 - 17,964,879 3,349,691 10,299,157 5,263,995 Corporate Notes:
Am azon.com Inc 1,055,853 - - - - 1,055,853 Apple Inc 707,054 - - - - 707,054 Bank of America Corp 1,361,396 - - 498,539 - 862,857 Bank of Montreal 665,273 - - - - 665,273 Bank of NY Mellon Corp 742,194 - - - 742,194 - Berkshire Hathaway 813,492 - - - - 813,492 Caterpillar Financial Service 743,751 - - - 743,751 - Charles Schwab Corp 1,085,331 - - 407,921 - 677,410 Chubb INA Holdings Inc 983,266 - - - 983,266 - Honeywell Intl 678,309 - - - 678,309 - John Deere Capital Corp 978,590 - - 978,590 - - JP Morgan Chase & Co 1,266,515 - - 501,192 369,434 395,889 Metlife 1,905,668 - - - 730,280 1,175,388 Morgan Stanley 843,293 - - - - 843,293 National Rural Utilities 976,348 - - - - 976,348 New York Life Global 691,628 - - - 691,628 - Paccar Financial Corp 563,256 - - 563,256 - - Royal Bank of Canada 1,508,148 - - - 1,508,148 - Salesforce.com Inc 700,864 - - - 700,864 - Target Corp 394,797 - - - - 394,797 Toronto-Dom inion Bank 2,919,292 - - 1,031,240 1,888,052 - Toyota Motor Credit Corp 837,229 - - 225,372 611,857 - Truist Financial Corp 401,863 - - - - 401,863 United Health G roup Inc 1,607,052 - - - - 1,607,052 US Bank NA 1,009,495 - - - 1,009,495 - Wal-Mart Stores 1,138,444 - - - 969,993 168,451 Negotiable CD 3,448,947 - 3,448,947 - - - Supranational 4,179,716 - - - 1,404,879 2,774,837 Asset-Backed Securities 10,761,798 - 373,958 4,661,476 2,758,756 2,967,608 Collateralized Mortgage Obligations 6,035,300 - 183,989 900,486 964,238 3,986,587 Municipal Bonds 659,295 - - 659,295 - - Money Market 22,223,096 22,223,096 - - - - L ocal Agency Investm ent Fund 63,818,048 63,818,048 - - - - California Asset Managem ent Program 68,352,236 68,352,236 - - - - San Mateo County Pool 63,035,689 63,035,689 - - - - Total investments 388,346,583$ 217,429,069 $ 23,679,021 $ 36,043,978 $ 51,264,097 $ 59,930,418 $ Maturities (in years)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an i nvestment 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.
However, some issuers do not seek a credit rating. For instance, the California Local Agency Investment Fund (LAIF) has not sought or received a credit rating. In these cases, the purchaser is solely responsible for performing their own due diligence before purchasing an investment or participating in an external investment pool.
Certificates of deposit of $250,000 or less are fully insured by the Federal Deposit Insurance Corporation (FDIC), and therefore, do not seek a credit rating.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
81 Note 2 – Cash and Investments (Continued)
D. Risk Disclosure (Continued)
Disclosures Relating to C redit Risk (Continued)
The City mitigates credit risk through diversification in its portfolio as outlined by the City’s Investment Policy.
The Investment Policy also guides the rating quality of purchased securities provided by Nationally Recognized Statistical Rating Organizations (NRSRO). As of June 30, 2022, the City’s deposits and investments were rated as follows:
Moody's S&P
Deposits P-1 to AA3 A-1+ to AA-
Investm ents:
Securities of U.S. G overnment Agencies:
Federal Farm Credit Bank Bonds (FFCB) Aaa AA+
Federal Hom e Loan Bank Bonds (FHLB) Aaa AA+
Federal Home Loan Mortg. Corp. Notes (FHLMC) Aaa AA+
Federal Home Loan Mortg. Corp.
Mortgage- Backed Security (FHLMC) Aaa AA+
Federal National Mortg. Assn. Notes (FNMA) Aaa AA+
US Treasuries Aaa AA+
Corporate Notes:
Am azon.com Inc A1 AA
Apple Inc Aaa AA+
Bank of Am erica Corp A2 A-
Bank of Montreal A2 A-
Bank of NY Mellon Corp A1 A
Berkshire Hathaway Aa2 AA
Caterpillar Financial Service A2 A
Charles Schwab Corp A2 A
Chubb INA Holdings Inc A3 A
Honeywell Intl A2 A
John Deere Capital Corp A2 A
JP Morgan Chase & Co A2 A-
Metlife Aa3 AA-
Morgan Stanley A1 A-
National Rural Utilities A1 A-
New Y ork Life G lobal Aaa AA+
Paccar Financial Corp A1 A+
Royal Bank of Canada A1 A
Salesforce.com Inc A2 A+
Target Corp A2 A
Toronto Dom inion Bank A1 A
Toyota Motor Credit Corp A1 A+
Truist Financial Corp A3 A-
United Health G roup Inc A3 A+
US Bank NA A1 AA-
Wal-Mart Stores Aa2 AA
Asset-Backed Securities Aaa to Not Rated AAA to Not Rated Collateralized Mortgage Obligations Aaa AA+
Municipal Bonds Aaa to Aa2 AA- to AAA
Local Agency Investment Funds Not Rated Not Rated
San Mateo County Pool Not Rated Not Rated
California Asset Managem ent Program Not Rated AAA m
Supranationa l Aaa AAA
Money Market Funds Aaa AAA
Credit Quality Ratings
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
82 Note 2 – Cash and Investments (Continued)
D. Risk Disclosure (Continued)
Disclosure Relating to Concentration of Credit Risk
The investment policy of the City contains requirements that no more than 5 percent of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy. GASB Statement No. 40 requires disclosure by amount and issuer, of investments in any one issuer that represent 5% or more of total investments. At June 30, 2022, there we no investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represents 5% or more of the City's total investments.
Disclosures Relating to Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:
The California Government Code requires that a financ ial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposi ted by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2022, the City’s deposits (bank balances) were collateralized under California Law.
E. Investment in State Investment Pool
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments in LAIF at June 30, 2022 included a portion of pool funds invested in Structure Notes and Asset-Backed Securities:
Structured Notes are debt securities (other than asset-backed securities) whose cash -flow characteristics (coupon rate, redemption amount, or stated maturity) de pend upon one or more indices and/or that have embedded forwards or options.
Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables.
As of June 30, 2022, the City had $63,818,048 invested in LAIF, which had invested 1.10% of the pool investment funds in Structured Notes and Asset-Back Securities. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The City valued its investments in LAIF as of June 30, 2022, by multiplying its account balance with LAIF times a fair value factor determined by LAIF. This fair value factor was dete rmined by dividing all LAIF participants ’ total aggregate amortized cost by total aggregate fair value. The fair value of the City’s position in the pool is the same as the value of the pool shares. The credit quality rating of LAIF is unrated as of June 30, 2022.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
83 Note 2 – Cash and Investments (Continued)
F. Investment in California Asset Management Program (CAMP)
The City is a voluntary participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act for the purpose of exercising the common power of its Participants to inv est funds. The investments are limited to investments permitted by California Govern ment Code. The total amount invested by all public agencies in CAMP at June 30, 2022 was $7.3 billion. A boa rd of five trustees who are officials or employees of public agencies has oversight responsibility for CAMP. Th e value of the pool shares in CAMP, which may be withdrawn at any time, is determined on an amortized cost basis, which is different from the fair value of the City’s position in the pool. At June 30, 2022 the amortized cost approximated is the City’s cost.
G. Investment in San Mateo County Investment Pool
As of June 30, 2022, the City’s has an investment in the San Mateo County Investment Fund (County Pool) that is regulated by Code Section 16429 under the oversight of the Treasurer of the County. The City reports its investment in the County Pool at the fair value amount provided by the County. Included in the County Pool’s investment portfolio are US Treasury Notes, Obligations issued by agencies of the United States Government, LAIF, Corporate Notes, Commercial Paper, collatera lized mortgage obligations, mortgage -backed securities, other asset-backed securities, and floating rate securities issued by fede ral agencies, government-sponsored enterprises, and corporations. The fair value factor of 0.9688 was used to calculate the fair value of the investments in the County Pool. At June 30, 2022, the total amount invested by a ll public agencies in the County Pool was approximately $7.1 billion.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
84 Note 3 – Loans and Notes Receivable
At June 30, 2022, loans and notes receivable consisted of the following:
Allowance for Financial Unav ailable
Notes Receiv able Doubtful Accounts Statement Rev enue
Balance Balance Balance Balance
June 30, 2022 June 30, 2022 June 30, 2022 June 30, 2022 Governmental Activities:
First-time Homebuyer Loans 15,002,997 $ (10,665,583) $ 4,337,414 $ 355,684 $ Home Rehabilitation Loans 584,274 (584,274) - - 106 N. El Dorado 450,000 (450,000) - - Darcy Building 1,368,295 (1,368,295) - - Edgewater Isle Senior Apartments 5,020,948 (5,020,948) - - Belmont Building 800,000 (800,000) - - St. Matthew Hote l 2,764,950 (2,764,950) - - Rotary Hacienda & Rotary Floritas 5,013,830 (5,013,830) - - First Step for Families (Turning Point) 710,141 (710,141) - - 12 N. Idaho Street 100,000 (100,000) - - 200 S. Delaware Street 2,083,744 (2,083,744) - - 232 S. Humboldt Street 527,500 (527,500) - - 11 S. Delaware Street 1,230,136 (1,230,136) - - El Camino Family Housing 3,969,955 (3,969,955) - - MP San Mateo Transit Associates 8,355,040 (8,355,040) - - MP Delaware Pacific Associates LP 1,360,156 (1,360,156) - - MP Foster Squar e 371,657 (371,657) - - Gateway Commons Assessment Loan 393,059 (393,059) - - Cal Home Loans 263,318 (263,318) - - HIP Housing - 1100 Cypress Avenue 1,166,513 (1,166,513) - - Bay Meadows Affordable Association 2,000,000 (2,000,000) - - Child Care Facility Project Loans 550,300 (550,300) MP Downtown San Mateo Associates LP 5,500,000 (5,500,000) - - Total Governmental Activities 59,586,813$ (55,249,399)$ 4,337,414$ 355,684$ Business-Type Activities:
Town of Hillborough 27,046,216$ -$ 27,046,216$ Total Business-Type Activities 27,046,216$ -$ 27,046,216$
First-Time Homebuyer Loans
The City has had provided various loan programs for fi rst time homebuyers since 1989. In general, they provide secondary financing for low and moderate income buyers in the City of Sa n Mateo that have de ferred payments in order to allow the buyer to maximize their purchasing capacity. The City, acting as the successor agency of the former redevelopment agency, engages in prog rams designed to encourage construction or improvement in low-to-moderate income housing or other projects. Under these programs, lo ans are provided under favorable terms to homeowners or developers who agree to spend these funds in accordance with the City’s terms. The amounts for potential loan forgiveness represent the best es timate of the amount of loans receivable th at may not be collectible from borrowers.
It does not necessarily reflect subsequent actual payments, which could differ from expectations.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
85 Note 3 – Loans and Notes Receivable (Continued)
First-Time Homebuyer Loans (Continued)
The various loan terms are described below:
Gateway Commons Original Buyers – Second loans accrue interest that compounds annually. Interest accrues for 20 years. Starting in year 21, 10% of principal and accrued interest is forgiven until the loan is fully forgiven in year 30. Payment of principal and interest is paid upon sale of property. Units are sold at market value, and at that time, the City also receives as payment a share of the appr eciation based on the percentage of the City loan to original purchase price.
First Time Buyer Resale Program – Subsequent buye rs at Gateway Commons and other first time buyer complexes have different loan terms: Prior to 2007, second loans up to $60,000 accrue interest that is compounded annually. The resale price is restricted by applying the percentage increase in median income from the time of the purchase date to the sale date, to the initial sales price. The principal is repaid, but payment of the accrued interest is waived. The City has the first right to purchase to roll unit to a new eligible buyer at the restricted sales price.
If the City does not exercise the option to purchase, the unit can be sold at fa ir market value to a non-eligible buyer. In this case, the principal, interest, and appreciation share payment is paid to the City. After 2007, the second loans were restructured to eliminate the interest rate and appreciation share in the event the unit is sold to non-eligible buyer. Instead, “contingent interest” is paid to the City, which is determined by the difference between the restricted price and the actual sales price (market value).
Neighborhood Purchase Program – A second loan of up to 20% of the purchase price, or maximum of $60,000, accrues simple interest of 3% per year. This is an amor tized loan, where monthly payments are deferred for five years and then repaid over 25 years. This program is no longer active. There are no resale price restrictions.
Countywide Home Investment Partnership (CHIP) Program – This program provides a second loan of up to 20% of the purchase price, or maximum of $60,000. No interest and no payments are due for 10 years. Then payments are amortized at 4% for 25 years. Upon sale of the property or refinance, an appreciation share payment is due to the City.
Meadow Court Program – This program provides fi rst-time homebuyers down payment assistance for the purchase of units at Meadow Court. The loans are secure d by a second deed of trust with a term of 40 years and interest compounding annually. At year 31, provided that the property has not been sold or transferred, 10% of principal and interest will be forgiven each year until year 40, at which time the entire note is forgiven.
Home Rehabilitation Loans
The City has administered various housing rehabilitation loan programs using Community Development Block Grant funds, former Redevelopment Agency Housing Set-Aside funds, and City Housing funds. Under these Programs, individuals with incomes below a certain level are eligible to receive low interest, variable term loans, secured by deeds of trust for rehabilitation work on their homes. The maximum loan limit is $85,000 for standard properties and $100,000 for historic properties. The loan repayments may be amortized over the life of the loans, deferred, or a combination of both.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
86 Note 3 – Loans and Notes Receivable (Continued)
106 N. El Dorado
The City loaned $450,000 to Housing Association fo r the Needy and Dispossessed, Inc. (HAND), a nonprofit organization, to acquire and rehabilitate six apartment units at 106 N. Eldorado for low-income housing. The loan bears no interest and is due in 40 years. If the property has not been sold or transferred, beginning in 2027, ten percent of the principal will be forgiven annually until 2036, at which time the entire loan principal will be forgiven.
Darcy Building
On June 30, 2000, the City and the former Redevelopment Agency made four loans, the proceeds of which were used to conduct substantial rehabilitation and residential conversion of the Darcy Building for low income households. The loans carry interest at rates that vary from 0% to 5% with a term of 30 years. If the property remains in the developer’s hands, two of the loans allow partial forgiveness beginning is year 30, with full forgiveness in year 40.
Edgewater Isle Senior Apartments
On June 30, 2000, the City and the fo rmer Redevelopment Agency made a lo an to the Human Investment Project (“HIP”) for the purchase and minor rehabilitation of 92 low and moderate income senior rental units at Edgewater Isle.
Payments of principal and 3% interest are deferred until 2048 or the sale or transfer of the property, whichever comes first.
Belmont Building
On June 30, 2000, the City and the form er Redevelopment Agency made two loans, the proceeds of which were used to convert the Belmont building into si x one-bedroom units for very low income families. The loans bear no interest and are for a term of 40 years. If the property remains in the developer’s hands, beginning in year 2023, ten percent of the principal will be forgiven annually until year 2032, at which time the entire loan principal will have been forgiven.
St. Matthew Hotel
On June 30, 2000, the City and the former Redevelopment Ag ency made a loan to a developer, who used these funds to rehabilitate this hotel into a single room occupancy development for very low-income households. Interest is at 0% to 3%; principal and interest are due in 2036. Annual payments on the 3% loan are based on available cash flow, if any.
Rotary Hacienda
In 1988, the former Redevelopment Ag ency entered into a Development a nd Disposition Agreement (“DDA”) with Rotary Hacienda Inc. for the construction and operation of an 82-unit senior rental housing project. The Agreement includes a promissory note in the amount of $968,383, which bears simple interest at a rate of 8.75% compounded annually, and is due on December 30, 2028. In 2004, the loan was recast for $968,000 with 0% interest, a 40-year term and no prepayment penalty.
Rotary Floritas
The former Redevelopment Agency provided $3,000,000 for the construction of 50 senior rental units at Rotary Floritas on March 24, 2006. The interest rate is 3% for 55 years. Annual payments of principal and interest are based on the “available cash flow” from the borrower’s preceding fiscal year.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
87 Note 3 – Loans and Notes Receivable (Continued)
First Step for Families (Turning Point)
On June 26, 1988, the City provided zero interest deferre d loans of $69,262 in City CDBG funds and $305,000 in former Redevelopment Agency funds to Mid-Peninsula Coalition Belle Haven, Inc. (MPCBH), for the acquisition and development of an emergency housing shelter called Turning Point. In 2002, MPCBH redeveloped the site into a new facility consisting of both emergency beds and transitional housing units to assist 39 families. The original loans plus interest were recast effective on April 1, 2002, in the amounts of $95,320 and $419,566 respectively. The loans bear 3% interest; principal and accrued interest are due in 30 y ears. At the same time, the City provided an additional $500,000 ($143,500 CDBG a nd $356,500 HOME) for the new project. These loans bear 3% interest, and annual payments are based on “available cash flow”. As long as the facility is operated as emergency and transitional housing, 1/30 of the principal and accrued interest annually until it fully forgiven in 30 years.
12 N. Idaho Street
In 1994, HAND, Inc., a non-profit organization, received loans of $100,000 from the former Redevelopment Agency and $10,436 from the City to assist in the purchase of a six-unit apartment building located at 12 N. Idaho Street to be used as an affordable housing complex. The Agency loan carries an interest rate of 10% and is for a period of 40 years.
The City loan carries no interest and is for a period of 15 years. Principal payments on both loans are deferred until the earlier of sale or transfer of the property or the maturity date.
200 S. Delaware Street
On October 6, 1999, the City and the former Redevel opment Agency loaned $1,266,0 00 to HAND to acquire and rehabilitate sixteen units at 200 S. Delawa re Street for low-income housing. The loan bears an interest rate of 3%.
Principal and interest are due in 2049. HAND has an option of renewing the loan agreement for another fifty years.
232 S. Humboldt Street
On February 9, 2001, the City and the former Redevel opment Agency loaned $500,000 to Mateo Lodge, Inc., to rehabilitate nine units at 232 S. Humboldt Street for low- income housing. The loan bears an interest rate of 3%.
Principal and interest are due in 2021. Mateo Lodge, Inc. has an option of renewing the loan agreement for another twenty years.
11 S. Delaware Street
On June 17, 2002, the City loaned $660,000 to HAND to acquire and rehabilitate eleven units at 11 S. Delaware Street for affordable housing. The loan bears an interest rate of 3%. Principal and interest are due in 2032. However, HAND has an option of renewing the loan agreement for another thirty years.
El Camino Family Housing
In December 2002, El Camino Family Housing, L.P., r eceived a loan of $3,386,000 from the former Redevelopment Agency to develop the Santa Inez Apartments at an interest rate of 3% and for a period of 40 years. Annual payments of principal and interest in the amount of $140,688 ar e based on the “available cash flow” from the borrower’s preceding fiscal year. On January 19, 2018, the project was refinanced in order to allow one of the general partners to purchase the property as Santa Inez Apartments, LP. Upon closin g, a portion of the accrued interest was paid to the City. The promissory note was amended to revise the principal amount to $4,000,000 (original principal plus remaining accrued interest). The other original terms remained the same for another 25 years.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
88 Note 3 – Loans and Notes Receivable (Continued)
MP San Mateo Transit Associates
In November 2006, the City and the former Redevelopmen t Agency entered into a loan agreement with the Mid- Peninsula Housing Coalition. The agreement includes thre e promissory notes in the amounts of $1,230,000 (City funds), $1,200,000 (Agency funds), and $2,870,000 (Agency funds), which bear 3% interest. The payment of principal and interest is due on the maturity date or the sale or transfer of the property except for a sale or transfer to an affiliate nonprofit public benefit corporation or to a limited partnership in which an affiliate is the general partner. The maturity date shall occur fifty-five (55) years from the date of the receipt of the final certificate of occupancy. Beginning with borrower’s first fiscal year following the first year after receipt of the certific ate of occupancy, borrower shall make annual payments of principal and interest to the City only from “Available Cash Flow” which is defined from borrower’s preceding fiscal year. In October 2009, the City received Infill Infrastructure Grant funds from the State of California in the amount of $3,854,240, which was passed on to the Mid-Peninsula Housing Coalition in the form of a deferred zero interest loan which is due at maturity, which is 55 years from receipt of the final certificate of occupancy.
MP Delaware Pacific Associates L.P.
In April 2012, the City and the Successor Agency entered into a loan agreem ent with the Mid-Peninsula Delaware Pacific Associates, LP. The agreement includes two promissory notes in the amounts of $880,000 (HOME Grant funds) and $320,000 (Successor Agency Funds), which bear 3% interest. Beginning with borrower’s first fiscal year following the first year after receipt of the certificate of occupancy, borrower shall make annual payments of principal and interest to the City only from “Available Cash Flow”, which is defined from borrower’s preceding fiscal year. The payment of remaining principal and interest is due on the maturity date or the sale or transfer of th e property except for a sale or transfer to an affiliate nonprofit public benefit corporation or to a limited partnership in which an affiliate is the general partner. The maturity date shall occur fifty-five (55) years from the date of the receipt of the final certificate of occupancy.
MP Foster Square
In July 2014, the City entered into a loan agreement with Mid-Peninsula Foster Square Associates, LP. The agreement includes one promissory note in the amount of $420,000 (HOME Grant funds), which bears 3% interest. Beginning with borrower’s first fiscal year following the first year af ter receipt of the certificate of occupancy, borrower shall make annual payments of principal and interest to the City only from “Residua l Receipts”, which is defined from the project’s preceding fiscal year. The payment of remaining principal and interest is due on the maturity date or the sale or transfer of the property. The maturity date shall occur fi fty-five (55) years from the date of the receipt of the final certificate of occupancy.
Gateway Commons Assessment Loan
In February 2011, the City and the former Redevelopment Agency entered into a loan agreement with the Gateway Commons Owners Association to assist the owner with payi ng for a special assessment for needed repairs at the complex. This agreement provides eligible owners of the affordable units lo ans in the range of $10,000 to $30,000 as one-time lump sum special assessment to Gateway Commons. The original term of the loan is 15 years with an interest rate varying between 0% and 3%. The loan repayment are amortized, deferred, or a combination of both.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
89 Note 3 – Loans and Notes Receivable (Continued)
Cal Home Loans
In June 2009, the City entered into a program agreement with the California Department of Housing and Community Development to receive $750,000 in grant funds from the CalHOME program for its Owner Occupancy Rehabilitation Program. These funds are used for home repair loans up to $60,000 for low and moderate income households at 3% interest, with payments deferred for 30 years. Loan repayments will go into a revolving loan fund to be used for future housing loans for owner occupied units.
HIP Housing Development - 1110 Cypress Avenue
In May 2016, the City entered into two loan agreements with HIP Housing Development Corporation in the amounts of $590,000 and $510,000 to be used for the acquisitio n of 1110 Cypress Avenue in the City of San Mateo, a 16-unit apartment complex, for the purpose of providing affordable housing to low and moderate income households.
Commencing on the first day of the month following the first anniversary of the notes, the borrower shall make annual payments of principal and interest to the City only from “Residual Receipts”, the amount by which gross revenue exceeds annual operating expenses from the project’s preceding fiscal year. The payment of remaining principal and interest is due on the maturity date or the sale or transfer of the property. The loans bear simple interest of 3% per annum, and mature fifty-five (55) years from the date of the notes.
Bay Meadows Affordable Housing
In December 2018, the City lent $2,000,000 to Bay Mea dows Affordable Associates, LP for the construction of 68 family rental units. The interest rate is 3%. Annual payments are due beginn ing with the first fiscal year after construction completion based on the City’s share of “Residual Receipts” which is defined from the project’s preceding fiscal year. The payment of remaining principal and interest is due in full 55 years after construction completion.
Child Care Facility Project Loans
On October 15, 2018, the City Council approved Resolution 2018-107, establishing the Interim Child Care Fund Guidelines and authorized staff to release a Notice of F unding Available (NOFA). The NOFA was intended to invite a wide breadth of proposals that result in increasing the numbe r of childcare spaces in the City of San Mateo with the earliest possible completion. The NOFA was released on January 7, 2019 with a deadline date of February 21, 2019.
The City held an informational meeting for potential app licants on January 21, 2019 to review the NOFA document and requirements and respond to questions from attendees. As this was the first time in providing this NOFA, the loan documents were developed after the submittal of applications, as it was entirely unknown as to what types of projects would apply for funds and the potential structure of the f unding. Each project offered di ffering levels of available leveraged funding, from zero to over 50% of the total development costs.
MP Downtown San Mateo Associates, L.P.
In December 2021, the City entered into three loan agreements with MP Downtown San Mateo Associates, L.P., to be used for the development of Kiku Crossing, a new 225 unit affordable housing project. Th e agreements include three promissory notes in the amount of $650,000 (HOME Grant funds), $2,000,000 (Commercial Linkage Fee funds), and $2,850,000 (Low Mod Income Housing Asset Funds), which b ear 3% interest. Beginning with borrower’s first fiscal year following the first year after receipt of the certificat e of occupancy, borrower shall make annual payments of principal and interest to the City only from “Residual R eceipts”, which is defined from the project’s preceding fiscal year. The payment of remaining principal and interest is due on the maturity date or the sale or transfer of the property.
The maturity date shall occur fifty-seven (57) years from the date of recordation of the leasehold deed of trust.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
90 Note 3 – Loans and Notes Receivable (Continued)
Town of Hillsborough
In June 2022, the City entered into a capital cost repayment agreement with the Town of Hillsborough (Town) for the payment of the Town’s percentage of project costs for clean water projects. The City begun construction on a comprehensive suite of capital improvements referred to as the “Clean Water Program,” including capital improvements to the sewage treatment plant. The costs of the sewage treatment plant are allocated based on predetermined factors. The capital cost repayment agreement carries and in terest rate of 1.91% with a term of 30 years. Payments will be in addition to the periodic charges for wastewater treatment services. As of June 30 2022, the balance of the capital cost repayment agreement was $27,046,216.
Note 4 – Lease Receivable
The portion of the City’s property is leased to others. Su ch property includes special purpose facilities, office and commercial space, and land. Lease receivable consists of agreements with other for the right-to-use of the underlying assets at various locations owned by the City. The terms of the arrangements range from 2 to 14 years. The calculated interest rates used vary depending on the length of the lease. For the fiscal year ended June 30, 2022, the City recognized $726,708 in lease revenue and $118,349 in interest revenue.
A summary of changes in lease receivable for the fiscal year ended June 30, 2022 is as follows:
Balance Balance Due within Due in More
July 1, 2021 Additions Deletions June 30, 2022 One Year Than One Year Leases receivable 4,121,012$ -$ (433,649)$ 3,687,363$ 722,867$ 2,964,496$ Classification
As of June 30, 2022, the required payments for these leases, including interest, are:
Year Ending
June 30, Principal Interest Total
2023 722,867 $ 100,893 $ 823,760 $
2024 791,688 78,285 869,973
2025 618,445 54,740 673,185
2026 270,391 42,448 312,839
2027 131,171 36,643 167,814
2028-2032 737,989 121,469 859,458 2033-2035 414,812 14,821 429,633 Total 3,687,363$ 449,299 $ 4,136,662 $
As of June 30, 2022, the amounts reported as deferred inflows of resources will be recognized as lease revenue as follows:
Year Ending Amortization
June 30, Schedule
2023 726,708 $
2024 726,708
2025 556,826
2026 277,999
2027 142,129
2028-2032 664,800
2033-2035 299,134
Total 3,394,304$
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
91 Note 5 – Interfund Receivables, Payables, and Transfers
A. Due To / From Other Funds
Amounts due to and due from other funds at June 30, 2022, were as follows:
Receivable Fund Payable Fund Amount Purpose
General Fund Community Development Block Grant Fund 283,858$ Overdrawn Cash General Fund 2% Hotel Tax Capital Projects Fund 1,588,077 Overdrawn Cash Total 1,871,935$
B. Transfers
Interfund transfers during the year ended June 30, 2022, consisted of the following:
Transfers In Transfers Out Amount Purpose
General Projects Capital Projects Fund General Fund 1,281,637$ Capital projects General Projects Capital Projects Fund Construction Services Special Revenue Fund 2,387,568 Capital projects General Projects Capital Projects Fund Community Development Block Grant Special Revenue Fund 1,028,098 Capital projects General Projects Capital Projects Fund Gas Tax Special Revenue Fund 18,165 Capital projects General Projects Capital Projects Fund Road M aintenance and Rehabilitation Fund 1,892,481 Capital projects General Projects Capital Projects Fund Solid Waste Special Revenue Fund 16,911 Capital projects General Projects Capital Projects Fund Parks and Recreation Special Revenue Fund 224,513 Capital projects General Projects Capital Projects Fund Traffic Impact Fee Special Revenue Fund 590,325 Capital projects General Projects Capital Projects Fund 2% Hotel Tax Capital Projects Fund 1,234,490 Capital projects General Projects Capital Projects Fund Vehicle and Equipment Replacement 828,987 Capital projects Sub total 9,503,175
General Fund Parking Special Revenue Fund 2,363,915 Capital projects Vehicle and Equipment Replacement Internal Service Fund General Fund 410,000 Capital projects General Obligation Bond Debt Service Fund General Fund 2,663,647 Debt service 2% Hotel Tax Capital Projects Fund General Fund 388,478 Debt service Total 5,826,040$
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
92 Note 6 – Capital Assets
A. Governmental Activities
The summary of changes in governmental activities capital assets for the year ended June 30, 2022, is as follows:
Balance Balance
July 1, 2021 Additions Deletions Transfers June 30, 2022 Capital assets, not being depreciated
Land 52,064,002$ -$ -$ - 52,064,002$ Construction in progress 57,727,270 31,832,507 (2,504,882) (10,303,265) 76,751,630 Total capital assets, not being depreciated 109,791,272 31,832,507 (2,504,882) (10,303,265) 128,815,632 Capital assets, being depreciated
Building and improvements 192,438,613 - - 334,045 192,772,658 Machinery and equipment 33,585,188 628,602 (263,934) 55,370 34,005,226 Infrastructure 509,254,155 - - 9,913,850 519,168,005 Total capital assets, being depreciated 735,277,956 628,602 (263,934) 10,303,265 745,945,889 Accumulated depreciation:
Building and improvements (70,207,685) (5,294,175) - - (75,501,860) Machinery and equipment (24,338,889) (1,943,110) 249,277 - (26,032,722) Infrastructure (295,783,003) (12,841,745) - - (308,624,748) Total accumulated depreciation (390,329,577) (20,079,030) 249,277 - (410,159,330) Total capital assets, being depreciated, net 344,948,379 (19,450,428) (14,657) 10,303,265 335,786,559 Leased assets, being amortized
Machinery and equipment 2,169,194 - - - 2,169,194 Total leased asset, being amortized 2,169,194 - - - 2,169,194 Less: accumulated amortization
Machinery and equipment - (587,856) - - (587,856) Total accumulated amortization - (587,856) - - (587,856) Total leased asset, being amortized, net 2,169,194 (587,856) - - 1,581,338 Total capital assets, net 456,908,845$ 11,794,223$ (2,519,539)$ -$ 466,183,529$
Depreciation and amortization expense we re charged to the functions/programs of the governmental activities as follows:
General government 884,418$
Community development 266,049
Public safety 2,772,103
Public works 12,328,939
Parks and recreation 1,440,183
Library 1,700,712
Internal service funds 1,274,482
Total depreciation/amortization expenses 20,666,886$
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
93 Note 6 – Capital Assets (Continued)
B. Business-Type Activities
The summary of changes in business-type activities capital assets for the year ended June 30, 2022, is as follows:
Balance Balance
July 1, 2021 Additions Deletions Transfers June 30, 2022 Capital assets, not being depreciated
Land 4,052,298$ -$ -$ -$ 4,052,298$ Construction in progress 231,393,930 153,872,335 - (7,144,093) 378,122,172 Total capital assets, not being depreciated 235,446,228 153,872,335 - (7,144,093) 382,174,470 Capital assets, being depreciated
Sewer treatment plant
and transmission lines 272,061,661 - - 7,144,093 279,205,754 Machinery and equipment 2,245,045 23,584 (226,639) - 2,041,990 Total capital assets, being depreciated 274,306,706 23,584 (226,639) 7,144,093 281,247,744 Accumulated depreciation:
Sewer treatment plant
and transmission lines (104,866,864) (5,468,767) - - (110,335,631) Machinery and equipment (1,198,866) (127,524) 226,639 - (1,099,751) Total accumulated depreciation (106,065,730) (5,596,291) 226,639 - (111,435,382) Total capital assets, being depreciated, net 168,240,976 (5,572,707) - 7,144,093 169,812,362 Total capital assets, net 403,687,204$ 148,299,628$ -$ -$ 551,986,832$
Depreciation expense was charged to the Sewer Fund in the amount of $5,596,291.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
94 Note 7 – Long-Term Liabilities
A. Summary
Annual Original
Final Interest Principal Issue Outstanding at
Maturity Rate Installments Amounts June 30, 2022
Governmental Activities
Direct Borrowing:
CEC Streetlight Loan 2028 1.00% $90,950 - $130,600 3,000,000 $ 2,013,305 $ PG&E - Energy Efficiency Retrofit Loans 2024 0.00% $340,322 3,356,274 2,866,265 Leases Payable 2024 3.00% $442,058 - $611,348 2,169,194 1,628,519 Advance Payable 2024 3.00% $442,058 - $611,348 45,765,000 43,845,000 Public Borrowing:
General Obligation Bonds, Series 2013
(Library Improvement Project) 2031 3.00% - 4.00% $1,395,000 - $2,070,000 27,295,000 16,140,000 Lease Revenue Bonds, Series 2007A
(Public Safety Project) 2039 Variable rate $415,000 - $1,195,000 17,240,000 13,615,000 Revenue Refunding Bonds, Series 2018A
(Golf Course Project) 2030 2.25% - 5.00% $450,000 - $665,000 6,050,000 4,695,000 Total Governmental Activities 104,875,468$ 84,803,089 $ Business-Type Activi ties
Sewer Revenue Bonds, Series 2011 2042 4.15% - 5.25% $665,000 - $1,340,000 31,990,000 $ - $ Sewer Revenue Bonds, Series 2014 2045 3.00% - 5.00% $670,000 - $2,665,000 32,255,000 28,090,000 Wastewater Revenue Bonds, Series 2019 2050 4.00% - 5.00% $2,520,000 - $16,020,000 236,180,000 236,180,000 Wastewater Revenue Notes, Series 2021B 2025 5.00% $271,565,000 271,565,000 271,565,000 Wastewater Revenue Refunding Bonds, Series 2021A 2042 2.00% - 5.00% $565,000 - $935,000 14,265,000 14,265,000 Total Business-Type Activities 586,255,000$ 550,100,000 $ Fidiciary Funds
Tax Allocation Refunding Bonds, Series 2015A 2033 4.00% - 5.00% $530,000 - $4,150,000 31,210,000 $ 31,210,000 $ Tax Allocation Refunding Bonds, Series 2015B 2023 3.60% - 3.90% $695,000 - $1,185,000 7,385,000 695,000 Tax Allocation Refunding Bonds, Series 2017A 2026 2.00% - 5.00% $2,425,000 - $3,100,000 21,440,000 11,530,000 Total Successor Agency 60,035,000$ 43,435,000 $
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
95 Note 7 – Long-Term Liabilities (Continued)
B. Governmental Activities
A summary of changes in the long-term liabilities of the governmental activities for the year ended June 30, 2022, is as follows:
Balance Debt Debt Balance Due within Due in More
July 1, 2021 Issued Retired June 30, 2022 One Year Than One Yea r Gove rnme ntal Acti vi ti e s:
Bonds payable:
General Obligation Refunding Bonds, Series 2013 17,605,000$ -$ (1,465,000)$ 16,140,000$ 1,520,000$ 14,620,000$ plus: unamortized bond premium 1,427,077 - (157,109) 1,269,968 - 1,269,968 Lease Revenue Bonds, Series 2007A 14,060,000 - (445,000) 13,615,000 480,000 13,135,000 Revenue Refunding Bonds, Series 2018A 5,170,000 - (475,000) 4,695,000 495,000 4,200,000 plus: unamortized bond premium 380,616 - (47,087) 333,529 - 333,529 Total bonds payable 38,642,693 - (2,589,196) 36,053,497 2,495,000 33,558,497 Direct borrowings:
Advance payable to other government
Advance payable to other government 44,990,000 - (1,145,000) 43,845,000 1,185,000 42,660,000 plus: unamortized advance premium 7,778,290 - (378,495) 7,399,795 - 7,399,795 Total advance payable to other government 52,768,290 - (1,523,495) 51,244,795 1,185,000 50,059,795 Loans payable:
CEC Streetlight Loan 2,253,867 - (240,562) 2,013,305 242,973 1,770,332 PG&E - Energy Efficiency Retrofit Loans 3,246,752 - (380,487) 2,866,265 351,219 2,515,046 Total loans payable 5,500,619 - (621,049) 4,879,570 594,192 4,285,378 Leases payable:
Leases payable 2,169,194 - (540,675) 1,628,519 575,113 1,053,406 Leases payable 2,169,194 - (540,675) 1,628,519 575,113 1,053,406 Total 99,080,796$ -$ (5,274,415)$ 93,806,381$ 4,849,305$ 88,957,076$ Classification
General Obligation Refunding Bonds, Series 2013
On March 21, 2013, the City of San Mateo issued $ 27,295,000 principal amount General Obligation Refunding Bonds (Library Improvement Project), Series 2013 (2013 Refunding Bonds). The proceeds of the 2013 Refunding Bonds were used to refund the 2000 and 2004A Ge neral Obligation Bonds. Th e 2000 and 2004A General Obligation Bonds were used to finance the construction, acquisition and improvement of a new main library and the improvement of the City’s branch libraries. The General Obligation Refunding Bonds mature annually each August 1 through 2030, with installments ranging from $1,395,000 to $2,070,000. The interest on the Bonds is payable semi-annually on each February 1 and August 1, with coupons ranging from 3.0% to 4.0%.
The 2013 Refunding Bonds are secured by voter-approved, ad valorem property taxes. Annual principal and interest payments on the bonds are expected to require 100% percent of net revenues. Total principal and interest remaining to be paid on the 2013 Refunding Bonds is $18,656,875. For the current year, principal and interest paid on the 2013 Refunding Bonds was $2,045,950 and ad valorem property tax net revenues were $2,286,880.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
96 Note 7 – Long-Term Liabilities (Continued)
B. Governmental Activities (Continued)
General Obligation Refunding Bonds, Series 2013 (Continued)
The annual debt service requirements on the 2013 General Obligation Refunding Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2023 1,520,000$ 521,250 $ 2,041,250 $
2024 1,590,000 459,050 2,049,050
2025 1,660,000 402,350 2,062,350
2026 1,720,000 351,650 2,071,650
2027 1,775,000 290,350 2,065,350
2028-2031 7,875,000 492,225 8,367,225
Total 16,140,000$ 2,516,875 $ 18,656,875 $
Lease Revenue Bonds, Series 2007A
On April 19, 2007, the City of San Mateo Joint Powers Financing Authority issued $17,400,000 principal amount Variable Rate Demand Lease Revenue Bonds (Public Safety Project), Series 2007A (2007A Variable Rate Bonds).
The proceeds of the 2007A Variable Rate Bonds contributed to the construction of a new police administration facility with a total project cost of $58,500,000. Other sources of funding for this project included transient occupancy tax (hotel tax), redevelopment agency funds, sale of the existing police facility site, and General Fund contributions. The 2007A Variable Rate Bonds mature annually each April 1 through 2039 with installments ranging from $415,000 to $1,195,000. The interest on the Bonds is payable monthly from the lease revenue to the Authority from the City. The interest rate on the Bonds is based on the weekly variable rate set by the remarketing agent, which can be no greater than 12% per annum. Week ly rates during the fiscal year varied from 0.07% to
5.85%, for an average weekly interest rate for the fiscal year of 1.03%. In addition, the letter of credit is with Wells Fargo and has an annual fee of 0.45%. The City also pa ys letter of credit (LOC) bank fees and remarketing agent fees on a quarterly basis. The remarketing agent is Stifel, Nicolaus & Co. and the annual remarketing fee has been
0.09% since 2007.
The City has elected to use the 2% tr ansient occupancy tax (hotel tax) authorized by Measure C, backed by a General Fund lease, to pay the annual principal and interest payments on the bonds. For the current year, principal, interest and other debt expenses pa id were $566,881, while 2% transien t occupancy tax revenues (TOT) were $218,851, resulting in a net loss of $348,029, not including transfers out to the CIP Fund. . Prior to COVID-19, the fund typically generated annual debt se rvice coverage of 2:1, and the accumu lated surplus of hotel tax revenues not needed for debt service serve as a built-in hedge against interest rate volatility. While the variable interest rate has reduced to historic lows as a result of the pandemic, TOT revenues have followed suit. Business travel is the primary component of the City’s TOT base, and is expected to be one of the last economic sectors to recover, if at all, from the pandemic. As such, the General Fund is expected to backfill the 2% TOT Fund for the long term, while both the interest rate and TOT revenues recover from the immediate and severe financial impact of the pandemic.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
97 Note 7 – Long-Term Liabilities (Continued)
B. Governmental Activities (Continued)
Lease Revenue Bonds, Series 2007A (Continued)
The annual principal requirements on these bonds are as follows:
Year Ending
June 30, Principal Interest Total
2023 480,000$ - $ 480,000$
2024 510,000 - 510,000
2025 545,000 - 545,000
2026 580,000 - 580,000
2027 615,000 - 615,000
2028-2032 3,690,000 - 3,690,000 2033-2037 4,865,000 - 4,865,000 2038-2039 2,330,000 - 2,330,000 Total 13,615,000$ - $ 13,615,000$
Revenue Refunding Bonds, Series 2018A
On May 1, 2018, the City of San Mateo Joint Powers Financing Authority issued $6,050,000 in Revenue Refunding Bonds Series 2018A (2018A Revenue Bonds) to refinance the City of San Mateo Joint Powers Financing Authority Revenue Bonds, Refunding Series 2007B, wh ich were issued to refinance the City of San Mateo Joint Powers Financing Authority Revenue Bonds, Series 1999 (issued to finance the construction and renovation of an 18-hole municipal golf course and appurtenant facilities). The refunding resulted in $516,000 gross debt service (principal and interest) savings over 20 years, and an economic gain of $420,000. The refunding resulted in an accounting deferred loss on refunding of $163,957. The 2018A Revenue Bonds mature annually each August 1 beginning in 2019 through 2030, with installments ranging from $450,0 00 to $665,000. The interest on the Bonds is payable semi-annually on each February 1 and August 1, and coupons range from 2.25% to 5% annually. The 2018A Revenue Bonds are payable solely from golf course facility lease revenue to the Authority. The 2018A Revenue Bonds are subject to early redemption provisions.
Prior to fiscal year 2018-19, the City funded the lease paym ents to the Authority from golf charges for services from the enterprise Golf Fund. Beginning fiscal year 2018-19, in recognition of the annual subsidy of golf operations from the City’s General Fund, the City moved its enterprise Golf Fund to the General Fund as a sub- fund. As such, lease payments to the Authority are f unded by the City’s General Fund since 2018-19. The total principal and interest remaining to be paid on the Bonds is $5,355,488. Principal and interest paid for the current year and golf course facility lease gross revenues were $670,475 and $3,537,203, respectively.
The annual debt service requirements on these bonds are as follows:
Year Ending
June 30, Principal Interest Total
2023 495,000$ 171,225 $ 666,225 $
2024 520,000 145,850 665,850
2025 550,000 119,100 669,100
2026 575,000 90,975 665,975
2027 605,000 61,475 666,475
2028-2030 1,950,000 71,863 2,021,863
Total 4,695,000$ 660,488 $ 5,355,488 $
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
98 Note 7 – Long-Term Liabilities (Continued)
B. Governmental Activities (Continued)
Advance Payable to Other Government
On February 27, 2020, the San Mateo-Foster City Joint Powers Financing Authority the 2020 Series A and B Lease Revenue Bonds utilizing a Lease-leaseback agreement between the San Mateo-Foster City Joint Powers Financing Authority and City of San Mateo. The lease agreement required the San Mateo-Foster City Joint Powers Financing Authority to pay upfront for the right to use of the buildings and leasehold improveme nts, owned by the City of San Mateo, over a period of time corresponding to the San Mateo-Foster City Joint Powers Financing Authority’s debt service requirement. The leaseback agreement required the City of San Mateo to make rental payments in amounts corresponding to the San Mateo-Foster City Joint Powers Financing Authority’s debt services requirements and related costs. Pe r the implementation of GASB 87 Leases, the components of lease-leaseback agreements are to be netted in the financial statemen ts, therefore the Authority will only record an advance receivable from other government for the amount to be paid back by the City of San Mateo for the upfront lease payment which reflects the present value of remaining future lease payments due to the San Mateo-Foster City Joint Powers Financing Authority. As of June 30, 2022, the City’s advance payable to other government balance was $43,845,000 with a remaining premium on advance bala nce of $7,399,795. Total principal and interest remaining to be paid on the advance from other government is $71,492,249.
The annual debt service requirements on the advance payable to other government are as follows:
Year Ending
June 30, Principal Interest Total
2023 1,185,000$ 1,833,429 $ 3,018,429 $
2024 1,230,000 1,784,904 3,014,904
2025 1,285,000 1,734,124 3,019,124
2026 1,340,000 1,680,638 3,020,638
2027 1,395,000 1,624,313 3,019,313
2028-2032 6,965,000 7,343,391 14,308,391
2033-2037 7,400,000 5,755,250 13,155,250
2038-2042 9,255,000 3,897,600 13,152,600
2043-2047 11,260,000 1,892,400 13,152,400
2048-2049 2,530,000 101,200 2,631,200
Total 43,845,000$ 27,647,249 $ 71,492,249 $
CEC Streetlight Loan
On January 14, 2015, the City entered into a loan agreement with the State of California Energy Conservation and Development Commission in the amount of $3,000,000 fo r the City-wide LED and High Voltage Conversion project. Loan funds are to be disbursed to the City on a reimbursement basis based on invoices submitted by the City for actual expenditures incurred for the project.
Semiannual payments due to the Energy Commission under this agreement are expected to be made from savings in energy costs or other available funds. The Loan accru es interest at a rate of 1.00% per annum on the unpaid principal computed from the date of each disbursement to the City.
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
99 Note 7 – Long-Term Liabilities (Continued)
B. Governmental Activities (Continued)
CEC Streetlight Loan (Continued)
The annual debt service requirements on the loan are as follows:
Year Ending
June 30, Principal Interest Total
2023 242,973$ 19,529 $ 262,502 $
2024 245,364 17,138 262,502
2025 247,869 14,633 262,502
2026 250,354 12,148 262,502
2027 252,863 9,639 262,502
2028-2030 773,882 13,622 787,504
Total 2,013,305$ 86,709$ 2,100,014$
PG&E – Energy Efficiency Retrofit Loans
On February 24, 2020, the City modified the loan agreement with Pacific Gas and Electric Company in the amount of $3,356,274 for the Sustainable Solutions Turnkey project. Loan funds are to be disbursed to the City on a reimbursement basis based on invoices submitted by the City for actual expenditures incurred for the project.
Monthly payments due under this agreement are expected to be made from savings in energy costs or other available funds. The loan does not accrue interest.
The annual debt service requirements on the loan are as follows:
Year Ending
June 30, Principal Interest Total
2023 351,219$ - $ 351,219$
2024 351,219 - 351,219
2025 351,219 - 351,219
2026 351,219 - 351,219
2027 351,219 - 351,219
2028-2031 1,110,170 - 1,110,170 Total 2,866,265$ -$ 2,866,265$
Lease Payable
The City has entered into leases for building space and equipment use. The terms of the agreements range from 2 to 3 years. The calculated interest rates used was 3.00%.
Principal and interest payments to maturity are as follows:
Year Ending
June 30, Principal Interest Total
2023 575,113$ 41,041 $ 616,154 $
2024 611,348 23,293 634,641
2025 442,058 5,449 447,507
Total 1,628,519$ 69,783 $ 1,698,302 $
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
100
Note 7 – Long-Term Liabilities (Continued)
C. Business-Type Activities
A summary of changes in the long-term liabilities of the business-type activities for the year ended June 30, 2022, is as follows:
Balance Debt Deb t Balance Due within Due in More
July 1, 2021 Issue d Retired June 30, 2022 One Year Than One Yea r Business-Type Activities:
Public borrowings:
Bonds payable:
Sewer Revenue Bonds, Series 2011 19,700,000 $ -$ (19,700,000)$ -$ -$ -$ plus: unamortized bond premium 634,007 - (634,007) - - - Sewer Revenue Bonds, Series 2014 29,210,000 - (1,120,000) 28,090,000 1,175,000 26,915,000 plus: unamortized bond premium 1,740,814 - (75,688) 1,665,126 - 1,665,126 Wastewater Revenue Bonds, Series 2019 236,180,000 - - 236,180,000 - 236,180,000 plus: unamortized bond premium 43,831,420 - (1,618,396) 42,213,024 - 42,213,024 Wastewater Revenue Notes, Series 2021B - 271,565,000 - 271,565,000 - 271,565,000 plus: unamortized bond premium - 50,540,962 (12,635,242) 37,905,720 - 37,905,720 Wastewater Revenue Refunding Bonds, Series 2021A - 14,265,000 - 14,265,000 565,000 13,700,000 plus: unamortized bond premium - 3,670,571 (174,790) 3,495,781 - 3,495,781 Total bonds payable 331,296,241 340,041,533 (35,958,123) 635,379,651 1,740,000 633,639,651 Total 331,296,241$ 340,041,533 $ (35,958,123) $ 635,379,651 $ 1,740,000 $ 633,639,651 $ Classification
Sewer Revenue Bonds, Series 2011A
On May 11, 2011, the City of San Mateo issued Se wer Revenue Bonds, Series 2011A (Series 2011A Bonds), totaling $31,990,000. The purpose was to refund the C ity’s outstanding (a) Sewe r Revenue Refunding Bonds, Series 1996A, (b) Sewer Revenue Bonds, Series 1998A, and (c) Sewer Revenue Refunding Bonds, Series 1998B, finance various improvements to the City’s municipal sewer enterprise, and make a deposit into reserve fund for the Series 2011A Bonds and the 2003 Bonds.
The Series 2011A Bonds mature annually each August 1 th rough 2041, with installments ranging from $665,000 to $1,340,000. The interest on the Series 2011A Bonds is payable semi-annually on Febr uary 1 and August 1 of each year, and the interest rates range from 4.15% to 5.25%. The Series 2011A Bonds are payable solely from net revenues received by the City from the operation of the sewer enterprise and certain funds and accounts held under the Indenture. The Series 2011A Sewer Revenue Bonds we re refunded with the issuance of the 2021 Series A Wastewater Revenue Refunding Bonds during fiscal year ended June 30, 2022.
Sewer Revenue Bonds, Series 2014A
On July 2, 2014, the City of San Mateo issued Sewer Revenue Bonds, Series 2014A (Series 2014A Bonds), totaling $32,255,000. The purpose was to refund the City’s outstanding Sewer Revenue Bonds, Series 2003, and finance various improvements to the City’s municipal sewer enterprise.
The Series 2014A Bonds mature annually each August 1 through 2044, with installments ranging from $670,000 to $2,665,000. The interest on the Series 2014A Bonds is payable semi-annually on Fe bruary 1 and August 1 of each year, with coupons ranging from 3.00% to 5.00%. The Series 2014A Bonds are payable solely from net revenues received by the City from the operation of the sewer enterprise and certain funds and accounts held under the Indenture. Total principal and interest remaining to be paid on the Bonds is $41,847,190.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
101
Note 7 – Long-Term Liabilities (Continued)
C. Business-Type Activities (Continued)
Sewer Revenue Bonds, Series 2014A (Continued)
The annual debt service requirements on the Series 2014A Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2023 1,175,000$ 1,116,440$ 2,291,440$
2024 1,235,000 1,056,190 2,291,190
2025 1,300,000 992,815 2,292,815
2026 1,365,000 926,190 2,291,190
2027 1,435,000 856,190 2,291,190
2028-2032 5,160,000 3,499,653 8,659,653
2033-2037 3,965,000 2,822,287 6,787,287
2038-2042 4,770,000 2,018,125 6,788,125
2043-2045 7,685,000 469,300 8,154,300
Total 28,090,000$ 13,757,190$ 41,847,190$
Wastewater Revenue Bonds, Series 2019
In June of 2019, the City of San Mateo and the Estero Municipal Improvement District/City of Foster City jointly issued the 2019 Series Wastewater Revenue Bonds in the amount of $270,000,000 (2019 Wastewater Bonds) through a joint powers financing authority, San Mateo-Foster City Public Financing Authority (Authority). Of the total issuance amount, the City is responsible for $236,180,000. Interest payments are payable semi-annually on February 1 and August 1, commencing February 1, 2020. The bonds mature through August 1, 2049, and bear interest at the rate of 4.00% - 5.00%. The issuance resulted in a bond premium of $53,780,407, of which the City’s share was $47,201,120.
Interest payments and revenue bond retirements are serviced by the revenues generated by the City of San Mateo Sewer Enterprise Fund and the Foster City/Estero Municipal Improvement District Wastewater Enterprise Fund pursuant to a reimbursement agreement. The City’s total principal and interest remaining to be paid on the bonds is $435,045,975.
The City’s annual debt service requirements on the 2019 Wastewater Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2023 - $ 10,947,250$ 10,947,250 $ 2024 - 10,947,250 10,947,250 2025 - 10,947,250 10,947,250 2026 2,520,000 10,884,250 13,404,250
2027 3,650,000 10,730,000 14,380,000
2028-2032 28,990,000 49,874,500 78,864,500
2033-2037 40,945,000 41,150,925 82,095,925
2038-2042 51,265,000 30,842,475 82,107,475
2043-2047 63,055,000 19,043,200 82,098,200
2048-2050 45,755,000 3,507,875 49,262,875
Total 236,180,000$ 198,874,975$ 435,054,975$
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
102
Note 7 – Long-Term Liabilities (Continued)
C. Business-Type Activities (Continued)
Wastewater Revenue Notes, Series 2021B
On July 1, 2021, the Authority issued the 2021 Series Wastewater Revenue Note in the amount of $62,760,000 and $271,565,000 respectively. The 2021B Notes were issued to costs of the Wastewater Treatment Plant (WWTP) capital improvements. Of the total issuance amount, the City is responsible for $271,565. Interest payments are payable semi- annually on February 1 and August 1, comm encing February 1, 2021. The bonds mature through August 1, 2025, and bear interest at the rate of 5. 00%. The issuance resulted in a bond premium of $62,249,468 , of which the City’s share was $50,540,962.
The annual debt service requirements for the Series 2021B Notes outstanding at June 30, 2022 were as follows:
Year Ending
June 30, Principal Interest Total
2023 -$ 13,578,250$ 13,578,250$
2024 - 13,578,250 13,578,250 2025 - 13,578,250 13,578,250 2026 271,565,000 6,789,125 278,354,125
Total 271,565,000$ 47,523,875$ 319,088,875$
Wastewater Revenue Refunding Bonds, Series 2021A
On July 1, 2021, the Authority issued the 2021 Series A Wastewater Revenue Refunding Bonds in the amount of $14,265,000. The Bonds were issued to refund the City of San Mateo’s 2011 Series A Bonds, which provided an arbitrage yield of 0.465% and $7.4 million in PV de bt service savings. The aggregate difference between the remaining debt service requirements of the 2011A Bonds and the Revenue Refunding Bonds at the time of refunding was $634,014.
The Series 2021A Bonds mature annually each August 1 th rough 2041, with installments ranging from $665,000 to $1,340,000. Interest payments are payable semi- annually on February 1 and August 1, commencing November 1, 2020. The bonds mature through August 1, 2042, and bear interest at the rate of 1.55-5.00%. The issuance resulted in a bond premium of $3,670,571. The Series 2021A Bonds are payable solely from net revenues received by the City from the operation of the sewer en terprise and certain funds and accounts held under the Indenture. Total principal and interest remaining to be paid on the Bonds is $20,771,875.
The annual debt service requirements for the Series 2021A Bonds outstanding at June 30, 2022 were as follows:
Year Ending
June 30, Principal Interest Total
2023 565,000$ 630,700 $ 1,195,700 $
2024 630,000 609,300 1,239,300
2025 660,000 577,050 1,237,050
2026 690,000 543,300 1,233,300
2027 730,000 507,800 1,237,800
2028-2032 3,255,000 2,009,875 5,264,875
2033-2037 3,430,000 1,226,025 4,656,025
2038-2042 4,305,000 402,825 4,707,825
Total 14,265,000$ 6,506,875$ 20,771,875$
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
103
Note 7 – Long-Term Liabilities (Continued)
C. Business-Type Activities (Continued)
Treatment of Revenue Bonds in Aggregate
The City has covenanted in the indenture, to the maximum extent permitted by law, to set rates and charges for the service and facilities of the Sewer Enterprise sufficient to provide net revenues each fiscal year equal to 120% of the aggregate annual amount of principal and interest due on all parity obligations for such fiscal year and sufficient to provide net revenues each fiscal year equal to at least 100% of the aggregate amount of principal and interest due on all parity obligations and subordinate obligations for such fiscal year.
There are four revenue bonds secured by revenues received from the operation of the Sewer Enterprise: Series 2014A Sewer bonds, 2019 Wastewater bonds, 2021 Wast ewater notes, and 2021 Wastewater bonds. Annual principal and interest payments on the three bonds are expected to require 20% of net revenues. For the current year, principal and interest paid on the Series 2014A Sewer bonds was $2,293,440, on the 2019 Wastewater bonds was $10,947,250, on the 2021 Wastewater notes was $7,920,646, and on the 2021 Wastewater bonds was $371,204. Sewer services net revenues were $41,658,337.
D. Fiduciary Funds Private Purpose Trust Funds - Successor Agency to the Redevelopment Agency of the City of San Mateo
A summary of changes in the long-term liabilities of the fi duciary fund financial statements for the year ended June 30, 2022, is as follows:
Balance Debt Debt Balance Due within Due in More
July 1, 2021 Issue d Retired June 30, 2022 One Year Than One Year Fiduciary Activities:
Public borrowings:
Bonds payable:
Tax Allocation Refunding Bonds, Series 2015A 31,210,000$ -$ -$ 31,210,000$ 530,000$ 30,680,000$ plus: unamortized bond premium 2,005,747 - (182,340) 1,823,407 - 1,823,407 Tax Allocation Refunding Bonds, Series 2015B 1,880,000 - (1,185,000) 695,000 695,000 - Tax Allocation Refunding Bonds, Series 2017A 14,075,000 - (2,545,000) 11,530,000 2,675,000 8,855,000 plus: unamortized bond premium 1,704,698 - (417,478) 1,287,220 - 1,287,220 Total bonds payable 50,875,445 - (4,329,818) 46,545,627 3,900,000 42,645,627 Total 50,875,445$ -$ (4,329,818)$ 46,545,627$ 3,900,000$ 42,645,627$ Classification
Tax Allocation Refunding Bonds, Series 2015A
On August 5, 2015, the Successor Agency of the Redeve lopment Agency of the City of San Mateo issued $31,210,000 principal amount Tax Allocation Refunding Bonds, Series 2015A (2015A Refunding Bonds). The proceeds of the 2015A Refunding Bonds were used to advance refund the Merged Area Tax Allocation Bonds, Series 2005A Bonds. The 2015A Refunding Bonds are tax-exempt. The 2015A Refunding Bonds mature annually each August 1 through 2032, with inst allments ranging from $530,000 to $4,150,000. The interest on the 2015A Refunding Bonds is payable semi-annually on each Febr uary 1 and August 1, with coupon rates ranging from
4.00% to 5.00%. The 2015A Refunding Bonds are subject to early redemption provisions. Total principal and interest remaining to be paid on the Bonds is $41,260,375.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
104
Note 7 – Long-Term Liabilities (Continued)
D. Fiduciary Funds Private Purpose Trust Funds - Successor Agency to the Redevelopment Agency of the City of San Mateo (Continued)
Tax Allocation Refunding Bonds, Series 2015A (Continued)
On August 5, 2015, the Successor Agency of the Redeve lopment Agency of the City of San Mateo issued $31,210,000 principal amount Tax Allocation Refunding Bonds, Series 2015A (2015A Refunding Bonds). The proceeds of the 2015A Refunding Bonds were used to advance refund the Merged Area Tax Allocation Bonds, Series 2005A Bonds. The 2015A Refunding Bonds are tax-exempt. The 2015A Refunding Bonds mature annually each August 1 through 2032, with inst allments ranging from $530,000 to $4, 150,000. The interest on the 2015A Refunding Bonds is payable semi-annually on each Febr uary 1 and August 1, with coupon rates ranging from
4.00% to 5.00%. The 2015A Refunding Bonds are subject to early redemption provisions. Total principal and interest remaining to be paid on the Bonds is $41,260,375.
The annual debt service requirements on the 2015A Refunding Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2023 530,000$ 1,463,450 $ 1,993,450 $
2024 1,265,000 1,427,550 2,692,550
2025 1,325,000 1,375,750 2,700,750
2026 1,375,000 1,321,750 2,696,750
2027 3,840,000 1,198,250 5,038,250
2028-2032 18,725,000 3,180,625 21,905,625
2033 4,150,000 83,000 4,233,000
Total 31,210,000$ 10,050,375$ 41,260,375$
Tax Allocation Refunding Bonds, Series 2015B
On August 5, 2015, the Successor Agency of the Redevel opment Agency of the City of San Mateo issued $7,385,000 principal amount Tax Allocation Refundin g Bonds, Series 2015B (2015B Refunding Bonds). The proceeds of the 2015B Refunding Bonds were used to a dvance refund the Merged Area Housing Set- Aside Tax Allocation Bonds, Series 2005A Bonds. The 2015B Refunding Bonds are federally taxable. The 2015B Refunding Bonds mature annually each August 1 through 2022, with installments ranging from $695,000 to $1,185,000. The interest on the 2015B Refunding Bonds is payable semi-annually on each Febr uary 1 and August 1, with coupon rates ranging from 3.60% to 3.90%. The 2015B Refunding Bonds are subject to early redemption provisions. Total principal and interest remaining to be paid on the Bonds is $708,553.
In connection with the issuance of the 2015A and B Ref unding Bonds, the City recorded a deferral on refunding of debt, which is reported as a deferred inflow of resources. At June 30, 2022, the total amount deferred was $42,377 which will be amortized over the remaining life of the Bonds. The economic gain on refunding for the 2015A and B Refunding Bonds was $2,831,116.
The annual debt service requirements on the 2015B Refunding Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2023 695,000$ 13,553 $ 708,553 $
Total 695,000$ 13,553 $ 708,553 $
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
105
Note 7 – Long-Term Liabilities (Continued)
D. Fiduciary Funds Private Purpose Trust Funds - Successor Agency to the Redevelopment Agency of the City of San Mateo (Continued)
Tax Allocation Refunding Bonds, Series 2017A
On October 17, 2017, the Successor Agency of the Redevelopment Agency of the City of San Mateo issued $21,440,000 principal amount Tax Allocation Refunding Bonds, Series 2017A (2017A Refunding Bonds). The proceeds of the 2017A Refunding Bonds were used to advance refund the tax-exempt Merged Area Tax Allocation Refunding Bonds, Series 2007A. The 2017A Refunding Bonds are tax-exempt. The 2017A Refunding Bonds mature annually each August 1 through 2025, with installments ranging from $2, 425,000 to $3,100,000. The interest on the 2017A Refunding Bonds is payable semi -annually on each February 1 and August 1, with coupon rates of 5.00%. The 2017A Refunding Bonds are subject to early redemption provisions. Total principal and interest remaining to be paid on the Bonds is $12,718,250.
The annual debt service requirements on the 2017A Refunding Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2023 2,675,000$ 509,625 $ 3,184,625 $
2024 2,810,000 372,500 3,182,500
2025 2,945,000 228,625 3,173,625
2026 3,100,000 77,500 3,177,500
Total 11,530,000$ 1,188,250 $ 12,718,250 $
Pledged Revenues
Tax Allocation Bonds held by the Successor Agency of the Redevelopment Agency of the City of San Mateo are secured by property tax revenues. For the current year, pr incipal and interest paid on the Series 2015A, 2015B, and 2017A, Tax Allocation Bonds we re $1,474,050, $1,233,435, and $3,185,125, respectively and Redevelopment Agency Property Tax Trust Fund distributions were $5,994,710.
Note 8 – Special Assessment Debt with No City Commitment
The City issued special tax and assessment bonds on behalf of property owners, pursuant to the Improvement Bond Act of 1915 and the Mellow-Roos Community Facilities Act of 1982, to finance the acqui sition and construction of certain infrastructure improvements within the assessment districts and community facilities districts.
The City of San Mateo has authorized the formation of the Bay Meadows Community Facilities District No. 2008-1 (Bay Meadows CFD), acting through its eligible landowne r voters, and the issuance of bonds under the public improvement act (Mello-Roos Community Facilities Act of 1982) of the State of California to finance eligible public facilities necessary to serve developing commercial, industrial, residential and/or mixed use developments. The bonds are secured by annual special tax levies or liens placed on the property within the district.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
106
Note 8 – Special Assessment Debt with No City Commitment (Continued)
The City of San Mateo is not liable for repayment and acts only as an agent for the property owners in collecting the special taxes or assessments, forwarding the collections to bondholders, and initiating fo reclosure proceedings when necessary. These bonds are payable solely from special taxes or assessments, specific reserves, and the proceeds from property foreclosures to be levied by the Bay Meadows CFD. The City is the collecting and paying agent for the debt, but has no direct or contingent liability for the payment of this debt. Accordingly, the special tax bonds are not reported as liabilities in the City’s basic financial statements.
Noncommittal debt amounts issued and outstanding at June 30, 2022 are as follows:
Outstanding
Original Balance
Amount June 30, 2022
CFD 2008-1, Series Special Tax Bonds Refunding Bonds Series 2022 72,345,000$ 72,345,000$
Note 9 – Compensated Absences
Employees accrue vacation, annual leave, earned time off, and holiday leave up to certain maximums, based on the employee’s bargaining unit. Employees may elect to be paid a portion of these leaves at various times according to the applicable Memorandum of Understanding. Sick leave may be accumulated without limit. Sick leave may be paid upon retirement up to 50% of accumulated balance up to 960 hours with the maximum payout not to exceed 480 hours.
A. Governmental Activities
A summary of changes in the compen sated absences balances for the governme ntal activities for the year ended June 30, 2022 is as follows:
Balance Balance Due within Due in More
July 1, 2021 Additions Deletions June 30, 2022 One Year Than One Year Compensated absences 9,082,612$ 5,747,119$ (6,725,932)$ 8,103,799$ 891,418$ 7,212,381$ Total 9,082,612$ 5,747,119$ (6,725,932)$ 8,103,799$ 891,418$ 7,212,381$ Classification
Compensated absences in the governmental activities generally liquidate to the General Fund.
B. Business-Type Activities
A summary of changes in the compen sated absences balances for the business- type activities for the year ended June 30, 2022 is as follows:
Balance Balance Due within Due in More
July 1, 2021 Additions Deletions June 30, 2022 One Year Than One Year Compensated absences 1,233,629$ 877,256$ (1,038,626)$ 1,072,259$ 117,948$ 954,311$ Total 1,233,629$ 877,256$ (1,038,626)$ 1,072,259$ 117,948$ 954,311$ Classification
Compensated absences in the business-type activities are obligations of the Sewer Fund.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
107
Note 10 – Landfill Closure
The City is responsible for closing the East Third Avenue Waste Disposal and Landfill site in accordance with the California Code of Regulations under the jurisdiction of the California Integrated Waste Management Board. In fiscal year 1992, the City developed a Closure Plan that in management’s view will meet all regulatory requirements. As stated in the California Code of Regulations, Division 2 Title 27 Article 2 Section 21 180, “a) the landfill shall be maintained and monitored for a period of not less than thirty (30) years after the completion of closure of the entire solid waste landfill.” The landfill is at capacity and inactive, and final closure occurred in FY 2005-06.
As of June 30, 2022, the estimated amount of $1,559,695 has been recorded as Landfill Post-Closure Costs Payable in the Government-Wide Financial Statements.
Balance Balance Due within Due in More
Landfill closure and July 1, 2021 Additions Deletions June 30, 2022 One Year Than One Yea r post-closure costs payable 1,498,265$ 161,315 $ (99,885) $ 1,559,695$ 103,980 $ 1,455,715$ Classification
Note 11 – Pension Plans
A. Summary
Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:
Pension contribution made after measurement date:
CalPERS Miscellaneous 8,036,643$ 1,917,088 9,953,731 $ CalPERS Safety 14,717,993 - 14,717,993 Total pension contribution made after measurement date 22,754,636 1,917,088 24,671,724 Difference between expected and actual experience
CalPERS Miscellaneous 51,516 12,289 63,805 CalPERS Safety 1,409,419 - 1,409,419 Total difference between expected and actual experience 1,460,935 12,289 1,473,224 Total deferred outflows of resources
CalPERS Miscellaneous 8,088,160 1,929,376 10,017,536 CalPERS Safety 16,127,412 - 16,127,412 Total deferred outflows of resources 24,215,572$ 1,929,376 $ 26,144,948 $ Net pension liability:
CalPERS Miscellaneous 41,709,692$ 9,949,575 $ 51,659,267 $ CalPERS Safety 125,512,845 - 125,512,845 Total net pension liability 167,222,537$ 9,949,575 $ 177,172,112 $
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
108
Note 11 – Pension Plans (Continued)
A. Summary (Continued)
Governmental Business-Type
Activities Activities Total
Deferred inflows of resources:
Actual earnings on pension plan investments in excess of projected earnings:
CalPERS Miscellaneous 18,949,844 4,520,361 23,470,205 CalPERS Safety 30,089,229 - 30,089,229 Total actual earnings on pension plan investments in excess of projected earnings 49,039,073 4,520,361 53,559,434 Total deferred inflows of resources
CalPERS Miscellaneous 18,949,844 4,520,361 23,470,205 CalPERS Safety 30,089,229 - 30,089,229 Total deferred inflows of resources 49,039,073$ 4,520,361$ 53,559,434$ Pension expenses:
CalPERS M iscellaneous 2,681,386$ 639,627$ 3,321,013$ CalPERS Safety 8,448,660 - 8,448,660 Total net pension expenses 11,130,046$ 639,627$ 11,769,673$
B. General Information about Pension
Plan Description
Substantially all City employees working the equivalent of 1,000 hours per fiscal year are eligible to participate in the Miscellaneous or Safety Agent multiple-employer de fined benefit plan administered by California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit Provisions under the Plans are established by State statutes within the Public Employee’s Retirement Law. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Copies of the CalP ERS annual financial report may be obtained from the CalPERS Executive Office – 400 P Street, Sacramento, CA 95814.
Employees Covered
At June 30, 2021, the measurement date, the following employees were covered by the benefit terms for the Plan:
M iscellaneous Plan Safety Plan Total
Active employees 358 101 459
Transferred and terminated employees 408 196 604
Retired employees and beneficiaries 638 389 1027
Total 1404 686 2090
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
109
Note 11 – Pension Plans (Continued)
B. General Information about Pension (Continued)
Benefits Provided
CalPERS provide retirement and disability benefits, annual cost-of-living adjust ments, and death benefits to plan members and beneficiaries. Classic CalPERS member becomes eligible for service retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 62 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit f actor, years of service, and final compensation. The final compensation is the monthly average of the member's highest 36 full-time equivalent monthly pay.
Following are the benefit provisions for each plan:
Hire Date Miscellaneous Plan Safety Plan
Benefit formula 2.0% @ 55 3% @ 50
Benefit vesting schedule 5 years service 5 years service Benefit payments Monthly for life Monthly for life
Retirement age 50 50
Monthly benefits, as a % of eligible compensation 2.0% 3.000% Required employee contribution rates for Classic members 8.00% 9.00% Required employer contribution rates 9.050% 19.480%
Final Annual Compensation 1 year 1 year
On January 1, 2013, the Public Employee Pension Reform Act (PEPRA) went into effect. This State law applies to employees hired on or after January 1, 2013 who ar e new to Public Employee Retirement Systems (PERS).
These employees are termed PEPRA members and employees that were enrolled in PERS (without significant separation) prior to January 1, 2013 are now referred to as classic members. PEPRA miscellaneous members will be enrolled in a 2% at 62 plan and PEPRA safety members will be enrolled in a 2.7% at 57 plan. PEPRA members will be required to pay half the normal cost of their plans.
Contributions
Section 20814(C) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees duri ng the year (normal cost), with additional amount to finance any unfunded accrued liability (UAL). The City is required to contribute the difference between the actuarially determined rate and th e contribution rate of employees. For the measurement period ended June 30, 2021 (the measurement date), the average active employee contribution rate is 8 percent of annual pay for the Miscellaneous Plan and 9 percent of annual pay for th e Safety Plan, and employer contribution rate is 28.63 percent of annual payroll for the Miscellaneous Plan and 104.06 percent of annual payroll for the Safety Plan. Of note, the pension liability for the service years of former City employees that transferred to the San Mateo Consolidated Fire Department remains with the City, t hus the UAL as a percentage of payroll is higher, as the UAL is relative to the remaining Safety Plan members (Police Department employees). As of June 30, 2021, in the opinion of City Administration, there were no additional outstanding matters that would have a significant effect on the financial position of the City.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
110
Note 11 – Pension Plans (Continued)
B. General Information about Pension (Continued)
Contributions (Continued)
For the year ended June 30, 2022, the plan’s contributions made for the Plan was as follows:
Miscellaneous Plan Safety Plan
Contributions - employer 9,953,731 $ 14,717,993 $
Net Pension Liability
The City’s net pension liability is m easured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 us ing standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown as follows.
Actuarial Assumptions
The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Investment Rate of Return
Morta l i ty Ra te Ta bl e
Post Retirement Benefit Increase
7.00%
Derived using CalPERS’ Membership Data for all Funds. The mortality table used was developed based on CalPERS’ specific data.
The table includes 20 years of mortality improvements using Society of Actuaries Scale M P-2016.
Contract COLA up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter Entry Age Normal in accordance with the requirement of GASB
7.15%
2.50%
Varies by Entry Age and Service
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020 valuation were based on the results of December 2017 actuarial experience st udy for the period 1997 to 2015. Further details of the Experiences Study can be found on the CalPERS website.
Discount Rate
In determining the long-term expected rate of return, CalPERS took into account, bot h short-term and long-term market return expectations as well as the expected pe nsion 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 funds’ asset classes, expected com pound (geometric) returns were calculated over the short-term (first 10 years) and the l ong-term (11-60 years) using a building-block approach.
Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. 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 th e one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate ca lculated above and rounded down to the nearest one quarter of one percent.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
111
Note 11 – Pension Plans (Continued)
B. General Information about Pension (Continued)
Discount Rate (Continued)
The table below reflects long-term expected real rate of return by asset class. The ra te 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
1 Real Return Years
11 +
2 Global equity 50.00% 4.80% 5.98%
Global fixed income 28.00% 1.00% 2.62%
Inflation sensitive assets 0.00% 0.77% 1.81%
Private equity 8.00% 6.30% 7.23%
Real assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
1 An expected inflation of 2.00% was used for this period. 2 An expected inflation of 2.92% was used for this period.
The discount rate used to measure the total pension liability was 7.15% 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 7.15% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15% is applied to all plans in the Public Empl oyees Retirement Fund (PERF). The stress test results are presented in a detailed report called “GASB Crossover T esting Report” that can be obtained from the CalPERS website under the GASB 68 Section.
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s net pension liability, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
Discount Rate - 1% Current Discount Discount Rate + 1%
(6.15%) Rate (7.15%) (8.15%)
Miscellaneous Plan 88,844,213$ 51,659,267$ 20,706,458$ Safety Plan 182,970,131$ 125,512,845$ 78,222,978$ Plan's Aggregate Net Pension L iability/(Asset)
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
112
Note 11 – Pension Plans (Continued)
B. General Information about Pension (Continued)
Changes in the Net Pension Liability
The following table shows the changes in net pension liability recognized over the measurement period:
Total Pension
Liability
Plan Fiduciary Net
Position Net Pension Liability
Balance at June 30, 2020 (Valuation Date) 293,509,581$ 208,767,343$ 84,742,238$ Changes in the year:
Service cost 5,417,134 - 5,417,134 Interes t on the total pens ion liabilities 20,553,253 - 20,553,253 Differences between expected and actual experience (812,628) - (812,628) Benefit payments, including refunds of members contributions (15,894,895) (15,894,895) - Contributions - em ployer - 8,968,085 (8,968,085) Contributions - em ployee - 2,454,476 (2,454,476) Net investm ent incom e - 47,026,715 (47,026,715) Adm inistrative ex penses - (208,546) 208,546 Net changes 9,262,864 42,345,835 (33,082,971) Balance at June 30, 2021 (Measurement Date) 302,772,445$ 251,113,178$ 51,659,267$ Miscellaneous Plan
Total Pension
Liability
Plan Fiduciary Net
Position Net Pension Liability
Balance at June 30, 2020 (Valuation Date) 429,955,594 $ 266,774,612 $ 163,180,982 $ Changes in the year:
Service cost 4,521,737 - 4,521,737 Interes t on the total pens ion liabilities 30,250,946 - 30,250,946 Differences between expected and actual experience 2,818,839 - 2,818,839 Benefit payments, including refunds of members contributions (23,890,302) (23,890,302) - Contributions - em ployer - 13,566,455 (13,566,455) Contributions - em ployee - 1,789,979 (1,789,979) Net investm ent incom e - 60,169,718 (60,169,718) Adm inistrative ex penses - (266,493) 266,493 Net changes 13,701,220 51,369,357 (37,668,137) Balance at June 30, 2021 (Measurement Date) 443,656,814 $ 318,143,969 $ 125,512,845 $ Safety Plan
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2022, the City recognized pension expense in the amount of $3,321,013 and $8,448,660 for the miscellaneous and safety plans, respectively.
The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service liv es of all members that are provided w ith benefits (active, inactive and retired) as of the beginning of the measurement period.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
113
Note 11 – Pension Plans (Continued)
B. General Information about Pension (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The Expected Average Remaining Service Lifetime (“EAR SL”) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the risk pool. For the Miscellaneous Plan, the EARSL for the Miscellaneous Plan for the 2020-21 measurement period is 2.7 years, which was obtained by dividing the total service years of 3,676 (the sum of remaining service lifetimes of the active employees) by 1,378 (the total number of participants: active, inactive, and retired). Fo r the Safety Plan, the EARSL for the Miscellaneous Plan for the 2020-21 measurement period is 2.0 years, which was obtained by dividing the total service years of 1,358 (the sum of remaining service life times of the active employees) by 688 (the total number of participants: active, inactive, and retired).
At June 30, 2022 the City reported deferred outflows of r esources and deferred inflows of resources related to pensions from the following sources:
Deferred outflows Deferred inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 9,953,731 $ - $
Difference between projected and actual
earning on pension plan investments - (23,470,205) Differences between expected and actual experience 63,805 - Total 10,017,536 $ (23,470,205)$
Deferred outflows Deferred inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 14,717,993$ -$
Difference between projected and actual
earning on pension plan investments - (30,089,229) Differences between expected and actual experience 1,409,419 - Total 16,127,412$ (30,089,229)$
Miscellaneous Plan
Safety Plan
Deferred outflows Deferred inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 24,671,724 $ - $
Difference between projected and actual
earning on pension plan investments - (53,559,434) Differences between expected and actual experience 1,473,224 - Total 26,144,948 $ (53,559,434)$
Total
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
114
Note 11 – Pension Plans (Continued)
B. General Information about Pension (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
For the General Information about Pension, for the Miscellaneous and Safety Plans, $9,953,731 and $14,717,993, respectively, was reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Year Ended June 30, Miscellaneous Plan Safety Plan Total 2022 (5,681,780)$ (6,239,173) $ (11,920,953) $ 2023 (5,645,591) (6,955,951) (12,601,542) 2024 (5,623,617) (7,201,324) (12,824,941) 2025 (6,455,412) (8,283,362) (14,738,774) 2026 - - - Thereafter - - - (23,406,400)$ (28,679,810)$ (52,086,210)$ Deferred Outflows/(Inflows)
of Resources
Pension Plan Fiduciary Net Position
Detailed information about the plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
C. Social Security
Total contributions to Social Security for all City employees during the year ende d June 30, 2022 amounted to $2,321,305 of which the City paid $2,321,305.
The Omnibus Budget Reconciliation Ac t of 1990 (OBRA) mandates that public sector employees who are not members of their employer’s existing retirement system as of January 1, 1992 be covered by either Social Security or an alternative plan.
The City’s part-time, seasonal and temporary employees are covered under an alternative savings plan, which requires these employees and the City to each contribute 3.75% of the employees’ pay for a total of 7.50%.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
115
Note 12 – Other Postemployment Benefits
A. Summary
Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:
OPEB contribution made after measurement date 1,790,683$ 265,919 $ 2,056,602 $ Total deferred outflows of resources 1,790,683$ 265,919$ 2,056,602$ Net OPE B L iability 6,541,578$ 971,430 $ 7,513,008 $ Deferred inflows of Resources:
Difference between expected and actual experience 1,906,979$ 283,190 $ 2,190,169 $ Net difference between projected and actual
earnings of OPEB Plan investments 1,066,494 158,376 1,224,870 Change in assumption 273,328 40,590 313,918 Total deferred inflows of resources 3,246,801$ 482,156$ 3,728,957$ O PEB Expe nse (Income ) (46,312)$ (6,877)$ (53,189)$
B. General Information about OPEB
Plan Description
The City administers a single-employer defined benef it post-employment healthcare plan. Merit employees who retire directly from the City under CalPERS at the minimu m age 50 with at least 5 years of CalPERS service (or disability) are eligible to receive $160 per month for medical insurance premiums paid to CalPERS. This same benefit may continue to a surviving spouse depending on the retirement plan election. As of June 30, 2021, there were 371 retirees receiving post-employment health care benefits from the City.
Employees Covered
As of the July 1, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms:
Active employees 461
Inactive employees or beneficiaries currently receiving benefits 371 Inactive employees entitled to, but not yet receiving benefits 226 Total 1,058
Contribution
Beginning in the fiscal year 2012-13, the City pre-funds the Plan through California Employers’ Retiree Benefit Trust (CERBT) by contributing the City’s Annual Required Contribution (ARC) every year. For the measurement period 2020-21, the City contributed $1,410,000.
CERBT is a tax qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to prefund retirement health benefits. The CERBT issu es a publicly available financial report that included financial statements and required supp lementary information for the City, not individualizing, but in aggregate with the other CERBT participants. That report may be obtained by contacting CalPERS.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
116
Note 12 – Other Postemployment Benefits (Continued)
C. Net OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
The City’s net OPEB liability was measured as of June 30, 2021, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of July 1, 2020.
Actuarial Assumptions
The total OPEB liability, measured as of June 30, 2021, was determined using the following actuarial assumptions:
Actuarial Assumptions
Actuarial Valuation Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost
Asset Valuation Method Market Value
Inflation 2.50%
Payroll Growth 2.75%
Salary Increases Aggregate - 2.75% annually
Merit - CalPERS 2000-2019 Experience Study
Contribution Policy Contributes full ADC
Discount Rate 6.25%
M ortality, Retirement, Disability, Termination
M ortality Improvement
Medical Trend Non-Medicare - 6.50% for 2023, decreasing to an ultimate rate of
3.75% in 2076
Medicare (Kaiser) - 4.60% for 2023, decreasing to an ultimate rate of 3.75% in 2076
CalPERS 2000-2019 Experience Study
Mortality projected fully generational with Scale MP-2021 Medicare (Non-Kaiser) - 5.65% for 2023, decreasing to an ultimate rate of 3.75% in 2076
The actuarial assumptions used in the Ju ly 1, 2021 valuation were based on th e results of an actuarial experience study for the period July 1, 2020 through June 30, 2021.
The long-term expected rate of return on OPEB plan i nvestments 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 and inflation) are developed for each major a sset class. These ranges are comb ined to produce the long- term expected rate of return by wei ghting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
Asset Class
Target
Allocation
Long-Te rm Expe cte d
Rate of Return
Global Equity 59.00% 4.560%
Fixed Income 25.00% 0.780%
TIPS 5.00% -0.080%
Commodities 3.00% 1.220%
REITs 8.00% 4.060%
100.00%
Long-term assumed rate of inflation 2.500%
Long-term expected rate of return 6.250%
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
117
Note 12 – Other Postemployment Benefits (Continued)
C. Net OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
Discount Rate
The discount rate used to measure the total OPEB liability was 6.25 percent. 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 City plan's fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees. 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 liability.
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 net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2021:
Discount Rate -1% Current Discount Rate Discount Rate +1% (5.25%) (6.25%) (7.25%)
9,543,110$ 7,513,008 $ 5,822,382 $ Plan's Net OPEB Liabiltiy
Sensitivity of the Net OPEB Liability to Changes in Healthcare Cost Trend Rates
The following presents the net OPEB liability of the City, as well as what the net OPEB liability would be if it were calculated using a health care cost trend rates that are one percentage point lower or one percentage point higher than the current rates, for the measurement period ended June 30, 2021:
1% Decrease
(5.5% - 2.75%)
Current Healthcare
Trend Rate
(6.5% - 3.75%)
1% Increase
(7.5% to 4.75%)
5,705,847$ 7,513,008 $ 9,752,694 $ Plan's Net OPEB Liabiltiy
194 of 417
City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
118
Note 12 – Other Postemployment Benefits (Continued)
C. Net OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
Change in Net OPEB Liability
Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability
Balance at June 30, 2020 17,024,683$ 6,447,726$ 10,576,957$ Changes Recognized for the M easurement Periood:
Service Cost 497,327 - 497,327 Interest on the total OPEB liability 1,144,590 - 1,144,590 Difference between expected and actual exp erience (670,829) - (670,829) Changes in assumptions (86,901) - (86,901) Contribution from the employer - 1,817,000 (1,817,000) Net investment income - 2,140,859 (2,140,859) Administrative expenses - (9,723) 9,723 Benefit payments (1,130,244) (1,130,244) - Net changes during July 1, 2020 to June 30, 2021 (246,057) 2,817,892 (3,063,949) Balance at June 30, 2021 16,778,626$ 9,265,618$ 7,513,008$
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2022, OPEB expense/(inc ome) in the amount of $(53,189) is included in the accompanying statement of activities.
At June 30, 2022, the City reported deferred outflows of resources and defe rred inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Contributions made after measurement date 2,056,602 $ - $ Differences between expected and actual experience - (2,190,169) Changes in assumptions - (313,918) Net difference between projected and actual
earnings of OPEB Plan investments - (1,224,870) 2,056,602$ (3,728,957)$
Amounts reported as deferred inflows of resources relate d to OPEB will be recognized as OPEB expense as follows:
Year Ending
June 30 Amount
2023 (1,142,435)$
2024 (1,134,435)
2025 (894,436)
2026 (453,136)
2027 (104,515)
Thereafter -
Total (3,728,957)$
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
119
Note 13 – Risk Management
A. Coverage
The City retains a level of risk for both general liability and workers’ compensation. The City carries commercial insurance above this limit. The City maintains occurrence basis insurance coverage up to $25 million in excess of its $1,000,000 risk retention per occurrence plus $1, 000,000 individual member corridor deductible for general liability, and $25 million in excess of its $1,000,000 risk re tention for workers’ compensation. The City has not had claims settlements exceeding insurance coverage for each of the past three fiscal years.
B. Claims Activity
The City’s claims activity is recorded in its internal service funds. Estimat ed liabilities are reco rded when it is probable that a loss has occurred and the amount of the lo ss can be reasonably estimated. Claims that have been incurred but not reported (IBNRs) are also included in the liability estimates.
A summary of the changes in claims liabilities for the past three fiscal years follows:
Current Year
Beginning of Claims and Balance at Due in
Fiscal Year Changes in Claim Fiscal Year Due Within M ore than Liability Esimates Payments End One Year One Year
Workers' Compensation
2022 15,936,000$ (2,514,129)$ (1,224,871)$ 12,197,000$ 2,800,000$ 9,397,000$ 2021 15,337,000 3,697,329 (3,098,329) 15,936,000 2,800,000 13,136,000 2020 12,748,000 5,342,281 (2,753,281) 15,337,000 2,600,000 12,737,000 Dental
2022 -$ 473,383$ (473,383)$ -$ -$ -$ 2021 - 661,872 (661,872) - - - 2020 - 599,814 (599,814) - - - General Liability
2022 1,116,000$ 1,663,353$ (907,353)$ 1,872,000$ 500,000$ 1,372,000$ 2021 1,071,000 789,699 (744,699) 1,116,000 500,000 616,000 2020 1,250,000 91,581 (270,581) 1,071,000 500,000 571,000
Note 14 – Joint Ventures
City of San Mateo and Estero Municipal Improvement District
The City and the Estero Municipal Improvement District (Estero), entered into a “Joint Exercise of Powers Agreement” in 1974 to construct, maintain, and operate a joint use wastewater treatment plant facility (Facility). The City and Estero jointly use and own the Facility. During the original construction phase, the City served as the lead agency. Currently, the day-to-day operations and maintenance of the treatment plant are managed by the City. Both parties continue to make capital contributions and pay for operational and maintenance costs. During the fiscal year ended June 30, 2022, the City paid $24,408,729 for operations and maintenance of the wastewater treatment plant facility.
196 of 417
City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
120
Note 14 – Joint Ventures (Continued)
City of San Mateo and Estero Municipal Improvement District (Continued)
In June of 2019, the City of San Mate o and the Estero Municipal Improvement District/City of Foster City jointly issued the 2019 Series Wastewater Revenue Bonds in the amount of $270,000,000 (2019 Wastewater Bonds) through a joint powers financing authority, San Mateo-Foster City Public Financing Authority (Authority). Of the total issuance amount, the City is responsible for $236,180,000. Inter est payments are payable semi-annually on February 1 and August 1, commencing February 1, 2020. The bonds mature through August 1, 2049, and bear interest at the rate of 4- 5%. The issuance resulted in a bond premium of $53,780,407, of which the City’s share was $47,201,120.
In July of 2021, the City of San Mateo and the Estero Municipal Improvement District/City of Foster City jointly issued the 2021 Series A and B Wastewater Revenue Notes and 2021 Series A Wastewater Revenue Refunding Bonds in the amount of $348,590,000 through a joint powers financing authority, San Mateo-Foster City Public Financing Authority (Authority). Of the total issuance amount, the City is responsible for $285,830,000. Interest payments are payable semi- annually on February 1 and August 1, commencing August 1, 2022. The bonds mature through August 1, 2041, and bear interest at the rate of 4.15-5.25%. The issuance resulted in a bond premium of $ 65,920,038, of which the City’s share was $54,211,533.
Interest payments and revenue bond retirements are serviced by the revenues generated by the City of San Mateo Sewer Enterprise Fund and the Foster City/Estero Municipal Improvement District Wastewater Enterprise Fund pursuant to a reimbursement agreement. The City’s total principal and interest remaining to be paid on the bonds is $774,915,725.
City of San Mateo, City of Belmont/Belmont Fire Protec tion District, and City of Foster City/Estero Municipal Improvement District
On November 22, 2017, the City of San Mateo, the City of Belmont/Belmont Fire Protection District, and the City of Foster City/Estero Municipal Improvement District form ed a Joint Powers Authority (JPA) named the San Mateo Consolidated Fire Department (SMC Fire) to provide integr ated and comprehensive fire protection, fire prevention, and emergency response services to all three communities serving a population of over 164,000. Effective January 13, 2019, San Mateo’s financial contributions to SMC Fire is accounted for annually as an investment in equity interest in its government-wide financial statements.
SMC Fire is governed under the terms of the JPA Agr eement by a Board of Directors consisting of one voting representative and one alternate who are elected members from the governing boards of the three JPA Member Agencies. Each member agency has the following weighted vote: City of San Mateo (60%), City of Belmont (20%), and City of Foster City (20%), with a minimum weighted vote of 80% needed for any action to be taken.
As of June 30, 2022, the City has an investment in JP A equity of $13,174,277. Ever y year the City adjusts the investment based on the City’s proporti on of financial activity at SMC Fire (6 0%). Audited financial statements of SMC Fire are available from City of San Mateo, 330 West 20th Avenue, San Mateo, CA 94403.
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City of San Mateo
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
121
Note 14 – Joint Ventures (Continued)
City of San Mateo, City of Belmont/Belmont Fire Protec tion District, and City of Foster City/Estero Municipal Improvement District (Continued)
The condensed audited financial information of the JPA as of June 30, 2022 is as follows (in millions):
Total assets and deferred outflows 32,444,107$
Total liabilities and deferred inflows 10,486,979$
Total equities 21,957,128$
Expenses 44,398,922$
Program revenues 48,160,245$
General revenues 48,635$
Change in net position 3,809,958$
Note 15 – Other Required Disclosures
A. Deficit Fund Balances/Net Position
At June 30, 2022, the following funds had a fund balances (deficit) or unrestricted net position (deficit), which will be eliminated through the reduction in future expenditures and/or the use of new unrestricted funding sources:
Fund Fund Type Deficit
2% Hotel Tax Fund Capital Projects Fund 1,363,829$
Permanent Local Housing Allocation Fund Special Revenue Fund 38,081 Benefit Fund Internal Service Fund 266,118
Comprehensive Liability Insurance Fund Internal Service Fund 1,517,337
B. Expenditures Exceeding Appropriations
For the year ended June 30, 2022, expenditures exceeded appropriations in the following funds by function:
Excess Expenditures
Fund Function over Appropriations
General Fund Finance 5,919
General Fund Public safety: Fire 5,551
General Fund Debt service: Principal 705,524
General Fund Debt service: Interest and fiscal charges 34,188 Construction Services Special Revenue Fund Information technology 2,594 Construction Services Special Revenue Fund Public works 360,726 General Projects Capital Projects Fund Debt service: Principal 545,938 General Projects Capital Projects Fund Debt service: Interest and fiscal charges 85,512 Police Grants Special Revenue Fund Public safety: Police 29,279 Police Grants Special Revenue Fund Capital outlay 27,474 HOME Special Revenue Fund Community Development 655,434 General Obligation Bonds Debt Service Fund Debt service: Interest and fiscal charges 1,174
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Note 16 – Fund Balance Classification
The City classifies fund balances, as shown on the Balance Sheet – Governmental Funds , as follows as of June 30, 2022:
Construction
Services General Non-major
General Special Revenue Capital Projects Governmental
Fund Fund Fund Funds Total
Nonspendable
Prepaid items and inventories 357,245 $ - $ 9,000$ - $ 366,245$ Total nonspendable 357,245 - 9,000 - 366,245 Restricted
Debt service - - - 5,929,315 5,929,315 Capital projects - - 24,459,421 - 24,459,421 Housing - - 823,216 9,277,968 10,101,184 Other capital projects - - 4,332,451 3,582,863 7,915,314 Public street and related facilities - - 11,793,018 15,870,260 27,663,278 Parks - - 572,940 - 572,940 Public safety - - - 503,267 503,267 Total restricted - - 41,981,046 35,163,673 77,144,719 Committed
Debt service 586,800 - - 4,843 591,643 Infrastructure - - 2,308,150 - 2,308,150 Other capital projects 7,957,380 - 4,240,103 - 12,197,483 Public street and related facilities 2,250,151 - 5,474,028 - 7,724,179 Parks - - 1,469,320 - 1,469,320 Other purposes:
Solid water - - - 9,242,831 9,242,831 Advance planning - - - 4,107,988 4,107,988 Construction services - 36,314,126 - 36,314,126 Employee compensation negotiation 5,500,000 - - - 5,500,000 Landfill post-closure - - - 2,720,100 2,720,100 Total committed 16,294,331 36,314,126 13,491,601 16,075,762 82,175,820 Assigned
Public safety 54,177 - - - 54,177 Other purposes 1,043,801 - - - 1,043,801 Total assigned 1,097,978 - - - 1,097,978 Unassigned 93,702,456 - - (1,401,910) 92,300,546 Total fund balances 111,452,010$ 36,314,126$ 55,481,647$ 49,837,525$ 253,085,308$
Note 17 – Successor Agency Private Purpose Trust For Assets of Former Redevelopment
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of Ca lifornia. This action impacted the reporting entity of the City of San Mateo that previously had reported the City ’s Redevelopment Agency within the reporting entity as a blended component unit. The Bill provided that upon dissolution of a redevelopment agency, either the City or another unit of local government agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 9, 2012, the City Council elected to become the Successor Agency for the former Redevelopment agency in accordance with the Bill as part of City Resolution No. 2 (2012).
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Note 17 – Successor Agency Private Purpose Trust For Assets of Former Redevelopment (Continued)
After enactment of the law, which occurred on June 28, 2 011, redevelopment agencies in the State of California were prohibited from entering into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, remaining assets could only be used to pa y enforceable obligations in existence at the date of dissolution (including the completion of any unfinished project s that were subject to legally enforceable contractual commitments). In accordance with the Bill, the State Controller’s Office (SCO) of the State of California reviewed the propriety of any transfers of assets between the San Mateo Redevelopment Agency (RDA) and the City that occurred after January 1, 2011.
On October 23, 2013, the SCO issued a report stating that there were no identified unallowable transfers of assets that occurred during the review period between the RDA, the City , and/or any other public agencies. In April 2013, the California Department of Finance (DOF) issued a Findi ng of Completion to the Su ccessor Agency which allowed proceeds ($3.3 million) from the Merged Area Tax Allocation Bonds, Series 2005A and Series 2007A, to be used to reimburse the City of San Mateo for construction costs of Fire Station 24 in accordance with the Cooperation Agreement between the City and the Successor Agency. Construction of Fire Station 24 was a use of the bond proceeds that is consistent with the stated purposes of the original bond covenants, and these bonds proceeds were utilized in this manner during fiscal year 2013-14. Once a Finding of Completion is issued by the DOF, State law (AB 1484) requires that successor agencies prepare a Long- Range Property Management Plan (LRPMP) for the disposition and use of the remaining assets of the former San Mateo Redevelopment Agency The Successor Agency submitted the required LRPMP, as amended and approved by the Oversight Board, to the DOF on October 17, 2013. The LRPMP addressed the disposition of five properties that were under title with the Successor Agency. The Successor Agency received a formal response from the DOF on April 28, 2014, rejecting the LRPMP as submitted. The letter outlined that public parking was not considered a governmental use by the State and as a result, the City needed to examine other available disposition options for several other remaining properties. As required, the Successor Agency submitted to the DOF on October 1, 2014, a revised LRPMP that was approved by the Oversight Board. In February 2015, the revised LRPMP was approved by the DOF after the Oversight Board approval. The actual land titles transferred to the City from the Successor Agency for th e former San Mateo Redevelopment Ag ency in July 2015. The outstanding enforceable obligations currently only include amounts owed to holders of the Successor Agency of Redevelopment Agency Tax Allocation Refunding Bonds Series 2015A, Successor Agency of Redevelopment Agency Tax Allocation Refunding Bonds Series 2015B, and the Successor Agency of Redevelopment Agency Tax Allocation Refunding Bonds, Series 2017A.
Late in the 2016-17 fiscal year, the Successor Agency began the due diligence process to refund the 2007 Tax Allocation Bonds, which were eligible to be refunded as of August 1, 2017. The Agency approved the refunding and an amendment to the Last and Final ROPS on June 5, 2017, and the Oversight Board made the same approvals on June 7, 2017. The resolutions of appr oval were submitted to the Department of Finance in June 2018, with approval for the Oversight Board Resolutions coming on August 21, 2017. The Department of Finance approved the amendment to the Last and Final ROPS, and its confirmation that this entire transaction would be considered the first of two allowed amendments to the Last and Final ROPS in a letter dated December 13, 2017.
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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
124
Note 18 – Commitments and Contingencies
A. Litigation
The City is currently a party to various claims and legal proceedings. Although the outcome of these lawsuits is not presently determinable, it is mana gement’s opinion that the ultimate li abilities, if any, resulting from such claims and proceedings will not materially affect the financial position of the City.
B. Contingent Liabilities
On March 1, 1993, the City issued Certificates of Participation in the aggregate of $10,250,000 for the benefit of San Mateo Community Hospital (Hospital), a California nonprofit public benefit corporation. The Hospital is not included in the City’s reporting entity. The City is obligated to make the purchase payments only from and to the extent that it receives revenue from the Hospital. They are not secured by any pledge of taxes or other revenues of the City. In addition, the purchase payments are insu red by the Office of Statewide Health Planning and Development of the State of California. As of June 30, 2022, the City has not recorded revenues from the Hospital.
C. Federal and State Grants
The City participates in various federal and state grant programs, the principal of which are subject to program compliance audits pursuant to the Single Audit act as amended, and various other state grant compliance requirements. Accordingly, the City’s compliance with applicable grant requirements will be established at a future date. The amount of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the City anticipates such amounts, if any, will be immaterial.
D. Contractual Commitments
The City has capital contractual commitments for which funds have been encumbered as of June 30, 2022.
Encumbrances related to capital projects are funded throug h the current year appropriated budget, which carries over to the following year.
The following is a list of the commitments at June 30, 2022:
Remaining
Commitment
Clean Water Program 158,744,759 $
Sanitary Sewer Rehabilitation and Improvement Project 4,259,095 Streetscape Improvements 2,075,368
Miscellaneous Projects 5,797,803
Total 170,877,025$
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REQUIRED SUPPLEMENTARY INFORMATION
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Required Supplementary Information (Unaudited)
Budgetary Information
For the Year Ended June 30, 2022
127
Budgetary Information
Budgetary Control and Budgetary Accounting
The City has two-year business plan development proce dures. The two-year business plan process requires that each department submit two one-year expenditure plans and revenue estimates to be provided to the City Council for approval. Only the first year of the two-year bu siness plan will be adopted. The second year represents a projected plan which will be subject to amendment in the following year. As a part of the two-year business plan, the focus in year one is on the operating budget, while the focus on year two is the City’s CIP.
In any budget cycle, to remain adaptable to changing economic and or operational conditions, the City may choose to develop a one-year plan instead of a two-year business plan. As a result of the immediate and severe financial impact of COVID-19, the City shifted to a one-year plan . With nearly two years of pandemic-related recession experience under its belt, the City plans on shifting back to the two-year business plan for 2022-24.
The City controls its budget at the fund and department level. The City Council is the sole budget authority.
Activities of the General Fund, Special Revenues Funds, Debt Service Funds, Proprietary Funds, and Capital Funds are included in the annual budget.
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Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules – General Fund
For the Year Ended June 30, 2022
128
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES :
Property taxes 66,181,679 $ 66,181,679 $ 72,348,402 $ 6,166,723 $ Sales taxes 25,488,900 25,488,900 29,123,009 3,634,109 Other taxes 18,742,822 18,742,822 28,256,902 9,514,080 Licenses, building and other permits 55,000 55,000 48,351 (6,649) Fines, forfeitures and penalties 1,828,000 1,828,000 1,454,845 (373,155) Intergovernmental 12,315,126 12,315,126 12,233,722 (81,404) Charges for Services 10,398,981 10,398,981 11,797,192 1,398,211 Investment income 1,200,000 1,200,000 (3,243,002) (4,443,002) Parking Meter and Lease Revenue 2,482,500 2,482,500 4,281,255 1,798,755 Other revenues 3,034,837 3,034,837 3,370,229 335,392 Total revenues 141,727,845 141,727,845 159,670,905 17,943,060 EXPEND ITURES :
Current:
General government:
City Council 371,627 378,887 304,993 73,894 City Manager 2,279,394 2,371,234 2,203,029 168,205 City Clerk 971,730 942,077 896,186 45,891 City Attorney 1,118,322 1,122,413 1,106,200 16,213 Finance 3,872,741 3,898,578 3,904,497 (5,919) Information technology 4,023,861 4,050,235 3,902,047 148,188 Human Resources 2,342,743 2,361,581 2,104,302 257,279 Community development 1,993,625
2,010,096 1,618,051 392,045
Public safety:
Police 51,127,574 51,700,221 51,417,279 282,942 Fire 25,217,245 25,217,245 25,222,796 (5,551) Public works 10,056,844 10,145,141 6,892,686 3,252,455 Parks and recreation 17,024,567 17,116,716 16,243,201 873,515 Golf 2,507,290 2,522,792 2,368,719 154,073 Library 8,307,993 8,372,583 7,645,003 727,580 Non-departmental 8,253,040 8,363,040 8,244,606 118,434 Debt service:
Principal 715,562 715,562 1,421,086 (705,524) Interest and fiscal charges 217,415 217,415 251,603 (34,188) Total expenditures 140,401,573 141,505,816 135,746,284 5,759,532
REVENUES O VER
(UNDER) EXPENDITURES 1,326,272 222,029 23,924,621 23,702,592 Budgeted Amounts
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Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules – General Fund (Continued) For the Year Ended June 30, 2022
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Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
OTH E R F I NA NCI NG SOU R CE S (U SE S):
Transfers in 1,750,500 1,747,500 312,896 (1,434,604) Transfers out (7,750,125) (7,910,610) (4,743,762) 3,166,848 Total other financing sources (uses) (5,999,625) (6,163,110) (4,430,866) 1,732,244 NET CHANGES IN FUND BALANCES (4,673,353)$ (5,941,081) $ 19,493,755 25,434,836 $ FUND BALANCES:
Beginning of year 91,958,255
End of year 111,452,010$
Budgeted Amounts
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Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules – Construction Services Special Revenue Fund For the Year Ended June 30, 2022
131
Variance with
Final Budget
Actual Favorable/
Original Fina l Amounts (Unfavorable)
REVENUES :
Licenses, building and other permits 7,396,600$ 7,396,600$ 6,346,921$ (1,049,679)$ Charges for services 1,200,000 1,200,000 2,453,808 1,253,808 Investment income - - (1,059,345) (1,059,345) Total revenues 8,596,600 8,596,600 7,741,384 (855,216) EXPENDITURES :
Current:
General government:
City Manager 106,399 107,476 99,736 7,740 City Attorney 205,465 206,757 185,434 21,323 Information technology 114,680 115,757 118,351 (2,594) Community development 9,341,718 9,398,666 9,193,684 204,982 Public works 439,225 445,684 806,410 (360,726) Total expenditures 10,207,487 10,274,340 10,403,615 (129,275)
REVENUES OVER
(UNDER) EXPENDITURES (1,610,887) (1,677,740) (2,662,231) (984,491) OTHER FINANCING (USES):
Transfers out (2,471,235) (2,529,506) (2,387,568) 141,938 Total other financing (uses) (2,471,235) (2,529,506) (2,387,568) 141,938 NET CHANGES IN FUND BALANCES (4,082,122)$ (4,207,246)$ (5,049,799) (842,553)$ FUND BALANCES:
Beginning of year 41,363,925
End of year, budgetary baisis 36,314,126$
Budgeted Amounts
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Required Supplementary Information (Unaudited) (Continued) Schedule of Changes in the Net Pension Liability and Related Ratios For the Year Ended June 30, 2022
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Total Pension Liability 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 1 Service cost 5,417,134$ 5,314,317$ 5,232,210$ 5,037,653$ 4,518,151$ 3,993,514$ 3,892,876$ 3,828,331$ Interest on total pension liability 20,553,253 19,910,417 19,039,419 18,044,112 17,389,674 17,090,620 16,438,129 15,777,588 Differences between expected and actual
experience (812,628) 2,219,628 4,029,100 1,103,888 (3,106,399) (331,929) (627,100) - Changes in assumptions - - - (1,424,920) 13,781,463 - (3,817,336) - Changes in benefit terms - - - - - - - - Benefit payments, including refunds of employee
contributions (15,894,895) (15,050,756) (13,650,253) (12,925,302) (12,461,817) (11,970,354) (11,069,836) (10,298,370) Net change in total pension liab ility 9,262,864 12,393,606 14,650,476 9,835,431 20,121,072 8,781,851 4,816,733 9,307,549 Total pension liab ility - beginning 293,509,581 281,115,975 266,465,499 256,630,068 236,508,996 227,727,145 222,910,412 213,602,863 Total pension liab ility - ending (a) 302,772,445$ 293,509,581 $ 281,115,975 $ 266,465,499 $ 256,630,068 $ 236,508,996 $ 227,727,145 $ 222,910,412 $ Plan fiduciary net position
Contributions - employer 8,968,085 8,308,013 7,343,013 6,287,676 5,873,612 5,126,750 4,501,438 3,783,964 Contributions - employee 2,454,476 2,412,286 2,4 63,688 2,208,675 2,041,614 1,928,776 1,950,191 1,924,145 Investment income (net of administrative expenses) 47,026,715 10,192,254 12,797,943 15,561,240 18,815,053 868,395 3,955,299 26,395,339 Benefit payments (15,894,895) (15,050,756) (13,650,253) (12,925,302) (12,461,817) (11,970,354) (11,069,836) (10,298,370) Other (208,546) (286,451) (138,259) (832,007) (251,079) (106,172) (198,614) - Net change in plan fiduciary net position 42,345,835 5,575,346 8,816,132 10,300,282 14,017,383 (4,152,605) (861,522) 21,805,078 Plan fiduciary net position - beginning 208,767,343 203,191,997 194,375,865 184,075,583 170,058,200 174,210,805 175,072,327 153,267,249 Plan fiduciary net position - ending (b) 251,113,178$ 208,767,343 $ 203,191,997 $ 194,375,865 $ 184,075,583 $ 170,058,200 $ 174,210,805 $ 175,072,327 $ Net pension liability - ending (a)-(b) 51,659,267$ 84,742,238$ 77,923,978$ 72,089,634$ 72,554,485$ 66,450,796$ 53,516,340$ 47,838,085$ Plan fiduciary net position as a percentage
of the total pension liability 82.94% 71.13% 72.28% 72.95% 71.73% 71.90% 76.50% 78.54% Covered payroll 36,154,902$ 35,484,738$ 35,068,361$ 34,688,256$ 31,556,856$ 28,252,538$ 26,888,005$ 25,179,750$ Net pension liability as a percentage of
covered payroll 142.88% 238.81% 222.21% 207.82% 229.92% 235.20% 199.03% 189.99% Notes to Schedule:
1 Historical information is presented only from the implementation year.
Miscellaneous Plan
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133
Total Pension Liability 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 1 Service cost 4,521,737$ 4,385,424$ 4,449,133$ 7,417,456$ 7,342,172$ 6,024,059$ 5,876,118$ 5,866,003$ Interest on total pension liability 30,250,946 29,312,094 28,324,725 27,109,372 25,954,748 25,211,819 24,350,391 23,707,497 Differences between expected and actual
experience 2,818,839 3,435,208 4,999,458 4,313,272 (652,769) (1,229,918) (4,513,903) - Changes in assumptions - - - (1,764,356) 20,868,220 - (5,706,829) - Changes in benefit terms - - - - - - - - Benefit payments, including refunds of employee
contributions (23,890,302) (23,017,166) (21,718,515) (20,369,839) (19,099,929) (18,246,437) (17,373,723) (16,930,299) Net change in total pension liab ility 13,701,220 14,115,560 16,054,801 16,705,905 34,412,442 11,759,523 2,632,054 12,643,201 Total pension liab ility - beginning 429,955,594 415,840,034 399,785,233 383,079,328 348,666,886 336,907,363 334,275,309 321,632,108 Total pension liab ility - ending (a) 443,656,814$ 429,955,594 $ 415,840,034 $ 399,785,233 $ 383,079,328 $ 348,666,886 $ 336,907,363 $ 334,275,309 $ Plan fiduciary net position
Contributions - employer 13,566,455 12,284,260 14,131,640 13,411,260 13,038,623 10,598,960 9,719,832 8,342,908 Contributions - employee 1,789,979 1,576,589 2,2 60,834 2,509,623 2,358,978 2,232,023 2,180,686 1,986,679 Investment income (net of administrative expenses) 60,169,718 13,065,390 16,597,022 20,229,991 24,165,223 1,116,133 4,925,152 33,561,544 Benefit payments (23,890,302) (23,017,166) (21,718,515) (20,369,839) (19,099,929) (18,246,437) (17,373,723) (16,930,299) Other (266,493) (371,100) (179,352) (1,073,204) (320,823) (135,133) (249,571) - Net change in plan fiduciary net position 51,369,357 3,537,973 11,091,629 14,707,831 20,142,072 (4,434,454) (797,624) 26,960,832 Plan fiduciary net position - beginning 266,775,612 263,237,639 252,146,010 237,438,179 217,296,107 221,730,561 222,528,185 195,567,353 Plan fiduciary net position - ending (b) 318,144,969$ 266,775,612 $ 263,237,639 $ 252,146,010 $ 237,438,179 $ 217,296,107 $ 221,730,561 $ 222,528,185 $ Net pension liability - ending (a)-(b) 125,511,845$ 163,179,982 $ 152,602,395 $ 147,639,223 $ 145,641,149 $ 131,370,779 $ 115,176,802 $ 111,747,124 $ Plan fiduciary net position as a percentage
of the total pension liability 71.71% 62.05% 63.30% 63.07% 61.98% 62.32% 65.81% 66.57% Covered payroll 16,442,390$ 16,067,107$ 22,211,287$ 28,442,831$ 27,088,471$ 24,092,535$ 22,899,741$ 21,936,448$ Net pension liability as a percentage of
covered payroll 763.34% 1015.62% 687.05% 519.07% 537.65% 545.28% 502.96% 509.41% Notes to Schedule:
1 Historical information is presented only from the implementation year.
Safety Plan
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Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions - Pension
For the Year Ended June 30, 2022
134
Fiscal Year: 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-151 Contractually determined
contribution (actuarially determined) 9,953,731$ 8,968,085 $ 8,308,301 $ 7,343,001 $ 6,287,697 $ 5,873,612 $ 5,331,714 $ 4,415,313 $ Contributions in relation to the
actuarially determined contributions (9,953,731) (8,968,085) (8,308,301) (7,343,001) (6,287,697) (5,873,612) (5,331,714) (4,415,313) Contribution deficiency (excess) -$ - $ - $ - $ - $ - $ - $ - $ Covered payroll 36,700,692 $ 36,154,902 $ 35,484,738 $ 35,068,361 $ 34,688,256 $ 31,556,856 $ 28,252,538 $ 26,888,005 $ Contributions as a percentage of
covered payroll 27.12% 24.80% 23.41% 20.94% 18.13% 18.61% 18.87% 16.42% Notes to Schedule
Methods and assumptions used to determine contribution rates for the fiscal year ended June 30, 2022:
Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
M ortality
2.50%
Actuarial Value of Assets. For details, see June 30, 2019 Funding Valuation Report.
For details, see June 30, 2019 Funding Valuation Report Entry Age Normal
Miscellaneous Plan
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2022 were derived from the June 30, 2019 funding valuation report.
Varies by entry age and service
1 Historical information is presented only from the implementation year.
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.
Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale M P-2016 published by the Society of Actuaries.
The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 and 2015.
7.00% net of pension plan investment and administrative expenses.
2.750%
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Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions – Pension (Continued)
For the Year Ended June 30, 2022
135
Fiscal Year: 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-151 Contractually determined
contribution (actuarially determined) 14,717,993$ 13,566,455 $ 12,284,260 $ 12,496,190 $ 12,011,260 $ 11,663,623 $ 10,576,566 $ 9,444,848 $ Contributions in relation to the
actuarially determined contributions (14,717,993) (13,566,455) (12,284,260) (14,121,190) (13,411,260) (13,038,623) (10,576,566) (9,444,848) Contribution deficiency (excess) -$ - $ - $ (1,625,000)$ (1,400,000) $ (1,375,000) $ - $ - $ Covered payroll 17,257,920 $ 16,442,390 $ 16,067,107 $ 22,211,287 $ 28,442,831 $ 27,088,471 $ 24,092,535 $ 22,899,741 $ Contributions as a percentage of
covered payroll 85.28% 82.51% 76.46% 63.58% 47.15% 48.13% 43.90% 41.24% Notes to Schedule
Methods and assumptions used to determine contribution rates for the fiscal year ended June 30, 2022:
Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
M ortality
1 Historical information is presented only from the implementation year.
Safety Plan
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2022 were derived from the June 30, 2019 funding valuation report.
Entry Age Normal
For details, see June 30, 2019 Funding Valuation Report Actuarial Value of Assets. For details, see June 30, 2019 Funding Valuation Report.
2.50%
Varies by entry age and service
2.750%
7.00% net of pension plan investment and administrative expenses.
The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 and 2015.
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.
Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale M P- 2016 published by the Society of Actuaries.
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Required Supplementary Information (Unaudited) (Continued) Schedule of Changes in Total OPEB Liability and Related Ratios For the Year Ended June 30, 2022
136
2022 2021 2020 2019 2018
For the Measurement Period: 2020-2021 2019-2020 2018-2019 2017-2018 2016-20171 Total OPE B L iability:
Service Cost 497,327$ 482,842$ 692,000$ 672,000$ 653,000$ Interest on the total OPEB liability 1,144,590 1,113,841 1,338,000 1,286,000 1,240,000 Changes in benefit terms - - - - - Difference between expected and actual experience (670,829) - (3,453,000) - - Changes in assumptions (86,901) - (509,000) - - Benefit payments (1,130,244) (1,181,000) (1,174,000) (1,269,000) (1,178,000) Net changes in Total OPEB Liability (246,057) 415,683 (3,106,000) 689,000 715,000 Beginning of Year 17,024,683 16,609,000 19,715,000 19,026,000 18,311,000 End of Ye ar 16,778,626$ 17,024,683$ 16,609,000$ 19,715,000$ 19,026,000$ Plan Fiduciary Net Position:
Employer contribution 1,817,000$ 1,825,000$ 1,950,000$ 1,913,000$ 1,852,000$ Employee contributions - - - - - Net investment income 2,140,859 239,112 495,000 372,000 334,000 Administrative expenses (9,723) (11,386) (7,000) (7,000) (2,000) Benefit payments (1,130,244) (1,181,000) (1,174,000) (1,269,000) (1,178,000) Net changes in Fiduciary Net Position 2,817,892 871,726 1,264,000 1,009,000 1,006,000 Beginning of Year 6,447,726 5,576,000 4,312,000 3,303,000 2,297,000 End of Ye ar 9,265,618$ 6,447,726$ 5,576,000$ 4,312,000$ 3,303,000$ Ne t O PEB Li abi l i ty 7,513,008$ 10,576,957$ 11,033,000$ 15,403,000$ 15,723,000$ Fiduciary Net Position as a
pe rce ntage of Total O PEB Li abi l i ty 55.22% 37.87% 33.57% 21.87% 17.36% Covered Payroll 57,176,000$ 55,405,000$ 62,798,000$ 66,133,000$ 57,300,000$ Net OPEB Liability as a % of Payroll 13.14% 19.09% 17.57% 23.29% 27.44% 1 Historical information is presented only from the implementation year.
213 of 417
City of San Mateo
Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions - OPEB
For the Year Ended June 30, 2022
137
2021-22 2020-21 2019-20 2018-19 2017-18
1 Actuarially determined contribution 1,319,000$ 1,281,000$ 1,817,000$ 1,764,000$ 1,913,000$ Contributions in relation to the
actuarially determined contributions (2,056,602) (1,817,000) (1,825,000) (1,950,000) (1,913,000) Contribution deficiency (excess) (737,602)$ (536,000)$ (8,000)$ (186,000)$ -$ Covered-employee payroll 59,443,000$ 57,176,000$ 55,405,000$ 62,798,000$ 66,133,000$ Contributions as a percentage of
covered-employee payroll 3.46% 3.18% 3.29% 3.11% 2.89%
Notes to Schedule
Actuarial valuation date 6/30/2021
Actuarial cost method Entry-Age Normal Cost Method
Asset valuation method Actuarial value of assets
Inflation 2.50%
Investment rate of return 6.25%
Healthcare cost trend rate Non-Medicare - 6.50% for 2023, decreasing to an ultimate rate of 3.75% in 2076 Medicare (Non-Kaiser) - 5.65% for 2023, decreasing to an ultimate rate of 3.75% in 2076; Medicare (Kaiser) - 4.60% for 2023, decreasing to an ultimate rate of 3.75% in 2076 Projected salary growth and increase Varies by Entry Age and Service Mortality CalPERS 2000-2019 experience study
1 Historical information is presented only from the imp lementation y ear.
The actuarial methods and assumptions used to set the actuarially determined contributions for the fiscal year ended June 30, 2022 were as follows:
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138
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SUPPLEMENTARY INFORMATION
139
216 of 417
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140
217 of 417
Special Revenue Funds:
Police Grants and Safety Fund accounts for the revenues and expenditures of State and Federal grants such as State Supplemental Law Enforcement Services Fund (SLESF).
Community Development Block Grant Fund (CDBG) accounts for revenue and expenditures of CDBG funds awarded by the Department of Housing and Urban Development.
HOME Special Revenue Fund accounts for revenue and expenditures of the Federal HOME grant program.
City Housing Special Revenue Fund accounts for revenues from a former Federal Rental Rehabilitation program and loan payments from the First-Time Homebuyer program.
Low and Moderate Income Housing Special Revenue Fund accounts for revenues and expenditures of the former Redevelopment Agency Special Revenue Fund.
Permanent Local Housing Allocation Special Revenue Fund accounts for revenues and expenditures of the Permanent Local Housing Allocation program.
Gas Tax Fund accounts for gasoline tax revenues as required by State law.
Road Maintenance and Rehabilitation Fund accounts for SB1 gasoline tax revenues as required by State law.
Advance Planning Fund accounts for fees collected through building permits and expenditures for activities relating to long term planning, including the general plan update.
Parking Fund accounts for parking meter revenues and expenditures of the City's downtown parking facilities.
Solid Waste Fund accounts for garbage collection surcharge revenues. The use of funds is restricted by City ordinance to street cleaning and waste disposal.
Parks and Recreation accounts for the Parks and Recreation Tax, as well as the Parks and Recreation Impact and In Lieu Fees to fund Parks and Recreation related projects through a transfer to the Capital Improvement Projects Fund.
Traffic Impact Fee accounts for traffic impact fee revenues to mitigate the cumulative impacts of new development and to accommodate future development.
Commercial Linkage Fee accounts for commercial linkage fee to be used for housing programs including acquisition, rehabilitation, or new construction of housing.
Debt Service Funds:
Landfill Bonds Fund accounts for debt service payments on landfill revenue bonds (to finance expenditures related to final closure of the former landfill site and construction of related park improvements) and post-closure monitoring costs.
General Obligation Bonds Fund accounts for voter-approved property tax revenues and debt service payments on general obligation bonds.
Capital Projects Funds:
2% Hotel Tax Fund accounts for the voter-approved 2% hotel tax revenue Measure C, the related transfers to the capital improvement fund, and debt service on variable rate bonds.
Non-Major Governmental Funds
141
218 of 417
Community
Police Development
Grants Block Grant HOME City Housing
Fund Fund Fund Fund
ASSETS
Cash and investments 245,851$ 171,028$ 102,835$ 988,637$ Restricted cash and investments held by fiscal agents - - - - Accounts receivable, net - - - 14,293 Taxes receivable - - - - Grants receivable 28,055 609,978 - - Loans and notes receivable, net - 431,123 302,835 54,684 Total assets 273,906$ 1,212,129$ 405,670$ 1,057,614$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND
FUND BALANCES
Liabilities:
Accounts payable -$ 497,148$ -$ -$ Due to other funds - 283,858 - - Unearned revenues 28,055 - - - Total liabilities 28,055 781,006 - -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - 73,824 32,642 - Total deferred inflows of resources - 73,824 32,642 - Fund Balances:
Restricted 245,851 357,299 373,028 1,057,614 Committed - - - - Unassigned (deficit) - - - - Total fund balances 245,851 357,299 373,028 1,057,614 Total liabilities, deferred inflows of
resources, and fund balances 273,906$ 1,212,129$ 405,670$ 1,057,614$ (Continued)
Special Revenue
Non-Major Governmental Funds
City of San Mateo
Combining Balance Sheet
For the Year Ended June 30, 2022
142
219 of 417
Permanent
Low & Moderate Local Housing Road Maintenance
Income Housing Allocation Gas Tax and Rehabilitation
Fund Fund Fund Fund
ASSETS
Cash and investments 1,286,877$ 24,354$ 882,734$ 1,798,177$ Restricted cash and investments held by fiscal agents - - - - Accounts receivable, net - - - - Taxes receivable - - 198,102 368,015 Grants receivable - - - - Loans and notes receivable, net 3,285,453 - - - Total assets 4,572,330$ 24,354$ 1,080,836$ 2,166,192$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND
FUND BALANCES
Liabilities:
Accounts payable 3,365$ 62,435$ -$ -$ Due to other funds - - - - Unearned revenues - - - - Total liabilities 3,365 62,435 - -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 238,458 - - - Total deferred inflows of resources 238,458 - - - Fund Balances:
Restricted 4,330,507 - 1,080,836 2,166,192 Committed - - - - Unassigned (deficit) - (38,081) - - Total fund balances 4,330,507 (38,081) 1,080,836 2,166,192 Total liabilities, deferred inflows of
resources, and fund balances 4,572,330$ 24,354$ 1,080,836$ 2,166,192$ (Continued)
Special Revenue
City of San Mateo
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2022
143
220 of 417
Parks and
Advance Planning Parking Solid Waste Recreation
Fund Fund Fund Fund
ASSETS
Cash and investments 4,649,817 $ - $ 12,157,155$ 12,126,319 $ Restricted cash and investments held by fiscal agents - - - - Accounts receivable, net - - - - Taxes receivable - - 254,620 - Grants receivable 208,850 - - - Loans and notes receivable, net - - - - Total assets 4,858,667$ - $ 12,411,775$ 12,126,319 $
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND
FUND BALANCES
Liabilities:
Accounts payable 44,914 $ - $ 61,702$ - $ Due to other funds - - - - Unearned revenues - - 171,988 - Total liabilities 44,914 - 233,690 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 208,850 - - - Total deferred inflows of resources 208,850 - - - Fund Balances:
Restricted 496,915 - 2,935,255 12,126,319 Committed 4,107,988 - 9,242,830 - Unassigned (deficit) - - - - Total fund balances 4,604,903 - 12,178,085 12,126,319 Total liabilities, deferred inflows of
resources, and fund balances 4,858,667$ -$ 12,411,775$ 12,126,319$ (Continued)
Special Revenue
City of San Mateo
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2022
144
221 of 417
Traffic Commercial General
Impact Fee Linkage Fee Landfill Bonds Obligation Bonds
Fund Fund Fund Fund
ASSETS
Cash and investments 257,416$ 3,159,518$ 3,324,853$ 5,934,158$ Restricted cash and investments held by fiscal agents - - - - Accounts receivable, net - - - - Taxes receivable - - 50,000 - Grants receivable - - - - Loans and notes receivable, net - - - - Total assets 257,416$ 3,159,518$ 3,374,853$ 5,934,158$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND
FUND BALANCES
Liabilities:
Accounts payable -$ -$ 7,144$ -$ Due to other funds - - - - Unearned revenues - - - - Total liabilities - - 7,144 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - Total deferred inflows of resources - - - - Fund Balances:
Restricted 257,416 3,159,518 647,608 5,929,315 Committed - - 2,720,101 4,843 Unassigned (deficit) - - - - Total fund balances 257,416 3,159,518 3,367,709 5,934,158 Total liabilities, deferred inflows of
resources, and fund balances 257,416$ 3,159,518$ 3,374,853$ 5,934,158$ (Continued)
City of San Mateo
Debt Service
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2022
Special Revenue
145
222 of 417
Capital Projects
Total Other
2% Hotel Tax Governmental
Fund Funds
ASSETS
Cash and investments -$ 47,109,729$ Restricted cash and investments held by fiscal agents 85,499 85,499 Accounts receivable, net - 14,293 Taxes receivable 155,005 1,025,742
Grants receivable - 846,883
Loans and notes receivable, net - 4,074,095 Total assets 240,504$ 53,156,241$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND
FUND BALANCES
Liabilities:
Accounts payable 16,256$ 692,964$
Due to other funds 1,588,077 1,871,935
Unearned revenues - 200,043
Total liabilities 1,604,333 2,764,942
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - 553,774 Total deferred inflows of resources - 553,774 Fund Balances:
Restricted - 35,163,673
Committed - 16,075,762
Unassigned (deficit) (1,363,829) (1,401,910) Total fund balances (1,363,829) 49,837,525
Total liabilities, deferred inflows of
resources, and fund balances 240,504$ 53,156,241$ (Concluded)
City of San Mateo
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2022
146
223 of 417
Community
Police Develo pment
Grants Block Gran t HOME Cit y Housing
Fund Fund Fund Fund
REVENUES:
Property taxes -$ -$ -$ -$ Other taxes - - - - Licenses, building and other permits - - - - Fines, forfeitures and penalties 21,330 - - - Intergovernmental 390,879 1,742,858 - - Charges for services - - - - Investment income (loss) 4,301 - - - Assessments and garbage collection - - - - Impact fees - - - - Capital contributions - - - - Other revenues - 31,273 86,797 149,789 Total revenues 416,510 1,774,131 86,797 149,789 EXPENDITURES:
Current:
Community development - 763,796 655,434 48,476 Public safety:
Police 336,968 - - - Public works - - - - Capital outlay 89,551 - - - Debt service:
Principal - - - - Interest and fiscal charges - - - - Total expenditures 426,519 763,796 655,434 48,476
REVENUES OVER
(UNDER) EXPENDITURES (10,009) 1,010,335 (568,637) 101,313 OTHER FINANCING SOURCES (USES):
Transfers in - - - - Transfers out - (1,028,098) - - Total other financing sources (uses) - (1,028,098) - - NET CHANGES IN FUND BALANCES (10,009) (17,763) (568,637) 101,313 FUND BALANCES:
Beginning of year 255,860 375,062 941,665 956,301 End of year 245,851$ 357,299 $ 373,028 $ 1,057,614 $ (Continued)
Special Revenue
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances City of San Mateo
For the Year Ended June 30, 2022
Non-Major Governmental Funds
147
224 of 417
Permanent
Low & Moderate Local Housin g Road Maintenance
Income Housing Allocation Gas Ta x and Rehabilitation
Fund Fund Fund Fund
REVENUES:
Property taxes -$ -$ -$ -$ Other taxes - - - - Licenses, building and other permits - - - - Fines, forfeitures and penalties - - - - Intergovernmental - 177,002 2,186,200 2,089,730 Charges for services 289,612 - - - Investment income (loss) (96,625) (2,025) (18,204) (67,768) Assessments and garbage collection - - - - Impact fees - - - - Capital contributions - - - - Other revenues - - - - Total revenues 192,987 174,977 2,167,996 2,021,962 EXPENDITURES:
Current:
Community development 2,934,341 198,376 - - Public safety:
Police - - - - Public works - - 1,747,500 - Capital outlay - - - - Debt service:
Principal - - - - Interest and fiscal charges - - - - Total expenditures 2,934,341 198,376 1,747,500 -
REVENUES OVER
(UNDER) EXPENDITURES (2,741,354) (23,399) 420,496 2,021,962 OTHER FINANCING SOURCES (USES):
Transfers in - - - - Transfers out - - (18,165) (1,892,481) Total other financing sources (uses) - - (18,165) (1,892,481) NET CHANGES IN FUND BALANCES (2,741,354) (23,399) 402,331 129,481 FUND BALANCES:
Beginning of year 7,071,861 (14,682) 678,505 2,036,711 End of year 4,330,507$ (38,081)$ 1,080,836$ 2,166,192$ (Continued)
City of San Mateo
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2022
Special Revenue
148
225 of 417
Parks and
Advance Planning Parking Solid Waste Recreation
Fund Fund Fund Fund
REVENUES:
Property taxes -$ -$ -$ -$ Other taxes - - - - Licenses, building and other permits - - - - Fines, forfeitures and penalties - - 724,997 - Intergovernmental - - 122,000 - Charges for services 1,038,518 - 779,683 - Investment income (loss) (132,308) - (290,939) (329,362) Assessments and garbage collection - - 971,388 137,026 Impact fees - - - - Capital contributions - - 750,000 - Other revenues - - 563,721 - Total revenues 906,210 - 3,620,850 (192,336) EXPENDITURES:
Current:
Community development 1,514,331 - - - Public safety:
Police - - - - Public works - - 1,890,701 - Capital outlay - - - - Debt service:
Principal - - - - Interest and fiscal charges - - - - Total expenditures 1,514,331 - 1,890,701 16,866
REVENUES OVER
(UNDER) EXPENDITURES (608,121) - 1,730,149 (209,202) OTHER FINANCING SOURCES (USES):
Transfers in - - - - Transfers out - (2,363,915) (16,911) (224,513) Total other financing sources (uses) - (2,363,915) (16,911) (224,513) NET CHANGES IN FUND BALANCES (608,121) (2,363,915) 1,713,238 (433,715) FUND BALANCES:
Beginning of year 5,213,024 2,363,915 10,464,847 12,560,034 End of year 4,604,903$ - $ 12,178,085$ 12,126,319 $ (Continued)
City of San Mateo
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2022
Special Revenue
149
226 of 417
Traffic Commercial General
Impact Fee Linka ge Fee Landfill Bonds Obli gation Bonds Fund Fund Fund Fund
REVENUES:
Property taxes -$ -$ -$ 2,448,170$ Other taxes - - - - Licenses, building and other permits - 132,980 - - Fines, forfeitures and penalties - - - - Intergovernmental - - - - Charges for services - - - - Investment income (loss) (20,681) (125,504) (82,426) (135,902) Assessments and garbage collection - - 600,000 - Impact fees 25,067 - - - Capital contributions - - - - Other revenues - - - - Total revenues 4,386 7,476 517,574 2,312,268 EXPENDITURES:
Current:
Community development - 4,005,141 - - Public safety:
Police - - - - Public works - - 72,943 - Capital outlay - - - - Debt service:
Principal - - - 2,280,000 Interest and fiscal charges - - - 2,462,546 Total expenditures - 4,005,141 72,943 4,742,546
REVENUES OVER
(UNDER) EXPENDITURES 4,386 (3,997,665) 444,631 (2,430,278) OTHER FINANCING SOURCES (USES):
Transfers in - - - 2,663,647 Transfers out (590,325) - - - Total other financing sources (uses) (590,325) - - 2,663,647 NET CHANGES IN FUND BALANCES (585,939) (3,997,665) 444,631 233,369 FUND BALANCES:
Beginning of year 843,355 7,157,183 2,923,078 5,700,789 End of year 257,416$ 3,159,518 $ 3,367,709 $ 5,934,158 $ (Continued)
Debt Service
City of San Mateo
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2022
Special Revenue
150
227 of 417
Capital Projects
Total Other
2% Hotel Tax Governmenta l
Fund Funds
REVENUES:
Property taxes -$ 2,448,170$
Other taxes 650,331 650,331
Licenses, building and other permits - 132,980 Fines, forfeitures and penalties - 746,327 Intergovernmental - 6,708,669 Charges for services - 2,107,813 Investment income (loss) 37 (1,297,406) Assessments and garbage collection - 1,708,414 Impact fees - 25,067
Capital contributions - 750,000 Other revenues - 831,580
Total revenues 650,368 14,811,945
EXPENDITURES:
Current:
Community development - 10,119,895 Public safety:
Police - 336,968
Public works - 3,711,144
Capital outlay - 89,551
Debt service:
Principal 444,700 2,724,700
Interest and fiscal charges 151,185 2,613,731 Total expenditures 595,885 19,612,855
REVENUES OVER
(UNDER) EXPENDITURES 54,483 (4,800,910) OTHER FINANCING SOURCES (USES):
Transfers in 388,478 3,052,125
Transfers out (1,234,490) (7,368,898)
Total other financing sources (uses) (846,012) (4,316,773) NET CHANGES IN FUND BALANCES (791,529) (9,117,683) FUND BALANCES:
Beginning of year (572,300) 58,955,208
End of year (1,363,829)$ 49,837,525$
(Concluded)
City of San Mateo
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2022
151
228 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Sales taxes 2,894,000 $ 2,911,000 $ 4,285,971 $ 1,374,971 $ Intergovernmental 970,000 1,133,478 4,343,806 3,210,328 Charges for services - - 399,223 399,223 Investment income (loss) - - 105,689 105,689 Assessments and garbage collection 510,000 510,000 539,889 29,889 Parking meter and lease revenue - - 1,526,038 1,526,038 Impact fees 2,250,000 2,250,000 588,823 (1,661,177) Other revenues 250,000 250,000 829,021 579,021 Total revenues 6,874,000 7,054,478 12,618,460 5,563,982 EXPENDITURES:
Capital outlay 466,263,660 468,272,054 31,859,240 436,412,814 Debt service:
Principal - - 545,938 (545,938) Interest and fiscal charges - - 85,512 (85,512) Total expenditures 466,263,660 468,272,054 32,490,690 435,781,364
REVENUES OVER
(UNDER) EXPENDITURES (459,389,660) (461,217,576) (19,872,230) (430,217,382) OTHER FINANCING SOURCES (USES):
Transfers in 15,028,000 15,971,343 11,554,194 (4,417,149) Total other financing sources (uses) 15,028,000 15,971,343 11,554,194 (4,417,149) NET CHANGES IN FUND BALANCES (444,361,660)$ (445,246,233) $ (8,318,036) (436,928,197) $ FUND BALANCES:
Beginning of year 63,799,683
End of year 55,481,647$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual General Projects Capital Projects Fund
For the Year Ended June 30, 2022
Budgeted Amounts
152
229 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Fines, forfeitures and penalties - $ - $ 21,330$ 21,330 $ Intergovernmental 353,309 458,824 390,879 (67,945) Investment income (loss) - - 4,301 4,301 Total revenues 353,309 458,824 416,510 (42,314) EXPENDITURES:
Current:
Public safety:
Police 169,523 307,689 336,968 (29,279) Capital outlay 37,562 62,077 89,551 (27,474) Total expenditures 207,085 369,766 426,519 (56,753) NET CHANGES IN FUND BALANCES 146,224$ 89,058$ (10,009) 14,439$ FUND BALANCES:
Beginning of year 255,860
End of year 245,851$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Police Grants Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
153
230 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Intergovernmental 759,246 $ 759,246 $ 1,742,858 $ 983,612 $ Other revenues 8,000 8,000 31,273 23,273 Total revenues 767,246 767,246 1,774,131 1,006,885 EXPENDITURES:
Current:
Community development 1,011,530 1,011,530 763,796 247,734 Total expenditures 1,011,530 1,011,530 763,796 247,734
REVENUES OVER
(UNDER) EXPENDITURES (244,284) (244,284) 1,010,335 759,151 OTHER FINANCING SOURCES (USES):
Transfers out (680,000) (680,000) (1,028,098) (348,098) Total other financing sources (uses) (680,000) (680,000) (1,028,098) (348,098) NET CHANGES IN FUND BALANCES (924,284)$ (924,284)$ (17,763) 411,053$ FUND BALANCES:
Beginning of year 375,062
End of year 357,299$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
154
231 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Other revenues 10,000 $ 10,000 $ 86,797 $ 76,797 $ Total revenues 10,000 10,000 86,797 76,797 EXPENDITURES:
Current:
Community development - - 655,434 (655,434) Total expenditures - - 655,434 (655,434)
REVENUES OVER
(UNDER) EXPENDITURES 10,000 10,000 (568,637) 732,231 OTHER FINANCING SOURCES (USES):
Transfers out - (10,000) - 10,000 Total other financing sources (uses) - (10,000) - 10,000 NET CHANGES IN FUND BALANCES 10,000$ -$ (568,637) 742,231$ FUND BALANCES:
Beginning of year 941,665
End of year 373,028$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual HOME Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
155
232 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Other revenues 12,000 $ 12,000 $ 149,789 $ 137,789 $ Total revenues 12,000 12,000 149,789 137,789 EXPENDITURES:
Current:
Community development 48,500 48,500 48,476 24 Total expenditures 48,500 48,500 48,476 24 NET CHANGES IN FUND BALANCES (36,500)$ (36,500) $ 101,313 137,813 $ FUND BALANCES:
Beginning of year 956,301
End of year 1,057,614$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual City Housing Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
156
233 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Charges for services 80,000 $ 80,000 $ 289,612 $ 209,612 $ Investment income (loss) - - (96,625) (96,625) Total revenues 80,000 80,000 192,987 112,987 EXPENDITURES:
Current:
Community development 142,213 142,644 2,934,341 (2,791,697) Total expenditures 142,213 142,644 2,934,341 (2,791,697) NET CHANGES IN FUND BALANCES (62,213)$ (62,644) $ (2,741,354) 2,904,684 $ FUND BALANCES:
Beginning of year 7,071,861
End of year 4,330,507$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Low and Moderate Income Housing Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
157
234 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Intergovernmental 531,409 $ 531,409 $ 177,002 $ (354,407) $ Investment income (loss) - - (2,025) (2,025) Total revenues 531,409 531,409 174,977 (356,432) EXPENDITURES:
Current:
Community development 863,654 $ 863,654 $ 198,376 $ 665,278 $ Total expenditures 863,654 863,654 198,376 665,278 NET CHANGES IN FUND BALANCES (332,245)$ (332,245) $ (23,399) (1,021,710) $ FUND BALANCES:
Beginning of year -
End of year (23,399)$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Permanent Local Housing Allocation Special Revenue Fund For the Year Ended June 30, 2022
Budgeted Amounts
158
235 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Intergovernmental 2,626,215 $ 2,626,215 $ 2,186,200 $ (440,015) $ Investment income (loss) - - (18,204) (18,204) Total revenues 2,626,215 2,626,215 2,167,996 (458,219) EXPENDITURES:
Current:
Public works 1,747,500 1,747,500 1,747,500 - Total expenditures 1,747,500 1,747,500 1,747,500 -
REVENUES OVER
(UNDER) EXPENDITURES 878,715 878,715 420,496 (458,219) OTHER FINANCING (USES):
Transfers out (1,480,000) (1,480,000) (18,165) 1,461,835 Total other financing (uses) (1,480,000) (1,480,000) (18,165) 1,461,835 NET CHANGES IN FUND BALANCES (601,285)$ (601,285)$ 402,331 1,003,616$ FUND BALANCES:
Beginning of year 678,505
End of year 1,080,836$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Gas Tax Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
159
236 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Intergovernmental 2,043,788 $ 2,043,788 $ 2,089,730 $ 45,942 $ Investment income (loss) - - (67,768) (67,768) Total revenues 2,043,788 2,043,788 2,021,962 (21,826) OTHER FINANCING SOURCES (USES):
Transfers out (2,000,000) (2,000,000) (1,892,481) 107,519 Total other financing sources (uses) (2,000,000) (2,000,000) (1,892,481) 107,519 NET CHANGES IN FUND BALANCES 43,788$ 43,788$ 129,481 85,693$ FUND BALANCES:
Beginning of year 2,036,711
End of year 2,166,192$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Road Maintenance and Rehabilitation Special Revenue Fund For the Year Ended June 30, 2022
Budgeted Amounts
160
237 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Charges for services 1,300,000 $ 1,300,000 $ 1,038,518 $ (261,482) $ Investment income (loss) - - (132,308) (132,308) Total revenues 1,300,000 1,300,000 906,210 (393,790) EXPENDITURES:
Current:
Community development 2,123,317 2,127,515 1,514,331 613,184 Total expenditures 2,123,317 2,127,515 1,514,331 613,184 NET CHANGES IN FUND BALANCES (823,317)$ (827,515) $ (608,121) (1,006,974) $ FUND BALANCES:
Beginning of year 5,213,024
End of year 4,604,903$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Advance Planning Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
161
238 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Fines, forfeitures and penalties 400,000 $ 400,000 $ 724,997 $ 324,997 $ Intergovernmental 214,000 214,000 122,000 (92,000) Charges for services 933,271 933,271 779,683 (153,588) Investment income (loss) - - (290,939) (290,939) Assessments and garbage collection 1,273,679 1,273,679 971,388 (302,291) Capital contributions 750,000 750,000 750,000 - Other revenues 82,000 82,000 563,721 481,721 Total revenues 3,652,950 3,652,950 3,620,850 (32,100) EXPENDITURES:
Current:
Public works 2,302,924 2,318,963 1,890,701 428,262 Total expenditures 2,302,924 2,318,963 1,890,701 428,262
REVENUES OVER
(UNDER) EXPENDITURES 1,350,026 1,333,987 1,730,149 (460,362) OTHER FINANCING SOURCES (USES):
Transfers out (750,000) (750,000) (16,911) 733,089 Total other financing sources (uses) (750,000) (750,000) (16,911) 733,089 NET CHANGES IN FUND BALANCES 600,026$ 583,987$ 1,713,238 272,727$ FUND BALANCES:
Beginning of year 10,464,847
End of year 12,178,085$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Solid Waste Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
162
239 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Investment income (loss) - $ - $ (329,362)$ (329,362) $ Assessments and garbage collection 3,407,000 3,407,000 137,026 (3,269,974) Total revenues 3,407,000 3,407,000 (192,336) (3,599,336) EXPENDITURES:
Current:
Non-departmental 16,866 16,866 16,866 - Total expenditures 16,866 16,866 16,866 -
REVENUES OVER
(UNDER) EXPENDITURES 3,390,134 3,390,134 (209,202) (3,599,336) OTHER FINANCING SOURCES (USES):
Transfers out (4,400,000) (4,400,000) (224,513) 4,175,487 Total other financing sources (uses) (4,400,000) (4,400,000) (224,513) 4,175,487 NET CHANGES IN FUND BALANCES (1,009,866)$ (1,009,866)$ (433,715) 576,151$ FUND BALANCES:
Beginning of year 12,560,034
End of year 12,126,319$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Parks and Recreation Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
163
240 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Investment income (loss) - $ - $ (20,681)$ (20,681) $ Impact fees 1,250,000 1,250,000 25,067 (1,224,933) Total revenues 1,250,000 1,250,000 4,386 (1,245,614) OTHER FINANCING (USES):
Transfers out (50,000) (50,000) (590,325) (540,325) Total other financing (uses) (50,000) (50,000) (590,325) (540,325) NET CHANGES IN FUND BALANCES 1,200,000$ 1,200,000$ (585,939) (1,785,939)$ FUND BALANCES:
Beginning of year 843,355
End of year 257,416$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Traffic Impact Fee Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
164
241 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Licenses, building and other permits 50,000 $ 50,000 $ 132,980 $ 82,980 $ Investment income (loss) - - (125,504) (125,504) Total revenues 50,000 50,000 7,476 (42,524) EXPENDITURES:
Current:
Community development 5,141 5,141 4,005,141 (4,000,000) Total expenditures 5,141 5,141 4,005,141 (4,000,000)
REVENUES OVER
(UNDER) EXPENDITURES 44,859 44,859 (3,997,665) 3,957,476 OTHER FINANCING (USES):
Transfers out - (40,000) - 40,000 Total other financing (uses) - (40,000) - 40,000 NET CHANGES IN FUND BALANCES 44,859$ 4,859$ (3,997,665) 3,997,476$ FUND BALANCES:
Beginning of year 7,157,183
End of year 3,159,518$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Commercial Linkage Fee Special Revenue Fund
For the Year Ended June 30, 2022
Budgeted Amounts
165
242 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Investment income (loss) 15,000 $ 15,000 $ (82,426) $ (97,426) $ Assessments and garbage collection 600,000 600,000 600,000 - Total revenues 615,000 615,000 517,574 (97,426) EXPENDITURES:
Current:
Public works 95,749 95,964 72,943 23,021 Total expenditures 95,749 95,964 72,943 23,021 NET CHANGES IN FUND BALANCES 519,251$ 519,036$ 444,631 (74,405)$ FUND BALANCES:
Beginning of year 2,923,078
End of year 3,367,709$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Landfill Bonds Debt Service Fund
For the Year Ended June 30, 2022
Budgeted Amounts
166
243 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Property taxes 2,045,950 $ 2,045,950 $ 2,448,170 $ 402,220 $ Investment income (loss) 10,000 10,000 (135,902) (145,902) Total revenues 2,055,950 2,055,950 2,312,268 256,318 EXPENDITURES:
Debt service:
Principal 2,280,000 2,280,000 2,280,000 - Interest and fiscal charges 2,461,372 2,461,372 2,462,546 (1,174) Total expenditures 4,741,372 4,741,372 4,742,546 (1,174)
REVENUES OVER
(UNDER) EXPENDITURES (2,685,422) (2,685,422) (2,430,278) 255,144 OTHER FINANCING SOURCES:
Transfers in 2,663,647 2,663,647 2,663,647 - Total other financing sources 2,663,647 2,663,647 2,663,647 - NET CHANGES IN FUND BALANCES (21,775)$ (21,775) $ 233,369 255,144 $ FUND BALANCES:
Beginning of year 5,700,789
End of year 5,934,158$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual General Obligation Bonds Debt Service Fund
For the Year Ended June 30, 2022
Budgeted Amounts
167
244 of 417
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:
Other taxes - $ - $ 650,331$ 650,331 $ Investment income (loss) 33,333 33,333 37 (33,296) Total revenues 33,333 33,333 650,368 617,035 EXPENDITURES:
Debt service:
Principal 445,000 445,000 444,700 300 Interest and fiscal charges 243,086 243,086 151,185 91,901 Total expenditures 688,086 688,086 595,885 92,201
REVENUES OVER
(UNDER) EXPENDITURES (654,753) (654,753) 54,483 709,236 OTHER FINANCING SOURCES (USES):
Transfers in 388,478 388,478 388,478 - Transfers out - - (1,234,490) (1,234,490) Total other financing sources (uses) 388,478 388,478 (846,012) (1,234,490) NET CHANGES IN FUND BALANCES (266,275)$ (266,275)$ (791,529) (525,254)$ FUND BALANCES:
Beginning of year (572,300)
End of year (1,363,829)$
City of San Mateo
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual 2% Hotel Tax Capital Projects Fund
For the Year Ended June 30, 2022
Budgeted Amounts
168
245 of 417
Internal Service Funds
Workers' Compensation Insurance Fund accounts for all workers' compensation self-insurance activities.
Dental Self-Insurance Fund accounts for the City's self-insurance activities related to the dental plan the City provides to its employees.
Benefits Fund accounts for charges to other funds and expenditures relating to employee benefits other than those accounted for in the Worker Compensation and Dental Self-Insurance Funds.
Comprehensive Liability Insurance Fund accounts for the general liability self-insurance transactions.
Vehicle and Equipment Replacement Fund accounts for rental charges to City departments and the replacement of vehicles and equipment.
Fleet and Building Maintenance Fund accounts for the charges to user departments and the expenses relating to the maintenance of City vehicles and buildings.
169
246 of 417
Workers' Comprehensive
Compensation Dental Liability
Insurance Self-Insurance Benefits Insurance
ASSETS
Current assets:
Cash and investments 16,940,256$ 933,307$ -$ 502,169$ Accounts receivable, net - - - - Due from other funds 110,898 - - - Prepaid items, inventory, and deposits 395,000 147,000 - 30,000 Total current assets 17,446,154 1,080,307 - 532,169 Noncurrent assets:
Capital assets:
Depreciable, net - - - - Total capital assets - - - - Total noncurrent assets - - - - Total assets 17,446,154 1,080,307 - 532,169
LIABILITIES
Current liabilities:
Accounts payable 109,649 1,078 47,336 177,506 Due to other funds - - 110,898 - Deposits payable 9,092 795 107,884 - Claims payable - due within one year 2,800,000 - - 500,000 Total current liabilities 2,918,741 1,873 266,118 677,506 Noncurrent liabilities:
Claims payable - due in more than one year 9,397,000 - - 1,372,000 Total noncurrent liabilities 9,397,000 - - 1,372,000 Total liabilities 12,315,741 1,873 266,118 2,049,506
NET POSITION
Investment in capital assets - - - - Unrestricted (deficit) 5,130,413 1,078,434 (266,118) (1,517,337) Total net position 5,130,413$ 1,078,434 $ (266,118) $ (1,517,337) $ City of San Mateo
Combining Statement of Net Position
All Internal Service Funds
For the Year Ended June 30, 2022
170
247 of 417
Vehicle and Fleet and
Equipment Building
Replacement Maintenance Total
ASSETS
Current assets:
Cash and investments 13,708,621 $ 923,748 $ 33,008,101 $ Accounts receivable, net - 8,095 8,095 Due from other funds - - 110,898 Prepaid items, inventory, and deposits - 32,174 604,174 Total current assets 13,708,621 964,017 33,731,268 Noncurrent assets:
Capital assets:
Depreciable, net 5,550,896 - 5,550,896 Total capital assets 5,550,896 - 5,550,896 Total noncurrent assets 5,550,896 - 5,550,896 Total assets 19,259,517 964,017 39,282,164
LIABILITIES
Current liabilities:
Accounts payable 103,019 209,145 647,733 Due to other funds - - 110,898 Deposits payable - - 117,771 Claims payable - due within one year - - 3,300,000 Total current liabilities 103,019 209,145 4,176,402 Noncurrent liabilities:
Claims payable - due in more than one year - - 10,769,000 Total noncurrent liabilities - - 10,769,000 Total liabilities 103,019 209,145 14,945,402
NET POSITION
Investment in capital assets 5,550,896 - 5,550,896 Unrestricted (deficit) 13,605,602 754,872 18,785,866 Total net position 19,156,498$ 754,872$ 24,336,762$ City of San Mateo
Combining Statement of Net Position (Continued)
All Internal Service Funds
June 30, 2022
171
248 of 417
Workers' Comprehensive
Compensation Dental Liability
Insurance Self-Insurance Benefits Insurance
OPERATING REVENUES:
Charges for services 4,501,344$ 801,735$ 39,439,370$ 1,610,000$ Other - - - 32,784 Total operating revenues 4,501,344 801,735 39,439,370 1,642,784 OPERATING EXPENSES:
Costs of sales and services (1,651,938) 514,464 10,540,349 3,599,582 Administration 409,487 - 29,281,513 135,497 Depreciation and amortization - - - - Total operating expenses (1,242,451) 514,464 39,821,862 3,735,079 OPERATING INCOME (LOSS) 5,743,795 287,271 (382,492) (2,092,295) NONOPERATING REVENUES (EXPENSES):
Investment income (430,248) - - (13,628) Gain on sale of capital assets - - - - Total nonoperating revenues (expenses) (430,248) - - (13,628) INCOME (LOSS) BEFORE TRANSFERS 5,313,547 287,271 (382,492) (2,105,923) TRANSFERS:
Transfers in - - - - Transfers out - - - - Total transfers - - - - Changes in net position 5,313,547 287,271 (382,492) (2,105,923) NET POSITION:
Beginning of year (183,134) 791,163 116,374 588,586 End of year 5,130,413$ 1,078,434$ (266,118)$ (1,517,337)$
City of San Mateo
Combining Statement of Revenues, Expenses, and Changes in Net Position All Internal Service Funds
For the Year Ended June 30, 2022
172
249 of 417
Vehicle & Fleet &
Equipment Building
Replacement Maintenance Total
OPERATING REVENUES:
Charges for services 1,637,512$ 5,406,903$ 53,396,864$ Other - - 32,784 Total operating revenues 1,637,512 5,406,903 53,429,648 OPERATING EXPENSES:
Costs of sales and services 492,362 3,385,244 16,880,063 Administration - 1,687,297 31,513,794 Depreciation and amortization 1,274,482 - 1,274,482 Total operating expenses 1,766,844 5,072,541 49,668,339 OPERATING INCOME (LOSS) (129,332) 334,362 3,761,309 NONOPERATING REVENUES (EXPENSES):
Investment income (379,355) - (823,231) Gain on sale of capital assets 42,999 - 42,999 Total nonoperating revenues (expenses) (336,356) - (780,232) INCOME (LOSS) BEFORE TRANSFERS (465,688) 334,362 2,981,077 TRANSFERS:
Transfers in 410,000 - 410,000 Transfers out (828,987) - (828,987) Total transfers (418,987) - (418,987) Changes in net position (884,675) 334,362 2,562,090 NET POSITION:
Beginning of year 20,041,173 420,510 21,774,672 End of year 19,156,498$ 754,872$ 24,336,762$ City of San Mateo
Combining Statement of Revenues, Expenses, and Changes in Net Position (Continued) All Internal Service Funds
For the Year Ended June 30, 2022
173
250 of 417
Workers' Comprehensive
Compensation Dental Liability
Insurance Self-Insurance Benefits Insurance
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers 4,501,344$ 801,735$ 40,169,373$ 1,610,000$ Cash payments to suppliers for goods and services (4,214,469) (49,156) (29,291,968) (46,191) Cash payments to employees for services 1,651,938 (514,464) (10,540,349) (3,599,582) Cash received from others - - - 788,784 Net cash provided by (used in) operating activities 1,938,813 238,115 337,056 (1,246,989)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Interfund borrowing (lending) 337,056 - - - Repayment of interfund borrowing (lending) - - (337,056) - Transfers in - - - - Transfers out - - - - Net cash provided by (used in)
noncapital financing activities 337,056 - (337,056) -
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Proceeds from sale of capital assets - - - - Acquisition of capital assets, net - - - - Net cash (used in) capital and
related financing activities - - - - CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income received (430,248) - - (13,628) Net cash (used in) investing activities (430,248) - - (13,628) Net change in cash and cash equivalents 1,845,621 238,115 - (1,260,617) CASH AND CASH EQUIVALENTS:
Beginning of year 15,094,635 695,192 - 1,762,786 End of year 16,940,256$
933,307$ -$ 502,169$
(Continued)
City of San Mateo
Combining Statement of Cash Flows
All Internal Service Funds
For the Year Ended June 30, 2022
174
251 of 417
Workers' Comprehensive
Compensation Dental Liability
Insurance Self-Insurance Benefits Insurance
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss) 5,743,795$ 287,271$ (382,492)$ (2,092,295)$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:
Depreciation - - - - Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:
Accounts receivable, net - - 730,003 - Accounts payable (65,982) (49,156) (28,956) 89,306 Deposits payable - - 18,501 - Claims payable (3,739,000) - - 756,000 Total adjustments (3,804,982) (49,156) 719,548 845,306 Net cash provided by (used in) operating activities 1,938,813$ 238,115$ 337,056$ (1,246,989)$
(Continued)
All Internal Service Funds
For the Year Ended June 30, 2022
City of San Mateo
Combining Statement of Cash Flows (Continued)
175
252 of 417
Vehicle & Fleet &
Equipment Building
Replacement Maintenance Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers 1,637,512 $ 5,398,903 $ 54,118,867 $ Cash payments to suppliers for goods and services 103,019 (1,718,609) (35,217,374) Cash payments to employees for services (492,362) (3,385,244) (16,880,063) Cash received from others - - 788,784 Net cash provided by (used in) operating activities 1,248,169 295,050 2,810,214
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Interfund borrowing (lending) - - 337,056 Repayment of interfund borrowing (lending) - - (337,056) Transfers in 410,000 - 410,000 Transfers out (828,987) - (828,987) Net cash provided by
noncapital financing activities (418,987) - (418,987)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Proceeds from sale of capital assets 57,656 - 57,656 Acquisition of capital assets, net (567,390) - (567,390) Net cash (used in) capital and
related financing activities (509,734) - (509,734) CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income received (379,355) - (823,231) Net cash (used in) investing activities (379,355) - (823,231) Net change in cash and cash equivalents (59,907) 295,050 1,058,262 CASH AND CASH EQUIVALENTS:
Beginning of year 13,768,528 628,698 31,949,839 End of year 13,708,621$ 923,748$ 33,008,101$
(Continued)
City of San Mateo
Combining Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30, 2022
176
253 of 417
Vehicle & Fleet &
Equipment Building
Replacement Maintenance Total
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss) (129,332) $ 334,362 $ 3,761,309 $ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:
Depreciation 1,274,482 - 1,274,482 Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:
Accounts receivable, net - (8,000) 722,003 Accounts payable 103,019 (31,312) 16,919 Deposits payable - - 18,501 Claims payable - - (2,983,000) Total adjustments 1,377,501 (39,312) (951,095) Net cash provided by (used in) operating activities 1,248,169$ 295,050$ 2,810,214$
(Concluded)
Combining Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30, 2022
City of San Mateo
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178
255 of 417
Fiduciary Funds - Custodial Funds
San Mateo Consolidated Fire Department Custodial Fund, accounts for assets that the City is holding for the San Mateo Consolidated Fire Department.
CFD 2008-1 Custodial Fund , accounts for assets that the City is holding for the Community Facilities District No. 2008-01 for which the City is acting as an agent.
Other Custodial Fund , accounts for assets that the City is holding for other entities for which the City is acting as an agent.
179
256 of 417
San Mateo
Consolidated
Fire Department CFD 2008-1 Other Total
ASSETS
Cash and investments 97,466$ 37,819$ 53,186$ 188,471$ Restricted cash and investments - 88,946,410 - 88,946,410 Total assets 97,466 88,984,229 53,186 89,134,881
LIABILITIES
Accounts payable 97,466 - 53,186 150,652 Total liabilities 97,466 - 53,186 150,652
NET POSITION
Restricted for:
Individuals, organizations, and other governments - 88,984,229 - 88,984,229 Total Net Position -$ 88,984,229$ -$ 88,984,229$ City of San Mateo
Combining Statement of Fiduciary Net Position
Fiduciary Funds - Custodial Funds
For the Year Ended June 30, 2022
180
257 of 417
San Mateo
Consolidated
Fire Department CFD 2008-1 Other Total
ADDITIONS:
Fee collections for other governments 311,148$ -$ 210,121$ 521,269$ Special Assessments for other governments - 5,630,130 - 5,630,130 Investment income - 7,310 - 7,310 Proceeds from conduit debt issuance - 78,183,627 - 78,183,627 Total additions 311,148 83,821,067 210,121 84,342,336 DEDUCTIONS:
Administration - 15,371 - 15,371 Payments on conduit bonds - principal - 835,000 - 835,000 Payments on conduit bonds - interest - 4,498,226 - 4,498,226 Project payments - 1,363,033 99,114 1,462,147 Payments to other governments 311,148 - 111,007 422,155 Other - 1,751,211 - 1,751,211 Total deductions 311,148 8,462,841 210,121 8,984,110 Changes in net position - 75,358,226 - 75,358,226 NET POSITION:
Beginning of year - 13,626,003 - 13,626,003 End of year -$ 88,984,229$ -$ 88,984,229$ City of San Mateo
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds - Custodial Funds
For the Year Ended June 30, 2022
181
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182
259 of 417
Fiduciary Funds - Private Purpose Trust Funds
RDA Obligation Retirement Fund (RORF), established in accordance with AB 1X 26, accounts for Redevelopment Property Tax Trust Fund amounts received after January 31, 2012 to pay for Recognized Obligation Payment Schedule (ROPS) items.
Successor Agency to RDA Merged Area Fund , a sub-fund of the RORF, accounts for assets and liabilities of the former RDA merged project area which were transferred to the Successor Agency upon RDA dissolution to be used for ROPS payments or redistributed to taxing entities.
Successor Agency to RDA Housing Fund , a sub-fund of the RORF, accounts for assets and liabilities of the former RDA housing set aside transferred to the Successor Agency upon RDA dissolution to be used for ROPS payments or redistributed to taxing entities.
183
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RDA Successor Agency Successor Agency
Retirement to RDA Merged to RDA
Obligation Area Housing Total
ASSETS
Cash and investments 4,990,852 $ - $ - $ 4,990,852$ Total assets 4,990,852 - - 4,990,852
DEFERRED OUTFLOWS
OF RESOURCES
Deferred loss on refunding - 420,532 - 420,532 Total deferred outflows of resources - 420,532 - 420,532
LIABILITIES
Interest payable - 854,396 11,294 865,690 Long-term debt - due within one year - 3,205,000 695,000 3,900,000 Long-term debt - due in more than one year - 42,645,627 - 42,645,627 Total liabilities - 46,705,023 706,294 47,411,317
DEFERRED INFLOWS
OF RESOURCES
Deferred gain on refunding - 43,377 - 43,377 Total deferred inflows of resources - 43,377 - 43,377
NET POSITION
Held in trust for dissolution of RDA 4,990,852 (46,327,868) (706,294) (42,043,310) Total Net Position 4,990,852$ (46,327,868)$ (706,294)$ (42,043,310)$ City of San Mateo
Combining Statement of Fiduciary Net Position
Fiduciary Funds - Private Purpose Trust Funds
For the Year Ended June 30, 2022
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RDA Successor Agency Successor Agency
Retirement to RDA Merged to RDA
Obligation Area Housing Total
ADDITIONS:
Investment income 40$ -$ -$ 40$ RDA property tax trust fund distribution 82,100 4,717,610 1,195,000 5,994,710 Total additions 82,140 4,717,610 1,195,000 5,994,750 DEDUCTIONS:
Administration - 10,000 10,000 20,000 Interest expense - 1,641,842 (17,775) 1,624,067 Total deductions - 1,651,842 (7,775) 1,644,067 Changes in net position 82,140 3,065,768 1,202,775 4,350,683 NET POSITION:
Beginning of year 4,908,712 (49,393,636) (1,909,069) (46,393,993) End of year 4,990,852$ (46,327,868) $ (706,294) $ (42,043,310)$ City of San Mateo
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds - Private Purpose Trust Funds
For the Year Ended June 30, 2022
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Schedules of Assessments and Investment Fees and Related Expenditures South Bayfront Levee Improvement Project accounts for the revenues and expenditures of assessments imposed to finance the South Bayfront Levee Improvement Project.
South Trunk area sewer improvements. The fee is imposed on all development and redevelopment served by the South Trunk line.
Child Care Development Impact Fee accounts for revenues and expenditures related to the child care development fee to fund child care facilities necessitated by commercial development.
Tree Impact Fee accounts for revenues and expenditures related to the tree replacement fee established on all development requiring approval of planning application, except for single-family dwelling design review applications, for the removal of existing trees on development sites.
Cable Television Impact Fee accounts for revenues and expenditures related to the cable television impact fee to fund public access community television.
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South
Bayfront Total
Levee Sout h Child Care Cable Assessment s
Improvement Trunk Sewer Development Tree Television and Impac t Project Impact Fee Impact Fee Impact Fee Impact Fee Fees REVENUES:
Assessments 539,889 $ 49,477 $ - $ 96,054$ 266,878 $ 952,298 $ Interest income - - 15,991 8,232 8,093 32,316 Total revenues 539,889 49,477 15,991 104,286 274,971 984,614 EXPENDITURES:
Capital outlay 33,682 641,421 - 9,339 55,369 739,811 Debt service 398,389 - - - - 398,389 Total expenditures 432,071 641,421 - 9,339 55,369 1,138,200 UNEXPENDED BALANCES:
Beginning of year 2,053,606 591,944 2,129,655 1,067,919 1,039,327 6,882,451 End of year 2,161,424 $ - $ 2,145,646$ 1,162,866 $ 1,258,929 $ 6,728,865 $ City of San Mateo
General Capital Projects Fund
Schedule of Assessments and Impact Fees and Related Expenditures For the Year Ended June 30, 2022
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STATISTICAL SECTION
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Contents Page
Financial Trends 194
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 206
These schedules contain information to help the reader assess the City's most significant local revenues source: property tax
Debt Capacity 212
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 219
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 221
These schedules contain service and infrastructure data to help the reader to understand how the information in the City's financial reports relates to the services the city provides and the activities it performs.
This part of the City of San Mateo's Annual Comprehensive Financial Reports 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 condition.
STATISTICAL SECTION (Unaudited)
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2013 2014 2015 2016 2017
Governmental Activities
Net investment in capital assets 333,716,045 $ 338,446,921 $ 338,597,493 $ 348,551,145 $ 361,295,211 $ Restricted 80,544,476 82,599,049 35,940,430 42,628,946 43,004,559 Unrestricted 64,260,546 83,713,423 (56,568,094) (25,485,083) (16,647,454) Total Governmental Activities Net Position 478,521,067$ 504,759,393 $ 317,969,829 $ 365,695,008 $ 387,652,316 $ Business-Type Activities
Net investment in capital assets 70,235,094 $ 76,417,915 $ 78,438,576 $ 83,893,024 $ 112,410,305 $ Restricted 9,139,202 5,982,278 11,056,422 9,457,948 17,976,147 Unrestricted 13,889,683 17,701,761 10,218,009 20,791,916 (7,096,918) Total Business-Type Activities Net Position 93,263,979$ 100,101,954 $ 99,713,007 $ 114,142,888 $ 123,289,534 $ Primary Government
Net investment in capital assets 403,951,139 $ 414,864,836 $ 417,036,069 $ 432,444,169 $ 473,705,516 $ Restricted 89,683,678 88,581,327 46,996,852 52,086,894 60,980,706 Unrestricted 78,150,229 101,415,184 (46,350,085) (4,693,167) (23,744,372) Total Primary Government Net Position 571,785,046$ 604,861,347 $ 417,682,836 $ 479,837,896 $ 510,941,850 $ Notes:
(1) Significant variance in restricted and unrestricted net position was due to implementation of GASB 65, 68 and 71 in FY2015 (2) Unrestricted net position included adjustment to reflect implementation of GASB 75 in FY2018 Source: City of San Mateo Annual Comprehensive Financial Reports