CITY OF BERKELEY

CALIFORNIA

Comprehensive Annual Financial Report for Year Ended June 30, 2012

 

CITY OF BERKELEY

CALIFORNIA

Comprehensive Annual Financial Report For the fiscal year ended June 30, 2012

Prepared by Finance Department Robert Hicks Director of Finance

 

CITY OF BERKELEYComprehensive Annual Financial ReportFor the Fiscal Year Ended June 30, 2012

TABLE OF CONTENTS

INTRODUCTORY SECTIONLetter of Transmittal 1-18GFOA Certificate of Achievement 19Government Structure 20List of Elected and Appointed Officials 21Organizational Chart 22

FINANCIAL SECTIONIndependent Auditor's Report 23-24

Management's Discussion and Analysis 25-40

Basic Financial Statements 41Government-wide Financial Statements:

Statement of Net Assets 42Statement of Activities 43

Fund Financial StatementsGovernmental Funds:

Balance Sheet 44Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Assets - Governmental Activities 45Statement of Revenues, Expenditures, and Changes in Fund Balances 46Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities - Governmental Activities 47

Proprietary Funds:Statement of Net Assets 48Statement of Revenues, Expenses and Changes in Fund Net Assets 49Statement of Cash Flows 50-51

Fiduciary Funds:Statement of Fiduciary Net Assets 52Statement of Changes in Fiduciary Net Assets 53

Notes to the Financial Statements 55-129Notes to the Private Trust Funds of the Successor Agency 130-133

Required Supplementary Information: 135Schedule of Revenues, Expenditures and Changes in Fund Balances - General Fund - Budgetary Basis 137Schedule of Revenues, Expenditures and Changes in Fund Balances - Other Major Special Revenue Funds - Budgetary Basis 138Schedule of Funding Progress - CALPERS, Safety Members Pension Fund (SMPF),Police Retirement Income Benefit Plan, and OPEB Plans 139-141Note to Required Supplementary Informaiton 142

Other Supplementary Information:Combining and Individual Fund Statements and Schedules: 143

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Major Capital Project Funds - Budgetary Basis 145-146

Fund legend for Nonmajor Governmental Funds 147-155

Combining Balance Sheet 156-165Combining Statement of Revenues, Expenditures and Changes in Fund Balances 166-175

CITY OF BERKELEYComprehensive Annual Financial ReportFor the Fiscal Year Ended June 30, 2012

TABLE OF CONTENTS

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Budgetary Basis 176-196

Fund legend for Internal Service Funds 197

Combining Statement of Net Assets - Internal Service Funds 198Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - Internal Service Funds - Budgetary Basis 199Combining Statement of Cash Flows - Internal Service Funds 200-201

Fund legend for Fiduciary Funds 203

Combining Statement of Fiduciary Net Assets - Pensions and Other Employee Benefit Trust Funds 204Combining Statement of Changes in Fiduciary Net Assets - Pension and Other Employee Benefit Trust Funds 205

Fund legend for Agency Funds 207

Combining Statement of Fiduciary Net Assets - Agency Funds 208Statement of Changes in Assets and Liabilities - Agency Funds 209

STATISTICAL SECTION Index to Statistical Section 211

Financial Trends:Net Assets by Component 212Changes in Net Assets 213-215Fund Balance, Governmental Funds 216Changes in Fund Balances, Governmental Funds 217-218

Revenue Capacity:Assess Value and Estimated Actual Values of Taxable Property 219Direct and Overlapping Property Tax Rates 220Principle Property Tax Payers 221Property Tax levies and Collections 222

Debt Capacity:Ratios of Outstanding Debt by Type 223Ratios of General Bonded Debt Outstanding 224Direct and Overlapping Governmental Activities Debt 225Legal Debt Margin Information 226Pledged Revenue Coverage 227

Demographic and Economic Information:Demographic and Economic Statistics 228Principal Employers 229Full-Time-Equivalent City Government Employees by Function/Program 230

Operating Information:Operating Indicators 231-233Capital Asset Statistics by Function/Program 234

REPORT ON INTERNAL CONTROL AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 235-236

Schedule of Findings and Responses 237

I. INTRODUCTORY

THIS PAGE LEFT INTENTIONALLY BLANK

Department of Finance Office of the Director

MEMORANDUM DATE: December 21, 2012 TO: Honorable Mayor and Members of the City Council, City Manager, and Citizens

of the City of Berkeley FROM: Robert Hicks, Director of Finance RE: Presentation of the Comprehensive Annual Financial Report Attached is the Comprehensive Annual Financial Report (CAFR) of the City of Berkeley for the fiscal year ended June 30, 2012. The CAFR has been prepared by the Finance Department in conformance with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB). Responsibility for the accuracy, comprehensiveness and fairness of the presented data, including all disclosures, rests with the City’s management. The report has been compiled in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain an understanding of the City’s financial affairs have been included. The City prepared the CAFR in accordance with generally accepted accounting principles, which included using the financial reporting requirements prescribed by GASB Statement No. 34, Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments (GASB 34). This statement requires that management provide a narrative overview and analysis to introduce the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the independent auditor’s report. THE REPORTING ENTITY This report combines the financial statements of the City, the Berkeley Redevelopment Agency (BRA) through January 31, 2012, the Berkeley Housing Authority (BHA), and the Rent Stabilization Board (RSB) in accordance with principles defining the governmental reporting entity adopted by the Governmental Accounting Standards Board (GASB). The Rent Stabilization Board is a discretely presented component unit because the citizens elect its nine-member Board of Commissioners. The Berkeley Housing Authority is a discretely presented component unit because Department of Housing and Urban Development (HUD) required the City to appoint an independent board responsible for oversight of BHA, and the City provides significant financial support to BHA.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 2 The financial operations of the BRA, though legally separate from the City, are closely related to the City. In fact, in separate sessions, the City Council members serve as the governing board of the BRA. As a result, the BRA is presented as a blended component unit in the financial statements. The financial activities of the BRA through January 31, 2012 are included with the capital project and debt service fund types. However, 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 California. This action impacted the reporting entity of the City of Berkeley that previously had reported Berkeley redevelopment agency (BRA) within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will 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 17, 2012, the City Council elected the City to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 65.574-N.S.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining 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 contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill. Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. Prior to that date, seven months of the activity of the redevelopment agency continued to be reported in the governmental funds of the City. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City. The transfer of the assets and liabilities of the former redevelopment agency as of February 1, 2012 (effectively the same date as January 31, 2012) from governmental funds of the City to fiduciary funds was reported in the governmental funds as an extraordinary loss (or gain) in the governmental fund financial statements. The receipt of

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 3 these assets and liabilities as of January 31, 2012 was reported in the private-purpose trust fund as an extraordinary gain (or loss). PROFILE OF THE CITY The City of Berkeley is located in Alameda County on the east side of the San Francisco Bay approximately ten (10) miles east of San Francisco. The City encompasses a total area of approximately 19 square miles and has an estimated population of 114,821, giving it the highest population density of any city in the East Bay. The City is defined to a large degree, both culturally and economically, by the presence of the University of California campus located on the eastern side of the City. The City of Berkeley is among the oldest cities in California. It was founded in 1864, incorporated as a town in 1878, and incorporated as a city in 1909. The original City Charter was adopted in 1895. At the geographic midpoint of the Greater Bay Area, Berkeley is 20 minutes from San Francisco and close to population centers in Contra Costa County and the Silicon Valley. The City is governed by a City Council composed of members elected from eight districts to serve four-year terms, and a Mayor who serves as the president of the City Council, elected citywide to a four-year term. The City’s FY 2012 adopted budget included $314,053,925 of expenditures and reserves, of which $149,576,309 was allocated to the General Fund of the City and $164,477,616 to all other funds. The City employs approximately 1,483 full-time equivalent employees. The City provides a full range of services exceeding that of most similarly sized cities in California: services include public safety (police and fire); sanitation and sewer; housing; leisure (parks, recreation and marina); health and human services including City funded health clinics; animal control; public improvements; planning and zoning; general and administrative services; and library services. In addition, the City’s reporting entity includes the financial activities of the Redevelopment Agency for seven months, the Housing Authority and the Rent Stabilization Board. The budget process is the vehicle through which the City establishes goals and objectives, and prioritizes the desired programs or services that the City should provide, and which can be financed by the City’s projected revenue for the budget year. It is the vehicle through which policy decisions are made, effected, controlled and monitored. Under the City Charter, the City Manager is responsible for preparing and recommending an operating budget and a capital improvements budget for City Council consideration and adoption. The City of Berkeley employs a two-year budget process. In year one of the biennial budget cycle, the City Council formally adopts authorized appropriations for the first year of the two-year budget and approves “planned” appropriations for the second fiscal year. In year two of the budget cycle, the City Council considers revisions and formally adopts authorized appropriations for the second fiscal year. Although the budget cycle covers a two-year period, the City Charter requires that the City Council adopt an annual appropriations ordinance for each budget year. The City's Capital Budget is considered as part of the City's Five-Year Capital Improvement Plan. Upon adoption each year by Council, the projects included in the annual budget represent

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 4 legal appropriations. Capital expenditures are not fully "consumed" in the year of expenditure but instead produce long-term, tangible, future benefits. In addition to this budget planning process, the City maintains budgetary controls. The City’s objective in maintaining budgetary control is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. The City Manager is authorized to transfer budgeted amounts within funds as deemed necessary in order to meet the City’s needs. However, revisions that alter the total budget or move amounts from one fund to another must be approved by the City Council. Activities of the General Fund, Special Revenue Funds, Debt Service Funds, Capital Project Funds, and Proprietary Funds are included in the annual appropriated budget. The City maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Purchase orders, contracts, and other commitments for the expenditure of money are secured in order to reserve that portion of the applicable appropriation. Encumbrances outstanding at year-end are reported as reservations of fund balance. Unencumbered amounts lapse at year-end and may be appropriated as part of the following year’s budget. Moving Toward an Integrated Budget Process. The City is continually improving its budget process and service delivery to align policy goals, program objectives and resources, and service delivery – including establishing useful performance goals and integrating them with sustainable performance goals. The two-year budget allows time to effectively integrate goal-setting and policy-making processes, with the establishment of performance targets and the allocation of resources. Short-term program and service objectives can be developed, and resources to meet these objectives can be appropriately allocated through the budget process. To complete the cycle, performance measures will be used to evaluate if services were effective and policy goals met. This information can feed the subsequent assessment of community conditions and trends for the next budget and performance cycle. LOCAL ECONOMY FY2012 was a period where the City continued to rebound slightly from the sharp decline in revenue in FY 2010 and FY2011, but the results were still below expectations. It was a period that continued to be dominated by relatively high unemployment, low consumer confidence, tighter credit standards, unwillingness on the part of banks to lend, and lower levels of consumer and business spending. The economic rebound resulted in increases in most economically-sensitive revenue sources, such as Sales Taxes and Business License Taxes. The total of Economically-sensitive revenue sources increased by $737,045, but the real growth was masked by the $2.2 million decrease in the fair value of investments during the fiscal year. There was a slight increase of $742,805 in Property-related revenues.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 5 Table 1

PROPERTY-RELATED TAXES (modified accrual basis of accounting)

Description FY 2012 FY 2011 Difference

Real property $ 38,851,956 $ 37,637,898 $ 1,214,058 3.2%

Personal property 2,508,130 2,331,981 176,149 7.6%

Supplemental 570,794 669,545 (98,751) (14.7)%

Property transfer 8,519,577 8,956,799 (437,222) (4.9)%

Redemptions 1,248,722 1,360,151 (111,429) (8.2)%

Total $ 51,699,179 $ 50,956,374 $742,805 1.5%

Table 2

ECONOMICALLY-SENSITIVE INCOME (modified accrual basis of accounting)

Description FY 2012 FY 2011 Difference

Sales tax $ 14,852,392 $ 14,420,383 $ 432,009 3.0%

Business license tax 15,645,924 13,954,587 1,691,337 12.1%

Transient occupancy tax

4,609,049 4,268,176 340,873 8.0%

Investment income 2,528,868 4,256,042 (1) (1,727,174) (40.6)%

Total $ 37,636,233 $ 36,899,188 $ 737,045 2.0% (1) Includes approximately $2.2 million in one-time decrease in the market value of investments held by the General Fund in FY 2012, primarily as a result of the maturity or near maturity of high-yielding securities purchased by the City. GASB Statement Number 31 requires that investments held at year-end be marked-to-market, and the increase or decrease in the market value of the investments be added to or subtracted from interest income.

The City of Berkeley’s financial position increased slightly and the City continued to be financially strong and to benefit from participation in the Bay Area’s diverse and stable economy. The City continues to maintain a bond rating of AA+ from Standard and Poors, one of the national rating agencies, and Aa2 at Moody’s. The City is home to the main campus of the University of California. With 36,142 students (Fall 2011) and approximately 13,882 employees, the University provides a high degree of economic stability for the City and has spurred growth in the high technology and biotechnology sectors. The Lawrence Berkeley Laboratory also has 4,200 employees, and the Alta Bates Medical Center has approximately 2,665 employees. Despite the large student population, the City has an average median family income of $99,975 (in 2011). During the fiscal year, the local economy rebounded slightly consistent with regional and national trends. Berkeley’s current economic base consists of approximately 12,000 licensed businesses operating in the City. These businesses include private manufacturing, technology research, retail and service businesses, educational services, healthcare and social assistance, consulting, arts and entertainment, hospitality services, along with several state, federal, and non-profit institutions. These businesses provide employment for 59,400 (up from 51,600 in June 2011), according to the State Economic Development Department. This economic base generated $4.71 billion in gross business receipts in the 2011 calendar year, an increase from the

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 6 $4.55 billion generated in 2010. Also, the City had nearly $1.49 billion in taxable sales during the fiscal year, up 4.9% from the $1.42 billion in FY 2011. In addition, the City’s unemployment rate (as reported by the State of California Employment Development Department) declined from 10.3% in June 2011 to 9.0% in June 2012, compared to 9.5% for the County, 10.7% for the state and 8.2% for the U.S. Growth in assessed valuation on secured property increased by 3.1% from $12.1 billion in FY 2011 to $12.5 billion in FY 2012, for a strong level of $109,096 per capita. The tax base is diverse, with the top ten property taxpayers accounting for 6.03% of total assessed valuation. Residential construction improved in FY 2012 with the estimated value of permits totaling $50,815,406 (up from $45,029,395 in FY 2011), and commercial construction improving in FY 2012 with the estimated value of permits issued totaling $54,220,981, versus $47,019,292 in FY2011. The City takes an active role in guiding economic development to serve the business and residential community. The City manages a number of programs intended to assist in local business expansion and retention efforts, provides permit assistance to new businesses, seeks appropriate sites, and works directly with local businesses and merchant organizations to improve the local business climate. Major implementation programs have also been initiated and are funded, in part, by a grant from the Metropolitan Transportation Commission (MTC), including development of financing programs to pay for street and open space improvements, managing parking for greater efficiency, and the construction of new shared parking facilities as new development occurs. Since 1994, the City Council resolved to promote environmentally sustainable businesses in Berkeley and formally adopted the Precautionary Principle based on the outcomes of the Kyoto Accord. Community Planning -- City Work Plan. One of the major components of the City’s efforts to develop an integrated budget process is the establishment of policy priorities by the City Council. One outcome of this process is an attempt, through the budget, to align City Council and community expectations with resources available to the City to deliver desired results. ADDRESSING LONG-TERM UNCERTAINTIES As we continue to deal with the lingering effects of the recession on the City’s economically sensitive revenues, it is vital that we maintain focus on the long-term health of the organization in order to deliver needed services to our residence. We must also continue to preserve the City’s ability to respond to external financial challenges such as continued healthcare and retirement cost increases, and federal and state funding decreases. These costs may create a General Fund deficit if steps are not taken to address the problem. One of Council’s fiscal policies is long-term planning. Since staff anticipates significant cost increases in FY 2013, staff will continue to use multi-year forecasting to update projections for FY 2013 and beyond. The following budget development policies frame staff’s approach:

Focus on the long-term fiscal health of the City by adopting a two-year budget and conducting multi-year planning;

Build a prudent reserve;

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 7

Develop long-term strategies to reduce unfunded liabilities; Control labor costs while minimizing layoffs; Allocate one-time revenue for one-time expenses; Require enterprise and grant funds to balance and new programs to pay for themselves,

and Any new expenditure requires new revenue or expenditure reductions.

Another important element to the budget is a “fix it first” approach in which the City funds currently needed capital improvements before funding new projects. In addition, as part of the budget process, we engage and inform Council early and often and continue to harvest good ideas throughout the organization. In order to address the forecasted $1.8 million General Fund deficit in FY 2013, we are proposing a $1.6 million expenditure reduction in the General Fund, which will be supplemented by planned use of the General Fund Reserves to cover the $248,000 gap. This will allow the City’s budget to balance while minimizing layoffs and negative impacts to services; however, this is a one-time solution. This does not resolve the ongoing structural problem of expenditures exceeding revenues. In addition, we are focused on managing the City’s unfunded liabilities. In the short-term, the only methods to effectively eliminate the City’s structural deficit is through cost reductions – primarily through controlling labor costs since employee salary and benefits make up 76% of the City’s General Fund operating budget. The budget attempts to maintain priority programs and services within the parameters of our fiscal constraints. Increased costs would result in the need for more expenditure reductions. Multi-year labor contracts are concluding. The City has an opportunity to manage labor costs in future years, possibly through greater sharing of benefit costs with employees. Controlling labor costs (total compensation) is an integral element of future cost containment and will continue to be part of budget balancing strategies as we move forward.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 8 LONG-TERM DEBT RATINGS Standard& Poor’s Corporation and Moody’s Investors Service assigned the General Obligation Bonds ratings of AA+ and Aa2, respectively, upon their issuance. The City was able to maintain these ratings in the face of challenges to the local economy and the City’s budgets, due to a proven record of sound fiscal management by the Mayor, City Council and City staff. SPENDING LIMITATION Article XIIIB of the California Constitution, also known as the GANN spending limit, restricts the amount of “proceeds of taxes” California governments may spend. As of June 30, 2012, the City was $37.6 million or 19.8% under the total Article XIIIB (Gann) spending limitation. The City was not impacted by the spending limitation in FY 2012.

MAJOR IMPACTS AND INITIATIVES

1. MAJOR CAPITAL PROJECTS a. Marina Plan and Waterfront Overview The Marina Fund is an enterprise fund that covers the costs of operations, maintenance, and capital improvements at the Berkeley Marina. Revenue for the fund comes from berth rentals and property leases. The Marina is in need of several infrastructure improvements, such as dock replacements and channel dredging. Without these improvements over the next ten years, docks will be removed from service and the Marina basin may eventually fill with silt. In the summer of 2012, the City completed the D & E Dock Restroom using funds borrowed from the California Department of Boating and Waterways Loan Program. In May of 2012, the City awarded a construction contract for the first segment Bay Trail Extension Project (BTE) using $1.928 million in federal transportation funds and $355,000 from the California Coastal Conservancy. The BTE is a spur of the San Francisco Bay Trail Project that will provide bicycle, pedestrian, and wheelchair access from the I-80 Bicycle/Pedestrian Bridge and the Bay Trail along West Frontage Road to the recreational opportunities at the Berkeley Marina. The first segment starts at the intersection of University Avenue and West Frontage Road and continues along the south side of University Avenue to the South Sailing Cove. In the Fall of 2011, the City received a design grant from the California Department of Boating and Waterways in the amount of $160,000 to design an improvement project at the Marina’s South Sailing Basin to replace the two small boat docks, install a new restroom, and pave the existing gravel parking lot and upgrade the windsurfing staging area. Once the design is completed, the City will work with DBAW to obtain construction funding of approximately $2 million. b. Parks The City relies on the Parks Tax to provide annual revenues to fund the operations, maintenance, and capital improvements of City parks. However, in recent years, funding has been negatively affected due to the larger economy. For the past ten years, State park bonds

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 9 have provided the City with funding for major parks capital improvement projects. The City completed the last of the projects funded by these streams. In 2008, voters approved the East Bay Regional Park District Parks Bond (Measure WW), that provides funding for major capital projects for parks. The City’s share of the bond funding is $4,876,584 and will be spent over the next six years (through 2018). In July of 2011, the City completed the new softball field and south parking lot at the Gilman Sports Fields Complex ($965,041). In the Fall of 2012, the City completed the renovation of the basketball courts at San Pablo Park ($550,785). The City is currently working on the following Measure WW funded projects: Skate Park Resurfacing; Terrace View Park Basketball Court and Access Improvements; Virginia McGee Totland Improvements; Ohlone Dog Park Improvements; and improvements to the picnic areas throughout the City. Future Measure WW project include improvements at Grove Park and John Hinkel Park. c. Recreation Facilities and Camps The City has recently completed renovations to the West Campus Pool filtration system and the Martin Luther King Junior Services Center doors and exterior. The King Pool Filtration System replacement will be complete by December of 2012. Additionally, PRW is continuing to work on the Master Plan for the Berkeley Tuolumne Camp , and the replacement or reinforcement of many of the snow damaged facilities at Echo Lake Camp. d. Animal Shelter The City’s Animal Services have been housed at 2013 2nd Street, since the facility was built in 1940. In 2002, Measure I was passed and authorized a General Obligation Bond for $7.2 million for land acquisition and construction of a new municipal animal shelter. The City Council appointed a subcommittee composed of members of the City Council and the Citizens’ Humane Commission to explore possible locations for a new animal shelter. Widespread agreement was reached among all stakeholders that the location at 1 Bolivar Drive was an ideal location for a new animal shelter facility. It is adjacent to Aquatic Park, affords easy access to areas for exercising and socializing animals and is not in close proximity to any residential uses. The General Obligation Bonds in the amount of $7.2 million were issued on January 9, 2008, and the City bought the property at 1 Bolivar Drive. On April 20, 2010 the City Council authorized the execution and delivery of Certificates of Participation in the aggregate principal amount not to exceed $5,750,000 to finance the project, and those Certificates of Participation were issued in May 2010. The animal shelter construction was recently completed. e. Branch Libraries On November 4, 2008, City of Berkeley voters approved Bond Measure FF, a $26 million measure limited to renovation, construction, seismic, and disabled access improvements, and expansion of program areas at the City’s four neighborhood branch libraries. Construction commenced May 2011 on the North Branch Library with the fully renovated enlarged branch reopening in April 2012. Construction commenced in April 2011 on the Claremont Branch Library with the fully renovated expanded library reopening in May 2012. The Library has applied for Silver LEED Certification, the Claremont certification notice has been received and the North one pending. In addition to the facility improvements the landscaping at both sites was designed to meet Bay Friendly certification, the North award was received in September and the Claremont award is pending. The construction of new libraries began in 2012, in April construction of a new 8,700 SF South Branch Library began and in June construction of a new 9,300SF West Branch Library began.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 10 The Library’s collection includes over 600,000 items, including books, magazines, DVDs, CDs, audiobooks, and tools. In FY2012, the Library’s total annual circulation (i.e. the number of items from the collection that were borrowed) was 1.76 million. The Central Library, four neighborhood branches, the Tool Lending Library and the BranchVan welcomed nearly 1.1 million visitors. The library provided public access to computers with Internet access; a variety of programs for all ages; professional assistance on information requests; and adult and family literacy related services. The Berkeley Public Library surpassed all other California public libraries in our population size group on per capita number of attendees at programs, circulation of materials and items in the library collection. 2. COMMUNITY EMERGENCY PREPARATION The following overview describes the City’s comprehensive efforts to reduce risk, to better prepare for disasters and safety actions taken last year to ensure community safety and preparedness. Other City efforts include staff training, response preparations, exercises, community preparedness initiatives, local and regional coordination and other preventive programs that are underway or are in development. a. Pre-Disaster Mitigation Efforts Since 1989, Berkeley has invested in disaster mitigation on many fronts. The City Council established an Office of Emergency Services in July 1989 and convened the commission that later became the Disaster Fire and Safety Commission. This leadership continued and acted to make risk reduction and community sustainability a priority.

Thus far, the City’s mitigation efforts include establishment of mandatory retrofit for unreinforced masonry building, as well as creation of an inventory of soft-story buildings. The City has multiple vegetation management programs to mitigate wildfire risk. The City is also working with multiple departments and partners to update its Local Hazard Mitigation Plan. Hazards include earthquakes, wildfires, landslides, floods, hazardous materials accidents, terror attacks and other multi-hazard events. b. Employee Disaster Response Training Training for City staff is required to meet the mandates of California Code of Regulations Title 19 Section 2401, 2930 and 2935, and the Homeland Security Presidential Directive 5 that requires workers to use the Standardized Emergency Management System and the National Incident Management System. All local government staff are designated Disaster Service Workers, according to State law. Consequently, it is critical that the City provide adequate training for staff to know their disaster response responsibilities and have learning opportunities to deepen that knowledge. Keeping training and disaster exercises on the organization’s larger schedule is a challenge when months of advance planning and practice must be maintained. In FY 2012, the City’s training programs included National Incident Management (NIMS) and Incident Command System (ICS) 300 and 400 courses. c. Community Disaster Preparedness The City has always been a leader in engaging community and neighborhood groups to be disaster ready. The City offered training classes, made presentations to the public, updated the City’s website information, and engaged in other outreach activities to strengthen disaster preparedness for the Berkeley community. The free year-round Community Emergency Response Training (CERT) classes are offered to anyone living or working in the Berkeley community and cover basic preparedness, disaster mental health, disaster first aid, fire suppression, light search and rescue, shelter operations, and radio

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 11 communication/incident command system. A consistent number of individuals, about 700, attended at least one CERT class. Berkeley voters approved Measure GG in November of 2008, providing critical resources to ensure minimum staffing of all fire suppression companies; enhance the City’s Emergency Operations Center; and to continue to focus on community preparedness, including resources for Community Emergency Response Training (CERT) and community caches. In 2010, the City of Berkeley opened another application period for disaster cache supplies to be awarded in 2011. Eleven disaster caches were awarded to neighborhood groups demonstrating a baseline level of preparedness. In 2011, ten more awards were added to the community. These disaster caches bring the total to sixty-three distributed caches throughout the City and help to bolster the community’s resilience in a disaster. In 2012, an additional twelve caches will bring the total to seventy-five. d. Response The City uses an emergency notification system to keep people informed during disasters. The Berkeley Emergency Notification System (BENS) is a telephone notification system that can contact residents and businesses through an automatic message service center in the event of an emergency. Berkeley’s emergency radio station is 1610 AM. Over the years, the City has activated its Emergency Operations Center (EOC) and responded to a number of disasters.

e. Recovery The City’s Finance Department has established procedures and protocols to document expenditures incurred during disaster operations. These procedures were very effective for submitting documentation for FEMA approval for all disaster reimbursements. f. Health and Human Service Programs The Public Health Division (PHD) receives CDC and state health department grants to develop plans for large PH emergencies such as bioterrorism or pandemic influenza and to coordinate with health care providers, clinics and hospitals on emergency surge capacity. The PHD coordinates its response to public health emergencies (outbreaks, pandemics) by activating the Public Health Departmental Operations Center (PH DOC), a group of public health staff members specially trained for disease investigations and emergency response. In this past grant year the PHD has updated plans for the distribution and dispensing of medical materials during a public health emergency and has begun planning for two new closed point of dispensing sites. PH continues to collaborate with the Office of Emergency Services in providing disaster preparedness training, education and resources to all Berkeley residents, particularly in South and West Berkeley. g. Disaster Fire Protection In the November 2000 election, Berkeley voters approved Measure Q, which provided $8,000,000 in funding for an Above Ground Portable Water System. This system is designed to provide water for firefighting independent of the domestic water system provided by the local water district. The engineering studies of the domestic water system infrastructure determined that after a major earthquake or in event of high fire flow demands that can occur during wild land/urban firestorms, the system may not be usable or able to support firefighting operations. The City has contracted with Hytrans Systems located in Holland for a pump and hose system that will allow use of salt or fresh water sources like the San Francisco Bay or lakes to provide water for firefighting.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 12 The system includes two 6,000-gpm pumps (HS 900) and six containers each with one mile of 12 inch ultra large diameter hose. The pumps and containers can be moved and deployed by trucks using a lift arm loading system. For more information on the system go to the Hydrants website at Hytrans.com. Construction for the 8,000 square foot warehouse has been completed and both the water system and warehouse are now operational.

h. Other Disaster Mitigation Efforts The City’s Corporation Yard facility plays a crucial role in Public Works’ overall operations and serves as a center for emergency responses and disaster recovery operations. The building is seismically unsafe. In July 2006, the State Office of Emergency Services approved a pre-disaster mitigation program grant from the Federal Emergency Management Agency for the relocation of employees from the building, site preparation, and seismic retrofit of the building to essential services standards in the amount of $2.8 million, with local matching funds in the amount of $962,633. Additional local funds have been allocated to the project bringing the current project budget to $7.3 million. The project was completed in June/July 2012 and will house the supervisory staff for both Public Works and Parks operations and maintenance as well as serve as the Public Works Department’s Operation Center (PW DOC) for emergency responses.

3. ECONOMIC DEVELOPMENT Berkeley’s economic development strategy seeks to build on existing strengths to accomplish goals that have been identified by the City Council and citizen planning processes: a. Revitalize Downtown Berkeley and strengthen its role in the local and regional economy. Downtown Berkeley’s existing strengths include the success of its growing Arts District in attracting a regional nighttime clientele and the emergence of the Downtown as a residential neighborhood. The Arts District is anchored by the Berkeley Repertory Theatre that attracts an annual audience of 180,000 and employs more than 400 artists, artisans and administrators. Next door is the Aurora Theatre, another professional theater company that is attracting growing audiences, and across the street is the new “Freight and Salvage” 440-seat musical performance venue. The nighttime audience of these and other arts organizations has attracted new quality restaurants such as “Revival Bar and Grill” and “Comal” on the edge of the Arts District and “Five” in the renovated 200-room Shattuck Hotel. In early 2012 the U.C. Regents approved moving forward with the new Berkeley Art Museum/Pacific Film Archive project. This will create a major new arts facility in the former printing plant building at the corner of Oxford and Center Streets at a cost of over $100 million. When completed, this project will become the largest single investment to date in Berkeley’s Downtown arts cluster. Thanks to the construction of more than 1,500 new housing units since the mid-1990s, Downtown is becoming an attractive location for urban living. Recently-opened housing includes the 148-unit New Californian on the NW corner of University and Martin Luther King Jr. Way. Despite the economic downturn, these units rented up quickly and the Trader Joe’s grocery store on the ground floor is also a success. In September of 2012, 143 units of new rental housing will open in the Arpeggio building a block from the Arts District. Several other Downtown housing projects are currently in the pipeline including approximately 200 new units planned for upper University Avenue at the former Acheson Estate properties.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 13 Downtown Berkeley is also becoming a popular location for startups and University spinout businesses to get an initial foothold in the office market. The nearly billion dollar pipeline of research investment at the University of California Berkeley and Lawrence Berkeley National Laboratory is a catalyst for entrepreneurship and Downtown is within walking distance as a logical launch pad for these types of businesses. This technology-based business development strategy is also based partly on the University’s plan to build up to 800,000 square feet of new research, office and public service space on the eastern edge of the Downtown (which is the western edge of campus.) In September 2012, the “Skydeck Innovation Accelerator/Incubator” will hold its official Grand Opening Celebration. Located on the top floor of the Chase Building (formerly the Power Bar Building), the Skydeck already houses 13 spinouts and nearly 50 worker/entrepreneurs. In addition, Helios West, a 112,800 square foot building that will house the Energy Biosciences Institute, has nearly finished construction on a site bounded by Oxford, Berkeley Way, and Shattuck. A few other private incubators and co-working spaces have sprung up in Downtown in recent years including “The HUB” and “Sandbox Suites” and it is likely that this trend will continue as demand grows for small and flexible office spaces in the future. Finally, the Berkeley Start-up Cluster (BSC), a partnership of the City, U.C. Berkeley, the Downtown Berkeley Association and the Berkeley Chamber of Commerce, is engaged in a major branding initiative for the near-to-campus area that will include a new logo, website and collateral marketing information. The goal of the BSC is to make Downtown Berkeley more closely identified with startup businesses and entrepreneurship. The Downtown Berkeley Association’s new tagline, “It Starts Here” is reflective of these goals. In November 2010, voters approved by a 64% to 36% margin an advisory measure that contained key provisions, particularly on building heights, for a new Downtown Plan. The new Downtown Area Plan (DAP) was approved by Council on March 12, 2012 and allows two residential buildings and one hotel with heights of up to 180 feet, plus two residential or office buildings with heights of up to 120 feet. As noted above, the University is allowed to build up to 800,000 square feet of new space in the Downtown, including two buildings up to 120 feet tall. As the economy improves, it is anticipated that new Downtown development projects with significant economic impact will become increasingly feasible. b. Strengthen neighborhood commercial districts such as Solano, Elmwood, Telegraph, Fourth Street, San Pablo, North Shattuck and University Avenue. The City seeks to encourage shopping opportunities close to residential neighborhoods, which reduces the need to drive. Efforts are underway to support expansion of district-based niche marketing campaigns that recognize local strengths and “district identity”. OED priorities in FY 2013 including the design and implementation of branding strategies for the Adeline Corridor, the Sacramento and Ashby Node, Telegraph Avenue and the Berkeley Start-up Cluster. The City facilitates five business improvement districts (BIDs) in the Downtown, Telegraph, Elmwood, North Shattuck and Solano commercial districts that generate funds through a self assessment to help promote and maintain their districts. The Office of Economic Development also contracts with a community-led “Buy Local Berkeley” initiative which is currently also fiscally supported by the Downtown Berkeley Association. The effort uses multiple communication channels to encourage residents to shop at local, independent businesses to retain money and tax revenues in the community. Buy Local Berkeley has over 400 affiliated businesses and over 5,000 subscribers to its electronic newsletter.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 14 c. Support creation of good jobs for local residents. While more than 30% percent of the jobs in Berkeley are in the public sector (13,882 at UC Berkeley, 4,200 at LBL, 1,486 City of Berkeley, 1,166 Berkeley Unified School District, 286 Berkeley City College), about 39,667 are employees in the private sector (Annual Average Employment 2011, Quarterly Census of Employment & Wages.) Large private sector employers include Alta Bates Summit Medical Center (Alta Bates and Herrick campuses) with 2,665, the Bayer Corporation with 1,300, Kaiser Permanente with 668, the Berkeley Bowl with 442 and Pacific Steel Casting with 470. However, more than 85% of Berkeley’s 3,583 private employers have fewer than 20 employees. (There are also about 7,000 self-employed who work and live in Berkeley.) Berkeley’s strong sectors include biomedical/ biopharmaceutical, computer systems design services, printing and publishing, environmental consulting services, and arts and entertainment. More than 300 “Green” businesses (i.e., businesses that either helps the environment or enterprises that have instituted environment-friendly practices) have located in Berkeley.

Approximately 17% of employees who work in Berkeley also live here; the remainders live at other bay Area locations within commuting distance. In order to reduce impacts on the environment from commuting as well as provide jobs to unemployed local residents, the City attempts to increase the number of people who both live and work in Berkeley. The City’s Work Source employment program requires certain new and expanding businesses to consider Berkeley residents first in their hiring. In December 2009, the City’s local hiring efforts were strengthened when the State of California extended its Enterprise Zone program to West Berkeley, the area bounded by San Pablo Avenue on the east, the I-80 Freeway on the west, Oakland on the south and Albany to the north. The 800 employers in this area are eligible for State tax credits for new hires of eligible workers and for qualified purchases of new equipment. d. Increase technology transfer from UC Berkeley and Lawrence Berkeley National Laboratory and encourage startups in the Downtown and West Berkeley. In recent years, federal, state and private sources have provided more than a billion dollars in new funding for research at UC Berkeley and Lawrence Berkeley National Laboratory in areas that are national priorities such as biofuels, energy conservation, advanced telecommunications and biomedical engineering. Even more than in the past, Berkeley has the opportunity to attract local startups that are commercializing new technology as well as attract national companies to set up research centers in Berkeley. These companies benefit from the City’s entrepreneurial climate and from interaction with UC faculty and graduate students. As described above, the City is working on various initiatives to help create the right environment to attract and retain startups that result from new research initiatives on the campus and at the Lab.

Studies have shown that many initial-stage start-ups want to locate close to Campus but lack opportunities to lease space, network with similar firms, and access financing. As described above, the Berkeley Start-up Cluster is attempting to address these problems. The City of Berkeley hosts a website, www.locateinberkeley.com, which displays all vacant commercial space in Berkeley, with a special module for inexpensive space close to campus. The City hopes to encourage somewhat larger start-ups to locate in industrial and office space in West Berkeley. Recent zoning changes are intended to increase the number of research and development firms, some of which will eventually decide to manufacture new products in West Berkeley. The Office of Economic Development is actively working with the City of Emeryville and the East Bay Economic Development Alliance (EBEDA) on creation of a branding strategy

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 15 for the I-80 Bioscience Cluster that is concentrated in our cities. Together, Berkeley and Emeryville have more bioscience lab space than Mission Bay in San Francisco. This provides Berkeley with an important economic development opportunity in the future, particularly West Berkeley. Berkeley has recently assisted the EBEDA in applying for a federal grant that, if funded, would support local and regional advanced manufacturing in medical devices and in bioscience. e. Generate GIS-based economic data to monitor and analyze local business trends and help fill commercial vacancies. Economic Development staff has completed a complete GIS ground floor space inventory in all the City’s commercial districts. This effort has proven very valuable as an analytic tool and the results have enabled staff to generate reports that outline and assess sectoral and sub-sectoral trends within specific commercial neighborhoods. For the commercial vacancy website referenced above, staff has also completed an inventory and contact listing of all commercial spaces within five blocks of the U.C. Berkeley Campus in order to attract and incubate new companies emerging from the University and Lawrence Berkeley National Lab. Staff eventually intends to generate similar data for the West Berkeley industrial area as resources permit.

f. Market Berkeley’s visitor appeal and support Berkeley’s Hotel/Motel Industry. The City provides annual support to Visit Berkeley (the Berkeley Convention and Visitors’ Bureau) for its comprehensive marketing efforts aimed at promoting local tourism and hospitality services. The Berkeley Convention and Visitors’ Bureau also runs the Berkeley Film Office that markets the City to the film and television industry. The City is now working with Visit Berkeley to establish a Tourism Business Improvement District (TBID) that would effectively double the amount of money available to market and promote Berkeley’s visitor industry. This BID recently received its final approvals will begin implementation soon recently.

g. Build on Berkeley’s strength as a regional hub of arts and culture. More than 130 arts and cultural organizations comprise an arts community that collectively is among the largest employment sectors in Berkeley. The arts provide some 3,400 jobs, reach an annual audience of 1.7 million people, and have a combined budget of $70 million. Arts, culture, entertainment and restaurants help drive the City’s economic engine. The City provides small annual arts grants to more than 60 non-profit arts groups and the City provides funds for public art commissions based on a 1.5 percent for art program that is tied to City building and infrastructure spending. Recent public art commissions include a series of installations on utility boxes throughout the Downtown area. The Arts Commission has recently committed budgets to new public art commissions the Downtown and South Berkeley and staff are actively working to leverage those funds with private and foundation monies. Of course, the City’s ongoing promotion of the arts and has helped established the Downtown as a regional center for the arts, culture and entertainment as described above.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 16 4. CLIMATE ACTION PLAN The Berkeley Climate Action Plan was adopted by City Council on June 2, 2009. The Plan guides the development, enhancement, and ultimately the implementation of actions that aggressively cut Berkeley’s greenhouse gas emissions. The Plan includes the following:

An inventory of Berkeley’s main greenhouse gas emissions sources

A forecast of how those emissions are expected to change over time

Recommendations for actions the City government and community can implement to achieve greenhouse gas reductions and other community benefits such as increased green job opportunities and improved public health

A timeline for the Plan’s implementation, including identifying existing and potential costs and funding sources

In fiscal year 2012, the City advanced implementation of the Climate Action Plan in several important ways, including:

(1) Implementation of the federal stimulus-funded Money for Energy Efficiency (ME2) program: The ME2 program provided cash incentives for energy efficiency upgrades in Berkeley homes and businesses.

(2) Continued expansion of Berkeley’s bicycle pathways: Among other bicycle infrastructure improvements, the City completed the 9th St. Bicycle Boulevard Extension, connecting West Berkeley to Emeryville. The City also secured $1.9 million in federal funds to extend the Bay Trail out to the Berkeley Marina.

(3) Ongoing efforts to divert solid waste from landfills: The City’s residential recycling cart program continues to contribute to a significant and sustained increase in curbside recycling. Curbside recycling has increased approximately 22 percent since the recycling carts were introduced in 2010.

(4) Tracking our progress: The City monitors and reports a range of metrics designed to illustrate the status of progress toward our greenhouse gas emissions reduction goals. These metrics are available online at www.cityofberkeley.info/climate

Using the Climate Action Plan as a guide, the City will continue to advance efforts to reduce local greenhouse gas emissions and achieve other associated benefits.

5. LEGISLATIVE IMPACTS/SUCCESSOR AGENCY TO THE BERKELEY

REDEVELOPMENT AGENCY

On December 29, 2011, the California Supreme Court delivered its decision in the California Redevelopment Association v. Matosantos case. The Court action dissolved all redevelopment agencies. On January 17, 2012, the City of Berkeley became the Successor Agency to the Berkeley Redevelopment Agency to take over redevelopment responsibilities in accordance with the Dissolution Act. As the Successor Agency, the City is required to make payments and perform other obligations of the former redevelopment agency, to dispose of assets or properties, and to wind down all other redevelopment affairs. As of February 1, 2012, the Berkeley Redevelopment Agency was dissolved and the assets and functions were transferred to the City

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 17 of Berkeley Successor Agency and the Successor Housing Agency. An Oversight Board was formed as required by state law.

Active Projects – West Berkeley

Funding for capital projects was transferred to the City Public Works and Parks Departments in 2009. The Aquatic Park Connection (APC) has been completed. Over $650,000 was allocated for construction of the West Berkeley Circulation Improvement Projects.

The Successor Agency will dispose of all assets, including the vacant single family dwelling at 1654 Fifth Street and the vacant lot/community garden at 1631 Fifth Street as required by state law.

Active Projects – Savo Island

Savo Island, built in 1978, is currently in the process of refinancing its HUD mortgage in order to provide funding to rehabilitate and upgrade the facility. The affordability restrictions were originally set for 60 years (expiration 2028). HUD has suggested that a condition of the refinancing would include Successor Agency approval to subordinate the affordability restrictions to the new financing package. The City is replacing the $135,000 in BRA funding with HOME funding from the Housing Trust Fund. Agency staffs are negotiating the terms of the refinancing with HUD and Savo Island representatives. AWARDS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2011. In order to receive this prestigious award of the Certificate of Achievement, the city must publish and submit such report to the GFOA for their evaluation. This report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to fulfill the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The City also received the GFOA's award for Distinguished Budget Presentation for the biennium (two-year period) beginning July 1, 2011. We believe that our current budget continues to conform to program requirements and we have submitted it to the GFOA to determine its eligibility for another award.

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December 21, 2012 Presentation of the Comprehensive Annual Financial Report Page 18 ACKNOWLEDGMENTS The preparation of this report could not be accomplished without the efforts of the following individuals: The Accounting Manager, Marvin Tam, the Project Lead, Victor Lo and the entire Accounting Division of the Finance Department; the accounting firm of Badawi & Associates, CPA, Inc., and the continued support of sound financial management by Mayor Tom Bates and the City Council, City Manager, Christine Daniel and her staff, particularly the Budget Manager, Teresa Berkeley. Due to the efforts of the entire City staff, the City's accounting and financial reporting systems continue to improve along with the quality of the information being reported to our citizens, the City Council, Department heads and Managers, Bond-holders, Federal, State and county agencies, and to other users of the City's financial reports.

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CITY OF BERKELEY GOVERNMENT STRUCTURE

2012

ELECT

Rent Stabilization Board

APPOINTMENT

City Auditor

Boards & CommissionsCity Manager

Mayor & COUNCIL

Board of Library Trustees

CITIZENS

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DIRECTORY OF CITY OFFICIALS

ELECTED OFFICIALS

City Auditor – Ann-Marie Hogan

Mayor – Tom Bates Vice-Mayor – Linda Maio

Council members

Linda Maio Darryl Moore Max Anderson Jesse Arreguin Laurie Capitelli Susan Wengraf

Kriss Worthington Gordon Wozniak

APPOINTED BY CITY COUNCIL

City Manager – Christine Daniel

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CITY OF BERKELEY

ORGANIZATIONAL CHART

 

RENT STABILIZATION BOARD 

 

CITIZENS OF BERKELEY 

 

CITY AUDITOR 

 

BERKELEY HOUSING AUTHORITY 

 

MAYOR & COUNCIL 

BOARDS & COMMISSIONS  

POLICE REVIEW 

COMMISSION

 

CITY MANAGER 

 

BOARD OF LIBRARY TRUSTEES 

DEPUTY  

CITY MANAGER LIBRARY 

 

CITY CLERK 

 

HUMAN RESOURCES 

 

CITY ATTORNEY  INFORMATION 

TECHNOLOGY 

HEALTH, HOUSING AND COMMUNITY 

SERVICES 

 

PUBLIC WORKS 

ECONOMIC 

DEVELOPMENT 

PARKS, 

RECREATION & 

WATERFRONT 

 

FINANCE 

 

PLANNING 

 

FIRE 

 

POLICE 

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II. FINANCIAL

THIS PAGE LEFT INTENTIONALLY BLANK

INDEPENDENT AUDITOR’S REPORT

To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund of information of the City of Berkeley, California (City) as of and for the year ended June 30, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Berkeley Housing Authority, which represent 67.2 percent, 89.9 percent, and 12.9 percent, respectively, of the assets, net assets, and revenues of the aggregately discretely presented component units. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for Berkeley Housing Authority, is based on the report of the other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinions.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2012, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2012, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California Page Two

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information and funding status of pension and other post-employment benefit plans on pages 25 through 40, pages 137 through 138 and 139 through 141 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements, nonmajor governmental fund budgetary comparison information, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements and nonmajor fund budgetary comparison information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Badawi and Associates Certified Public Accountants Oakland, California December 21, 2012

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MANAGEMENT’S DISCUSSION AND ANALYSIS

As management of the City of Berkeley, we offer readers of the City of Berkeley’s financial statements this narrative overview and analysis of the financial activities of the City of Berkeley for the fiscal year ended June 30, 2012. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 1-18 of this report. All amounts, unless otherwise indicated, are expressed in millions of dollars. Financial Highlights The City’s assets exceeded its liabilities (net assets) by $405.0 million at the close of the fiscal

year ended June 30, 2012. Included in this amount was a balance of $14.9 million in unrestricted net assets. Unrestricted net assets are net assets that may be used to meet the City’s ongoing obligations to citizens and creditors.

During the year, the City’s total net assets increased by $1.8 million from $403.2 million to

$405.0 million. Governmental activities revenues increased by $.4 million while governmental activities expenses decreased by $.7 million. Business-type activities revenues decreased by $.1 million, while business activities expenses decreased by $.5 million.

As of June 30, 2012 the City’s governmental funds reported a combined ending fund balance of

$153.4 million, a decrease of $17.5 million. Approximately 25.3% percent of this total amount ($38.8 million) is available for spending at the government’s discretion (Assigned to and unassigned fund balance).

The total cost of all City programs decreased by $1.2 million from $294.6 to $293.4 million.

This was accounted for primarily by increases (decreases) of $(2.7) million in General Government, $1.5 million in Public Safety, $1.3 million in Highways and Streets, ($2.2) million in Health and Welfare, $.3 million in Community Development/Housing, $1.1 million in Culture and Recreation, $.8 million in Economic Development, ($.8) million in Interest on long-term debt, $.4 million in Parking-related, $.8 million in Marina operations and maintenance, $1.1 million in Sewer services, ($.1) million in Clean Storm Water, $(2.7) million in Refuse Service, ($.2) million in Permit Service Center, and $.2 million in Building purchase and management.

At June 30, 2012 the assigned to and unassigned to fund balance for the General fund was $38.8

million or 26.8% of FY2012 total General fund expenditures and transfer out. The City’s total long-term debt decreased by $(5.4) million during the current fiscal year. This

decrease was accounted for by the following: (1) principal payments of ($6.1 million); (2) transfer of principal balances of BRA to Successor Agency under Private trust Funds based on AB 1X 26 of $(4.9) million; (3) increase in workers compensation payable of $3.5 million and decrease in Public liability of ($.8 million); (4) increase in compensated absences payable of $.1 million; (5) decrease in loan proceeds of $(.3) million for recycling carts project and Landfill liabilities of $(.6) million; (6) Decrease in capital lease obligations of ($.4 million) (7) increase in other postemployment benefit obligation of $.4 million, and (8) increase in net pension obligation of Police Retirement Income Benefit Plan of $3.7 million.

Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Berkeley’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

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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 a private sector business.

The statement of net assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position is improving or deteriorating. You will need to consider other nonfinancial factors, such as changes in the City’s property tax base and the condition of the City’s roads, to assess the overall health of the City.

The statement of activities presents information showing how the government’s net assets changed during the fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include all of the City’s basic services that are considered to be governmental activities: general government, public safety, highways and streets, health and welfare, culture-recreation, community development/housing and economic development. Property taxes, business license taxes, transient occupancy taxes, sales taxes, utility users’ taxes, ambulance fees and franchise fees finance most of these activities. The business-type activities of the City include a Parking related operation, a Clean Storm Water operation, a Marina, a Sanitary Sewer operation, a Refuse Collection and Disposal operation, a Permit Service Center, and Building Purchases and Management.

The government-wide financial statements include not only the City itself (known as the primary government), but also a legally separate Rent Stabilization Board and Housing Authority for which the City is financially accountable. Financial information for these component units are reported separately from the financial information presented for the primary government itself. The Berkeley Redevelopment Agency, although also legally separate, functions for all practical purposes as a department of the City of Berkeley, and therefore has been included as an integral part of the primary government through January 31, 2012).

The government-wide financial statements can be found on pages 42-43 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Berkeley, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Some funds are required to be established by State law and by bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money. All of the funds of the City of Berkeley can be divided into three categories: governmental, proprietary, and fiduciary. Governmental funds—Governmental funds are used to account for essentially the same

functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a

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reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City of Berkeley maintains 93 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General fund, Grant fund, Measure FF branch Renovation and Capital Improvements fund, all of which are considered to be major funds. Data from the other 89 governmental funds are combined into a single, aggregated presentation.

The City of Berkeley adopts an annual appropriated budget for its General fund, special revenue funds, capital project funds (Except Capital Improvement Administration Fund; Savo Island Project Fund; Income Housing Fund for West Berkeley Improvement Project; and Income Housing Fund for Savo Island Project), and debt service funds. The budgetary comparison schedules have been provided for the General Fund and major Special Revenue Funds to demonstrate compliance with this budget under “Required Supplementary Information other than MD&A section”. The basic governmental fund financial statements can be found on pages 44-47 of this report.

Proprietary funds—The City of Berkeley maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Berkeley uses enterprise funds to account for its, Refuse Collection/Disposal, Marina Operation/Maintenance, Sanitary Sewer, Clean Storm Water, Permit Service Center, Off-Street Parking, Parking Meter, and Building Purchase and Management operations, which are all considered to be major funds of the City of Berkeley. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of Berkeley’s various functions. The City of Berkeley uses internal service funds to account for its equipment maintenance, building maintenance, supply warehouse, computer replacement, workers’ compensation program, sick leave and vacation payout, public liabilities, and catastrophic loss reserves. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more details. The eight internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

The basic proprietary fund statements can be found on pages 48-51 of this report.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of Berkeley’s own programs. The accounting used for fiduciary funds is much like that for proprietary funds.

The basic fiduciary fund financial statements can be found on pages 52-53 of this report.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 55-129 of this report. Notes to the Private Trust Funds of the Successor Agency. The notes provide additional information that is essential to a full understanding of the data provided for the transition from the Berkeley Redevelopment Agency as governmental funds to the Successor Agency as the Private Trust Funds. The notes can be found on pages 130-133 of this report Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Berkeley’s progress in funding its obligation to provide pension benefits and other postemployment benefits to its employees. Required supplementary information can be found on pages 135-142 of this report.

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The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information on pensions and other postemployment benefits. Combining and individual fund statements and schedules can be found on pages 141-207 of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City of Berkeley, assets exceeded liabilities by $405.0 million at the close of the fiscal year ended June 30, 2012.

By far the largest portion of the City of Berkeley’s net assets 68.9% reflects its investment in capital assets (e.g., infrastructure, land, buildings, machinery and equipment, construction in progress); less any related debt used to acquire those assets that are still outstanding. The City of Berkeley uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Berkeley’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.

Table 1 City of Berkeley

Net Assets (In Millions)

Restricted net assets 27.5% represent debt services, special purposes, and capital project requirements. The remaining balance of unrestricted net assets 3.6% may be used to meet the City’s ongoing obligations to citizens and creditors.

At June 30, 2012 and June 30, 2011, the City was able to report positive balances in unrestricted net assets for its business-type activities.

The City’s net assets from governmental activities were $241.5 million.

Governmental activities. Governmental activities increased the City’s net assets by $1.5 million in FY2012. Business-type activities increased the City’s net assets by $.3 million. Key elements of these changes are as follows:

Governmental Business typeActivities Activities Total

2012 2011 2012 2011 2012 2011Assets:

Current and other assets 264.7$ 231.0$ 46.4$ 50.3$ 311.2$ 281.3$ Capital assets 213.8 202.9 165.6 163.9 379.5 366.7 Total assets 478.5 433.9 212.1 214.2 690.6 648.1

Liabilities:Other liabilities 67.3 20.8 3.8 4.2 71.2 25.0 Long-term debt outstanding 169.7 173.1 44.8 46.9 214.5 219.9 Total Liabilities 237.0 193.9 48.6 51.0 285.6 244.9

Net assets:Invested in capital assets, net of related debt 140.2 135.8 138.7 135.6 278.9 271.4 Restricted for Debt services 9.3 11.6 9.3 11.6 Restricted for Special purposes 74.1 74.1 74.1 74.1 Restricted for Capital project 27.8 44.9 27.8 44.9 Unrestricted (9.9) (26.5) 24.8 27.6 14.9 1.1

Total net assets 241.5$ 240.0$ 163.5$ 163.2$ 405.0$ 403.2$

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Table 2Changes in Net Assets

(In Millions)Governmental Business-type

Activities Activities Total2012 2011 2012 2011 2012 2011

RevenuesProgram revenues:

Charges for services 29.6 26.9 74.0 73.8 103.6 100.7 Operating contributions and grants 31.5 36.0 0.0 0.1 31.5 36.1 Capital contributions and grants 4.2 3.3 4.2 3.3

Total program revenues 65.3 66.2 74.0 73.9 139.3 140.2 General revenues

Taxes:. Property taxes

For general purposes 60.2 59.7 60.2 59.7 For debt service 7.1 8.1 7.1 8.1 For special purposes 30.0 29.1 30.0 29.1 Sales taxes 14.8 14.4 14.8 14.4 Utility users taxes 14.1 14.4 14.1 14.4 Transient occupancy taxes 4.6 4.7 4.6 4.7 Business license tax 15.6 14.0 15.6 14.0 Other taxes 2.9 3.2 2.9 3.2

Investment income 2.8 4.7 0.2 0.4 3.0 5.1 Miscellaneous 3.6 2.1 3.6 2.1

- Total general revenues 155.7 154.4 0.2 0.4 155.9 154.7

Total revenues 221.0 220.6 74.2 74.3 295.2 294.9

ExpensesGeneral government 30.0 32.7 30.0 32.7 Public safety 93.8 92.3 93.8 92.3 Highways and streets 14.7 13.4 14.7 13.4 Health and welfare 19.5 21.7 19.5 21.7 Culture and recreation 35.1 34.0 35.1 34.0 Community development/housing 19.4 19.1 19.4 19.1 Economic development 3.6 2.8 3.6 2.8 Interest on long-term debt 4.1 4.9 4.1 4.9 Parking related 7.4 7.0 7.4 7.0 Marina operations and maintenance 5.9 5.1 5.9 5.1 Sewer services 12.8 11.7 12.8 11.7 Clean storm water 2.3 2.4 2.3 2.4 Refuse services 32.3 35.0 32.3 35.0 Permit service center 9.2 9.4 9.2 9.4 Building purchase and management 3.3 3.1 3.3 3.1

Total expenses 220.2 220.9 73.2 73.7 293.4 294.6

Increase in net assets before transfers 0.8 (0.3) 1.0 0.7 1.8 0.3

Transfers 0.7 0.3 (0.7) (0.3) - - Increase ( decrease ) in net assets 1.5 (0.0) 0.3 0.4 1.8 0.3

Net assets, July 1 240.0 240.0 163.2 162.8 403.2 402.8 Net assets, June 30 241.5 240.0 163.5 163.2 405.0 403.2

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Total governmental activities revenues increased approximately $.4 million. Key factors in that increase were the following:

Charges for services increased by $2.7 million or 10.0%, which was primarily attributable to:

o An increase of $2.4 million in ambulance billing revenue using the accrual basis of accounting.

Operating grants and contributions decreased by $4.5 million. This was primarily due to the following projects in FY2012:

o The decrease of ($5.8 million) allocation from the MSHA Program.

o The increase of $.2 million in the Transition Independence Program.

o The increase of $.4 million in the State Gas tax Program

Capital grants and contributions decreased by $.9 million. This was due to the following projects:

o The decrease of ($.3) million in the Ashby BART Station intermodal improvement project. Ed Roberts Campus project was completed in FY2012, resulting in $.3 million lower grant receipts compared to FY2011.

o The increase of $1.4 million due to FY2005 Pre-disaster Mitigation Competitive program, which was completed in FY2012. $1.2 million for FY2011 and $.6 million for FY2012 were billed and received in FY2012 compared to $.4 million received in FY2011.

Property taxes for general purposes increased $.5 million or .8% due primarily to a 3.1% increase in assessed values that resulted in a $1.2 million increase in Real Property Taxes in FY 2012; this increase was offset by decreases of $.06 million in Supplemental tax and $.7 million in Property Transfer Tax.

Property taxes for debt service declined by $1.0 million due primarily to the $.9 million decrease in tax increment receipts for the Redevelopment Agency, due to the State takeover during FY 2012.

Property taxes for special purposes increased $.9 million primarily due to the increase in special taxes as a result of the 2.821% increase in the CPI and the 2.51% increase in the per capita personal income growth in California.

Business License Tax (BLT) revenues increased $1.6 million or 11.4% to $15.6 million in FY2012, from $14.0 million in FY2011. This increase was primarily accounted for by the increase in cannabis club collections, healthy growth in many economic categories, and a one-time cleanup of the liability BLT suspense account in the amount of approximately $400,000.

Other taxes decreased $.3 million, from $3.2 million in FY 2011 to $2.9 million in FY 2012 due to a decline in In lieu Taxes.

Investment income decreased $1.9 million or 40.4% in FY2012. Investment income is the total interest income earned plus or minus the change in the market value of investments during the fiscal year. GASB Statement No. 31 requires governments to mark investments to market value, whether or not the intent is to hold them to maturity. Interest income during FY2012 actually totaled $5.1 million during FY 2012. However, that total was offset by a $2.3 million decrease in the market value of the City’s investments in FY2012, as medium-term investments matured or were closer to their maturity dates. GASB Statement No. 31

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requires that this decrease be subtracted from the total interest income, to calculate investment income for the year.

Sales tax revenues increased $.4 million to $14.4 million in FY2011 from $14.8 million in FY2012 due to slight growth in the revenue base and new retail companies added in FY 2012.

General Government expenses decreased by $2.7 million for the following reasons:

Utilities fees increased by $.1 million

Community agencies expenses increased by $.1 million

Salaries and wages increased, due to the increase of 1-2% in COLAs, but that increase was offset by the effects of the hiring freeze and budget cuts.

A purchase of Radio communication system for $2.5 million was capitalized, which reduced the expenses total by the same amount.

Public Safety expenses increased by $1.5 million in FY2012. Contributing factors were as follows:

Fringe benefits increased by $1.5 million, due to the increase in health insurance and other benefits.

Highway and streets expenses increased by $1.3 million in FY2012. Contributing factors were as follows:

Salaries and fringe benefits increased by $.2 million, due to the increase of 1-2% in COLAs

Professional fee expenses increased by $.2 million. Due to street rehabilitation project and West Street Bike blvd., phrase 2 project.

Health and Welfare expenses decreased by $2.2 million as follows:

The reduction of wages and fringe benefits of $1.5 million and $0.5 million, respectively, due to personnel budget cuts in grants funds.

The following charts illustrate the City’s governmental expenses by function and revenues by source. As shown, General revenues such as property, sales, utility users and business license taxes are not shown by function but are effectively used to support citywide programs. Taxes are by far the largest segment of revenues (67.56%) followed by grants and subventions (16.15%) and charges for services (13.39%). Public safety is the largest function in terms of expenses (42.59%), followed by culture and recreation (15.93%), general government (13.59%), and Health and welfare (8.88%).

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Fiscal Year 2012 Governmental Activities (See Table 2)

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Business-type activities.

The City’s Business-type activities provide the same type of information found in the proprietary fund financial statements, but in less detail. During FY2012, Business-type activities increased the City’s net assets by $.3 million. Key elements of this increase are as follows:

Refuse service fees decreased by $1.0 million; Parking related revenues increased by $.9 million; and Permit related fees increased by $.4 million.

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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 near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, Assigned to and 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, 2012, the City’s governmental funds reported combined fund balances of $153.4 million, a decrease of $17.5 million from the prior fiscal year. The bulk of the decrease came from the expenditures of $7.4 million for the renovation project of the North Branch library; the expenditures of $2.5 million for the Motorola radio communication system; the transfer of fund balances for all Berkeley Redevelopment Agency funds of $4.0 million to private Trust funds in compliance with AB 1X 26; the expenditures of $2.2 million under General Fund due to prepayment amount to CalPERS with a net pension asset resulted, and the expenditures of $1.4 million for construction of the animal shelter building.

The General Fund is the chief operating fund of the City. As of June 30, 2012 fund balance for “assigned to” and “unassigned” of the General Funds are $2.3 and $32.3 million respectively and total fund balance was $38.1 million. As a measure of the General Fund’s liquidity, it may be useful to compare both assigned to and unassigned fund balance and total fund balance to total expenditures. Assigned and unassigned fund balance represents 26.8% of total General Fund expenditures and transfer out of $144.7 million, while total fund balance represents 25.3% of that same amount. The fund balance of the City’s General Fund decreased by $3.6 million, due primarily to a

revenue shortfall of $1.5 million, caused by a $2.0 million decrease in the fair value of investments. The decrease in operations was accounted for by the following:

o The General Fund generated an excess of revenues over expenditures in FY2012 of $2.7 million, as revenues totaled $133.9 million and expenditures totaled $131.2 million; however,

o General Fund transfers out in FY2012 totaled ($13.5 million), which exceeded transfers in of $6.7 million, for net transfers out of ($6.8 million).

The fund balance of the City’s Grants Fund increased by $2.7 million. The increase in

operations was primarily accounted for by the following: o The reduction of salaries, wages, fringe benefits and various expenditures under various

grants funds due to personnel budget cuts. The Grants Fund generated an excess of revenues over expenditures in FY2012 of $1.0 million, as revenues totaled $23.0 million and expenditures totaled $22.0 million;

o Grants Fund net transfers in FY2012 was $1.7 million, as transfers in totaled $2.6 million and transfers out totaled $.9 million.

The fund balance of the Measure FF Branch Renovation Fund decreased by $8.4 million. The

decrease was accounted for by the following: o The expenditure of $8.0 million in the renovation of the North Brach library.

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The fund balance of the City’s Capital Improvement Fund increased by $.5 million. The

decrease in operations was primarily accounted for by the following:

o The Capital Improvement Fund generated a deficiency of revenues over expenditures in FY2012 of ($4.3 million), as revenues totaled $.5 million and expenditures totaled ($4.8 million); However,

o Capital Improvement Fund transfers-in in FY2012 totaled $5.6 million, which exceeded transfers out of ($.9 million), for net transfers in of $4.8 million.

The fund balance of the Non-Major Governmental Funds decreased by $8.7 million. The decrease in operations was primarily accounted for by the following:

o The recognition of extraordinary loss of $4.4 million due to the transfer of Berkeley

Redevelopment Agency’s funds to a Private Trust, in accordance with AB 1X 26;

o Professional expenditures increased by $1.4 million due to architectural and engineering expenditures related to the Animal Shelter Construction Project.

.

o General government expenditures increased by $2.5 million due to the purchase of Motorola radio communication system.

General Fund Budgetary Highlights:

The City Council approved an original annual appropriation ordinance of $149.6 million, including transfers out for FY2012, and made supplementary budget appropriations totaling $5.1 million during the year. The supplementary budget appropriations consisted of the following: (1) FY2012 outstanding encumbrances of $2.3 million; and (2) unencumbered carryovers of $.7 million, which were re-appropriated; and other adjustments of $2.1 million, for a final budget of $154.7 million.

General fund expenditures were $5.7 million less than the approved budget, and the following functions accounted for most of this total:

General government - $1.4 million under budget: The balance is due to personnel savings from vacancies and lower benefit costs and non-personnel savings.

Public Safety- $3.0 under budget: The balance is due to personnel savings from vacancies and lower benefit costs and non-personnel savings.

Community Development & Housing- $.4 million under budget: The balance is due to personnel savings from vacancies and lower benefit costs and non-personnel savings.

Health and welfare- $.5 million under budget: The balance is due to personnel savings from vacancies and lower benefit costs and non-personnel savings.

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Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Please refer to Statement of Net Assets and Statement of Revenues, Expenses, and Changes in Net Assets of Proprietary Funds for the below information:

Total net assets of the enterprise funds as of June 30, 2012 and the changes in those net assets are summarized below:

The net decrease of ($.05 million) in net assets in the Refuse fund resulted from the following:

o Key factors for the decrease in Refuse Collection Fund: Operating revenues ($32.7 million) exceeded operating expenses ($32.6 million) by $.15 million. The non-operating expenses totaled $.08 million and transfers out totaled $.1 million.

The net decrease of ($.6 million) in the Marina fund net assets was primarily due to the following:

o Operating income increased by $.1 million, as revenues of $5.3 million exceeded operating expenses of $5.2 million.

o Operating expenses increased by $.8 million or 15.7%. Factors causing the increase were as follows: an increase in personnel services of $.2 million; an increase in material and supplies expenses of $.2 million.

The net decrease of ($.3) million in the Sanitary Sewer Fund was primarily due to the following:

o Operating income decreased by ($.5 million), as operating expenses of $12.7 million exceeded operating revenues of $12.2 million.

o Investment earnings totaled $.2 million o The net transfers out totaled $.02 million.

The net increase of $.1 million in the Clean Storm Water Fund was primarily due to the following:

o Operating income decreased by ($.3 million), as expenses of $2.4 million exceeded operating revenues of $2.0 million; and

o Net transfers-in increased by $.4 million.

The net decrease of $.1 million in the Permit Service Center Fund net assets was primarily due to the following:

Fund Net assets as of

June 30, 2011

Net assets as of June 30, 2012

Changes - Increase

(Decrease)

Refuse Collections (2,544,191)$ (2,591,587)$ (47,395)$ Marina Operations 4,976,755 4,419,653 (557,102) Sanitary Sewer 124,586,767 124,257,520 (329,247) Clean Storm Water 18,533,776 18,673,222 139,447 Permit Service Center 2,615,638 2,464,397 (151,241) Off-street Parking 12,722,617 13,461,386 738,770 Parking Meter 1,146,322 1,920,386 774,064 Building Purchase and Management 1,227,470 950,989 (276,481)

Total 163,265,153$ 163,555,968$ 290,814$

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o There was an operating loss of ($.1 million), as operating revenues of $9.0 million were exceeded by operating expenses of $9.1 million.

The net increase in the net assets of $1.5 million for the Parking-related Operation consisted of a $.8 million increase for Off-Street Parking Operations and an increase of $.8 million in net assets for Parking Meter operations. This was compared to an increase in net assets of $1.3 million in FY2011: $.7 million for the Off-Street Parking Fund and $.6 million for the Parking Meter Fund.

o Key factors for the Off-Street Parking Operations were: Operating revenues of $3.6 million exceeded operating expenses of $2.6 million by $1.0 million.

o Key factors for the increase in Parking Meter Operations: Operating revenues of $6.2 million exceeded operating expenses of $4.5 million by $1.7 million.

CAPITAL ASSETS AND DEBT ADMINISTRATION Capital assets The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2012 totaled $379.4 million (net of accumulated depreciation), which is $12.7 million more than the total as June 30, 2011. This investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure and construction in progress (See Table 3 below.).

Capital assets for governmental activities increased by $10.9 million primarily due to:

o $3.0 million increase in the following “Building Improvements”: $3.0 million Library Claremont Branch.

o $7.1 million increase in the “Construction in progress” for the following projects: $4.1 million for the new Animal Shelter; $2.1 million for the Corporate Yard Ratcliff Building; and $ .9 million for Library Branches.

Capital assets for business type activities increased by $1.8 million primarily due to:

o $.8 million increase in “improvements other than building”: $.8 million in the Marina Float Replacement.

o $1.2 million increase in “Construction in progress” for the Corporation Yard Ratcliff Bldg.

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Table 3 City of Berkeley

Capital Assets at Year-End (Net of Depreciation, in Millions)

Additional information on the City’s capital assets can be found in note III C on page 78-80 of this report. Long-term debt. At year-end, the City had total long-term obligations from governmental activities of $169.7 million, a decrease of $3.4 million or 1.5% from the previous year (as shown in table 4). The June 30, 2012 total included: $79.5 million in general obligation bonds, $6.1 million in Certificates of Participation including a premium of $.4 million, $7.0 million in lease revenue bonds, $1.9 million in pension refunding bonds, $0 million in tax allocation bonds, $3.3 million in capital lease obligations, loans and notes payable of $11.8 million, $14.1 million in compensated absences, and $29.4 million in workers’ compensation and public liability judgments and claims. A net OPEB Obligation and Net Pension Obligation of $1.7 million and $15.0 million, respectively, were added. Please refer to Note 1.D to the Financial Statements for more details

Government Business-TypeActivities Activities Total

2012 2011 2012 2011 2012 2011

Land 21.8$ 22.3$ 3.0$ 3.0$ 24.7$ 25.3$ Buildings and improvements 72.0 69.1 24.1 25.1 96.1 94.2 Improvements other than buildings 8.7 8.7 10.3 9.5 19.0 18.2 Machinery and equipment 18.5 17.9 1.4 1.0 19.9 18.9 Infrastructure 81.0 80.1 125.3 124.9 206.2 205.0 Construction in progress 11.8 4.7 1.6 0.4 13.4 5.1

213.8$ 202.9$ 165.6$ 163.9$ 379.4$ 366.7$

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Table 4 City of Berkeley

Outstanding Debt, at Year-End (In Millions)

Standard & Poor’s Corporation and Moody’s Investors Service have assigned the general obligation bonds ratings of AA+/Aa2. Additional information on the City’s long-term debt can be found in note III D on pages 84-92 of this report. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES The City’s current economic base consists of approximately 12,000 licensed businesses operating in the City. These businesses include private manufacturing, technology research, retail and service businesses, along with several state, federal, and non-profit organizations. The City is home to the main campus of the University of California, with 36,142 students (Fall 2011) and approximately 13,882 employees. The University provides a high degree of economic stability for the City and has spurred growing high technology and biotechnology sectors. The economic base generates slightly more than $4.71 billion in gross business receipts in 2011 (up from $4.55 billion in 2010) and about $1.49 billion in taxable sales in 2011 (up from $1.42 billion in 2010). Taxable property values growth increased 3.1% in FY2012. The job picture also improved slightly in Berkeley according to the State Economic Development Department, with the City’s unemployment rate declining to 9.0% in June 2012 from 10.3% in June 2011.

Government Business-TypeActivities Activities Total

2012 2011 2012 2011 2012 2011

General obligation bonds - -including $0.4M premium 79.5$ 82.4$ $79.5 82.4$

Lease revenue bonds 7.0 7.2 $3.7 4.0$ 10.7 11.2 Pension refunding bonds 1.9 2.3 1.9 2.3 Certificates of participation -- including $0.4 premium

6.1 6.1 24.7 25.4 30.8 31.5

Tax allocation bonds - * 4.4 - 4.4 Capital leases 3.3 3.7 3.3 3.7 Loans and notes payable 11.8 * 12.4 10.4 11.1 22.2 23.5 Compensated absences 14.1 15.0 2.8 2.7 16.9 17.7 Landfill liabilities 2.7 3.3 2.7 3.3 Judgments and claims 29.4 26.8 29.4 26.8 Net OPEB Obligation 1.7 1.3 0.6 0.4 2.2 1.7 Net Pension Obligation 15.0 11.4 15.0 11.4

169.7$ 173.1$ $44.8 46.9$ 214.5$ 219.9$

* BRA accounts closeout in compliance with AB 1X 26. Please see detailed disclosure under "Notes"

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Staff anticipates significant cost increases in FY 2013, and a $1.8 million shortfall in the General Fund. In order to address the forecasted $1.8 million General Fund deficit in FY 2013, staff is proposing a $1.6 million expenditure reduction in the General Fund, which will be supplemented by planned use of the General Fund Reserves to cover the $248,000 gap. This will allow the City’s budget to balance while minimizing layoffs and negative impacts to services; however, this is a one-time solution. This does not resolve the ongoing structural problem of expenditures exceeding revenues.

Staff continues to focus efforts on maximizing revenues through a number of special revenue-focused projects, such as auditing business license tax, hotels, and parking lot operators. Several of the underlying budget assumptions are very sensitive to economic changes and assume modest growth in FY2013. While an increase in property-related revenues is projected, these growth rates are lower than in previous years. The City expects General Fund revenues in FY2013 to increase by .9% to approximately $149.2 million, from $147.9 million in FY2012. General Fund expenditures are projected to total $149.4 million for FY2013 compared to $146.4 million in FY2012. Revenues do not include fund balance, which is used to balance the budget with expenditure appropriations.

REQUESTS FOR INFORMATION This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City’s Finance Department, at the City of Berkeley, 2180 Milvia Street, Third Floor, California 94704.

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BASIC FINANCIAL STATEMENTS

41

City of BerkeleyStatement of Net Assets

June 30, 2012

Governmental Business-Type Rent BerkeleyActivities Activities Total Stabilization Housing Authority

ASSETSCash and investments 173,555,810$ 33,806,263$ 207,362,074$ 4,070,537$ 1,711,788$ Receivables (net of allowance for uncollectibles) 83,731,756 2,979,800 86,711,555 104,011 Inventories 129,295 129,295 Due from Component Unit 179,630 179,630

Internal balances 85,602 (85,602)

Deferred costs 1,237,783 1,237,783

Restricted assets: Cash and investments 3,548,446 9,733,247 13,281,692 1,847,915 Capital assets not being depreciated: Land 21,750,132 2,979,050 24,729,182 2,579,621 Construction in progress 11,775,403 1,634,868 13,410,271 Capital assets net of accumulated depreciation: Buildings 71,997,082 24,111,101 96,108,183 2,060,941 Improvements other than buildings 8,731,142 10,266,356 18,997,498 Machinery and equipment 18,521,082 1,351,481 19,872,563 3,396 27,239 Infrastructure 81,026,931 125,305,944 206,332,875 Net Pension assets 2,180,414 2,180,414 Net OPEB assets - Fire 74,808 74,808 Total assets 478,525,316 212,082,506 690,607,821 4,073,933 8,331,515

LIABILITIESAccounts payable 5,429,592 1,270,625 6,700,216 57,717 83,730 Accrued salaries and wages 4,219,665 886,031 5,105,696 68,096 Advances - rent registration 2,751,047 Due to primary government 179,630 Accrued Interest Payable 695,667 905,406 1,601,073 Deposit Held 789,925 398,151 1,188,076 10,100 18,978 Other Liabilities 6,176,590 357,170 6,533,760 154,664 225,000 Tax and revenue anticipation notes 50,000,000 50,000,000 Noncurrent liabilities (Note III): Due within one year 11,157,462 3,121,228 14,278,690 22,878 198,397 Due in more than one year 158,535,152 41,673,530 200,208,682 278,677 1,101,898 Total liabilities 237,004,051 48,612,141 285,616,192 3,343,179 1,807,633

NET ASSETSInvested in capital assets, net of related debt 140,218,431 138,673,632 278,892,063 3,396 3,532,399 Restricted for:

Debt service 9,320,347 9,320,347 Special purposes 21,696,321 21,696,321 Health and welfare 10,592,612 10,592,612 Urban Redevelopment and Housing 41,785,729 41,785,729 1,845,007 Capital projects 27,810,334 27,810,334 Unrestricted (9,902,509) 24,796,734 14,894,225 727,358 1,146,476 Total net assets 241,521,265$ 163,470,366$ 404,991,631$ 730,754$ 6,523,882$

Primary Government Component Units

The accompanying notes are an integral part of these financial statements.42

City of BerkeleyStatement of Activities

For the Year Ended June 30, 2012

Indirect Operating CapitalExpenses Charges for Grants and Grants and Governmental Business-Type Total Rent Berkeley

Functions/Programs Expenses Allocation Services Contributions Contributions Activities Activities Stabilization Housing AuthorityPrimary Government:Governmental activities: General government 34,737,606$ (4,807,696)$ 2,965,332$ 21,836$ -$ (26,942,741)$ -$ (26,942,741)$ -$ -$ Public safety 93,788,397 16,271,404 571,023 (76,945,970) (76,945,970) Highways and streets 14,576,613 124,114 2,165,995 7,566,710 4,080,103 (887,918) (887,918) Health and welfare 19,546,406 1,472,907 16,574,202 (1,499,296) (1,499,296) Culture and recreation 35,079,112 3,122,421 64,427 111,463 (31,780,800) (31,780,800) Community development and housing 19,215,309 197,707 2,129,425 6,685,766 (10,597,825) (10,597,825) Economic development 3,646,479 1,505,706 - (2,140,773) (2,140,773) Interest on long-term debt 4,088,267 (4,088,267) (4,088,267) Total governmental activities 224,678,187 (4,485,876) 29,633,190 31,483,965 4,191,566 (154,883,591) (154,883,591) Business-type activities: Parking related 7,360,188 9,817,873 2,457,685 2,457,685 Marina operations and maintenance 5,456,570 397,523 5,299,039 18,200 (536,854) (536,854) Sewer services 11,874,424 938,762 12,166,250 (646,936) (646,936) Clean storm water 2,231,786 158,563 2,065,087 (325,262) (325,262) Refuse services 30,245,384 2,172,612 32,702,914 284,919 284,919 Permit service center 8,334,161 818,416 8,968,166 11,631 (172,779) (172,779) Building purchase and management 3,259,428 2,984,924 (274,504) (274,504)

Total business-type activities 68,761,941 4,485,876 74,004,253 29,831 - - 786,268 786,268 Total primary government 293,440,129$ - 103,637,444$ 31,513,796$ 4,191,566$ (154,883,591) 786,268 (154,097,322)

Component units: Rent Stabilization 3,940,634 3,886,599 (54,035) Berkeley Housing Authority 24,824,155 228,839 25,759,747 239,298 1,403,729 Total Component Units 28,764,789$ -$ 4,115,438$ 25,759,747$ 239,298$ (54,035) 1,403,729

General revenues: Taxes:

Property taxes, levied for general purposes 60,233,049 60,233,049 Property taxes, levied for debt service 7,115,652 7,115,652 Property taxes for special purposes: Library 14,581,791 14,581,791 Parks 9,186,260 9,186,260 Paramedic 2,454,762 2,454,762 Fire 3,741,157 3,741,157 Sales taxes 14,844,945 14,844,945 Utility users taxes 14,091,347 14,091,347 Transient occupancy taxes 4,609,048 4,609,048 Business license tax 15,645,975 15,645,975 Other taxes 2,853,421 2,853,421

Other unrestricted state subventions 399,476 399,476 Contributions not restricted to specific programs 1,036,535 1,036,535 Investment earnings 2,760,171 176,551 2,936,722 Miscellaneous 1,972,376 1,972,376 184,625

Gain on sales of capital assets 464,093 2,068 466,161 Extraorindary Gain/ (Loss) (259,613) (259,613) Transfers: Primary government 671,173 (671,173) (0) p

Total general revenues and transfers 156,401,618 (492,554) 155,909,065 - 184,625 Changes in net assets 1,518,026 293,713 1,811,739 (54,035) 1,588,354 Net assets--beginning (as restated) 240,003,238 163,176,653 403,179,891 784,789 4,935,528 Net assets--ending 241,521,264$ 163,470,366$ 404,991,630$ 730,754$ 6,523,882$

Component Units

Net (Expense) Revenue andProgram Revenues Changes in Net Assets

Primary Government

The accompanying notes are an integral part of these financial statements.43

City of BerkeleyBalance Sheet

Governmental FundsJune 30, 2012

Special RevenueOther Total

General Measue FF Capital Governmental GovernmentalFund Grants Branch Renov Improvement Funds Funds

ASSETSCash and investments in treasury 80,421,748$ 11,725,043$ 13,769,430$ 6,562,664$ 33,122,890$ 145,601,775$ Restricted Cash and investments 3,548,446 3,548,446 Receivables (net of allowance where applicable): Accounts 8,221,054 492,412 1,202,461 9,915,927 Interest 816,560 547,553 249,789 1,613,902 Taxes 5,403,585 563,266 5,966,851 Special assessments 303,697 303,697 Subventions/grants 7,452,212 664,397 8,116,609 Due from other funds 6,777,054 2,659,832 9,436,886 Due from components units 179,629 179,629 Notes receivable 3,438,803 23,115,308 9,229,057 20,372,585 56,155,752 Other 487,519 7,776 495,295

Total assets 105,745,951$ 42,792,750$ 13,769,430$ 18,999,106$ 60,027,530$ 241,334,769$

LIABILITIESAccounts payable 2,951,049 441,940 105,758 224,449 906,184 4,629,381

Accrued salaries and wages 2,368,020 222,510 2,233 21,138 1,396,447 4,010,349 y

Other liabilities 5,362,762 221,934 204,657 5,789,353

Due to other funds 7,385,945 1,461,238 8,847,183 pAdvance from other funds - - Deposits held 603,155 12,933 173,836 789,925 Deferred revenue 6,392,105 5,562,445 502,303 1,396,248 13,853,102 p yTax and revenue anticipation note 50,000,000 50,000,000 Total liabilities 67,677,092 13,834,774 107,991 760,824 5,538,612 87,919,292

FUND BALANCES

Nonspendable 3,438,803 - 2,114,083 5,552,886 Restricted for - 35,353,151 11,239,045 9,229,057 53,270,008 109,091,260 Assigned to 2,343,500 - 2,422,394 9,009,226 - 13,775,120

Unassigned 32,286,557 (6,395,175) (895,172) 24,996,209

Total fund balances 38,068,859 $28,957,976 $13,661,439 18,238,283 54,488,919 153,415,478 Total liabilities and fund balances 105,745,951$ 42,792,750$ 13,769,430$ 18,999,106$ 60,027,530$ 241,334,769

Capital Project

The accompanying notes are an integral part of these financial statements.44

Fund balances – total governmental funds (Page 44) 153,415,478$

Land 21,750,132 Construction in progress 11,775,403

Buildings 71,551,014 Improvements other than buildings 8,629,180

Machinery and equipment 8,025,849 Infrastructure 81,026,931

resources and therefore, are not reported in the funds. Net pension obligation - Police (15,006,249)

Net OPEB obligation - Misc Retiree (1,543,431) Net pension assets 2,180,415

Net OPEB assets - Fire 74,808

therefore, are deferred in the funds.Deferred revenue 13,853,102

Deferred charge 1,237,783

equipment maintenance, building maintenance, supply warehouse, workers compensation,electrical warehouse and catastrophic loss services to individual funds.The assets and liabilities of the internal services funds are included in governmentalactivities in the statement of net assets. 4,956,953

period and, therefore, are not reported in the funds.Accrued Interest Payable on long-term debt (636,038)

Bonds, certificates of participation, notes and loans (106,227,400) Compensated absences (13,542,663)

Net assets of governmental activities (Page 42) 241,521,265$

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

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

Long-term liabilities, including bonds payable, are not due and payable in the current

Other long-term assets are not availble to pay for current period expenditures and,

not reported in the funds.

Amounts reported for governmental activities in the Statement of net assets are different because:

City of BerkeleyReconciliation of the Balance Sheet of Governmental Funds

To the Statement of Net AssetsJune 30, 2012

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

Net OPEB assets and Net pension obligation in governmental activities are not financial

45

City of BerkeleyStatement of Revenues, Expenditures,

and Changes in Fund Balances Governmental Funds

For the Fiscal Year ended June 30, 2012Special Revenue

Other Total Measure FF Capital Governmental Governmental

General Grants Branch Renov Improvement Funds Funds

Revenues: Taxes 102,405,529$ -$ -$ -$ 42,454,516$ 144,860,044$ Licenses and permits 681,664 199,444 881,108 Intergovernmental 9,023,088 22,836,209 13,939,485 45,798,782 Charges for service 7,735,753 116,574 190,199 3,887,395 11,929,921 Fines and penalties 9,495,955 - 355,363 9,851,317 Rents and royalties 115,668 - 242,766 358,434 Franchise 1,539,773 1,539,773 Private contributions and donations 14,955 1,021,580 1,036,535 Investment income 2,528,868 38,208 4,508 23,720 309,315 2,904,618 Miscellaneous 352,145 23,687 1,000 258,834 723,656 1,359,323

------------------------ --------------------------------------------------- ---------------------- ----------------------- ------------------------- Total revenues 133,893,398 23,014,678 5,508 472,753 63,133,518 220,519,856

------------------------ --------------------------------------------------- ---------------------- ----------------------- -------------------------Expenditures: Current: General government 27,234,262 30,803 119,222 3,862,430 31,246,717 Public safety 81,385,105 404,459 7,034,804 88,824,367 Highway and streets 2,118,785 2,966,474 7,546,094 12,631,353 Health and welfare 6,363,660 11,657,295 1,437,741 19,458,695 Culture-recreation 5,521,609 778,890 8,401,623 260,966 26,260,545 41,223,633 Community development and housing 6,487,398 5,781,386 5,870,201 18,138,985 Economic development 1,889,270 360,086 1,347,887 3,597,243 p Debt service: Principal repayment - 3,780,000 3,780,000 Interest and fiscal charges 127,222 - 4,433,434 4,560,657 Cost of issuance 57,941 - - 57,941 Capital outlay: Highway and streets 3,244,598 - 3,244,598

Community development and housing 1,189,700 4,944,377 6,134,077 ------------------------ --------------------------------------------------- ---------------------- ----------------------- -------------------------

Total expenditures 131,185,252 21,979,393 8,401,623 4,814,486 66,517,513 232,898,267 ------------------------ --------------------------------------------------- ---------------------- ----------------------- -------------------------

Excess(deficiency) of revenues over(under) expenditures 2,708,146 1,035,285 (8,396,115) (4,341,733) (3,383,994) (12,378,411) ------------------------ --------------------------------------------------- ---------------------- ----------------------- -------------------------

Other financing sources(uses): Transfers in 6,719,053 2,623,678 5,637,000 5,042,412 20,022,143 Transfers out (13,516,530) (952,397) (872,718) (5,911,800) (21,253,445) Issuance of loan proceeds - 140 140 p p Sale of capital assets 508,114 1,522 509,636

------------------------ --------------------------------------------------- ---------------------- ----------------------- ------------------------- Total other financing sources(uses) (6,289,363) 1,672,803 - 4,764,282 (869,248) (721,526)

------------------------ --------------------------------------------------- ---------------------- ----------------------- -------------------------

Extraordinary gain/ (loss) (4,405,488) (4,405,488)

Net change in fund balances (3,581,217) 2,708,088 (8,396,116) 422,549 (8,658,730) (17,505,425)

Fund Balance, July 1, 2011 41,650,076 26,249,889 22,057,555 17,815,734 63,147,649 170,920,903

------------------------ --------------------------------------------------- ---------------------- ----------------------- -------------------------Fund Balance, June 30, 2012 38,068,859$ 28,957,976$ 13,661,439$ 18,238,283$ 54,488,919$ 153,415,478$

============== ============================ ============ ============= ==============

Capital Project

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

46

Net change in fund balances – total governmental funds (Page 46) (17,505,425)$

The capital outlay expenditures are therefore added back to fund balance. 23,678,415

Deletion of capital assets due to sale is therefore deducted from fund balance (75,699) Depreciation expense is therefore deducted from fund balance. (11,155,495)

Deferred revenue - Tax receivable (422,751)

Deferred revenue - Grant receivable (1,189,903) Deferred revenue - Accounts receivable 1,817,308

Issuance of loan (140) pPrincipal payments 3,780,000

Compensated absences 942,100 Amortization of premium on debt 28,771 Amortization of bond issuance costs (83,036) Net pension obligation - Police (3,649,438) Net OPEB Obligation - Misc Retiree (326,861) Net pension assets 2,180,414 Net OPEB assets - Fire (22,319) Accrued Interest Payable 594,294 Extraordinary gain/loss due to AB 1X 26 for Redevelopment Agency 4,145,875

Loss (3,120,562) Transfers in 3,052,716

Transfers out (1,150,241)

Change in net assets of governmental activities (Page 43) 1,518,027$

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

Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported expenditures in governmental funds.

Internal service funds are used by management to charge the costs of certain activates to individual funds. The net revenue (expense) of the internal service funds is reported with governmental activities.

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

Amounts reported for governmental activities in the Statement of Activities are different because:

City of BerkeleyReconciliation of the Statement of Revenues, Expenditure, and Change in

Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2012

Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.

Issuance of long term debt provides current financial resources to governmental funds but incurring debt increases long-term liabilities in the Statement of Net Assets. Repayment of principal on long-term debts is an expenditures in the governmental funds, but in the Statement of Net Assets the repayment reduces long-term liabilities.

47

City of BerkeleyStatement of Net Assets

Proprietary FundsJune 30, 2012

Business-type Activities--Enterprise Funds

Refuse Marina Sanitary Clean Storm Permit Service Off-Street Parking Bldg. PurchasesCollection Operations Sewer Water Center Parking Meter & Management Total Internal Service

ASSETSCurrent assets: Cash and cash equivalents 29,203$ 65,273 412,923$ 39,678$ 88,493$ 217,290$ 57,807$ 66,345$ 977,013$ 796,040$ Investments 987,753 2,198,192 13,888,567 1,329,899 2,974,265 7,293,484 1,937,215 2,219,875 32,829,251 27,157,995 Accounts receivables, net 1,060,250 288,690 1,306,444 141,644 92,019 58,937 30,827 989 2,979,800 101,362 Inventory 129,295

Others 899,489

Total current assets 2,077,206 2,552,155 15,607,934 1,511,221 3,154,777 7,569,712 2,025,849 2,287,210 36,786,063 29,084,181 Noncurrent assets: Restricted cash and cash equivalents 3,564,650 6,168,596 9,733,247 Others 162,872 Capital assets: Land 1,089,529 557,386 40,426 1,291,709 2,979,050 Construction in Progress 1,634,867 1,634,867 Buildings, property, equipment, and infrastructure, net 1,734,786 10,789,930 108,298,391 17,294,243 23,316 4,859,458 207,590 17,827,167 161,034,883 11,043,262 Total capital assets, net 2,824,315 11,347,316 109,973,685 17,294,243 23,316 6,151,167 207,590 17,827,167 165,648,800 11,043,262

Total non current assets 2,824,315 11,347,316 109,973,685 17,294,243 23,316 9,715,817 207,590 23,995,763 175,382,046 11,206,134

Total assets 4,901,522 13,899,471 125,581,618 18,805,464 3,178,093 17,285,529 2,233,439 26,282,972 212,168,109 40,290,315

LIABILITIES:Current liabilities: Accounts payable 499,230 34,534 484,737 756 68,212 89,400 40,825 52,931 1,270,625 800,211 Accrued salaries and wages 360,922 98,346 167,618 27,159 146,348 7,424 65,269 12,946 886,031 209,316 Accrued interest payable 34,036 352,797 - 48,046 470,527 905,406 59,628 Compensated absences 223,241 34,980 91,959 12,950 47,519 2,264 26,227 6,004 445,144 41,290 Landfill Liabilities - current portion 1,024,651 - 1,024,651 Due to other funds - - 589,703 Other liabilities 235,468 95,956 - 23,264 354,689 387,238 Deposits held 215 243,251 - 60,303 9,866 84,516 398,151 Recycling carts - current portion 341,598 - 341,598 Claims and judgments payable - - 2,481 2,481 5,537,091 Notes payable 259,835 - 259,835 Capital lease payable - - 412,868 Revenue bonds payable - 305,000 305,000 Certificate of participation 745,000 745,000 Total current liabilities 2,719,361 1,119,699 744,315 43,346 345,647 461,999 132,321 1,371,924 6,938,611 8,037,345 Noncurrent liabilities: Compensated absences 1,171,301 183,532 482,492 67,948 249,324 11,876 137,608 31,499 2,335,580 502,962 Landfill Liabilities - less current portion 1,696,266 - 1,696,266 Recycling carts - less current portion 1,692,723 - 1,692,723 Claims and judgments payable - - 23,874,000 Notes payable 8,133,579 - 8,133,579 Capital lease payable - - 2,890,741 Revenue bonds payable - 3,345,000 3,345,000 Certificate of participation - 23,920,000 23,920,000 Net OPEB obligation 213,457 43,008 97,291 20,947 118,726 5,268 43,124 8,561 550,382 113,916 Total noncurrent liabilities 4,773,747 8,360,119 579,783 88,895 368,050 3,362,144 180,732 23,960,060 41,673,530 27,381,619

Total liabilities 7,493,108 9,479,818 1,324,098 132,242 713,696 3,824,143 313,053 25,331,984 48,612,141 35,418,964

NET ASSETSInvested in capital assets, net of related debt 2,824,315 2,953,902 109,973,685 17,294,243 23,316 6,065,817 207,590 (669,237) 138,673,632 7,739,653 Restricted for: Debt Service - - - Unrestricted (deficit) (5,415,902) 1,465,751 14,283,836 1,378,979 2,441,081 7,395,569 1,712,796 1,620,226 24,882,336 (2,868,302) Total net assets (2,591,587)$ 4,419,653$ 124,257,520$ 18,673,222$ 2,464,397$ 13,461,386$ 1,920,386$ 950,989$ 163,555,968 4,871,351$

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. (85,602) Net Assets of business-type activities 163,470,366$

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

48

City of BerkeleyStatement of Revenues, Expenses, and Changes in Net Assets

Proprietary FundsFor the Year Ended June 30, 2012

Business-type Activities--Enterprise Funds

Refuse Marina Sanitary Clean Storm Permit Service Off-Street Parking Bldg. PurchasesCollection Operations Sewer Water Center Parking Meter & Management Total Internal Service Funds

Operating revenues: Parking related revenues -$ -$ -$ -$ -$ 3,575,057$ 6,242,816$ -$ 9,817,873$ -$ Marina operations and maintenance 5,299,039 5,299,039 Sewer service fees 12,166,250 12,166,250 Clean storm water fees 2,065,087 2,065,087 Refuse service fees 32,702,914 32,702,914 Building permits 2,628,251 2,628,251 Other permits 1,994,708 1,994,708 Plan checking fees 2,785,397 2,785,397 Other fees 1,559,810 1,559,810 Contract 2,984,924 2,984,924 Equipment rentals service charge 10,695,085 Building maintenance 3,593,640 Central store service charge 690,549 Workers' compensation fees 8,788,113 Other revenues 2,161,015 Total operating revenues 32,702,914 5,299,039 12,166,250 2,065,087 8,968,166 3,575,057 6,242,816 2,984,924 74,004,253 25,928,402

Operating expenses: Personnel services 9,682,461 2,018,803 4,305,207 702,738 4,210,359 215,967 1,882,202 426,861 23,444,598 7,278,395 Employee benefits 6,489,592 1,268,173 2,840,462 448,051 2,353,900 122,123 1,235,825 294,592 15,052,717 3,236,115 Transportation 4,699,819 112,162 359,540 232,875 65,967 - 445,865 5,916,228 312,935 Repairs and maintenance 9,379 34,924 18,023 96,364 38,147 119,730 16,695 32,225 365,485 358,994 Materials and supplies 346,445 262,221 458,847 147,235 1,037,497 628,911 226,918 162,758 3,270,832 3,371,409 Utilities 574,693 401,755 19,413 1,286 32,681 151,435 325,756 1,507,018 71,184 Insurance 29,188 - - - 29,188 1,211,145 Specialized and professional services 8,438,615 267,602 1,372,134 32,636 537,259 1,166,835 590,731 62,208 12,468,020 2,331,050 Depreciation 130,266 436,953 2,378,918 569,459 7,519 209,573 142,610 784,995 4,660,294 2,355,709 Judgments and claims - - - - 8,500,765 Communication 11,802 12,460 19,297 715 15,722 21,409 4,026 3,725 89,156 8,018 General administration 2,172,612 397,523 938,762 158,563 818,415 - 4,485,875

-

Total operating expenses 32,555,682 5,241,764 12,710,603 2,389,922 9,117,466 2,635,982 4,544,871 2,093,120 71,289,410 29,035,719

Operating income (loss) 147,232 57,275 (544,353) (324,835) (149,300) 939,074 1,697,945 891,804 2,714,843 (3,107,317) Nonoperating revenues (expenses): Investment earnings (1,663) 19,958 240,506 (6,875) (15,640) (38,414) (10,231) (11,091) 176,551 (144,447)

Interest expense (74,377) (564,855) - - (153,171) (1,157,194) (1,949,597) (150,675) Operating grants 18,200 - 11,631 - 29,831 254,620 Gain(loss) on disposal of capital assets (7,717) (3,191) 2,068 (801) (9,640) 30,156 Total nonoperating revenue (expenses) (83,757) (526,697) 237,316 (6,875) (1,941) (192,386) (10,231) (1,168,285) (1,752,855) (10,346) Net Income (loss) before contributions and transfers 63,476 (469,422) (307,037) (331,710) (151,241) 746,689 1,687,714 (276,481) 961,987 (3,117,663)

Transfers in - 80,312 496,242 - 576,554 3,052,716 Transfers out (110,870) (87,680) (102,522) (25,085) (7,920) (913,650) (1,247,727) (1,150,241) Change in net assets (47,394) (557,102) (329,247) 139,447 (151,241) 738,769 774,064 (276,481) 290,814 (1,215,188)

Total net assets--beginning (2,544,191) 4,976,755 124,586,767 18,533,776 2,615,638 12,722,617 1,146,322 1,227,470 6,086,539 Total net assets--ending (2,591,587)$ 4,419,653$ 124,257,520$ 18,673,222$ 2,464,397$ 13,461,386$ 1,920,386$ 950,989$ 4,871,351$

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. 2,899 Change in net assets of business-type activities 293,713$

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

49

CITY OF BERKELEYStatement of Cash Flows

Proprietary FundsFor the year ended June 30, 2012

Enterprise Funds

Refuse Marina Sanitary Clean Permit Service Off-Street Parking Bldg. PurchasesCollections Operations Sewer Storm Water Center Parking Meter & Management T o t a l Internal Service Funds

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------Cash flows from operating activities: Cash received from customers 33,228,006$ 5,300,399$ 12,471,361$ 2,068,084$ 8,920,369$ 3,589,044$ 6,213,950$ 2,983,935$ 74,775,148$ 25,915,946$ Cash paid for goods and services (16,902,445) (1,565,780) (2,835,468) (1,352,961) (2,595,314) (2,014,329) (1,291,207) (643,378) (29,200,882) (7,364,692) Cash paid for employees' services (16,160,250) (3,393,420) (7,317,182) (529,180) (6,768,625) (342,409) (3,185,922) (765,941) (38,462,929) (10,824,925)p Claims and Judgments Paid (6,032,649)

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------Net cash provided (used) by operating activities 165,311 341,199 2,318,711 185,943 (443,570) 1,232,306 1,736,821 1,574,616 7,111,337 1,693,680

----------------------- ----------------------- ----------------------- -------------------------- ----------------------- ----------------------------- --------------------- --------------------- ------------------------ -----------------------------------Cash flows from non capital financing activities: Transfers in 80,312 496,242 576,554 3,052,716 Transfers out (110,870) (87,680) (102,522) (25,085) (7,920) (913,650) (1,247,727) (1,150,241) Grants received 18,200 - 11,631 29,831 254,620 Interfund advance 484,464

Interfund repayments - - - (500,000)

- ----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------

Net cash provided (used) by non capital financing activities (110,870) (69,480) (22,210) 471,157 11,631 (7,920) (913,650) - (641,342) 2,141,559

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------Cash flows from capital and related financing activities: Interest paid (79,887) (347,444) - (156,624) (1,167,011) (1,750,966) (157,733) Purchases of capital assets (455,743) (819,792) (1,328,576) - (24,618) (575,442) (2,064) (5,310) (3,211,545) (2,497,402) Purchases of Infrastucture assets (3,125,538) (134,385) (3,259,923) Debt repayment (329,948) (298,988) (300,000) (720,000) (1,648,936) (395,361) Proceeds from sale of capital assets 860 - 4,435 2,068 7,363 81,627

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------Net cash provided (used) by capital and related financing activities (864,719) (1,466,224) (4,449,679) (134,385) (22,550) (1,032,066) (2,064) (1,892,321) (9,864,007) (2,968,869)

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------Cash flows from investing activities Investment sales 726,802 1,047,738 1,262,071 327,163 591,970 222,949 4,178,693 565,789 Investment purchases (29,500) - (535,467) (1,017,105) (835,835) (2,417,907) (2,335,943) Interest received 999 31,510 313,585 147 42 650 346,933

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------Net cash provided (used) by investing activities 727,801 1,049,748 1,575,656 (535,320) 327,163 (425,093) (835,835) 223,599 2,107,719 (1,770,153)

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------Net increase (decrease) in cash and cash equivalents (82,478) (144,757) (577,522) (12,605) (127,327) (232,772) (14,728) (94,106) (1,286,293) (903,783)

Cash and cash equivalents, July 1, 2011 111,681 210,030 990,444 52,284 215,819 4,014,713 72,535 6,329,050 11,996,556 1,699,823----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------

Cash and cash equivalents, June 30, 2012 29,203$ 65,273$ 412,923$ 39,678$ 88,493$ 3,781,940$ 57,807$ 6,234,941$ 10,710,262$ 796,040$ ============= ============= ============= =============== ============== ================ ============= ============ ============== ===================

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

50

CITY OF BERKELEYStatement of Cash Flows

Proprietary FundsFor the year ended June 30, 2012

Enterprise Funds

Refuse Marina Sanitary Clean Permit Service Off-Street Parking Bldg. PurchasesCollections Operations Sewer Storm Water Center Parking Meter & Management T o t a l Internal Service Funds

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------

Reconciliation of operating income (loss) to net operating cash:

Income (loss) from operations 147,232$ 57,275$ (544,353)$ (324,835)$ (149,300)$ 939,074$ 1,697,945$ 891,804$ 2,714,843 (3,107,317)$

Adjustments to reconcile income (loss) from operations to net cash provided (used) by operating activities: Depreciation 130,266 436,953 2,378,918 569,459 7,519 209,573 142,610 784,995 4,660,294 2,355,709 Change in: - Accounts receivable 525,091 (68,096) 305,111 2,997 (47,797) 13,987 (28,866) (989) 701,438 (57,105) Inventories - - - - - - - - (30,143) Accounts payable 329,165 (50,235) 350,548 (13,186) (76,775) 73,991 6,197 (56,706) 563,000 400,454 Accrued salaries and wages (521,953) (107,977) (218,079) (52,942) (232,216) (6,988) (104,275) (27,905) (1,272,335) (354,690) Compensated absences 60,600 (8,708) 19,061 504 4,720 1,450 26,840 (19,132) 85,335 19,711 Other liabilities (552,896) 71,746 3,548 - 27,150 (13,170) (463,622) (71,562) Net OPEB Obligation 47,806 10,241 23,957 3,945 23,130 1,219 9,540 2,549 122,387 24,563 Claims and judgement payables - - - - - - - 2,514,060

----------------------- ----------------------- ----------------------- -------------------------- ------------------------- ----------------------------- ----------------------- --------------------- ------------------------ -----------------------------------Net cash provided (used) by operating activities 165,311$ 341,199$ 2,318,711$ 185,943$ (443,570)$ 1,232,306$ 1,736,821$ 1,574,616$ 7,111,337 1,693,680$

============= ============= ============= =============== ============== ================ ============= ============ ============== ==================

Noncash investing, capital, and financing activities:

Increase/ (decrease) in fair value of investments $ (2,662) $ (11,552) $ (73,079) $ (7,022) $ (15,640) $ (38,456) (10,231)$ $ (11,742) $ (170,382) (144,447)$

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

51

CITY OF BERKELEYStatement of Fiduciary Net Assets

Fiduciary FundsJune 30, 2012

Private TrustPension and Other Funds - Post-employment Successor

Benefit Agency ofTrust Funds Former RDA Agency Funds

----------------------- --------------------- --------------------Assets Cash and cash equivalents 7,136,695$ 1,220,271$ 3,768,702$ Restricted cash and cash equivalents 1,896,258 1,976,651 Investments, at fair value - Corporate Notes 17,608,249 Interest receivable 578,303 126,718 Taxes receivable 86,076 Grants receivable 10,000 Notes receivable 353,540 Other accounts receivable - 366,499Deferred charges 98,044 Capital assets: Land 501,966 Building,property,equipment, net 816,097 Property held for resale 211,347 Total assets 27,219,505 5,314,634 4,221,277

LiabilitiesAccounts payable 4,477 Accrued salaries and wages 4,519 Pension benefits payable 51,045 Interest payable 753,135 Other liabilities 57,848 364,751 Bonds payable 4,097,000 Other agency obligations 3,856,526 Total liabilities 51,045 4,916,979 4,221,277$

Net AssetsHeld in trust for pension benefits 8,131,894 Held in trust for OPEB benefits 19,036,566 Held in trust for City of Berkeley Successor Agency 397,655 Total net assets 27,168,460$ 397,655$

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

52

CITY OF BERKELEY Statement of Changes in Fiduciary Net Assets

Fiduciary Funds For the Year Ended June 30, 2012

Private TrustPension and Other Funds - Post-employment Successor

Benefit Agency ofTrust Funds Former RDA

----------------------- --------------------

ADDITIONS:Grants revenue 10,000$ Tax increment income 517,527 Contributions: Employer 4,780,099$ Investment income 886,816 3,889 Operating transfer in 4,071

Total Additions 5,666,915 535,486

DEDUCTIONS:General government 23,404 Highway and streets 9,156 Community development 158,107 Benefits payment for service 3,410,034 Benefits payment for disability 423,642

Administrative expenses 109,078 Interest payment 139,918 Pass through to COB 62,787 Operating transfer out 4,071

Total Deductions 3,942,754 397,442

Extraordinary Gain 259,612

Change in net assets 1,724,161 397,655

Net Assets - beginning 25,444,299

Net Assets - ending 27,168,460$ 397,655$

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

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54

CITY OF BERKELEY

Notes to the Basic Financial Statements

June 30, 2012

I) Summary of Significant Accounting Policies

A. Description of the Reporting Entity

The City of Berkeley (the City) is a municipal corporation created under the laws of the State of California. The City operates under its own charter. The current charter provides for a Council-Manager form of government and the City is governed by an elected mayor and eight-member council. The City provides the following services: public safety (police and fire); sanitation and sewer; housing; leisure (parks, recreation, and marina); health and human services, including City funded health clinics; animal control; public improvements; planning and zoning; library services; and general and administrative services.

As required by generally accepted accounting principles, these financial statements present the City of Berkeley and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City’s operations. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable for an organization if that organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete. Each discretely presented component unit is reported in a separate column in the government-wide financial statements (see note below for description) to emphasize that it is legally separate from the City.

Successor Agency Trust for Assets of Former Redevelopment Agency. 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 California. This action impacted the reporting entity of the City of Berkeley that previously had reported Berkeley redevelopment agency (BRA) within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will 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 17, 2012, the City Council elected the City to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 65.574-N.S. Please refer to more details under “Notes to the Successor Agency” section.

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(I) Summary of Significant Accounting Policies (Continued)

Discretely Presented Component Units. The Rent Stabilization Board (Rent Board) is responsible for the proper administration of programs to regulate residential rents; protecting tenants from unwarranted rent increases and arbitrary, discriminatory or retaliation evictions; helping maintain the diversity of the Berkeley community; and to ensure compliance with legal obligations relating to the rental of housing. The nine member Board of Commissioners is elected by the citizens. However, the Rent Board is fiscally dependent upon the City because the City Council must approve its annual budgets, authorizes any bonded debt, and provides support services such as accounting, human resources, payroll, information technology and finance.

The Berkeley Housing Authority (BHA) is a Public Housing Agency as defined in Section 8 of the United States Housing Act of 1937, and a public body corporate and politic established pursuant to the California Housing Authorities Law, Health and Safety code Section 34200 et seq. It was organized in 2007 under the laws of the State of California and was established to administer rental assistance programs with the objective of providing affordable, decent, safe, and sanitary housing for low-income residents of the City. The BHA has a 7-member Board of Commissioners appointed by the Mayor of the City. Although the BHA is a legally distinct entity operating within the geographical jurisdiction of the City of Berkeley, it has been determined that the BHA's financial statements would be presented as a discrete component unit of the City's financial statements in response to the significant financial assistance, budget, setting charges, and issuing debt provided by the City to the BHA. Because BHA operations are not self-supporting, the City agreed to continue to provide some of the ongoing support services to BHA, including human resources, payroll, information technology and finance.

Complete financial statements for each of the individual component units may be obtained at the entity’s administrative offices:

Rent Stabilization Board Berkeley Housing Authority 2125 Milvia Street 1901 Fairview Street Berkeley, California Berkeley, California Berkeley Redevelopment Agency 2118 Milvia Street Berkeley, California (Through January 31, 2012)

B. Government-wide Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements except in the case of interfund services provided and used, which are not eliminated in the consolidation process. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific

56

(I) Summary of Significant Accounting Policies (Continued)

function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants are recognized as revenues as soon as all eligibility requirements imposed by the grantor have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal year. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, utility users taxes, transient occupancy taxes, ambulance fees, interest, and sales taxes associated with the current fiscal year are all considered susceptible to accrual and so have been recognized as revenues of the current fiscal year. All other revenue items are considered to be measurable and available only when the City receives cash.

The City reports the following major governmental funds:

The GeneralFund is the City’s primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund.

The GrantsFund accounts for grant monies received from other governments and private sources to be used to cover expenditures for providing public services and improving public safety.

The Measure FF Branch Renovation Capital Project Fund accounts for the receipt and expenditure of the proceeds from the General Obligation bonds approved by over two thirds of the voters on November 4, 2008, to finance renovations, construction, seismic and access improvements, and expansion of program area at four neighborhood libraries in the City.

The Capital ImprovementFund accounts for expenditures for land, buildings, major reconstruction and renovation of structures, and for major landscaping or park improvements financed by local revenues.

The government reports the following major proprietary funds:

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(I) Summary of Significant Accounting Policies (Continued)

The Refuse Collection/Disposal Fund accounts for the monies received and expended from refuse collection services, including the surcharge to provide for expenses incurred in the collection and disposal of solid waste materials as well as for plans, surveys, engineering expenses, property acquisition and construction costs of facilities for future refuse disposal.

The MarinaOperationsFund accounts for the day-to-day operations of the Berkeley Marina.

The Sanitary Sewer Fund accounts for the collection of revenues from sanitary sewer charges, and the expenses related to the operation, maintenance, replacement, reconstruction, and repair of sanitary facilities.

The CleanStormWaterFund accounts for the fees collected to improve the quality of storm water discharged from the City’s storm drainage system.

The PermitServiceCenterFund accounts for revenues from customers processing development permit application (i.e., building and zoning permits) and the funds expended to operate the permit review functions of the Permit Service Center.

The OffStreetParkingFund accounts for the operations of the City’s Center Street garage, Sather Gate garage, Sather Gate Mall leases, and Oxford/Fulton parking lot.

The Parking Meter Fund accounts for the collection of coins from the City’s parking meters and for the purchasing, leasing, installing, repairing, maintaining, operating, removing, and policing of the meters.

The Building Purchases&Management Fund accounts for the purchase and management of the building at 1947 Center Street.

Additionally, the City reports the following fund types:

Internal Service Funds account for equipment maintenance, building maintenance and replacement, supply warehouse, computer replacement, workers’ compensation, sick and vacation payouts, public liability, and catastrophic loss services to other departments of the City on a cost reimbursement basis.

The Pension Trust Funds accounts for the activities of the Safety Members Pension Fund, Police Retirement and Pension Annuity Fund, which provides pension benefits on a pay-as-you-go basis for fire and police employees hired on or before February 28, 1973; and the Police Retirement Income Benefit Plan. It also accounts for the Other Post‐employment Benefits Trust Funds account for the Retiree Medical Benefit Trust and Fire Medical Trust funds and allocated sources to provide medical benefits for retirees.

The Private Trust Funds accounts for Successor Agency accounts for the activities of the former Berkeley Redevelopment Agency, which was dissolved on January 31, 2012 under AB 1X 26. Please refer to more details above in Section 1 under “Successor Agency Trust for Assets of Former Redevelopment Agency”.

The AgencyFunds account for the Community Facilities District No. 1 Disaster Fire Protection special assessment tax monies, the Thousand Oaks Heights Applicant Funded Utility Undergrounding special assessment tax monies, District 47 Underground/Miller, Sick Leave Entitlement, Measure H School Tax, and Sustainable Energy.

58

(I) Summary of Significant Accounting Policies (Continued)

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989 generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance.

The effect of interfund activity has been eliminated from the government-wide financial statements. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. General revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues for all the enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include personnel services, employee benefits, repairs and maintenance, professional services, transportation, materials and supplies, claims and judgments, rent, insurance, utilities, communications, general administration and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources as they are needed.

D. Implementation of Accounting Principles

During fiscal year 2012, the City adopted the following GASB Statement:

In June, 2011, GASB issued Statement No.64, Derivative Instruments: Application of Hedge Accounting Termination Provisions. The objective of this Statement is to address some governments, which have entered into interest rate swap agreements and commodity swap agreements in which swap counterparty, or the swap counterparty’s credit support provider, commits or experiences either an act of default or a termination event as both are described in the swap agreement. Many of those governments have replaced their swap counterparty, or swap counterparty’s credit support providers, either by amending existing swap agreements or by entering into new swap agreements. When these swap agreements have been reported as hedging instruments, questions have arisen regarding the application of the termination of hedge accounting provisions in Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. Those provisions require a government to cease hedge accounting upon the termination of the hedging derivative instrument, resulting in the immediate recognition of the deferred outflows of resources or deferred inflows of resources as a component of investment income. The objective of this Statement is to clarify whether an effective hedging relationship continues after the replacement of swap counterparty or swap counterparty’s credit support provider. This Statement sets forth criteria that establish when the effective hedging relationship continues and hedge accounting should continue to be applied. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2011. This Statement did not have any impact on the financial position of the City during the fiscal year.

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(I) Summary of Significant Accounting Policies (Continued)

In December 2009, the Governmental Accounting Standards Board (GASB) issued Statement No.57, OPEB Measurements by Agent employers and Agent Multiple-employer Plans. The objective of this Statement is to address issues related to the use of the alternative measurement method and the frequency and timing of measurements by employers that participate in agent multiple-employer other postemployment benefit (OPEB) plans (that is, agent employers). This Statement amends Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, to permit an agent employer that has an individual-employer OPEB plan with fewer than 100 total plan members to use the alternative measurement method, at its option, regardless of the number of total plan members in the agent multiple-employer OPEB plan in which it participates. Consistent with this change to the employer-reporting requirements, this Statement also amends a Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, requirement that a defined benefit OPEB plan obtain an actuarial valuation. The amendment permits the requirement to be satisfied for an agent multiple-employer OPEB plan by reporting an aggregation of results of actuarial valuations of the individual-employer OPEB plans or measurements resulting from use of the alternative measurement method for individual-employer OPEB plans that are eligible. In addition, this Statement clarifies that when actuarially determined OPEB measures are reported by an agent multiple-employer OPEB plan and its participating employers, those measures should be determined as of a common date and at a minimum frequency to satisfy the agent multiple-employer OPEB plan’s financial reporting requirements.

E. Assets, Liabilities, and Net Assets or Equity

1. Deposits and Investments The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

State of California statutes authorize the City to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, certificates of deposits, commercial paper rated A-1/P-1, medium term corporate notes rated A or its equivalent or better by Moody’s or Standard & Poor’s, asset backed corporate notes, negotiable certificates of deposits, bankers’ acceptances, mutual funds, guaranteed investment contracts, repurchase agreements, reverse repurchase agreements when authorized by the City Council, and the State Treasurer’s investment pool (Local Agency Investment Fund).

The City does not utilize the Local Agency Investment Fund, as this fund is not in compliance with the City’s nuclear free ordinance.

Investments for the City, as well as for its component units, are reported at fair value. The value is determined based upon market closing prices. The fair value of mutual funds is stated at share value. Income from pooled investments is allocated to the individual funds based on the fund average monthly balance in relation to the total pooled investments.

2. Receivables and Payables Transactions between funds that are representative of long-term lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “advances to/advances from other funds”. All other outstanding balances between funds are reported as “due to/from other funds”. The latter transactions are typically loans from the General Fund to cover cash shortages in other funds that result from the pooled cash arrangement. The loans are short-term in nature and generally result from the time lag in receiving grant reimbursements. The amounts are repaid to the General Fund when the

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(I) Summary of Significant Accounting Policies (Continued)

grant reimbursements are made. Any residual balances between the governmental activities and business type activities are reported in the government-wide financial statements as internal balances.

Advances between funds are offset by a fund balance reserve account in applicable City funds to indicate the extent to which they are not available for appropriation and are not expendable available financial resources.

All trade accounts receivable are presented net of allowance for doubtful accounts. No allowances for doubtful accounts have been provided for taxes or rental registration fees. Property taxes are levied as of July 1 on property assessed on the same date. Alameda County assesses properties, bills for, collects and distributes property taxes as follows:

Secured Unsecured

Valuation/lien dates January 1 January 1

Levy dates July 1 July 1

Due dates 50% on Nov. 1 July 150% on Feb. 1

Delinquent as of Dec. 10 (for Nov.) August 31Apr. 10 (for Feb)

The term “unsecured” refers to taxes on businesses’ furniture and equipment. Property taxes are secured by liens on the property being taxed.

Property taxes are recorded as revenue when they become both measurable and available to finance expenditures in the fiscal year. Deferred revenue is recorded for the amount included in taxes receivable, which is not collected within 60 days after fiscal year-end.

3. Inventories All inventories are valued at the lower of cost or market on a first-in-first-out basis. Inventory in the Supplies Warehouse Fund consists of postage supplies held for consumption by all departments of the City. The cost is recorded as an expense in the appropriate fund at the time inventory items are withdrawn for use (consumption method).

4. Restricted Assets Certain proceeds of the City’s Off-Street Parking enterprise fund revenue bonds, the Building Purchases and Management enterprise fund certificates of participation, Animal Shelter fund Certificates of Participation, Berkeley Redevelopment Agency’s debt service and capital project funds revenue bond proceeds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net assets because they are maintained in separate bank accounts and their use is limited by applicable bond covenants.

The debt service account is used to segregate resources accumulated for principal payments; the construction account is used to report those proceeds of the revenue bond issuance that are restricted for use in construction; the interest account is used to segregate resources accumulated for interest payments; the debt service reserve account is used to segregate resources set aside to make up potential future deficiencies in the interest account and the debt service account; and the cost of

61

(I) Summary of Significant Accounting Policies (Continued)

issuance account is used to segregate proceeds of the revenue bond issuance that are to be used to pay the cost of issuance.

5. Capital Assets Capital assets, which include land, buildings, machinery, construction in progress and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $1,000 for non-infrastructure assets and $100,000 for infrastructure assets, and an estimate useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

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. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, buildings, machinery and equipment, furniture and fixtures, vehicles and infrastructure of the primary government, as well as the component units, is depreciated using the straight-line method over the following estimated useful lives:

Assets YearsBuildings 30Building improvements 30Improvements other than building 15Machinery and equipment 4-5Furniture and fixtures 7Infrastructure:

Roadway/Street:Pavement 30Sidewalk, curb and gutter 15Traffic signals/devices 40Street lights 10Street trees 25Guard rails 50Retaining walls 50Paths (Residential) 60

Sanitary sewer system:Pipelines 50Structures 50

Storm drain system:Pipelines 50Structures 50

Vehicles 5-10Other 5

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(I) Summary of Significant Accounting Policies (Continued)

6. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. Vacation pay is accrued when incurred in proprietary funds and is reported as a fund liability. In governmental funds, compensated absences are recorded as expenditures in the year paid, as it is the City’s policy to liquidate any unpaid compensated absences at June 30 from future resources, rather than currently available financial resources. The City has established an Internal Service Fund (Sick and Vacation Payout Fund) to pay for compensated absences when a worker leaves the City or retires. The City uses the vested method for calculating compensated absences.

The personnel policies of the City do not allow employees to accrue vacation in excess of eight weeks (320 hours). For example, when a miscellaneous employee (Police and Fire sworn employees have different formulas) is terminated or retires, with a vested pension with twenty years of service, an employee is entitled to be paid 38% of the accrued sick leave balance and 62% of the balance can be used for CALPERS credit. Employees with at least twenty-eight (28) years of benefited City service or an employee retiring on permanent disability arising out of and incurred in the course and scope of their employment with City with at least twenty-eight (28) years of benefited service shall be entitled to receive payment in an amount equal to fifty percent (50%) of their accrued sick leave days up to a maximum of (200) unused sick leave days. The employee has the option of using the payout entitlement for retiree medical insurance premium payments. The liability for retirees who do not choose the payout option is paid from the medical sick leave entitlement trust fund.

7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

8. Fund Balances The City follows the provisions of GASB Statement No. 54 Fund Balance and Governmental Fund Type Definitions. GASB 54 establishes Fund Balance classifications based largely upon the extent to which a government is bound to observe constraints imposed upon the use of resources reported in governmental funds. The Governmental Fund statements confirm to this new classification.

Statement 54 distinguishes fund balance between amounts that are considered non-spendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative strength of the constraints that controls the purposes for which specific amounts can be spent. Beginning with the most binding constraints, fund balance amounts will be reported in the following classifications:

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(I) Summary of Significant Accounting Policies (Continued)

Nonspendable – assets that will never convert to cash or soon enough to affect the current period. Resources that must be maintained intact pursuant to legal or contractual requirements.

Restricted – amounts constrained by external parties, constitutional provision, or enabling legislation

Committed – includes amounts that can only be used for the specific purposes determined by a formal action, adopting a resolution, of the City’s highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City adopting a resolution that imposed constraint originally.

Assigned – comprises amounts intended to be used by the City for specific purposes that are

neither restricted nor committed. Intent is expressed by the City Council or City manager, to which the City Council has delegated the authority, to assign amounts to be used for specific pruposes.

Unassigned – amounts that are not constrained at all will be reported in the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund.

9. Spending Policy

The City’s policy is to spend restricted fund balances first, before spending unrestricted fund balances, for expenditures incurred for purposes for which both restricted and unrestricted fund balances are available, except for instances wherein a City’s ordinance or resolution specifies the fund balance.

The City’s policy is that committed and assigned fund balances are considered to have been spent first before unassigned fund balances have been spent, when expenditure are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used, except for instances where in a City ordinance specifies the fund balance.

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(I) Summary of Significant Accounting Policies (Continued)

Schedule of ending fund balances, June 30, 2012:

General Fund Grants Funds

Measure FF 

Branch 

Renovation 

Fund

Capital 

Improvement 

Fund

Non‐Major 

Governmental 

Funds Total

Fund Balances:

Nonspendable*

Noncurrent receivables 3,438,803$     ‐$                   ‐$              ‐$                  2,114,083$       5,552,886$              

Property held for resale ‐                   ‐                          

Restricted for*

General government 6,717             521,954         3,823,421         4,352,093                

Public safety programs 289,631         1,867,830         2,157,461                

Highway and streets 315,332         6,016,923      6,493,558         12,825,813              

Health and welfare 10,199,247    393,365            10,592,612              

Culture and recreation ‐                 11,239,045    483,947         7,026,852         18,749,844              

Community development and housing 22,828,787    2,206,232      21,773,700       46,808,718              

Economic development 1,713,437      ‐                2,570,934         4,284,371                

Debt service 9,320,347         9,320,347                

Assigned to*

General government 1,648,511       476,976         2,125,487                

Public safety programs 355,099          ‐                355,099                   

Highway and streets 78,434            5,819,794      5,898,228                

Health and welfare 98,775            ‐                98,775                     

Culture and recreation 13,656            2,422,394      596,328         3,032,378                

Community development and housing 55,582            2,095,987      2,151,569                

Economic development 93,442            20,141           113,583                   

Unassigned* 32,286,557     (6,395,175)     (895,172)          24,996,210              

TOTAL FUND BALANCE: 38,068,859$   28,957,976$  13,661,439$  18,238,283$  54,488,919$     153,415,478$          

* Please refer to the previous page under item 9. Fund balance for the definition and type of action needed in order to qualify such category.

65

(I) Summary of Significant Accounting Policies (Continued)

Schedule for the trend of fund balances for General Fund, June 30, 2012:

Schedule for the trend of fund balances for Grants Fund, June 30, 2012:

Fund Balances: (General Fund)

Beginning 

Fund Balance Addition Deletion 

Ending Fund 

Balance

Nonspendable

Noncurrent receivables 3,357,980$       80,928$                 (105)$                      3,438,803$     

Assigned to

General government 1,385,708         5,088,459.87       (4,825,657)             1,648,511        

Public safety programs 307,134             1,127,827.10       (1,079,862)             355,099           

Highway and streets 137,516             504,972.65           (564,054)                78,434              

Health and welfare 185,075             679,614.11           (765,914)                98,775              

Culture and recreation 104,382             383,301.26           (474,027)                13,656              

Community development and housing 51,198               188,004.23           (183,620)                55,582              

Economic development 100,353             368,506.36           (375,417)                93,442              

Unassigned 36,020,731       132,190,837.66  (135,925,012)        32,286,557     

TOTAL FUND BALANCE: 41,650,077$     140,612,451$      (144,193,669)$      38,068,859$   

Fund Balances: (Grants Fund)

Beginning 

Fund Balance Addition Deletion 

Ending Fund 

Balance

Restricted for

General government 910,714$            889,497$           (1,793,494)$      6,717$               

Public safety programs 285,153              278,510             (274,032)            289,631             

Highway and streets 524,234              512,021             (720,923)            315,332             

Health and welfare 9,512,331          9,290,726         (8,603,810)        10,199,247       

Culture and recreation 628                      613                     (1,241)                 ‐                          

Community development and housing 22,848,611        22,316,316       (22,336,140)      22,828,787       

Economic development 1,627,791          1,589,869         (1,504,223)        1,713,437         

‐                          

‐                          

Unassigned (9,459,573)         (9,239,197.21)  12,303,595        (6,395,175)       

TOTAL FUND BALANCE: 26,249,888$      25,638,356$     (22,930,268)$    28,957,976$    

66

(I) Summary of Significant Accounting Policies (Continued)

Schedule for the trend of fund balances for Measure FF Branch Renovation Fund, June 30, 2012:

Schedule for the trend of fund balances for Capital Improvement Fund, June 30, 2012

Fund Balances: (Measure FF Branch Renovation Fund)

Beginning Fund 

Balance Addition Deletion 

Ending Fund 

Balance

Restricted for

General government

Culture and recreation 22,057,555$     5,508$        (10,824,018)$  11,239,045$      

Assigned to 0                           

Culture and recreation ‐                    2,422,394  2,422,394           

TOTAL FUND BALANCE: 22,057,555$          2,427,902  (10,824,018)     13,661,439$      

Beginning 

Fund Balance Addition Deletion 

Ending Fund 

Balance

Fund Balances: (Capital Improvement)

Restricted for

General government 975,699              558,919          (1,012,663)    521,954          

Public safety programs

Highway and streets 5,122,996          2,934,654      (2,040,726)    6,016,923      

Health and welfare

Culture and recreation 572,038              327,686          (415,777)        483,947          

Community development and housing 1,999,345          1,145,304      (938,417)        2,206,232      

Economic development 293,032              167,860          (460,892)        ‐                        

Debt service

Assigned to

General government 70,113                40,163            366,700          476,976          

Public safety programs ‐                       ‐                        

Highway and streets 631,978              584,667          4,603,149      5,819,794      

Health and welfare ‐                       ‐                        

Culture and recreation 121,849              120,571          353,908          596,328          

Community development and housing 870,466              498,637          726,883          2,095,987      

Economic development 8,221                  13,809            (1,890)             20,141            

TOTAL FUND BALANCE: 10,665,735$     6,392,270      1,180,276      18,238,283$  

67

(I) Summary of Significant Accounting Policies (Continued)

Schedules for the trend of fund balances for Other Governmental Funds, June 30, 2012:

10. Net Assets Net assets of the government-wide and proprietary funds are categorized as invested in capital assets, net of related debt; restricted or unrestricted. Invested in capital assets, net of related debt, is that portion of net assets that relates to the City’s capital assets reduced by accumulated depreciation and by any outstanding debt incurred to acquire, construct or improve those assets, excluding unexpended proceeds.

Restricted net assets is that portion of net assets that has been restricted for general use by external parties (creditors, grantors, contributors, or laws or regulations of other governments) or imposed by law through constitutional provisions or enabling legislation. Unrestricted net assets consist of all net assets do not meet the definition of either of the other two components.

11. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

Beginning 

Fund Balance Addition Deletion 

Ending Fund 

Balance

Fund Balances: (Other Governmental Funds)

Nonspendable

Noncurrent receivables 2,426,929$       122,820.15$      (435,666)$          2,114,083$     

Property held for resale 211,347             ‐                        (211,347)            

Restricted for

General government 2,466,680         1,973,685           (616,943)             3,823,421       

Public safety programs 3,319,620         2,656,154           (4,107,944)         1,867,830       

Highway and streets 6,126,872         4,902,344           (4,535,658)         6,493,558       

Health and welfare 394,590             315,726               (316,951)             393,365           

Culture and recreation 29,081,772       23,269,434         (45,324,354)       7,026,852       

Community development and housing 27,783,953       22,231,000         (28,241,253)       21,773,700     

Economic development 2,645,053         2,116,408           (2,190,527)         2,570,934       

Debt service 11,521,904       9,219,115           (11,420,671)       9,320,347       

Unassigned (773,517)           1,371,669           (1,493,324)         (895,172)         

TOTAL FUND BALANCE: 85,205,203$    68,178,355$      (98,894,639)$    54,488,919$   

68

CITY OF BERKELEY

Notes to the Basic Financial Statements (Continued) June 30, 2012

II) Stewardship, Compliance, and Accountability

a) Excess of Expenditures / Over Appropriations

The following non-major governmental funds expenditures exceeded appropriations at the legal level of budgetary control (the fund level):

Amount

Community Workforce (17,668)$ (1)

Sec 108 HUD Loan GTY Asst. (78,277) (2)

Paramedic Assessment District (274) (2)

State 2107.5 (8,219) (2)

State Prop. 111 (138,747) (3)

Transport and Tax Fund (4,283) (2)

Street Lighting (48,514) (1)

Solano Avenue BID (128) (2)

Vital Health Statistic (17,099) (2)

Park Acquisition Development (146) (2)

Pension Refunding Bonds (2,656) (2)

09 Measure FF Library (1,690) (2)

2007 GO Refunding Bonds (849) (2)

2007 GO Bonds Series A (849) (2)

2008 GO Animal Shelter (895) (2)

2010 COP Animal Shelter (1,885) (2)

(1) An amendment to the appropriations ordinance was not prepared. A transfer from the General Fund will be needed to cover the excess.

(2) An amendment to the appropriations ordinance was not prepared. The fund balance was used to cover the excess.

(3) An amendment to the appropriations ordinance was not prepared. A transfer from other fund will be needed to cover the excess.

69

(II) Stewardship, Compliance, and Accountability (Continued)

B. Deficit Fund Balances/Net Assets

The following funds had deficit fund balances / net assets on June 30, 2012:

(1) Special Revenue Funds

The Workforce Investment Act Fund has a fund balance deficit of $8,736, which will be eliminated by a subsidy from the General Fund.

The Community Workforce Fund has a fund balance deficit of $22,620, which will be eliminated by a subsidy from the General Fund.

The Domestic Violence Prevention Fund has a fund balance deficit of $23,548, which will be eliminated by more timely expenditure reimbursements.

The State Gas Tax 2106 Fund has a fund balance deficit of $182,983, which will be eliminated when the tax allocation is received.

The State Gas Tax Prop.111 Fund has a fund balance deficit of $131,532, which will be eliminated when the tax allocation is received.

The Underground District Fund has a fund balance deficit of $108,871, which will be eliminated by a subsidy from the General Fund.

The Health State Aid Fund has a fund balance deficit of $299,990, which will be eliminated by more timely expenditure reimbursements.

The Tobacco Control Fund has a fund balance deficit of $36,595, which will be eliminated by more timely expenditure reimbursements.

(2) Internal Service Funds

The Building Maintenance Fund has a deficit in net assets of $213,572, which will be eliminated by better allocation of costs to City departments.

The Supply Warehouse Fund has a deficit in net assets of $50,976, which will be eliminated by better allocation of costs to City departments.

The Workers' Compensation Fund has a deficit in net assets of $13,027,351. Total projected current year claims incurred but not paid are recorded as an expense resulting in negative net assets. As a matter of policy, current year claims are paid from current year revenues from all operating departments. The Sick

Leave and Vacation Payouts Fund has a deficit in net assets of $511,957, which will be eliminated by a transfer from the General Fund.

The Public Liability Fund has a deficit in net assets of $976,725. Total projected current year claims incurred but not paid are recorded as an expense resulting in negative net assets. As a matter of policy, current year claims are paid from current year transfers from the General Fund.

70

(II) Stewardship, Compliance, and Accountability (Continued)

(3) Enterprise Funds

The Refuse Fund has a deficit in net assets of $2,591,587, which will be eliminated through additional reductions, negotiating new terms with some vendors and possible rate increase in the future.

71

CITY OF BERKELEY

Notes to the Basic Financial Statements (Continued) June 30, 2012

III. Detailed Notes on All Funds

A. Cash and Investments

Cash and investments as of June 30, 2012 are classified in the accompanying financial statements at fair value as follows:

Unrestricted Restricted Total

207,362,075$ 13,281,692$ 220,643,767$ Fiduciary Funds 29,733,917 3,872,909 33,606,826

237,095,992 17,154,601 254,250,593 Component Units

Berkeley Housing Authority 1,711,788$ 1,847,915$ 3,559,703$ Rent Stabilization Board 4,070,537 4,070,537

Subtotal Component Units 5,782,325 1,847,915 7,630,240

Total cash and investments 242,878,317$ 19,002,516$ 261,880,833$

Primary Government (except Fiduciary funds)

Subtotal Primary Government

Cash and investments as of June 30, 2012 consist of the following:

Cash on hand 24,790$ Deposits with financial institutions 11,456,612

Total cash and deposits 11,481,402 Investments:

Investments for City government, excluding trust funds 230,535,376 Investments held in trust and the Successor Agency 19,864,056

Total investments 250,399,432

Total cash, deposits and investments 261,880,833$

Equity in pooled cash and investments held by treasury 214,992,316$ Cash and investments held by fiscal agent 13,281,691 Cash and investments of retirement plans 26,641,202 Cash and investments of other trust funds 3,196,922 Cash and investments of Agency funds 3,768,702

Total cash, deposits and investments 261,880,833$

72

(III) Detailed Notes on All Funds (Continued)

PooledCashandInvestmentsHeld inCityTreasury - The City maintains a cash and investment pool that is available for use by all funds and component units. Each fund’s portion of this pool is displayed on the governmental fund balance sheets and proprietary fund statement of net assets as “cash and investments held in treasury.”

RestrictedCashand Investments- The City has other investments, not held by the City Treasury, that are invested pursuant to governing bond covenants. These amounts are reflected as restricted cash in the financial statements.

Investments in Retirement Plans - The funds of the retirement plans and retiree medical plans are invested pursuant to City investment policies established specifically for those plans by the City Council. The objective of the investment policies is to maximize the expected return of the plans’ at the acceptable level of risk.

1. Investments Investments Authorized by the California Government Code and the City of Berkeley Investment Policies:

The table below identifies the investment types that are authorized for the City of Berkeley‘s pooled investment policies. The table also identifies certain provisions of the California Government Code and/or the City’s investment policies 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.

Maximum Maximum

Maximum Percentage/Dollar Investment

Authorized Investment Type Maturity of Portfolio in one issuer

Local Agency bonds 5 years 5% N/A

U.S. Treasury Securities 5 years 25% N/A

U.S. Agency Securities 5 years 100% N/A

Banker's Acceptances 180 days 40% 30%

Commercial Paper 180 days 25% $5M or 2%

Negotiable Certificates of Deposit 5 years 30% N/A

Repurchase Agreements 1 year 10% N/A

Medium‐Term Notes 5 years 30% N/A

Guaranteed Investment Contracts 5 years 25% N/A

Money Market funds N/A 100% N/A

Mortgage pass‐Through Securities 5 years 20% N/A

County Pooled Investment Funds N/A N/A N/A

JPA Pools (other investment pools) N/A N/A N/A

73

(III) Detailed Notes on All Funds (Continued)

Investments Authorized by Debt Agreements

Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policies. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, and concentration of credit risk.

Maximum MaximumMaximum Percentage/Dollar Investment

Authorized Investment Type Maturity Of Portfolio In One IssuerU.S. Treasury Securities 5 years 25% N/AU.S. Agency Securities 5 years 100% N/AMoney Market Mutual Funds N/A 10% in any fund N/AGuaranteed Investment Contracts 5 years 25% N/A

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

The City has the intention to hold all investments to maturity. The average maturity of the City’s pooled investments governed by the Investment Policies was approximately 14.9 months as of June 30, 2012.

74

(III) Detailed Notes on All Funds (Continued)

City’s Investments

Information about the sensitivity of the fair values of the City’s investments (excluding investments held in trust for retiree medical plans) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

Total Less than 1 1 - 2 2 - 3 4 - 5 5 or more

U.S. Agency Securities 26,122,370$ 4,109,920$ -$ -$ 22,012,450$ -$

Medium Term Notes 63,702,920 18,331,090 5,205,000 34,595,830 5,571,000

Money Market Funds 138,167,956 138,167,956

Guaranteed Investment Contracts 2,542,130 2,542,130

Total investments 230,535,376$ 160,608,966$ 5,205,000$ 34,595,830$ 27,583,450$ 2,542,130$

Trust Fund Investments

In accordance with Government Code Sections 53620-53622, the assets of the City of Berkeley retiree medical plan trusts may be invested in any form or type of investments deemed prudent by the City Council. These plans are authorized by investment policies approved by the City Council to invest in various types of investments, up to a maturity of 30 years. These OPEB and pension investments are reported at fair value, as follows:

Total Less than 1 3 - 4 4 - 5 5 or more

Medium Term Notes 19,864,056$ 2,737,806$ 599,790$ 3,212,460$ 13,314,000$

Total investments 19,864,056$ 2,737,806$ 599,790$ 3,212,460$ 13,314,000$

Investment Maturities (in years)

75

(III) Detailed Notes on All Funds (Continued)

Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by the California Government Code, the City’s investment policies, or debt agreements and the actual rating as of year end for each investment type.

City’s Investments

MinimumLegal Amount Rating

Investment Rating Held at June 30, 2012

U.S. Agency Securities AAA 26,122,370$ AAAMedium Term Notes A 63,702,920 A/AAMoney Market Funds N/A 138,167,956 Not ratedGuaranteed Investment Contracts N/A 2,542,130 Not rated

Total Investments 230,535,376$

Trust Fund Investments

MinimumLegal Amount Rating

Investment Rating Held at June 30, 2012

Medium Term Notes A 12,608,250$ A

Total Investments 12,608,250$

The issuer of commercial paper must have the highest rating from two nationally recognized rating agencies, not one (as required by the State).

Purchases of corporate notes shall be limited to securities rated “A” or higher by Moody’s or “A” or higher by Standard and Poor’s.

Purchases of long-term (i.e., beyond five years) corporate bonds are limited to the Retiree Medical Plan Trust Fund and debt service reserve funds. Issuers must have a Moody’s credit rating of “A3” or higher and Standard and Poor’s rating of “A-“or higher.

76

(III) Detailed Notes on All Funds (Continued)

Concentration of Credit Risk

The investment policies of the City contain no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows:

Issuer Investment Type Reported Amount

FNMA Federal Agency Securities 16,115,320$ Federal Home Loan Bank Federal Agency Securities 10,007,050

Custodial Credit Risk

For an investment, custodial credit risk is the risk that the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party if the counter party fails. All of the City’s investments except money market mutual funds and guaranteed investment contracts are subject to custodial risk. However, the California Government Code and the City’s investment policies do not contain legal or policy requirements that would limit the exposure to custodial risk for investments. The City’s investments, OPEB trust fund investments and pension fund investments are held by Wells Fargo, in the Trust and Custody Department, which is separate from the operations of the bank. In addition, Wells Fargo maintains a Financial Institution Bond of at least $100 million which provides protection from losses sustained by employee dishonesty, burglary, robbery, check forgery, securities forgery, computer crime, safe deposit, etc.

2. Deposits Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover its deposits. Included as deposits are bank deposits. In accordance with the California Government Code, demand deposits that aren’t insured must be collateralized with governmental securities at 110 percent of all such deposits or pledging of first deed mortgage notes equal to 150% of the City’s deposits. The collateral must be held by the bank in the City’s name. The following chart presents bank deposit balances for the primary government, its component units, and fiduciary funds as of June 30, 2012. Deposits are listed in terms of whether they are exposed to custodial credit risk (i.e., the risk that in the event of a bank failure, the City’s deposits may not be returned). Deposits are exposed to custodial credit risk if they are either, (1) insured and collateralized, (2) uninsured and collateralized with securities held by the pledging financial institution, or (3) uninsured and collateralized with securities held by the pledging financial institution’s trust department or agent, but not in the name of the City.

77

(III) Detailed Notes on All Funds (Continued)

TotalPrimary Bank

Description Government BHA Rent Board OPEB Funds Others Balances

Uninsured and collateralized with securities held by pledging institution's trust department or agent, but not in City's name 5,468,184 3,399,166 108,319 188,552 134,117 9,298,338

Total bank balance - all deposits 5,468,184$ 3,399,166$ 108,319$ 188,553$ 134,117$ 9,298,338$

Bank Deposit BalancesDeposits Exposed to Custodial Credit Risk

Component Units Fiduciary Funds

The City applies the provision of GASB 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, which requires governments to present investments at fair value. For the fiscal year ended June 30, 2012, the City had a decrease in the fair value of investments based on quoted market prices for the securities held, which are included as investment income in the General Fund, as follows:

Interest income 4,761,231$ Net decrease in the fair value of investments (2,232,363)

Total investment income 2,528,868$

78

(III) Detailed Notes on All Funds (Continued)

B. Receivables

Receivables as of year-end for the City’s individual governmental major funds, non-major governmental funds, and internal service fund, including the applicable allowance for uncollectible accounts, are as follows:

Details of Notes Receivable as of June 30, 2012 are as follows:

Capita l P ro jec t

Other InternalCapital Governmental Service

Receivables: General Grant Improvement Funds Fund Total

Accounts $50,331,176 492,412 -$ 1,231,388$ 102,921$ $52,157,897

Interest 816,560 547,553 249,789 1,613,902

Taxes 5,403,585 563,266 5,966,851

Special assessments 303,697 303,697

Subventions/grants 7,452,212 664,397 8,116,610

Notes 3,438,803 23,115,308 9,229,057 20,549,960 56,333,127

Other 2,667,933 7,776 1,062,359 3,738,068

Gross receivables 62,658,056 31,067,707 9,776,610 23,562,497 1,165,280 128,230,152

Less: allowance for

uncollectibles (42,110,122) (206,302) (1,559) (42,317,983)

Net total receivable 20,547,934$ 31,067,707$ 9,776,610$ 23,356,195$ 1,163,721$ 85,912,169$

Specia l Revenue

Capital Nonmajor Total

General Grant Improvement Governmental Notes

Notes Receivables : Fund Fund Fund Funds receivable

Development Loans: 3,059,844$ 21,997,520$ 9,017,595$ 18,114,151$ 52,189,110$

S. B. Rental Rehabilitation 260,000 468,875 728,875

CALHOME_Senior Home Repair 917,788 211,461 1,022,064 2,151,314

Rehabilitation-Emergency Repair 31,748 31,748

Rehabilitation-Senior Disabled 20,000 20,000

1st Time Homebuyer home loans 200,000 200,000

OED-Citywide Loans 53,026 571,007 624,033

OED- WB Building Acuisition Fund 65,933 65,933

OED-Mortgage Loan 77,000 77,000

OED- Revolving Loan 245,115 245,115

Gross notes receivable 3,438,803 23,115,308 9,229,057 20,549,960 56,333,127

(177,375) (177,375)

Total receivables, net 3,438,803$ 23,115,308$ 9,229,057$ 20,372,585$ 56,155,752$

Less: allowance for uncollectibles

79

(III) Detailed Notes on All Funds (Continued)

Receivables as of year-end for the City’s major enterprise funds, including the applicable allowance for uncollectible accounts, are as follows:

Development Loans

This loan program began in 1991, in which the City awards loans to developers every year. The first year of maturity for loans starts in 2046, but most of the loans may be forgiven. Development loans normally are charged 6% simple interest per annum, with a range of 3% to 6%. The agreements require the borrower to pay annual interest only, at the lesser of 50% of the property’s net cash flow or the amount of interest calculated at 6%. The loans may be forgiven after 55 years from the loan date, if the terms of the agreement are satisfied.

Senior Rehabilitation Loans

This loan program began in 1980. The City is unable to predict the maturity dates of the loans because most of them are only due upon sale of the property. 90% of these loans are deferred with no monthly payments required. Interest rates range between 0% and 6%.

CALHOME Senior home repair loans

CalHome funds are additional resources to existing Senior and Disabled Home Rehabilitation Loan Program. Financial assistance from the CalHome is the form of deferred payment loan that is due and payable upon sale or transfer of title of the property. The interest rate is zero. CalHome was in existence since 2002 and it targeted seniors and disabled homeowners who are very low income and are unable to undertake rehabilitation of their homes because of limited income.

OED Citywide Loans

OED loans are revolving loans funds that can provide access to capital for businesses and entrepreneurs who seek to grow, retain or create jobs, but do not qualify for traditional bank loan. The OED program serves all commercial areas in the City. The interest rate is based on Prime Rate plus 2 percent at the time of loan approval. Loan terms is up to 7 years.

Permit

Refuse Marina Sanitary Clean Storm Service Off-Street Parking Bldg.

Collection Operations Sewer Water Center Parking Meter Purchases Total

Accounts Receivable $1,634,774 $488,217 $1,306,444 $180,144 $147,526 $188,772 $31,414 $989 $3,978,281Less: allowance for uncollectibles (574,525) (199,527) (38,500) (55,507) (129,835) (587) (998,481)

Total receivables $1,060,250 $288,690 $1,306,444 $141,644 $92,019 $58,937 $30,827 $989 $2,979,800

80

(III) Detailed Notes on All Funds (Continued)

Capital Assets

Capital asset activity for the year ended June 30, 2012 was as follows: Primary Government Beginning Ending

Balance Additions Deletions Transfer (a) BalanceGovernmental activities:Capital assets, not being depreciated:Land 22,327,797$ (75,699)$ (501,966)$ 21,750,132$ Construction in progress 4,735,495 7,039,908 11,775,403

Total capital assets, not being depreciated 27,063,292 7,039,908 (75,699) (501,966) 33,525,535

Capital assets, being depreciated:Buildings 131,110,495 6,576,766 (1,139,104) 136,548,157Improvements other than buildings 10,452,395 964,719 (612,960) 10,804,154Machinery and equipment 67,742,822 5,242,729 (5,935,578) (26,748) 67,023,226Infrastructure 168,808,937 5,843,634 174,652,571Total capital assets being depreciated 378,114,649 18,627,848 (7,074,682) (639,708) 389,028,108

Less accumulated depreciation for:Buildings (61,982,269) (3,707,910) 1,139,104 (64,551,075)Improvements other than buildings (1,748,422) (339,499) 14,909 (2,073,012)Machinery and equipment (49,826,358) (4,578,165) 5,884,108 18,271 (48,502,144)Infrastructure (88,740,012) (4,885,628) (93,625,640)Total accumulated depreciation (202,297,061) (13,511,202) 7,023,212 33,180 (208,751,870)

Total capital assets, being depreciated, net 175,817,588 5,116,646 (51,470) (606,528) 180,276,238

Governmental activities capital assets, net 202,880,880$ 12,156,554$ (127,169)$ (1,108,494)$ 213,801,772$

Beginning EndingBalance Additions Deletions Transfer Balance

Business-type activities:Capital assets, not being depreciated:Land 2,979,050$ - -$ -$ 2,979,050$ Construction in progress 380,677 1,254,190$ 1,634,868 Total capital assets, not being depreciated 3,359,727 1,254,190 - - 4,613,918

Capital assets, being depreciated:Buildings 38,258,615 89,207 38,347,822Improvements other than buildings 11,308,197 1,194,190 12,502,386Machinery and equipment 8,948,721 673,956 (913,830) 8,708,847Infrastructure 170,239,118 3,259,923 173,499,041Total capital assets being depreciated 228,754,651 5,217,276 (913,830) - 233,058,096

Less accumulated depreciation for:Buildings (13,193,910) (1,042,811) (14,236,721)Improvements other than buildings (1,825,719) (410,311) (2,236,030)Machinery and equipment (7,929,252) (324,940) 896,826 (7,357,366)Infrastructure (45,310,867) (2,882,230) (48,193,097)Total accumulated depreciation (68,259,748) (4,660,292) 896,826 - (72,023,214)

Total capital assets, being depreciated, net 160,494,903 556,984 (17,004) 161,034,882

Business-type activities capital assets, net 163,854,630$ 1,811,174$ (17,004)$ -$ 165,648,800$

(a)Transfer of capital assets from Berkeley Redevelopment Agency in Governmental fund to Private Trust Fund due to AB 1X 26.

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(III) Detailed Notes on All Funds (Continued)

C. Capital Assets.

Depreciation expense was charged to functions/programs of the primary government as follows:

Government activities: General government 1,251,178$ Public safety 1,937,592 Highways and streets 5,009,950 Health and human services 73,805 Culture and recreation 1,700,725 Community development/housing economic development 1,182,245 Amount reported in the internal service funds 2,355,709

Total depreciation expense - governmental activities 13,511,202$

Business-type activities: Parking-related 352,183$ Marina operations and maintenance 436,953 Sewer services 2,378,918 Clean storm water 569,459 Refuse services 130,266 Permit service center 7,519 Building Purchases 784,995 Housing authority

Total depreciation expense - business-type activities 4,660,292$

Discretely Presented Component Units

Capital asset activity for the Rent Stabilization Board for the fiscal year ended June 30, 2012 was as follows:

Beginning balance Prior period Restated BalanceJuly 1, 2011 Adjustment Beg. Balance Additions Deletions June 30, 2012

Capital assets, being depreciated:Machinery and equipment 316,649$ -$ 316,649$ -$ (49,740)$ 266,909$

Total capital assets being depreciated 316,649 - 316,649 - (49,740) 266,909

Less accumulated depreciation for:Machinery and equipment (271,042) (40,271) (a) (311,313) (1,940) 49,740 (263,513)

Total capital accumulated depreciation (271,042) (40,271) (311,313) (1,940) 49,740 (263,513)

Total capital assets, net 45,607$ (40,271)$ 5,336$ (1,940)$ -$ 3,396$

(a) Beginning net assets reduced by a prior period adjustment of $40,271 due to understatement of depreciation expense in the past years.

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(III) Detailed Notes on All Funds (Continued)

Capital asset activity for the Berkeley Housing Authority for the fiscal year ended June 30, 2012 was as follows:

Beginning EndingBalance Increase Decrease Balance

Business-type activities:Capital assets, not being depreciated:Land 2,579,621$ -$ -$ 2,579,621$ Construction in progress - - - - Total capital assets, not being depreciated 2,579,621 - - 2,579,621

Capital assets, being depreciated:Buildings and improvements 6,711,886 11,979 - 6,723,865 Furniture and equipment 316,346 - - 316,346 Leasehold improvements 57,737 - - 57,737 Total capital assets, being depreciated 7,085,969 11,979 - 7,097,948

Less accumulated depreciation for:Buildings and improvements (4,331,773) (319,171) - (4,650,944) Leasehold improvements (57,737) - - (57,737) Machinery and equipment (289,787) (11,299) - (301,086) Total accumulated depreciation (4,679,297) (330,470) - (5,009,767)

Total capital assets, being depreciated, net 2,406,672 (318,491) - 2,088,181

Business-type activities capital assets, net 4,986,293$ (318,491)$ -$ 4,667,802$

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(III) Detailed Notes on All Funds (Continued)

(III) Detailed Notes on All Funds (Continued)

The Composition of Interfund Balances as of June 30, 2012, is as follows:Due to Due from

Due Due Component ComponentFund To From Units UnitsPrimary Government:General Fund - 6,777,054 - 179,630 Grants Funds 7,385,945 Capital Improvement Fund - 2,659,832 Nonmajor Governmental Funds 1,461,237 Internal Service Funds 589,703

TOTAL 9,436,886$ 9,436,886$ -$ 179,630$

Due to Due From

Primary Primary Government Government

Component Units: Berkeley Housing Authority 179,630$ -$

(i)

(ii)

The "Due to Other Funds" are loans from the General Fund to cover cash shortages in other funds that result from the pooled cash arrangement. The loans are short-term in nature and generally result from the delay in grant reimbursements. The amounts are repaid to the General Fund as the grant reimbursements are made.

The advances to other funds are long-term in nature and consisted of Community Development Block Grant loans to Berkeley Redevelopment Agency, which the Berkeley Redevelopment Agency uses to make low-income property loans to City residents. As the loans are repaid or properties sold, the proceeds are used to repay the Community Development Block Grant Fund

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(III) Detailed Notes on All Funds (Continued)

The $13,516,530 General Fund transfers out include (1) subsidies of $464,697 to Paramedic Fund; (2) $5,637,000 to pay for capital improvement projects; (3) transfer of $533,410 to pay debt service for the refunding pension bonds; (4) $1,556,325 to the Public Liability Fund and $500,000 to the Catastrophic Loss Fund; and (5) $1,953,018 in matching funds for public health programs; (6) $528,469 subsidy to Street Lighting Assessment District; (7) $403,592 to the Equipment Replacement Fund and $250,000 to Sick and Vacation Payouts Fund; (8) $75,362 to Sanitary Sewer Fund; (9) $1,611,229 to various grants funds; and (10) $3,428 to various non-major governmental funds. Other significant transfers out from other funds included (1) Realignment Fund transfer to General Fund for public health programs, required by the State ($2,604,024); (2) Parking Meter Fund transfer to General Fund ($905,000); and (3) Transfers from enterprise and internal service funds to help fund the operations of the Catastrophic Loss Fund ($842,799).

The General Fund received transfers in of $2,604,024 from the Health State Realignment Fund, $1,150,241 from Workers’ Compensation Fund, $905,000 from the Parking Meter Fund, $718,061 from the UC Settlement Fund $62,633 from the Coastal Conservancy Fund; $179,003 from Fire Assessment District Fund; $147,694 from Citywide RLF Fund; and $952,397 from various grants funds.

Special Revenue

Fund

Capital Project Fund

General Fund

Grant FundCapital

Improvement

Clean Storm Water

Sanitary Sewer

Internal Service Funds

Nonmajor Government

al Fund

Total Transfer-O ut

General Fund -$ 1,611,229$ $5,637,000 -$ 75,362$ $2,709,917 $3,483,022 $13,516,530

Capital Projects Fund:

Capital Improvement 39,285 4,950 828,483 872,718Enterprise Fund:

Refuse Fund 110,870 110,870Marina O perations/Maint 62,633 16,890 8,157 87,680Sanitary Sewer O peration 102,522 102,522Clean Storm Water 25,085 25,085O ff Street Parking Fund 7,920 7,920Parking Meter Fund 905,000 8,650 913,650

Internal Service Fund:

Worker Compensation Fun 1,150,241 1,150,241Special Revenue Fund:

Grant Fund 952,397 952,397

Nonmajor Governmental Fund: 3,648,782 1,012,449 456,957 70,862 722,750 5,911,800

Total Transfer-In $6,719,053 $2,623,678 $5,637,000 $496,242 $80,312 $3,052,716 $5,042,412 $23,651,413

Interfund transfers: Proprietary Fund

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(III) Detailed Notes on All Funds (Continued)

D. Leases

Operating Leases

The government leases building and office facilities and other equipment under non-cancelable operating leases. Total costs for such leases were $1,243,877 for the year ended June 30, 2012. The future minimum lease payments for these leases are as follows:

Year Ending June 30 Amount2013 $1,276,770 2014 1,310,590 2015 1,347,442

Total $3,934,803

Capital Leases

The City has entered into leases for financing the acquisition of fire equipment. These lease agreements qualify as capital leases for accounting purposes and therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases include four engines and two trucks which are allocated among four fire stations. The Acquisition amount for the equipment described in this schedule to be paid to the vendor is $4,439,584 (excluding sales tax of $386,276 to be payable to the State Board of Equalization) with the contract rate is 4.38%. The capital leases are as follows:

The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2012, were as follows:

Fiscal Year Interest Principal Total2013 $140,226 $412,868 $553,094 2014 121,945 431,149 553,094 2015 102,853 450,241 553,094 2016 82,917 470,177 553,094 2017 62,098 490,996 553,094

2018-2019 58,009 1,048,179 1,106,188 Totals $568,048 $3,303,610 $3,871,658

GovernmentalActivities

Assets:Machinery and Equipment $4,825,860 Less: Accumulated depreciation (1,691,923)

Total $3,133,937

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(III) Detailed Notes on All Funds (Continued)

E. Bonds, Capital Leases, Notes, Loans and Other Long-Term Obligations

Changes in Long-Term Liabilities

Long-term liability activity for the year ended June 30, 2012 was as follows:

  Beginning Ending Due WithinBalance Additions Reductions Balance One Yr

Governmental ActivitiesBonds payable:

General obligation bonds 82,420,782$ -$ (2,945,305)$ 79,475,477$ 3,185,305$ Revenue bonds 13,945,000 - (5,070,000) 8,875,000 620,000

Total bonds payable 96,365,782 - (8,015,305) 88,350,477 3,805,305

Capital leases 3,698,972 (395,361) 3,303,610 412,868 Certificates of Participation 5,750,000 - 5,750,000 100,000 Premium on COP 389,389 - (13,466) 375,923 13,466 Notes and loans payable 12,437,860 140 (687,000) 11,751,000 220,000 Claims and judgments 26,773,135 4,169,885 (1,531,929) 29,411,091 5,537,091 Compensated absences 15,009,304 9,140,467 (10,062,855) 14,086,916 1,068,732 Net OPEB obligation* 1,305,925 351,423 - 1,657,348 Net pension obligation* 11,356,811 3,649,438 - 15,006,249

Governmental ActivitiesLong-term Liabilities 173,087,178$ 17,311,353$ (20,705,916)$ 169,692,614$ 11,157,462$

Business-type ActivitiesCertificates of participation 25,385,000$ -$ (720,000)$ 24,665,000$ 745,000$ Revenue bonds 3,950,000 (300,000) 3,650,000 305,000 Notes payable 11,056,671 - (628,936) 10,427,735 601,433 Landfill liabilities 3,339,207 - (618,290) 2,720,917 1,024,651 Compensated absences 2,691,840 1,825,670 (1,736,787) 2,780,723 445,144 Net OPEB obligations* 427,996 122,387 - 550,383

Business-type ActivitiesLong-term Liabilities 46,850,714$ 1,948,057$ (4,004,013)$ 44,794,758$ 3,121,228$

* General Fund and Enterprises Funds typically have been used in prior years to liquidate the net pension obligation or nbenefit obligation

87

(III) Detailed Notes on All Funds (Continued)

The following is a summary of Long-term obligations of the City as of June 30, 2012:

FinalMaturity Interest Principal

FY Rates AmountGovernmental Activities Long-Term ObligationsGeneral Obligation Bonds:

GO 2007 Refunding bonds,Series A, Fire Safety (Measure G) 2027 3.90%-5.00% 3,810,000$ GO 2002 Refunding bonds, Fire Safety (Measure G) 2020 1.35%-4.50% 9,760,000

GO 2007 Refunding bonds, Series B (Measure S): 2029 3.50%-4.40% 32,985,000 Library, Martin Luther King, Jr.Civic Center and Downtown

GO bonds 2008 Animal shelter 2037 3.50%-4.30% 6,925,000 09 Measure FF library 2040 1.25%-5.30% 9,850,000 10 Measure FF library , including premium of $400,477 2040 3.00%-5.00% 16,145,477

General obligation bonds 79,475,477

Revenue Bonds:Berkeley Repertory Theatre 2029 4.10%-5.70% 7,010,000 Refunding Pension Bonds 2018 3.80%-5.25% 1,865,000

Revenue bonds 8,875,000

2010 COP - Animal Shelter, including premium of $375,923 2041 3.00%-5.75% 6,125,923 Capital Lease Payable:

Fire Engines and Trucks 2019 4.38% 3,303,610

Capital lease payable 3,303,610

Loans Payable:CHFA 2012 3.00% 500,000 HUD 108 - Adeline Street 2023 4.25% 292,000 HUD 108 - UNA 2025 4.25% 604,000 HUD 108-David Brower 2016 3.646%-6.320% 4,000,000 HUD 108 B-02-MC-06-008- BHA 2014 3.46%-4.83% 355,000 Ed Roberts Campus 2029 Variable 6,000,000

Loans payable 11,751,000 Other Long-Term Obligations

Accrued Vacation and Sick Leave 14,086,916 Accrued Workers' Compensation Claims and Judgments 28,374,000 Accrued Public Liability Claims and Judgments 1,037,091 Net Pension Obligation-Police Retirement Income Benefit 15,006,249 Net OPEB Obligation-MRHP 1,657,348

Other payables 60,161,604

Governmental Activites Total Long-Term Obligations 169,692,614$

Type of Obligation and Purpose:

Governmental Activities

88

(III) Detailed Notes on All Funds (Continued)

Governmental-type Activities

General Obligation Bonds

The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for governmental activities. The original amount of general obligation bonds issued in prior years was $81,500,000. General obligation bonds are direct obligations and pledge the full faith and credit of the government. These bonds generally are issued as 25-30 year serial bonds with amounts of principal maturing each year. General obligation bonds currently outstanding are as follows:

Purpose Interest Rates AmountGovernmental Activities - Measure G (2002 & 2007 Series A) 2.00%-7.5% 13,570,000$ Governmental Activities - Measure S (2007 Series B) 4.04%-5.6% 32,985,000

Governmental Activities - Animal Shelter 2008 3.50%-4.30% 6,925,000 Governmental Activities - Neighborhood Branch Library 2009 1.25%-5.30% 9,850,000 Governmental Activities - Neighborhood Branch Library 2010 3.00%-5.00% 15,745,000

79,075,000$

Annual debt service requirements to maturity for general obligations bonds are as follows:

On November 1, 2002, the City issued $17,865,000 in General Obligation Refunding bonds to refund its 1996 Measure G (Series A) and 1995 Measure G (Series B) General Obligation bonds. The interest rates on the Refunding bonds range between 1.35%-4.50% and the final maturity is September 1, 2020. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.

The 2002 General Obligation bonds were issued to finance facilities to increase the level of fire protection in the City, including the construction of a jointly funded, multi-jurisdictional fire station, the seismic retrofitting of City buildings which house public safety personnel and equipment, the replacement of water mains and the seismic retrofitting of other City buildings.

Year Ending

June 30 Principal Interest

2013 3,170,000$      3,351,800$          

2014 3,340,000        3,210,938            

2015 3,505,000        3,060,651            

2016 3,680,000        2,909,413            

2017 3,840,000        2,755,113            

2018‐2022 18,580,000      11,416,536          

2023‐2027 17,870,000      7,685,067            

2028‐2032 11,940,000      4,055,601            

2033‐2037 8,190,000        2,128,473            

2038‐2041 4,960,000        333,333                

79,075,000$   40,906,925$        

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(III) Detailed Notes on All Funds (Continued)

Advance Refunding of General Obligation Bonds:

The 2007 Series A Bonds were issued by the City to (1) refund its City of Berkeley 1997 General Obligation Bonds (Election of 1992, Series C), dated July 1, 1997, in the principal amount of $10,500,000, and (2) and to pay for costs of issuance of the Series A Bonds. On June 07, 2007, the City of Berkeley issued $4,340,000 of General Obligation Bonds with interest rates ranging from 3.9% to 5.0% to advance refund prior General Obligation Bonds with interest rates ranging from 4.800% to 5.625% and a par value of $8,975,000. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.

The net proceeds from the issuance of the Refunding General Obligation 2007 Series A Bonds were used to purchase U.S. government securities and those securities were deposited in an irrevocable trust with an escrow agent to provide debt service payments until the bonds were called on July 9, 2007. The advance refunding met the requirements of an in-substance defeasance and the term bonds were removed from the City's government-wide financial statements. The amount of the outstanding in-substance defeased debt was $3,810,000 as of June 30, 2012.

The 2007 Series B Bonds were issued by the City to (1) refund its City of Berkeley 1997 General Obligation Bonds (Election of 1996, Series A), dated June 1, 1997, in the principal amount of $10,000,000; (2) its City of Berkeley 1998 General Obligation Bonds (Election of 1996, Series B), dated December 1, 1998, in the principal amount of $25,000,000; (3) its City of Berkeley 1999 General Obligation Bonds (Election of 1996, Series C), dated August 1, 1999, in the principal amount of $14,000,000, and, with the 1996A Bonds and the 1996B Bonds, the “1996 Bonds”, and (4) and to pay for costs of issuance of Bonds. The 1996 Bonds were issued to acquire property, expand and retrofit the Main Library, internally retrofit (as the most cost-effective means to achieve earthquake safety) and improve the Martin Luther King, Jr. Civic Center building, and revitalize the downtown/ Civic Center area. On June 7, 2007, the City of Berkeley issued $41,245,000 of General Obligation Bonds with interest rates ranging from 3.5% to 4.4% to advance refund prior General Obligation Bonds with an interest rate of 5.375% and a par value of $42,425,000. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.

The net proceeds from the issuance of the General Obligation Bonds were used to purchase U.S. government securities and those securities were deposited in an irrevocable trust with an escrow agent to provide debt service payments until the bonds were called on July 9, 2007 and September 9, 2007. The advance refunding met the requirements of an in-substance defeasance and the term bonds were removed from the City's government-wide financial statements. The amount of the outstanding in-substance defeased debt was $32,985,000 as of June 30, 2012.

2008 Animal Shelter Bonds

On January 9, 2008, the City of Berkeley issued $7,200,000 of General Obligation Bonds with interest rates ranging from 3.50% to 4.30%. Interest is payable semi-annually on March 1 and September 1, and principal is payable annually on September 1, with the 1st principal payment on September 1, 2010. The bonds were issued to finance a new Animal Shelter to replace the existing shelter in the City of Berkeley, and to pay for costs of issuing the bonds. The General Obligation bonds mature on September 1, 2037, but are callable on or after September 1, 2017. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.

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(III) Detailed Notes on All Funds (Continued)

2009 Neighborhood Branch Library Improvement Project Bonds

On April 14, 2009, the City of Berkeley issued the first series of bonds to be issued from an aggregate authorized amount of $26,000,000 of General Obligation Bonds duly approved by at least two-thirds of the voters voting on Measure FF at an election held on November 4, 2008, to provide funds to finance renovations, construction, seismic and access improvements, and expansion of program areas at four neighborhood branch libraries in the City. The interest rates on the bonds range from 1.25% to 5.30%. Interest is payable semi-annually on March 1 and September 1, and principal is payable annually on September 1. The General Obligation bonds mature on September 1, 2039, but are callable on or after September 1, 2019. This bond has a rating of Aa2 from Moody’s and AA+ from S&P.

Revenue Bonds

The government also issues bonds where the government pledges income derived from the acquired or constructed assets or tax increment or the General Fund to pay debt service.

Revenue bond debt service requirements to maturity for the Berkeley Repertory Theatre and Refunding Pension Bonds are as follows:

Lease Revenue Bonds

Berkeley Repertory Theatre: On October 1, 1999, BJPFA issued $9,125,000 in lease revenue bonds, on behalf of the City, to acquire a new theatre facility and a 6.4 acre park and park facilities. Interest rates ranging from 4.1%-5.7% are payable semi-annually on April 1st. and October 1st. Principal is due annually on October 1st. This bond has a rating of A1 from Moody’s and AA from S&P.

Year Ending 

June 30 Principal Interest

2,013 $620,000 $477,513

2,014 600,000 446,013         

2,015 585,000 415,056         

2,016 575,000 384,540         

2,017 565,000 354,265         

2018‐2022 1,980,000 1,386,575     

2023‐2027 2,260,000 817,950         

2028‐2031 1,690,000 148,200         

$8,875,000 $4,430,112

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(III) Detailed Notes on All Funds (Continued)

Refunding Pension Bonds

The City has an obligation pursuant to an ordinance to make payments, on behalf of the Safety Members Pension Board, to certain retired City police and fire personnel. On May 1, 1998, the City issued debenture bonds in the amount of $12,415,000 to refund certificates of participation, which were issued to purchase a funding and risk agreement that provides payments to the Safety Members Pension fund to assist in funding the City’s pension obligation. Interest rates range from 3.8%-5.25% and are payable semi-annually on June 1st. and December 1st. Principal is payable annually on June 1st.

Certificates of Participation (COP)-Animal Shelter

On May 19, 2010, the Berkeley Joint Powers Financing Authority issued $5,750,000 of Certificates of Participation to provide funds to the City to finance a portion of the acquisition and construction of an animal shelter. Annual principal payments on the debt will range from $100,000 in FY2013 to $385,000 in FY2041. Interest rates will range from 3.0% in FY2013 to 5.75% in FY2041. The Certificates of Participation will be repaid from a transfer from the Capital Improvement Fund. The face value of the Certificates of Participation was deposited into two separate funds: $4,896,625 was recorded in the Capital Projects – 2010 COP Animal Shelter Fund for project construction; and $853,375 was recorded in the Debt Service Funds – 2010 Animal Shelter for capitalized interest. This COP has a rating of Aa3 from Moody’s and AA from S&P.

COP debt service requirements to maturity are as follows:

Year Ending

June 30 Principal Interest

2013 100,000$         312,975$              

2014 100,000            309,725                

2015 105,000            306,269                

2016 100,000            302,063                

2017 110,000            297,638                

2018‐2022 605,000            1,410,394            

2023‐2027 785,000            1,223,169            

2028‐2032 1,045,000        962,406                

2033‐2037 1,380,000        615,825                

2038‐2041 1,420,000        169,050                

5,750,000$      5,909,513$          

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(III) Detailed Notes on All Funds (Continued)

Loans Payable

CHFA

On January 2002, the City of Berkeley received $500,000 from California Housing Finance Agency. Loan funds will be used exclusively to provide for a revolving source of funds from which to make loans to nonprofit developers for the purpose of financing the acquisition of sites for development, and existing single-family and multifamily properties HUD 108 – Adeline Street. There is no amortization table available as it is simple interest at 3% per annum.

HUD 108 – Adeline Street

In August 7, 2003, the City of Berkeley borrowed $500,000 from the U.S.Housing and Urban Development (HUD) Section 108 Loan Guarantee Program to bridge a funding gap that resulted from a 30% increase in construction costs of 3222 Adeline Street Apartments and anticipated increases for monthly utility costs. The apartments consist of a 19-unit mixed-use project for persons with disabilities and their families. Though the City as the grantee is required to make the loan payments, the funds for the repayment are the obligation and responsibility of the project developer as with any conventional loan a developer may secure. The 108 Loan is secured by a first or second lien on the property and by a pledge of an income stream, such as monthly rents. The interest rate is 4.25%, and interest is payable semiannually on February 1 and August 1 of each year. This loan will mature on August 1, 2022.

HUD 108- University Avenue Neighborhood Apartments (UNA)

As of June 30, 2012, the City of Berkeley made a total drawdown of $604,000 of the $705,000 loan commitment from the U.S. Housing and Urban Development (HUD) Section 108 Loan Guarantee Program. The purpose of this loan is to help finance the costs associated with the development of certain real property located at 1719 and 1725 University Avenue, Berkeley, California.

The interest rate is variable until the date HUD converts it into a permanent loan or the redemption date, whichever is earlier. These dates have not been determined. During the

Year Ending

June 30 Principal Interest

2013 26,000$            14,701$                

2014 26,000              13,467                  

2015 26,000              12,198                  

2016 26,000              10,898                  

2017 26,000              9,565                     

2018‐2022 130,000            26,931                  

2023 32,000              902                        

292,000$         88,662$                

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(III) Detailed Notes on All Funds (Continued)

interim period, interest will be billed by HUD on the first day of February, May, August and November. A schedule of principal and interest will be provided by HUD after the conversion of the loan.

HUD 108- David Brower

In December, 2007, the City of Berkeley borrowed $4,000,000 from the U.S. Housing and Urban Development (HUD) Section 108 Loan Guarantee Program. The loan is for the development of the Oxford Plaza and David Brower Center which is expected to create jobs for low and moderate income persons. The interest rates ranged from 3.6460% to 6.320%. Interest is payable quarterly. This loan will mature on August 1, 2015.

This loan is currently interest only until the date HUD converts it into a permanent loan or the redemption date, whichever is earlier. These dates have not been determined. During the interim period, interest will be billed by HUD on the first day of February, May, August and November. A schedule of principal and interest will be provided by HUD after the conversion of the loan.

HUD 108 B-02-MC-06-008-BHA

On August 7, 2003, the City of Berkeley received a loan from the U.S. Housing and Urban Development (HUD) Section 108 Loan Guarantee Program in the amount of $1,400,000. The same loan process was loaned to Berkeley Housing Authority for funding the rehabilitation of the 75 units in the Public Housing Operating Fund Program. The interest rates ranged from 3.46% to 4.80%. The interest payment is due semiannually as of February 1 and August 1 of each year, commencing on February 1, 2004. This loan will mature on August 1, 2014.

HUD 108- Ed Roberts Campus

In August 2009, the City of Berkeley accepted a $6,000,000 loan from the U.S. Department of Housing and Urban Development (HUD) Section 108 Loan Guarantee Program and executed a loan agreement with The Ed Roberts Campus, Inc. to construct a public facility that will operate primarily as a one-stop service center for people with disabilities. The interest rate is variable and is payable quarterly. The loan will mature on August 15, 2028.

This loan is currently interest only until the date HUD converts it into a permanent loan or the redemption date, whichever is earlier. These dates have not been determined. During the interim period, interest will be billed by HUD on the first day of February, May, August and November. A schedule of principal and interest will be provided by HUD after the conversion of the loan.

Year Ending

June 30 Principal Interest

2013 172,000$         12,847$                

2014 183,000            4,419                     

355,000$         17,266$                

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(III) Detailed Notes on All Funds (Continued)

Business-type Activities

Revenue Bonds

Garage improvements: On July 19, 2005, BJPFA issued $5,620,000 in lease revenue bonds, on behalf of the City, to refund, at a lower interest rate, the outstanding bonds that were issued to finance improvements to the Center Street and Sather Gate garages, and to finance certain new improvements to the garages. Interest rates ranging from 3.25%-4.25% are payable semi-annually on March 1st. and September 1st. Principal is due annually on October 1st. The bonds mature March 1, 2022 and are collateralized solely by the City’s pledge of the net revenues of the City’s Off Street Parking Fund. This bond has a rating of A2 from Moody’s and BBB+ from S&P.

Year Ending

June 30 Principal Interest

2013 305,000$         146,124$              

2014 320,000            135,144                

2015 330,000            123,144                

2016 340,000            110,769                

2017 355,000            97,594                  

2018‐2022 2,000,000        258,888                

3,650,000$      871,661$              

Final RemainingMaturity Interest Principal

Date Rates AmountBusiness-Type Activities Long-Term ObligationsRevenue Bonds - Garage Improvements 2022 3.25%-4.25% 3,650,000$ Certificates of Participation 2033 2.50%-5.00% 24,665,000 Notes Payable - Harbor Construction 4 2016 4.50%-7.90% 705,519 Notes Payable - Harbor Construction 5 until paid 4.50% 7,687,894 Loan Payable - Recycling carts 2017 3.50% 2,034,322 Landfill liabilities 2,720,917 Compensated absences 2,780,723 Net OPEB Obligation-MRHP 550,383 Business-Type Activities, total Long-Term Obligations 44,794,758$

Type of Obligation and Purpose

Business-Type Activities Long-Term Obligations

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(III) Detailed Notes on All Funds (Continued)

Certificates of Participation

On April 1, 2003, Berkeley Joint Powers Financing Authority issued $27,950,000 in Certificates of Participation on behalf of the City to purchase and renovate the building at 1947 Center Street. Annual principal payments on the debt will range from $265,000 in FY 2007 to $1,795,000 in FY 2033. Interest rates will range from 2.5% in FY 2005 to 5.00% in FY 2033. The Certificates of Participation will be repaid from the income derived from leasing floors in the acquired building and the leasing costs saved by housing some City departments’ staff in the building. This bond has a rating of Aa3 from Moody’s and AA from S&P.

Certificates of Participation debt service requirements to maturity are provided below:

Notes Payable

Harbor Construction 4

For the period October 30, 1986 to March 31, 1999, the City of Berkeley borrowed a total of $2 million with the California State Department of Boating and Waterways for the development of the Berkeley Marina Rehabilitation project. The loan is payable on August 1 of each year at an interest rate of 4.5%. This loan will mature on August 1, 2016.

Year Ending

June 30 Principal Interest

2013 745,000$         1,141,811$          

2014 770,000            1,114,805            

2015 800,000            1,085,545            

2016 835,000            1,053,545            

2017 865,000            1,020,145            

2018‐2022 4,915,000        4,516,775            

2023‐2027 6,155,000        3,281,215            

2028‐2032 7,785,000        1,660,475            

2033 1,795,000        89,750                  

24,665,000$   14,964,066$        

Year Ending

June 30 Principal Interest

2013 128,965$         31,748$                

2014 134,768            25,945                  

2015 140,830            25,845                  

2016 147,170            19,880                  

2017‐2021 153,786            6,920                     

705,519$         110,338$              

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(III) Detailed Notes on All Funds (Continued)

Harbor Construction 5

The City of Berkeley borrowed a total of $7,687,894 of the $9.0 million maximum loan amount from the California State Department of Boating and Waterways. The purpose of this loan is financing for the demolition and replacement of wooden docks and wood piles into a new marina berthing system and concrete piles. New utilities, including electrical power and water are to be installed. The new docks and gangways were to be designed and built for barrier-free access. In addition, existing restroom buildings were to be replaced. The loan is payable on August 1 of each year with an interest of 4.50%. The amortization schedule will not be available until the final draw down reaches $9.0 million. Currently, the California State Department of Boating and Waterways provides an annual statement of the amount of interest the City is required to pay.

Loans Payable

In FY2011, the City has entered into agreement for financing the acquisition of recycle carts. The assets acquired through agrement include 24,200 of 64-gallon split carts, 5,000 of 64 gallon standard carts, and 1,800 of 96 gallon standard carts. The acquisition amount for the carts described in this schedule to be paid to the vendor is $2,525,000 (including sales tax of $196,320 to be payable to the State Board of Equalization) with the contract rate is 3.50%. This loan will mature on July 8, 2017.

Fiscal Year Principal Interest Total2013 341,598 68,238 409,836 2014 353,658 56,178 409,836 2015 366,145 43,691 409,836 2016 379,072 30,764 409,836 2017 392,455 17,381 409,836 2018 201,394 3,524 204,918

Totals $2,034,322 $219,776 $2,254,097

Landfill Liabilities

In July 13, 2010, the City council adopted an amendment with SCS Field Services for Cesar Chavez Park Landfill post-closure monitoring and maintenance under contract No.71988. The City began to record the landfill liabilities in FY2011 based on GASB 18. This Statement is based on the October 9, 1991, U.S. Environmental Protection Agency (EPA) rule, "Solid Waste Disposal Facility Criteria," which establishes closure requirements for all municipal solid waste landfills (MSWLFs) that receive solid waste after October 9, 1991. The EPA rule also establishes thirty-year post closure care requirements for MSWLFs that accept solid waste after October 9, 1993. The effect of the EPA rule and similar state or local laws or regulations is to obligate MSWLF owners and operators to perform certain closing functions and post closure monitoring and maintenance functions as a condition for the right to operate the MSWLF in the current period. For MSWLFs that use proprietary fund accounting and reporting, a portion of the estimated total current cost of MSWLF closure and post closure care is required to be recognized as an expense and as a liability in each period that the MSWLF accepts solid waste. Recognition should begin on the date the MSWLF begins accepting solid waste, continue in each period that it accepts waste, and be

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(III) Detailed Notes on All Funds (Continued)

completed by the time it stops accepting waste. Estimated total current cost should be assigned to periods based on MSWLF use rather than on the passage of time, using a formula provided in this Statement. MSWLF capital assets excluded from the calculation of the estimated total cost of MSWLF closure and post closure care should be fully depreciated by the date that the MSWLF stops accepting solid waste. Capital assets used for a single cell should be fully depreciated by the date that each cell is closed

In accordance with requirements established by the California Integrated Waste Management Board, the City has recognized a portion of the landfill's closure and post closure care (closure) costs. These cost estimates are based on the amount of landfill used to date. The estimated closure and corrective action costs are current estimates based on data provided by SCS Field Services, an independent consultant and are subject to changes in inflation, technological advancements, or regulatory changes. The total estimated costs are as follows:

Total estimated closure costs $ 0

Total estimated post-closure costs $3,717,774

The City has last accepted waste in 1983 and was closed in phases over the period 1981 through 1990 in accordance with closure regulations contained in California Code of Regulations Title 14, Chapter 15 and the San Francisco Regional Water Quality Control Board requirements which were then in effect. At June 30, 2012, the estimated landfill closure cost liabilities of $2,720,917 and estimated annual landfill closure cost adjustment of $618,290 were calculated as follows:

Total estimated closure and post-closure costs $3,717,774 Percent of used capacity to total capacity 100.00 % $3,717,774

Revised estimated total closure and post-closure costs liablity $3,717,774

Previous closure costs accrued 3,099,484

FY2012 expense for closure and post-closure costs $618,290

The landfill has an estimated remaining capacity of zero cubic yards and closure construction was completed in 1990.

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(III) Detailed Notes on All Funds (Continued)

Debt Compliance

There are a number of limitations and restrictions contained in the bonds’ indentures. The City believes it is in compliance with all significant limitations and restrictions, except as follows:

The City currently has outstanding parking revenue bonds which require a net revenue pledge. The bond covenants require the City to maintain 125% of debt service from net revenues. At the time of the financing, the city anticipated taking one of the three parking facilities off line for development of a new parking structure for a period of time which would reduce the amount of net revenues and therefore prevent the covenant from being met. The City maintains significant fund balances which are available for debt service and can be used in the event net revenues do not equal the debt service payments. As of June 30, 2012, the City was able to pay its debt service from net revenues without the need to draw on fund balances.

Arbitrage

The Tax Reform Act of 1986 instituted arbitrage restrictions related to the issuance of tax-exempt bonds issued after August 31, 1986. Those regulations relate to the investment of tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. An independent firm performs arbitrage rebate calculations to determine the applicability of federal arbitrage regulations. There were no bond issues with a positive arbitrage rebate liability during the fiscal year.

Compensated Absences

It is the policy of the City to record the cost of vested vacation and sick leave as earned. Earned vacation and sick leave that is taken during the year is payable from the fund(s) the employee’s salary or wage is chargeable to. The vested compensated absences balances for employees who retire or otherwise leave the City are paid from the Sick Leave and Vacation Payouts Internal Service Fund at the time of departure.

Internal Service Funds

These funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the totals above for governmental activities. At June 30, 2012, $544,253 in compensated absences, $30,221,226 in claims and judgments payables, and $113,917 in Net OPEB Obligation are included in the above amounts. The liabilities for workers’ compensation are paid from the Workers’ Compensation Internal Service Fund and the liabilities for public liability claims are paid from the Public Liability Internal Service Fund.

Special Assessment Debt Without City Commitment

On September 2, 2004, the City issued $1,490,000 in Thousand Oaks Heights Applicant Funded Utility Undergrounding Assessment District Limited Obligation Improvement Bonds pursuant to the provision of the Improvement Bond Act of 1915 (Division 10 of the California Streets and Highways Code) for the purpose of financing the construction and acquisition of certain public improvement within the City’s Thousand Oaks Heights Applicant Funded Utility Undergrounding Assessment District. Interest on the Bonds is payable March 2, 2005, and thereafter semiannually

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(III) Detailed Notes on All Funds (Continued)

on September 2 and March 2 of each year. The bonds were issued to improve to 105 parcel district are briefly summarized as the undergrounding of existing overhead utility facilities, removal of existing poles and related above ground facilities, replacement of street lighting, with appurtenant work and improvements and including incidental costs and expenses of project design and construction supervision, legal proceedings, and bond financing. The Bonds were issued upon and secured by the unpaid special assessment levied on parcels within the Districts. The Bonds are special limited obligations of the City and are not payable from the City’s general fund and is not obligated in any way to repay the debt in the event of a default. The Bonds are due in annual installments ranging from $50,525 to $100,255, and have an interest rate ranging between 4.6 to 5.25%. The total principal outstanding as of June 30, 2012 was $1,310,000.

On June 1, 2002, the City issued $9,750,000 in Community Facilities District No. 1 bonds (for disaster fire protection), pursuant to the Mello-Roos Community Facilities Act of 1982 (being section 53311 et seq. of the California Government Code and City Council Resolution #66,615-N.S). The bonds were issued to finance a mobile disaster fire protection system for the delivery of auxiliary fire fighting water, including transportation pumping units, ultra large diameter hose, transport and support vehicles, portable hydrants, accessory fittings, hose bridges, and a storage site or sites, together with incidental expenses related thereto. These bonds will be repaid from amounts levied against property owners benefited by the disaster fire protection system. The amounts levied against property owners to repay the bonds are accounted for in an agency fund. The faith and credit or taxing power of the City is not pledged to the payment of the bonds. Accordingly, the debt has not been included in the basic financial statements. The bonds are due in annual installments ranging from $270,000 to $760,000, and have an interest rate ranging between 3.0% and 4.75%. The City is not obligated in any way to repay the debt in the event of a default. The total principal outstanding as of June 30, 2012 was $6,070,000. This bond has rating of Aa3 from Moody’s since 4/16/2010 and A (Stable) from S&P since 3/8/2011.

Conduit Bond Issues

On June 1, 1992, the City issued refunding revenue bonds on behalf of Alta Bates Medical Center in the amount of $93,200,000. This issue was refinanced in August 1997 for $88,660,000. The amount outstanding at June 30, 2012 totaled $27,290,000 and is due as follows:

August 20, 2011 to August 30, 2023 27,290,000

27,290,000$

In addition, on June 1, 1993, the City issued variable rate revenue bonds on behalf of the Berkeley Young Men’s Christian Association in the amount of $10,755,000. The bonds were re-offered on June 1, 1998. The amount outstanding at June 30, 2008 totaled $8,515,000 but it was fully paid in July 2008 by a re-offering of bonds in July 2008. The amount outstanding at June 30, 2012 totaled $12,930,000. These bonds are not included in the accompanying financial statements as neither the faith and credit nor the taxing power of the City of Berkeley have been pledged to the payment of these obligations.

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(III) Detailed Notes on All Funds (Continued)

Tax Revenue Anticipation Notes Payable

The City issued $50,000,000 of tax revenue anticipation notes with a coupon rate of 2.0% and a yield of 0.25% in October 2011, in order to alleviate the strain on working capital prior to the receipt of property tax revenues in December, and to prepay the FY2012 CalPERS retirement obligations. The notes are recorded in the General Fund. Interest and principal on these notes are payable on July 5, 2012 by the General Fund. The City has maintained a MIG-1 rating on its short-term issues. A schedule of changes in the Tax Revenue Anticipation Note follows:

July 1, 2011 Increases Decreases June 30, 2012-$ 50,000,000$ -$ 50,000,000$

Pledged Revenue

City Pledge to Berkeley Joint Powers Financing Authority: On July 19, 2005, the City issued $5,620,000 of bonds called the Revenue Bonds, 2005 Series A (City of Berkeley Parking System Financing Project), which were collateralized solely by the City’s pledge of the net revenues of the City’s Off Street Parking Fund. The bonds were issued to refund, at a lower interest rate, the outstanding bonds that were issued to finance improvements to the Center Street and Sather Gate garages, and to finance certain new improvements to the garages. The City payments pledged as of June 30, 2012 total $5,652,077, and the pledged City payments are scheduled from fiscal years 2012 to 2022. The City has pledged and assigned to Berkeley Joint Powers Financing Authority approximately 100 percent of the City’s rights to the net revenues of the Off Street Parking Fund. For FY2012, the pledged revenues totaled $1,148,648 compared with debt service of $456,624.

City Pledge to The Bank of New York Trust Company: On October 6, 1999, the City of Berkeley issued $9,125,000 of bonds called the Berkeley Joint Powers Financing Authority Lease Revenue Bonds, Series 1999. The bonds were issued for the acquisition of a theatre and park facilities. All of the revenues and fund balance are pledged in their entirety to the payment of principal and interest on the bonds. The City has pledged and assigned to Berkeley Joint Powers Financing Authority approximately 100 percent of the City’s rights to the revenues and 100% of the fund balance of the Berkeley Repertory Theatre Fund. For FY2012, the pledged revenues totaled $40,951 and pledged fund balance totaled $702,363, compared with debt service of $620,888. The fund was subsidized by a $650,000 Transfer In from the General Fund.

City Pledge to Depository Trust Company (DTC): On July 6, 2011, the City of Berkeley issued $50,000,000 of FY2012 Tax and Revenue Anticipation Notes. The Notes were issued to provide moneys to meet the City’s General Fund cash flow requirements during the 20011-12 fiscal year commencing July 1, 2011 and ending June 30, 2012, including current expenditures, capital expenditures, the prepayment of the FY2012 CalPERS retirement obligation and the discharge of other obligations or indebtedness. The City pledges to deposit in a special fund (a) an amount equal to 50% of the principal amount of the Notes in January 2012; (b) an amount equal to 50% of the principal amount of the Notes in the month of May 2012; and (c) an amount sufficient to pay interest as due on the

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(III) Detailed Notes on All Funds (Continued)

Notes at their maturity, in the month of July 2012. The City pledges $51 million in General Fund taxes and other revenue received in 2011-12. Pledged City payments are scheduled from fiscal years 2012 to 2013. The City has pledged and assigned to DTC (on behalf of the note holders) approximately $51 million or 38.0 percent of the City’s rights to the General Fund annual revenues. For FY2012, the pledged revenues totaled $51 million compared with debt service of $51 million.

Restricted assets

The balance of the restricted asset accounts in the enterprise and governmental funds are as follows:

Enterprise Funds:Off Street Parking Fund:

Revenue bond construction account 3,108,026$            

Revenue bond debt service reserve account 456,624                  

3,564,650               

Building Acquisition Fund:COP 2003 Acquisition and construction account 4,278,996               

COP 2003 debt service reserve account 1,889,600               

6,168,596               

Total Enterprise Funds: 9,733,247$            

Governmental Funds:

COP 2010 Project fund account (2010 COP Animal shelter capital project fund) 2,421,801               

COP 2010 Reserve fund account (2010 COP Animal shelter debt service fund) 412,975                  

Berkeley Repertory Theatre debt service fund 645,874                  

Pension Refunding Bonds 67,796                     

Total Governmental Funds: 3,548,446$            

Note: All the Redeveloment Agency funds were moved from Governmental Funds to Private trust Funds in FY2012,

in compliance with AB 1X 26. As a result, the amounts were now presented under Statement of Fiduciary Net Assets.

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(IV) Other Information (Continued)

IV. OtherInformation

A. Restatement of Fund Balance and net Assets

The beginning fund balance reduced by a prior period adjustment of $40,271 due to understatement of depreciation expenditure in the past few years.

B. Risk Management

The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

1. Public Liability The City has excess coverage for Public Liability claims between $350,000 and $1,000,000 through Bay Cities Joint Powers Insurance Authority (BCJPIA). The California Affiliated Risk Management Authority (CARMA) provides additional coverage to BCJPIA and its member entities from claims in excess of $1 million to $29 million. The program is administered through the Public Liability Internal Service Fund which is funded through transfers from the General Fund totaling $1,556,325 in FY2012. Disbursements from the Public Liability Internal Service Fund are restricted to the payment of liability claims, personnel and other investigation costs.

The City is a member of the Bay Cities Joint Powers Insurance Authority (BCJPIA) for its liability coverage. BCJPIA was created in 1986 to develop effective risk management programs to reduce the amount and frequency of losses; to provide for pooled self-insurance among member agencies, to share the risk of self-insured losses; and to jointly purchase and provide administrative and other services including, but not limited to claims adjusting, data processing, risk management, loss prevention, accounting services, actuarial services, and legal services in connection with the program. BCJPIA consists of 14 cities, three towns, one redevelopment agency and one police authority all located within the metropolitan Bay Area.

BCJPIA provides General Liability, Auto Liability, and Errors & Omissions coverage for its members in excess of the member’s retained limit, or Self-Insured Retention (SIR), up to $1,000,000 per occurrence.

Each Member retains the portion of every loss that falls within their SIR, ranging from $5,000 to $500,000. The City’s SIR is $350,000. BCJPIA is also a member of the California Affiliated Risk Management Authorities (CARMA), a risk-sharing joint powers authority. When losses exceed the $1,000,000 per occurrence limit, CARMA provides coverage up to $25,000,000. BCJPIA is

Component Unit

DescriptionRent

Stablilization Total

Fund balance at 6/30/11 825,060$ 825,060$

Restatements: Capital Assets (40,271) (40,271)

Restated fund balance 6/30/11 784,789$ 784,789$

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(IV) Other Information (Continued)

governed by a Board of Directors, which is comprised of appointed officials from the member entities. To the extent that allocated losses and administrative expenses exceed contributions previously paid and other income, the BCJPIA may assess its member’s additional premiums. Complete financial statements of BCJPIA can be obtained from: Bay Cities Joint Powers Insurance Authority, 6371 Auburn Blvd., Suite B, Citrus Heights, CA 95621-0488. Condensed unaudited accrual basis financial information of BCJPIA as of and for the year ended June 30, 2012 is as follows (amounts expressed in thousands):

Total assets 23,351$

Total liabilties (14,718)

Net assets 8,633$

Total revenues 9,602$

Total expenses 10,411

Net income (809)$

2. Workers' Compensation The City is self insured for workers’ compensation. Payments are made to the Workers’ Compensation Self-Insurance Internal Service Fund by transfers from all City funds. Funds are available to pay claims and administrative costs of the program.

At June 30, 2012, $1,847,226 and $28,374,000 have been accrued for public liability, and workers' compensation claims, respectively. These accruals represent estimates of amounts to ultimately be paid for reported claims and upon past experience, recent claim settlement trends and other information. It is the City's practice to obtain an actuarial study on an annual basis. Although the amount of actual losses incurred through June 30, 2012 are dependent on future developments, based upon information from the administrators and others involved with the administration of the programs, the City's management believes that the aggregate accrual is adequate to cover such losses.

Changes in the balance of claim liabilities during the fiscal year for all self-insurance funds are as follows:

Public Worker'sLiability Compensation Total

Balance, July 1, 2010 1,415,664$ 23,390,000$ 24,805,664$ Incurred claims and changes in estimates 1,168,836 5,635,947 6,804,783 Claims paid (674,365) (4,162,947) (4,837,312)

Balance, June, 30,2011 1,910,135 24,863,000 26,773,135 Incurred claims and changes in estimates 658,885 8,011,719 8,670,604 Claims paid (1,531,929) (4,500,719) (6,032,648)

Balance, June, 30, 2012 1,037,091$ 28,374,000$ 29,411,091$

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(IV) Other Information (Continued)

There were no significant reductions in insurance coverage from the prior year in public liability and there were no settlements exceeding the limits of the City's excess coverage for the past three years.

3. Construction Commitments As June 30, 2012, the City had entered into various contracts related to the Construction of the libraries from the proceeds of the Measure FF, as follows:

C. Contingent Liabilities

Grants

Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although City management expects such amounts, if any, to be immaterial.

Lawsuits and Claims

There are a number of lawsuits and claims pending against the City. Included in these are a number of property damage, civil suits, and personal injury seeking damages in excess of the City's insurance limits. The aggregate amount of the uninsured liabilities of the City which may result from all suits and claims will not, in the opinion of City management, materially affect the City's finances, or impair its ability to otherwise meet its obligations.

D. Defined Benefit Pension Plans

1. California Public Employees’ Retirement System

Plan Description

The City contributes to three plans in California Public Employees’ Retirement System (CalPERS). The first plan covers all of the City’s full-time and part-time benefited sworn uniformed fire employees and all chiefs (Safety Fire Plan). The second covers all of the City’s full-time and part-time benefited sworn uniformed police employees and all chiefs (Safety Police Plan). The third plan covers all remaining eligible City employees (Miscellaneous Plan). These plans are agent multiple-employer defined benefit pension plans administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. State statutes within the Public Employees’ Retirement Law establish a memo of benefit

Outstanding Commitment as of June 30, 2012

Project Management 420,488$ South Branch 4,464,491 West Branch 5,351,649 North Branch 10,000 Claremont Branch 311,459

Total Construction Commitments 10,558,087$

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(IV) Other Information (Continued)

provisions as well as other requirements. The City may select optional benefits provisions from the benefit menu by contract with CalPERS and adopted through City ordinance. Optional benefits that the City has contracted for the Miscellaneous Plan include, but are not limited to, the 2.7% at age 55 retirement benefit formula, single highest year final compensation credit for unused sick leave, and post retirement survivor allowance. The benefits include (among others) service retirement, non-industrial disability retirement, industrial disability retirement, post-retirement death benefit, and pre-retirement death benefits. CalPERS issues a separate comprehensive annual financial report, which may be obtained from the CalPERS Executive Office - 400 P Street, Sacramento, CA 95814.

All full-time and part-time benefited sworn uniformed fire employees and all chiefs are eligible to participate in CalPERS Safety Fire Plan and all full-time and part-time benefited sworn uniformed police employees and all chiefs are eligible to participate in CalPERS-Safety Police Plan. All other full-time, regular “at will” and part-time employees in the career service are required to be enrolled in the CalPERS Miscellaneous Plan. CalPERS pension benefits vest after five years of service. The Safety Plans pension benefits are based on the employees’ years of service, age and final compensation and the Miscellaneous Plan pension benefits are based on the employee’s years of CalPERS benefited service, age at retirement, and single highest year of compensation. These benefit provisions and all other requirements are established by State statute and City ordinance.

Part-time and hourly employees working less than half time are excluded from CalPERS participation regardless of the number of hours worked through an hourly exclusion contract amendment. These employees are enrolled in the Public Agency Retirement System, (PARS), which is established under Internal Revenue Code Section 401(a) as a tax qualified multiple employer trust.

Funding Policy

Miscellaneous Plan members are required by statute to contribute 8% of their annual covered salary. The Employer Paid Member Contribution (EPMC) is the method the City uses for reporting the employee contribution for Miscellaneous Plan employees. CalPERS’ recognizes the EPMC method of making the employee contribution in Public Employment Retirement Law (PERL) Section 20691. The 8% employee contribution is not included in base pay but is instead made through a separate payroll transaction to CalPERS as “special compensation” and is not subject to federal or state taxes until the money is distributed at the time of retirement or when otherwise withdrawn from CalPERS. CalPERS’ recognizes the EPMC as “special compensation” in the California Code of Regulations (Chapter 2 of Division 1 of Title 2, Subchapter 1, Article 5) Section 571(a)(1). Safety Fire Plan and Safety Police Plan members are required to contribute 9% of their annual covered salary.

The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The required employer contribution rate for the year ended June 30, 2012 was 19.047%, 28.602%, and 40.379% for Miscellaneous Plan, Safety Fire Plan and Safety Police Plan employees annual covered payroll, respectively. The contribution requirements of the plan members are established by State statute, and the employer contribution rates are established and may be amended by CalPERS.

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(IV) Other Information (Continued)

Miscellaneous Public Safety - Public Safety - Plan Fire Plan Police Plan

City Employer Contribution for year ended June 30, 2012 16,559,062$ 4,342,326$ 8,640,281$

Employees' contributionfor year ended June 30, 2012 6,959,695$ 1,366,110$ 1,922,535$

Actuarial valuation date June 30, 2010 June 30, 2010 June 30, 2010

Actuarial cost method Entry Age Normal Entry Age Normal Entry Age NormalCost Method Cost Method Cost Method

Amortization method for actuarial Level percentage of Level percentage of Level percentage of

accrued liabilities projected payroll projected payroll projected payroll

Remaining amortization period 27-year period, closed 30-year period, open 30-year period, open

Actuarial asset valuation method 15 year smooth market 15 year smooth market 15 year smooth market

Investment rate of return 7.75% 7.75% 7.75%

Projected salary increases 3.55% to 14.45% 3.55% to 13.15% 3.55% to 13.155%

Growth in overall payroll/Cost-of-living 3.25% 3.25% 3.25%

Inflation component 3.00% 3.00% 3.00%Active members 1196 126 178Retired members & beneficiaries 1676 185 254

CalPERS Net Pension Asset

The City’s Annual Required Contribution (ARC) is its actual covered payroll times the rate CalPERS calculates for the City. CalPERS offers municipalities a discount of 3.8% on employer CalPERS obligations if they are paid at the beginning of the fiscal year, instead of being made in installments each payroll period. During FY 2012, the City prepaid the CalPERS obligation, in order to earn this discount of 3.8% (or approximately $1.2 million). However, the FY 2012 prepayment resulted in a payment to CalPERS that was $2,180,414 greater than the City’s ARC. The primary reason for this is that CalPERS continued to assume annual payroll growth rates of 3.25% for the City and reflected this in its calculation of the prepayment amount due. In fact, the City’s payroll grew only .828% in FY 2011 and actually declined in FY 2012 by -.634%. Since the prepayment amount to CalPERS was $2,180,414 greater than the City’s ARC, a net pension asset of this amount resulted. It is CalPERS’ practice not to make a direct refund of such overpayments, but to make the refund to the City in the form of credits that will lower CalPERS rates in the future. In addition, the City will earn interest on the overpayment amount at the same rate as CalPERS earns on its investment portfolio. Governmental Accounting Standards Board (GASB) pension accounting rules state that the net pension asset cannot be recorded in a governmental fund (i.e., General Fund), but must be reflected as an asset of the CalPERS pension funds, even though the General Fund prepaid the CalPERS amounts.

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(IV) Other Information (Continued)

Three-year trend information for the CalPERS plans are as follows:

Funded Status and Funding Progress-CalPERS Plans

The funded status of the CalPERS plans as of June 30, 2010, the most recent actuarial date, is as follows:

Miscellaenous 

Plan

Public Safety ‐ 

Police Plan

Public Safety ‐ 

Fire Plan Total

Annual Required Contributions 16,559,062$            8,640,281$              4,342,326$             29,541,668$         

Contributions Made 18,262,550              8,948,292                4,511,240               31,722,082           

Increase in Net CALPERS Pension Asset 1,703,488                308,011                    168,914                   2,180,414             

Net CALPERS Obligations/(Assets) ‐ Beginning of Year ‐                                  ‐                                  ‐                                 ‐                               

Net CALPERS Obligations/(Assets) ‐End of Year 1,703,488$              308,011$                  168,914$                 2,180,414$           

Determination of CALPERS Net Pension Obiligation (Assets)

Unfunded UAAL

Acturial  Actuarial as

Actuarial Actuarial  Accrued Accrued Percentage

Valuation Asset Liability‐ Liability‐ Funded Covered of covered

Date Value Entry Age UAAL Ratio Payroll Payroll

CalPERS ‐ Miscellaneous Plan

6/30/2010 548,374,504       662,163,240        113,788,736    82.80% 91,164,520      124.8%

CalPERS ‐ Public Safety ‐ Fire Plan

6/30/2010 170,108,400       196,510,989        26,402,589       86.6% 15,397,099      171.5%

CalPERS ‐ Public Safety ‐ Police Plan

6/30/2010 205,865,230       286,191,617        80,326,387       71.9% 21,640,256      371.2%

Annual Percentage NetFiscal Year Pension of APC Pension

Ended Cost (APC) Contributed Obligation Miscellaneous Plan

6/30/2010 14,444,453 100% $ N/A 6/30/2011 14,437,926 100% $ N/A 6/30/2012 15,713,788 100% $ N/A

Public Safety - Fire Plan 6/30/2010 3,598,119 100% $ N/A 6/30/2011 3,839,076 100% $ N/A 6/30/2012 4,394,363 100% $ N/A

Public Safety - Police Plan 6/30/2010 7,756,713 100% $ N/A 6/30/2011 7,829,710 100% $ N/A 6/30/2012 8,708,429 100% $ N/A

108

(IV) Other Information (Continued)

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

2. Berkeley Police Retirement Income Benefit Plan Plan Description

The City sponsors a Retiree Income Benefit Plan for its Police retirees. This plan is a single employer plan which provides defined income benefits (i.e., Pension plan) for Police employees who retired from the City on or after July 1, 1989, who were also vested in a CalPERS pension, who had ten years of service with the Berkeley Police Department and retire from the City on or after age 50. Benefits commence 10 years after retirement for retirements before July 6, 1997, five years after retirement for retirements before July 1, 2007, and two years after retirement for retirements after July 1, 2007. In addition, retirees receiving a disability or industrial disability retirement benefit from CalPERS are eligible.

The plan is administered by The Lipman Company (TLC). The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City, and are approved by the City Council. The plan does not issue a publicly available financial report that includes financial statements and required supplementary information. At July 1, 2012, the date of the most recent actuarial valuation, there were 164 active members, 124 retired employees receiving current benefits and 25 retired employees in deferred pay status. Benefits are payable for the retiree’s lifetime. For employees retiring before September 19, 2012, the City pays a monthly supplemental benefit equal to the City’s Active 2-party Kaiser Premium regardless of marital status. Under an agreement between City Management and the Berkeley Police Association, the City will pay for employees retiring on or after September 19, 2012, $600 toward the cost of single party coverage and $1,200 toward the cost of two party coverage for retirees under age 65 enrolled in the City’s health plan. For retirees over age 65 the City’s share of single/two party coverage is $382.90 / $765.80 and retirees must pay the difference of the actual premium cost. The City’s share will increase up to 6% per year.

The income benefit is prorated by service based on the following years of service of the retiree, effective July 1, 2007 (prior to July 1, 2007, the vesting percentage was 75% for 20-24 years of service):

Years of Service City PercentageLess than 10 0%

10 to 14 25%15 to 19 50%

20 or more 100%

Benefits are paid from a Section 401(a) trust and are therefore taxable to the retiree when paid. Benefits are payable for the retiree’s lifetime, and continue to the retiree’s surviving spouse for his or her lifetime.

109

(IV) Other Information (Continued)

Summary of significant accounting policies – basis of accounting and valuation of investments

The financial statements of the Berkeley Police Retirement Income Benefit Plan are prepared using the accrual basis of accounting. The City’s contributions are recognized in the period in which the contributions are due. There are no plan member contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value. The fair values of the investments are based on the market value on the date of the actuarial report.

Funding Policy

The City’s current targeted funding policy is equal to the service cost for active employees plus an amount to amortize unfunded liabilities over an open 30-year period (rolling 30 year amortization) as a level percentage of payroll. Plan members are not required to contribute to the Plan. The estimated required employer contribution rate for the year ended June 30, 2012 was 3.26% of covered payroll for Police employees. For FY2012, the City contributed $1,208,475, which was $2,968,029 less than the ARC of $4,176,504 for this plan. The unpaid contribution as of June 30, 2012 of $15,006,249 to fund this pension obligation is recorded as a liability. Any changes to the contribution requirements of the plan are negotiated by the bargaining units and City Labor Negotiating team, and approved by the City Manager and City Council.

The following shows the calculation of the Annual Required Contributions for FY2012:

Amount

Normal Cost at Year End 1,450,716$ Amortization of UAAL 2,725,788

Annual Required Contribution (ARC) 4,176,504$

The actuarial cost method used for determining the benefit obligations is the Projected Unit Benefit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on certain assumptions and census data. The Actuarial Accrued Liability (AAL) is the actuarial present value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the present value of benefits multiplied by a fraction equal to service to date divided by service expected at retirement. The Normal cost is the actuarial present value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. Since retirees are not accruing any more service, their normal cost is zero. In determining the Annual Required Contribution, the unfunded AAL is amortized as a level percentage of payrolls over 30 years. The actuarial assumptions included (a) 6.0% investment rate of return (net of administrative expenses); (b) inflation increases are tied to the City’s 2-party Kaiser premium and are assumed to be 6% for FY2012, with increases grading down by .5% per year to 5% for FY 2016 and thereafter; (c) 3% annual payroll increase; (d) 80% of retirees are assumed to retire with a covered spouse; and (e) female spouses are assumed to be three years younger than male spouses.

110

(IV) Other Information (Continued)

Three-year trend information for the Berkeley Police Retirement Income benefit plan is as follows:

Annual Percentage Net

Fiscal Year OPEB Contribution of APC Pension

Ended Cost (APC) Made Contributed Obligation

6/30/2010 $3,030,566 $1,181,503 39% $7,336,257

6/30/2011 5,200,999 1,180,445 23% 11,356,811

6/30/2012 4,857,913 1,208,475 25% 15,006,249

The following tables show the annual pension cost and net pension obligations, and the increase in the net pension obligation for the year:

Determination of Net Pension ObligationAnnual Required Contribution 4,176,504$

Interest on prior year Net Pension Obligation 681,409Adjustment to ARC -

Annual Pension Cost 4,857,913 Contributions Made (1,208,475)

Increase in Net Pension Obligation 3,649,438 Net Pension Obligation - beginning of year 11,356,811

Net Pension Obligation - end of year 15,006,249$

Status and Funding Progress

As of July 1, 2012, the most recent actuarial valuation date, the plan was 10.64% funded. The actuarial accrued liability for benefits was $58.7 million, and the actuarial value of assets was $6.2 million, resulting in an unfunded accrued liability of $52.5 million. The fair value of the assets were determined using market values as of the date of the actuarial report. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Funded status of the plan as of July 1, 2012, the most recent actuarial valuation date is as follows:

111

(IV) Other Information (Continued)

The Statement of net assets and Statement of Changes in net assets for the Berkeley Police Retirement Income benefit Plan as of end and for the year ended June 30, 2012 (using the accrual basis of accounting), are as follows:

Statement of Net AssetsBerkeley Police Retirement Income Benefit Plan

June 30, 2012

AssetsCash and cash equivalents 556,328$ Investments, at fair value Corporate notes 5,579,947 Interest receivable 99,361

Total assets 6,235,636

LiabilitiesRetiree pension payable -

Total liabilities -

Net assetsHeld in trust for OPEB benefits 6,235,636

Total net assets 6,235,636$

Statement of changes in Net Assets

Berkeley Police Retirement Income Benefit PlanFor the Year Ended June 30, 2012

Additions:Contribution: Employer 1,208,475$ Investment income 209,505

Total additions 1,417,980

Deductions:Benefits: Service 1,447,947 Administrative expenses 24,108

Total deductions 1,472,055

Change in net assets (54,075)

Net assets - beginning 6,289,711

Net assets - ending 6,235,636$

112

(IV) Other Information (Continued)

3. Safety Members Pension Fund

Plan Description

The City maintains the Safety Members Pension Fund (SMPF). This plan is a single-employer defined benefit pension plan for fire and police officers that retired before March 1973. In March 1973, all active fire and police officers were transferred from SMPF to CalPERS. The Safety Members Pension Board administers the plan. The authority under which benefit provisions are established or may be amended is the Berkeley Municipal Code chapters 4.20, 4.24, 4.28 and 4.32. At July 1, 2011, the date of the most recent actuarial valuation, there were 24 retired members and surviving spouses.

Service and disability retirement benefits are based on a percentage of salary at retirement, multiplied by years of service. Benefits are adjusted annually by either:

(a) Current active salary increases (based on the same rank at retirement) or

(b) The increase in the California Consumer Price Index (with a 1% minimum and a 3% cap). SMPF also provides surviving spouse benefits.

Summary of significant accounting policies – basis of accounting and valuation of investments

The financial statements of the Safety Members Pension Fund are prepared using the accrual basis of accounting. The City’s contributions are recognized in the period in which the contributions are due. There are no plan member contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value. The fair value of the investments is based on the market value on the date of the actuarial report.

Funding Policy

The City pays SMPF benefits on a pay-as-you-go basis. In February 1989, the Berkeley Civic Improvement Corporation (BCIC) purchased, on behalf of the City, a Guaranteed Income Contract (GIC) from Massachusetts Mutual. This contract provides annual payments through 2018 and an annual guaranteed 9.68% rate of return (net of expenses). The City pays the difference between actual benefit payments and contract provided annual payments, from the General Fund. Additional amounts may be paid, in 2008 through 2017, under a Risk Agreement to compensate the City for the difference between the amounts paid by the City to its pensioners and the actuarially determined amounts.

The City is required to determine the plan’s annual pension cost (APC) based on the most recent actuarial valuation. The APC equals the plan’s annual required contribution (ARC), adjusted for historical differences between the ARC and amounts contributed. The actuary has determined the City’s annual required contribution and amounts contributed. The actuary has determined the City’s ARC is the greater of (a) a 20-year amortization of the unfunded actuarial liability, or (b) actual benefit payments made for the year. For the year ended June 30, 2012, the City’s ARC was $1,554,836 and was equal to the benefit payments during the year. The City contributed this amount for the year through a $596,000 payment from the GIC plus $958,836 paid from the General Fund. The actuarial liability was determined using the unit credit actuarial cost method.

113

(IV) Other Information (Continued)

The actuarial assumptions included (a) 8.0% investment return, (b) 1992 CalPERS Experience Table, (c) projected annual benefit increases of 5% a year for full fluctuating and 3% a year for CPI COLAs. Both (a) and (c) include a 3% annual inflation component. The following table provides historical information of the Annual Pension Cost:

Prior to 1997, the actuarial valuation did not calculate an Annual Pension Cost. Consequently, consistent with GASB 27, the Net Pension Obligation at transition (July 1, 1996) equaled zero. The plan’s unfunded actuarial accrued liability is being amortized as a level percentage of projected payrolls on a closed basis. The amortization period of the unfunded actuarial liability ends June 30, 2017. A copy of the stand-alone financial report may be obtained at 2180 Milvia Street,

Berkeley, CA.

Contributions and benefits are recognized in the Statement of Changes in fiduciary net assets using the accrual basis of accounting. The fair value of the SMPF assets was determined by market value as reflected in the provisions of the guaranteed investment contract with Massachusetts Mutual.

Funded Status and Funding Progress

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial liabilities for benefits. Funded status of the SMPF as of July 1, 2011, the most recent actuarial date, is as follows:

E. Other Post-Employment Benefits

The City has adopted the provisions of GASB Statement No. 45 (GASB 45), Accounting and Financial Reporting for Post-employment Benefits Other Than Pensions. The Statement establishes standards for the measurement, recognition, and display of OPEB costs/contributions and related liabilities (assets), note disclosures, and if applicable, required supplementary information in the financial reports of state and local government employers. The City has also adopted GASB Statement No. 43 (GASB 43), Financial Reporting for Post-employment Benefit Plans Other Than Pension Plans. GASB 43 applies to the City’s post-employment healthcare plans and requires additional disclosures with respect to the healthcare plans.

Fiscal Year Ended

Annual Pension Cost

(APC)

Percentage of APC

ContributedNet Pension Obligation

6/30/2010 $1,666,559 100% N/A6/30/2011 $1,554,836 100% N/A6/30/2012 $1,338,800 100% N/A

114

(IV) Other Information (Continued)

1. Berkeley Fire Employees Retiree Health Plan Plan Description

The City of Berkeley Fire Employees Retiree Health Plan (FRHF) is a single-employer defined benefit medical plan administered by The Lipman Company (TLC). It is reported in an Other Employee Benefit Trust Fund of the City. To be eligible for benefits, sworn Fire employees must retire from the City on or after July 1, 1997, be vested in a CalPERS pension, and retire from the City on or after age 50. Benefits commence immediately upon retirement. Benefits are payable for the retiree’s lifetime and continue for his or her covered spouse’s/domestic partner’s lifetime. The amount the City contributes toward the Fire Employees Retiree Health Plan is 4.5% per year regardless of the amount of increase in the underlying premium rate. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City Labor Negotiating Team, and are approved by the City Manager and City Council. The FRHF does not issue a publicly available financial report that includes financial statements and required supplementary information. The City’s portion of the benefit is based on the following years of service of the retiree:

Years of Service City PercentageLess than 10 0%

10 to 14 25%15 to 19 50%20 to 24 75%

25 or more 100%

The City makes a contribution towards the medical premium. For employees who retired on or after July 1, 2006: The maximum City payment is equal to the City’s percentage of the base rates of $426.83 per month (single party) and $851.49 per month (two party) as of July 1, 2012. After Age 65 (eligible for Medicare): For all Medicare eligible retirees of retirement age, the maximum payment is equal to the City’s percentage of the 2001 single or 2-party Health Net Senior Plus rate (depending on whether retiree has a covered dependent) increased by 4.5% per year. The maximum City payment is equal to the City’s percentage of the base rates of $315.48 per month (single party) and $628.82 per month (two parties) as of July 1, 2012. As of July 1, 2012, there were 115 active employees, 62 retirees receiving benefits and zero terminated employees entitled to receive benefits in the future.

Summary of significant accounting policies – basis of accounting and valuation of investments

The financial statements of the Berkeley Fire Employees Retiree Health Plan are prepared using the accrual basis of accounting. The City’s contributions are recognized in the period in which the contributions are due. There are no plan member contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value. The fair value of the investments are based on the market value on the date of the actuarial report.

115

(IV) Other Information (Continued)

Funding Policy

FRHF plan members are not required to contribute to the plan. The City’s targeted funding policy is equal to the service cost for active employees plus an amount to amortize unfunded liabilities over 30 years (rolling 30 year amortization) as a level percentage of payroll. The employer contribution rate for the year ended June 30, 2010 was 5.0% of covered payroll for Fire employees. The City strives to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45.The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not exceed 30 years. The current ARC rate is 5.44% of annual covered payroll as of July 1, 2010. For FY2012 the City contributed $735,022, which was $23,386 less than the ARC of $758,408 for this plan. Any changes to the contribution requirements of the plan are negotiated by the bargaining units and City Labor Negotiating team, and approved by the City Manager and City Council.

Annual OPEB Cost and Net OPEB Obligation (Asset)

The City’s annual OPEB cost (expense) is calculated based on the ARC of the City, an amount that was actuarially determined by using the Projected Unit Benefit Cost method (one of the actuarial cost methods in accordance with the parameters of GASB Statement No. 45). Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current active employees and retirees and is calculated based on certain assumptions and census data. The following tables show the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City’s net OPEB asset to FRHF:

Determination of Net OPEB Obligation (Asset)Annual Required Contribution 758,408$

Interest on prior year Net OPEB Obligation (5,828)Adjustment to ARC 4,761

Annual OPEB Cost 757,341 Contributions Made 735,022

Decrease Net OPEB Asset 22,319Net OPEB Asset - beginning of year (97,127)

Net OPEB Asset - end of year (74,808)$

The following table shows the calculation of the Annual Required Contributions and employers’ schedule of contributions for FY2012:

Normal Cost at Year End 427,892$ Amortization of UAAL 311,615

Annual Required Contribution (ARC) 739,507$

116

(IV) Other Information (Continued)

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for FY2012 and the two preceding years were as follows:

Annual Percentage NetFiscal Year OPEB of Annual OPEB OPEB

Ended Cost Contributed Asset6/30/2010 $692,399 104% $108,581

6/30/2011 738,314 98% 97,127

6/30/2012 757,341 97% 74,807

Funded Status and Funding Progress

As of July 1, 2012, the date of the most recent actuarial report, the plan was 52.8% funded. The actuarial accrued liability for benefits was $12.0 million, and the actuarial value of the assets was $6.3 million, resulting in an unfunded actuarial accrued liability (UAAL) of $5.7 million. The covered payroll (annual payroll of active employees covered by the plan) was approximately $12,828,000.

Funded Status of the Plan as of July 1, 2012

Actuarial Accrued Liability (AAL) 12,017,316$

Actuarial Value of Plan Assets 6,348,008

Unfunded Actuarial Accrued Liability (UAAL) 5,669,308$

Funded Ratio (Actuarial Value of Plan Assets/UAAL) 52.8%

Covered payroll (Payroll of Active Plan Members) 12,828,000$

UAAL as of Percentage of Covered Payroll 44.2%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the July 1, 2012 actuarial valuation, the actuarial cost method used for determining the benefit obligations is the Projected Unit Benefit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on certain assumptions and census data. The Actuarial Accrued

117

(IV) Other Information (Continued)

Liability (AAL) is the actuarial present value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the present value of benefits multiplied by a fraction equal to service-to-date over service at expected retirement. The Normal Cost is the actuarial present value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. Since retirees are not accruing any more service, their normal cost is zero. In determining the Annual Required Contribution (ARC), the unfunded AAL is amortized as a level percentage of payrolls over 30 years on an open basis.

The actuarial assumptions included (a) 6.0% investment rate of return (net of administrative expenses); (b) annual healthcare cost trend is projected to increase at a rate higher than 4.5% (c) benefit increases are fixed at 4.5% per year, based on the bargaining agreement; (d) 70% of retirees are assumed to retire with a covered spouse; and (e) female spouses are assumed to be three years younger than male spouses; (g) projected payroll increase at 3% per year.

2. Berkeley Miscellaneous Employees Retiree Health Plan Plan Description

The City of Berkeley Retiree Health Premium Assistance Plan (RHPAP) is a single-employer defined benefit medical plan administered by The Lipman Company (TLC). It is an Other Employee Benefit Trust Fund of the City, which provides retiree health benefits to eligible retirees and his/her spouse or domestic partner. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City, and are approved by the City Council. The RHPAP does not issue a publicly available financial report that includes financial statements and required supplementary information.

Employees are eligible for retiree health benefits if they satisfy the following requirements:

Retirees who are at least age 50, with at least 8 years service with the City at the time of separation from service are eligible to receive retiree health benefits commencing at age 55.

Benefits are payable for the retiree’s lifetime and continue for his or her covered spouse’s/domestic partner’s lifetime. The City pays the monthly cost of the monthly premiums up to a participant’s applicable percentage of the base dollar amount and subject to annual 4.5% increases as specified in the Retiree Health Premium Assistance Plan document regardless of the amount of increase in the underlying premium rate. The base monthly dollar amount paid by the City for FY2012 was as follows:

118

(IV) Other Information (Continued)

The City’s portion of the benefit is based on the following years of service of the retiree:

Fully CompletedYears of Service City Percentage

8 30%9 40%

10 50%11 58%12 66%13 74%14 82%15 90%16 92%17 94%18 96%19 98%

20+ 100%

As of July 1, 2012, there were 1,068 active employees, 261 terminated participants and 224 retirees.

SEIU Local 1021 CSU 

(Local 535)

SEIU Local 1021 CSU 

(Local 535) IBEW Local 1245 IBEW Local 1245 IBEW Local 1245 IBEW Local 1245

Retired before 

June 29, 2008

Retired on or after 

June 29, 2008

Retried before 

June 28, 2009

Retried on or after 

June 28, 2009

Retried after June 

27, 2010

Retried on or 

after June 26, 

2011

Less than Age 65

Single $308 $308 $427 $308 $427 $484 $512

Two Party 616 616 735 616 854 968 1023

Age 65 and Over

Single 30 120 120 30 30 30 30

Two Party 60 239 239 60 60 60 60

PEU Local One PEU Local One

Upresented in Units, 

Z‐1, Z‐5 and Z‐7 

(BHA)

Upresented in 

Units, Z‐1, Z‐5 and 

Z‐7 (BHA)

Unpresented in 

Units, E‐1, Z‐2, Z‐3, 

Z‐6 and Z‐8 (BHA)

Unpresented in 

Units, E‐1, Z‐2, Z‐3, 

Z‐6 and Z‐8 (BHA)

Retired before 

July 1, 2008

Retired after July 

1, 2008

Retired before July 

1, 2008

Retired after July 

1, 2008

Retired before 

June 29, 2008

Retired on or after 

June 29, 2008

Less than Age 65

Single $308 $502 $308 $369 $308 $427

Two Party $616 $1,005 $616 $738 $616 $735

Age 65 and Over

Single $30 $422 $166 $229 $166 $166

Two Party $60 $843 $331 $459 $331 $331

SEIU Local 1021 

C&M (Local 790 

& R1)

119

(IV) Other Information (Continued)

Summary of significant accounting policies – basis of accounting and valuation of investments

The financial statements of the Berkeley Miscellaneous Employees Retiree Health Plan are prepared using the accrual basis of accounting. The City’s contributions are recognized in the period in which the contributions are due. There are no plan member contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value. The fair value of the investments are based on the market value on the date of the actuarial report.

Funding Policy

RHPAP plan members are not required to contribute to the plan. The City’s targeted funding policy is equal to the normal cost for active employees plus an amount to amortize unfunded liabilities over 30 years as a level percentage of payrolls. The employer contribution rate for the year ended June 30, 2012 was 1.08% of covered payroll for Miscellaneous Local 1021 Maintenance and Clerical employees and 2.58% for Miscellaneous Local 1021 Community Services and career benefited unrepresented employees. The City is required to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45.The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The current ARC rate is 2.74% of annual covered payroll. For FY2012, the City contributed $2,036,801 which was $447,600 less than the ARC of $2,484,401 for this plan. Any changes to the contribution requirements of the plan are negotiated by the bargaining units and City negotiating staff, and approved by the City Council.

Annual OPEB Cost and Net OPEB Obligation

The City’s annual OPEB cost (expense) is calculated based on the ARC of the City, an amount that was actuarially determined by using the Projected Unit Benefit Cost method (one of the actuarial cost methods in accordance with the parameters of GASB Statement No. 45). Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current active employees and retirees and is calculated based on certain assumptions and census data.

The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City’s net OPEB obligation to RHPAP:

Determination of Net OPEB Obligation

Annual Required Contribution $2,484,401

Interest on prior year Net OPEB Obligation 121,376Adjustment to ARC (95,164)

Annual OPEB Cost 2,510,613Contributions Made 2,036,801

Increase in Net OPEB Obligation 473,812

Net OPEB Obligation - beginning of year 1,733,919

Net OPEB Obligation - end of year $2,207,731

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(IV) Other Information (Continued)

The following shows the calculation of the Annual Required Contributions and schedule of employer contributions for FY2012:

Amount

Normal Cost at Year End 1,436,346$ Amortization of UAAL 1,048,055

Annual Required Contribution (ARC) 2,484,401$

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for FY2012 and the two preceding years were as follows:

Annual Percentage NetFiscal Year OPEB of Annual OPEB OPEB

Ended Cost Contributed Obligation6/30/2010 $2,247,270 91% $1,224,375 6/30/2011 2,502,909 80% 1,733,9186/30/2012 2,510,611 81% 2,207,726

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(IV) Other Information (Continued)

Funded Status and Funding Progress

As of July 1, 2012, the date of the most recent actuarial report, the plan was 34.6% funded. The actuarial accrued liability for benefits was $36.5 million, and the actuarial value of the assets was $12.7 million, resulting in an unfunded actuarial accrued liability (UAAL) of $23.9 million. The covered payroll (annual payroll of active employees covered by the plan) was approximately $91,227,000.

Funded Status of the Plan as of July 1, 2012

Actuarial Accrued Liability (AAL) 36,543,741$

Actuarial Value of Plan Assets 12,655,994

Unfunded Actuarial Accrued Liability (UAAL) 23,887,747$

Funded Ratio (Actuarial Value of Plan Assets/AAL) 34.6%

Covered payroll (Payroll of Active Plan Members) 91,227,000$

UAAL as of Percentage of Covered Payroll 26.2%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the July 1, 2008 actuarial valuation, the actuarial cost method used for determining the benefit obligations is the Projected Unit Benefit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on certain assumptions and census data. The Actuarial Accrued Liability (AAL) is the actuarial present value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the present value of benefits multiplied by a fraction equal to service-to-date over service at expected retirement. The Normal Cost is the actuarial present value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. Since retirees are not accruing any more service, their normal cost is zero. In determining the Annual Required Contribution (ARC), the unfunded AAL is amortized as a level percentage of payrolls over 30 years on an open basis.

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(IV) Other Information (Continued)

The actuarial assumptions included (a) 6.0% investment rate of return (net of administrative expenses); (b) annual healthcare cost trend is projected to increase at a rate higher than 4.5% (c) benefit increases are fixed at 4.5% per year, based on the bargaining agreement; (d) 70% of retirees are assumed to retire with a covered spouse; and (e) female spouses are assumed to be three years younger than male spouses; (g) projected payroll increase at 3% per year.

Financial Statements for OPEB Plans

The Statement of OPEB Net Assets and Statement of Changes in OPEB Net Assets as of and for the year ended June 30, 2012, using the accrual basis of accounting, are as follows:

Statement of OPEB Net Assets June 30, 2012Miscellaneous

Retiree Fire RetireeMedical Plan Medical Plan

------------------ --------------------Assets Cash and cash equivalents 5,438,234$ 1,091,088$ Investments, at fair value

Corporate notes 6,848,116 5,180,186

Interest receivable 393,081 85,861------------------ --------------------

Total assets 12,679,431 6,357,135 ------------------ --------------------

LiabilitiesOther accounts payable

------------------ --------------------Total liabilities - -

------------------ --------------------Net AssetsHeld in trust for OPEB benefits 12,679,431 6,357,135Total net assets 12,679,431$ 6,357,135$

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(IV) Other Information (Continued)

------------------------------ -------------------------

Miscellaneous Retiree Fire RetireeMedical Plan Medical Plan

-------------------------- -------------------------

ADDITIONS:

Contributions: Employer 2,036,802$ 735,022$ Investment income 260,832 232,377 Other income Total Additions 2,297,634 967,399

DEDUCTIONS:

Benefits: Service 708,028 345,101 Administrative expenses 64,279 14,491 Total Deductions 772,307 359,592

Change in net assets 1,525,327 607,807

Net Assets - beginning 11,154,104 5,749,328

Net Assets - ending 12,679,431$ 6,357,135$

Statement of Changes in OPEB Net Assets

For the Year Ended June 30, 2012

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(IV) Other Information (Continued)

F. Defined Contribution Plans

1. Supplemental Retirement and Income Plans (SRIP) There are three separate Supplemental Retirement and Income Plans (SRIP) that were enacted by Ordinance at different times and are set forth in the Berkeley Municipal Code as follows:

Supplementary Retirement and Income Plan I – Berkeley Municipal Code Chapter 4.36.101 et seq.

Supplementary Retirement and Income Plan II – Berkeley Municipal Code Chapter 4.38.101 et seq.

Supplementary Retirement and Income Plan III – Berkeley Municipal Code Chapter 4.39.101 et seq.

SRIP I and SRIP II cover non-sworn employees. SRIP III covers sworn Police personnel except for the Police Chief who is included in SRIP II.

SRIP I

On January 1, 1983, Ordinance No. 5450-N.S., which was codified in the Berkeley Municipal Code under Chapter 4.36.101 et seq., established SRIP I. The SRIP I plan consists of two components: 1) a defined contribution money purchase pension plan adopted in accordance with Sections 401(a) and 501(a) of the Internal Revenue Code, and 2) an employer paid disability benefit.

Money Purchase Pension Plan: The administrators of the money purchase pension plan are Hartford Life Insurance Company and Prudential Retirement Services. The plan is a defined contribution plan whereby the City contributes 5.7% of salary up to a salary of $32,400 into a tax deferred and self directed investment account and 1% of salary up to a salary of $32,400 into a disability reserve account for each covered employee (all permanent City employees). The total assets of SRIP I available for benefits at June 30, 2012, was $8,194,441, which was comprised of participant accounts, in the amount of $8,194,441. These assets are the property of the individual account holders and not the property of the City. These assets cannot be used to pay disability benefits.

Disability Benefit: Employees hired after January 1, 1983 but prior to July 22, 1988, who became disabled in their own occupation are entitled to receive a disability income benefit equal to 60% of their highest compensation, reduced by any disability payments they receive from Social Security, State Disability Insurance, or Workers’ Compensation. Employees hired after July 21, 1988 are not eligible for benefits under this plan which was closed to new enrollees.

Benefits are payable for the disabled participant’s lifetime or until recovery from disability. The third party administrator is Cigna. Currently, the City pays the monthly cost of the monthly disability benefits on a pay-as-you-go basis. There were a total of 160 closed groups of participants, 36 active employees and 71 disabled participants receiving benefits. The unfunded liability for SRIP I at July 1, 2008, the date of the last actuarial study, was $13,055,000. For FY2012, the City paid total SRIP 1 disability payments of $1,288,909.

With the inception of SRIP II, the City contracted with Standard Insurance Company of Oregon to provide a portion of disability benefits through a Long Term Disability plan for those active employees remaining in SRIP I on or after July 22, 1988. Subsequently, the City prospectively dropped the Long Term Disability plan provided by Standard Insurance Company of Oregon and purchased a Long Term Disability plan from Hartford Life Insurance Company. Later, the City dropped the Long Term Disability plan provided by Hartford Life and purchased a Long Term

125

(IV) Other Information (Continued)

Disability Plan from UNUM Provident. Ultimately, the City chose to delete the Long Term Disability plan and self fund the benefit. The disability benefits of all those in SRIP I disabled prior to July 22, 1988 as well as the self-insured portion of SRIP I disability benefits arising on or after July 22, 1988 applicable to SRIP I coverage, are paid from City contributions.

SRIP II

On July 22, 1988, Ordinance No. 5900-N.S., which was codified in the Berkeley Municipal Code under Chapter 4.38.101 et seq., established SRIP II, a defined contribution money purchase pension plan adopted in accordance with Sections 401(a) and 501(a) of the Internal Revenue Code. The plan is a defined contribution money purchase pension plan, whereby the City contributes 6.7% of salary up to a salary of $32,400 into a tax deferred and self directed investment account for each eligible employee. Enrollment in the plan is mandatory for all eligible persons hired on or after July 22, 1988, and elective for those eligible and hired prior to July 22, 1988.

SRIP III

Effective January 1, 1989, the City established SRIP III, which was codified in the Berkeley Municipal Code under Chapter 4.39.101 et seq., a defined contribution money purchase pension plan adopted in accordance with Sections 401(a) and 501(a) of the Internal Revenue Code. The plan is a defined contribution plan, whereby the City contributes 2% of salary up to a salary of $32,400 into a tax deferred and self directed investment account for all sworn police officers except the Police Chief.

The total assets of SRIP II and SRIP III available for benefits at June 30, 2012 were $54,088,670, and there were 1,999 participants.

The City Council is responsible for establishing or amending (through changes in the Berkeley Municipal Code) retirement provisions and contribution requirement for all SRIP plans. These investments are held by trustees for the benefit of the participants and are not included in the City's basic financial statements.

The City's contributions (required and actual) and covered payroll for the year ended June 30, 2012 were as follows:

City's City's Covered % of CoveredPlan Contributions Payroll Payroll

SRIP I 71,966$ 1,262,552$ 5.7%SRIP II 2,342,384 34,960,732 6.7%SRIP III 107,419 5,370,902 2.0%

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(IV) Other Information (Continued)

2. Public Agency Retirement System (PARS) On September 14, 1993, the City Council adopted Resolution # 57,141- N.S. authorizing a contract with the Public Agency Retirement System (PARS) to administer a 401(a) retirement plan for the City’s hourly and daily employees, effective October 1, 1993. This retirement plan is an alternative to participation in Social Security. The plan is a defined contribution plan whereby the City and employee each contribute 3.75% of salary into a tax deferred savings account. These benefits are non-forfeitable at all times, meaning that the benefit may be distributed to the employee only upon retirement or separation from service or death (with certain restrictions). All temporary and hourly employees are eligible and enrolled in the plan. There were a total of 789 active and 1223 inactive participants in this plan as of June 30, 2012.

The total asset of PARS available for benefits at June 30, 2012 was $2,769,082, which was comprised of participant accounts. The City Council is responsible for establishing or amending (through changes in the Berkeley Municipal Code) retirement provisions and contribution requirements for the PARS plan. These investments are held by trustees for the benefit of the participants and are not included in the City's basic financial statements.

The City’s contribution (required and actual) and covered payroll for the year ended June 30, 2012 were as follows:

Contributions asFiscal City's Covered a % of CoveredYear Contributions Payroll Payroll

2012 $200,099 $5,335,925 3.75%

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(IV) Other Information (Continued)

G. Related Party Transaction

In June 2010, The City recruited a new Chief of Police. Included as part of the compensation package was a $500,000, 15 year or due- on- sale, 3% interest only housing assistance loan made to the Chief of Police. The loan is secured by a note signed by the Chief of Police and his spouse, and a deed of trust on the residence that was purchased. The payments may be deferred and there is no prepayment penalty. The loan and accrued interest must be repaid in full within 12 months of the Chief of Police’s separation with the City.

H. Subsequent Events

1. FY2012 Tax and Revenue Anticipation Notes

In the past, the City issued $25,000,000 of tax revenue anticipation notes in order to alleviate the strain on working capital prior to the receipt of property tax revenues in December. In FY2011 and 2012, the issue amount was increased to $50 million. The amount of the issue was increased by $25 million because staff determined that it was economically beneficial for the City to prepay PERS costs at the beginning of the fiscal year at a discounted rate of approximately 3.7% , rather than pay them each payroll period. This discounted rate is equivalent to a rate of return of over 7%. Prepaying the FY2012 PERS costs of nearly $32 million will generate a reduction in these costs of nearly $1 million. The $32 million borrowed to prepay the PERS costs will be repaid from the collection of the PERS charges from all City departments each payroll period in FY2012.

The notes were issued with a coupon rate of 2.0% and a yield of .40%., and are recorded in the General Fund. Interest and principal on these notes are payable on July 5, 2012 by the General Fund. The City has maintained a MIG-1 rating on this short-term issue.

2. The Berkeley Redevelopment Agency (BRA) ABx1 26 (the "Dissolution Act") was enacted in late June 2011 as part of the FY 2011-12 state budget package and was held by the California Supreme Court to be largely constitutional on December 29, 2012. Under the Dissolution Act, each of California's redevelopment agencies (each a "Dissolved RDA") was dissolved as of February 1, 2012, and the cities, counties, and city and county that formed the Dissolved RDAs, together with other designated entities, have initiated the process under the Dissolution Act to unwind the affairs of the Dissolved RDAs. As part of the FY 2012-13 state budget packages, on June 27, 2012, the Legislature passed and the Governor signed AB 1484, the primary purpose of which is to make technical and substantive amendments to the Dissolution Act based on experience to-date at the state and local level in implementing that act. As a budget "trailer bill," AB 1484 took immediate effect upon signature by the Governor. Section 34179.5 provides new procedures for reviewing the available cash assets of the Dissolved RDA (the “Review”). This Review is to be conducted by each Successor Agency with the end goal of distributing what are determined to be available cash assets to the taxing entities during FY2012-13. At the conclusion of the Review, if the Successor Agency remits the cash assets to the County auditor-controller (CAC), and if the Successor Agency has also made the payments summarized in

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(IV) Other Information (Continued)

Part II.D.1, the DOF will issue a finding of completion for the Successor Agency (a “Finding of Completion”). As a result, there will be a potential that the cash assets in the Successor Agency under the current private trust funds to be fully disbursed.

3. 2012 Refunding Lease Revenue Bonds were issued by the Berkeley Joint Powers Financing Authority under a resolution adopted by the Authority Commission of the Berkeley Joint Powers Financing Authority on October 2, 2012, and an indenture of Trust dated October 1, 2012 (the “indenture”) by and between the Authority and the Bank of New York Mellon Trust Company, N.A., as trustee for the Bonds (the “Trustee). The proceeds of the Bonds will be used to (i) refinance the lease obligations of the City of Berkeley (the “City”) and related outstanding 1999 Lease Revenue Bonds of the Authority and 2003 Certificates of participation of the City and (ii) pay the costs of issuing the Bonds. This refunding will result in present value savings of $5.7 million over the life of the 2012 Refunding Lease Revenue Bonds.

129

CITY OF BERKELEY

Notes to the Private Trust Funds of the Successor Agency June 30, 2012

A. Description of the Reporting Entity.

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 California. This action impacted the reporting entity of the City of Berkeley that previously had reported Berkeley redevelopment agency (BRA) within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will 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 17, 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 number 65.574-N.S. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining 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 contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. Prior to that date, the final seven months of the activity of the redevelopment agency continued to be reported in the governmental funds of the City. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City. The transfer of the assets and liabilities of

130

the former redevelopment agency as of February 1, 2012 (effectively the same date as January 31, 2012) from governmental funds of the City to fiduciary funds was reported in the governmental funds as an extraordinary loss (or gain) in the governmental fund financial statements. The receipt of these assets and liabilities as of January 31, 2012 was reported in the private-purpose trust fund as an extraordinary gain (or loss). Because of the different measurement focus of the governmental funds (current financial resources measurement focus) and the measurement focus of the trust funds (economic resources measurement focus), the extraordinary loss (gain) recognized in the governmental funds was not the same amount as the extraordinary gain (loss) that was recognized in the fiduciary fund financial statements. The difference between the extraordinary loss recognized in the fund financial statements and the extraordinary gain recognized in the fiduciary fund financial statements is reconciled as follows: Total extraordinary loss reported in governmental funds – increase to net assets of the Successor Agency Trust Fund $4,405,488 Capital assets recorded in the government-wide financial statements – increase to net assets of the Successor Agency Trust Fund 1,108,493 Accrued bond interest reported in the government-wide financial statements – decrease to net assets of the Successor Agency Trust Fund (338,474) Long-term debt reported in the government-wide financial Statements – decrease to net assets of the Successor Agency Trust Fund (4,915,895) Net decrease to net assets of the Successor Agency Trust Fund as a result of initial transfers (equal to amount of extraordinary gain reported in the government-wide financial statements of the City) ($259,612)

B. Assets, Liabilities, and Net Assets or Equity

1. Details of Notes Receivable as of June 30, 2012 are as follows:

Successor Agency

Notes Receivables : Private Trust Fund

Delarware Historical Project Hosuing Loan 12,926$

D&E Loan 16,943

Jubilee Senior Hone LLC Loan 310,279

Beth Montano Home Loan 13,392

Gross notes receivable 353,540

Total receivables, net 353,540$

Less: allowance for uncollectibles

131

2. Capital Assets

Capital assets, which include land, buildings, machinery, construction in progress and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $1,000 for non-infrastructure assets and $100,000 for infrastructure assets, and an estimate useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

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. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, buildings, machinery and equipment, furniture and fixtures, vehicles and infrastructure of the primary government, as well as the component units, is depreciated using the straight-line method over the following estimated useful lives:

Assets YearsBuildings 30Building improvements 30Improvements other than building 15Machinery and equipment 4-5Furniture and fixtures 7Infrastructure:

Roadway/Street:Pavement 30Sidewalk, curb and gutter 15Traffic signals/devices 40Street lights 10Street trees 25Guard rails 50Retaining walls 50Paths (Residential) 60

Sanitary sewer system:Pipelines 50Structures 50

Storm drain system:Pipelines 50Structures 50

Vehicles 5-10Other 5

Capital asset activity for the year ended June 30, 2012 was as follows:

132

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133

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134

REQUIRED SUPPLEMENTARY INFORMATION

(Other than MD&A)

135

THIS PAGE LEFT INTENTIONALLY BLANK

136

(IV) Other Information (Continued)

Variance with

Final Budget

Original Final Actual Positive

Budget Budget Amount (Negative)

Revenues:

Taxes 104,641,682$ 102,721,521$ 102,784,357$ 62,836$

Licenses and permits 519,176 681,664 681,664 0

Intergovernmental 9,955,993 9,020,283 9,020,325 42

Charges for services 7,451,201 7,702,183 7,702,479 296

Fines and penalties 10,415,685 9,744,061 9,742,307 (1,754)

Rents and royalties 88,720 115,668 115,668 (0)

Franchise 1,805,297 1,765,489 1,765,488 (1)

Private contributions and donation 40,000 14,955 14,955 0

Indirect cost reimbursement 4,877,834 4,807,696 4,807,696 0

Investment income 5,550,000 4,766,026 4,761,231 (4,795)

Miscellaneous 333,306 352,493 352,144 (349)

Total revenues 145,678,894 141,692,039 141,748,315 56,276

Expenditures:

Current:

General government 32,414,326 33,145,163 31,734,697 1,410,466

Public safety 82,468,828 82,433,268 79,449,823 2,983,445

Highway and streets 1,921,852 1,961,162 1,795,974 165,188

Health and welfare 6,703,613 6,788,593 6,247,828 540,765

Culture-recreation 5,220,516 5,393,951 5,225,372 168,579

Community development/housing 6,537,104 6,682,807 6,302,146 380,661

Economic development 1,885,242 1,944,527 1,908,103 36,424

Debt service:

Principal repayment

Interest and fiscal charges 200,000 200,000 127,222 72,778

Cost of issuance 57,941 (57,941)

Total expenditures 137,351,481 138,549,471 132,849,108 5,700,363

Excess (deficiency) of revenues over

(under) expenditures 8,327,413 3,142,568 8,899,207 5,756,639

Other financing sources (uses):

Transfers in 3,509,024 4,227,085 5,568,812 1,341,727

Transfers out (12,224,828) (13,839,486) (13,516,530) (322,956)

Interfund repayments 0 0 3,960,474 3,960,474

Interfund advances (1,475,406) (1,475,406)

Sale of Capital Assets 508,114 508,114 0

Total other financing inflows (outflows) (8,715,804) (9,104,287) (4,954,536) 3,503,839

Net change in fund balance (388,391) (5,961,719) 3,944,671 9,906,390

Fund balance, beginning of year 16,914,805 16,914,805 16,914,805

Fund balance, end of year 16,526,414$ 10,953,086$ 20,859,476$ 9,906,390$

Explanation of differences between budgetary basis to modified accrual basis:

Net change in fund balances - budgetary basis 3,944,671

Receivable accrual (3,362,049)

Due to/from advances 1,475,406

Due to/from repayments (3,960,474)

Accounts Payable accruals 349,686

Other Adjustments (2,028,457)

Net change in fund balances - GAAP basis (3,581,217)$

CITY OF BERKELEY

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

General Fund - Budgetary Basis

For the Fiscal Year Ended June 30, 2012

Required Supplementary Informaiton

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(IV) Other Information (Continued)

Variance withFinal Budget

Original Final Actual PositiveBudget Budget Amount (Negative)

Revenues:Taxes -$ -$ -$ -$ Licenses and permits - - - - Intergovernmental 18,546,749 22,847,155 23,566,819 719,664Charges for services 122,000 62,000 116,574 54,574 Investment income 55,000 55,000 38,208 (16,792) Private contributions and donation - - - - Miscellaneous 115,000 115,000 67,483 (47,517)

Total revenues 18,838,749 23,079,155 23,789,084 709,929

Expenditures:Current:

General government - 9,778 23,946 14,168 Public safety 315,632 328,002 404,459 76,457 Highway and streets 641,619 6,722,247 3,063,269 (3,658,978) Health and welfare 14,053,286 14,763,561 12,083,382 (2,680,179) Culture-recreation 785,186 2,130,639 774,661 (1,355,978) Community development and housing 4,572,919 7,455,890 5,840,863 (1,615,027) Economic development 1,013,299 3,098,236 420,541 (2,677,695)

Total expenditures 21,381,941 34,508,353 22,611,121 (11,897,232)

Excess (deficiency) of revenues over (under) expenditures (2,543,192) (11,429,198) 1,177,963 12,607,161

Other financing sources (uses):

Transfers in 2,080,570 3,691,800 2,623,678 (1,068,122) Transfers out - (952,397) (952,397) - Receipt of loan repayment - - - - Sale of capital assets - - 1,522 1,522

Total other financing inflows (outflows) 2,080,570 2,739,403 1,672,803 (1,066,600)

Net change in fund balance (462,622) (8,689,795) 2,850,766 11,540,561

Fund balance, beginning of year 849,427 849,427 849,427 -

Fund balance, end of year 386,805$ (7,840,368)$ 3,700,193$ 11,540,561$

Explanation of differences between budgetary basis to modified accrual basis:Net change in fund balances - budgetary basis 2,850,766$

Receivable accrual (730,610) Notes receivable accrual (43,797) Payable accrual 631,728

Net change in fund balances - GAAP basis 2,708,088$

CITY OF BERKELEYRequired Supplementary Informaiton

Grants Fund- Budgetary BasisFor the Fiscal Year Ended June 30, 2012

Special Revenue Funds

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and actual

138

CITY OF BERKELEY

Required Supplementary Information (Unaudited) Schedules of Funding Progress

June 30, 2012

REQUIRED SUPPLEMENTARY INFORMATION

1. Defined Pension Benefit Plans – Schedules of Funding Progress

Unfunded UAAL

Acturial  Actuarial as

Actuarial Actuarial  Accrued Accrued Percentage

Valuation Asset Liability‐ Liability‐ Funded Covered of covered

Date Value Entry Age UAAL Ratio Payroll Payroll

CalPERS ‐ Miscellaneous Plan

6/30/2008 493,477,863       561,891,793        68,413,930       87.80% 86,150,561      79.4%

6/30/2009 520,135,684       627,609,326        107,473,642    82.90% 90,422,589      118.9%

6/30/2010 548,374,504       662,163,240        113,788,736    82.80% 91,164,520      124.8%

CalPERS ‐ Public Safety ‐ Fire Plan

6/30/2008 160,099,069       178,219,311        18,120,242       89.8% 13,860,072      130.7%

6/30/2009 164,903,251       189,798,794        24,895,543       86.9% 14,874,302      167.4%

6/30/2010 170,108,400       196,510,989        26,402,589       86.6% 15,397,099      171.5%

CalPERS ‐ Public Safety ‐ Police Plan

6/30/2008 190,186,515       250,205,289        60,018,774       76.0% 19,609,940      306.1%

6/30/2009 197,576,597       270,317,116        72,740,519       73.1% 20,898,773      348.1%

6/30/2010 205,865,230       286,191,617        80,326,387       71.9% 21,640,256      371.2%

Berkeley Police Retirement Income Benefit Plan

7/1/2008 4,734,673            37,241,858          32,507,185       12.7% 21,898,343      148.4%

7/1/2010 5,928,724            61,483,076          55,554,352       9.64% 19,703,000      282.0%

7/1/2012 6,246,804            58,708,200          52,461,396       10.64% 19,760,000      265.5%

Berkeley Safety members Pension Fund

7/1/2009 3,042,685            7,611,896             4,569,211         40.0% N/A N/A

7/1/2010 2,630,205            6,895,254             4,265,049         38.1% N/A N/A

7/1/2011 2,251,156            5,912,070             3,660,914         38.1% N/A N/A

139

CITY OF BERKELEY

Required Supplementary Information (Unaudited) Schedules of Funding Progress

June 30, 2012 REQUIRED SUPPLEMENTARY INFORMATION

2. Employers’ Schedule of Contribution- Berkeley Police Retirement Income Benefit Plan

Annual

Fiscal Year Required Percentage

Ended Contribution Contributed

6/30/2010 $ 2,756,206 42.8%6/30/2011 4,760,824 24.8%6/30/2012 4,176,504 28.9%

3. Defined Other-Post Employment Benefits Plans-Schedules of Funding Progress and Schedules of Employer Contributions

SCHEDULES OF FUNDING PROGRESS

Unfunded UAALActuarial Actuarial as

Actuarial Actuarial Accrued Accrued PercentageValuation Value of Liability (AAL)- Liability – Funded Covered of Covered

Date Assets Unit Credit UAAL Ratio Payroll PayrollBerkeley Fire Employees Retiree Health Plan (FRHF)

7/1/2008 3,455,055$ 9,340,812$ 5,885,757$ 37.0% 15,107,000$ 39.0%7/1/2010 5,030,505$ 11,027,941$ 5,997,436$ 45.6% 13,593,000$ 44.1%7/1/2012 6,348,008$ 12,017,316$ 5,669,308$ 52.8% 12,828,000$ 44.2%

Berkeley Miscellaneous Employees Retiree Health Plan (RHPAP)7/1/2008 5,450,647 22,133,755 16,683,108 24.6% 89,867,000 18.6%7/1/2010 9,235,065 27,081,758 17,846,693 34.1% 90,790,000 19.7%7/1/2012 12,655,994 36,543,741 23,887,747 34.6% 91,227,000 26.2%

Employers’ Schedule of Contributions- Berkeley Fire Employees Retiree Health Plan (FRHF)

Annual

Fiscal Year Required Percentage

Ended Contribution Contributed

6/30/2008 $ 488,502 121.0%6/30/2009 695,572 89.2%6/30/2010 695,572 104.0%6/30/2011 739,507 97.7%6/30/2012 758,408 96.9%

140

CITY OF BERKELEY

Required Supplementary Information (Unaudited) Schedules of Funding Progress

June 30, 2012

REQUIRED SUPPLEMENTARY INFORMATION

Employers’ Schedule of Contributions Berkeley Miscellaneous Employees Retiree Health Plan (RHPAP)

AnnualFiscal Year Required Percentage

Ended Contribution Contributed6/30/2008 1,378,827 89.5%6/30/2009 2,196,134 71.1%6/30/2010 2,196,134 93.2%6/30/2011 2,484,401 80.2%6/30/2012 2,484,401 82.0%

141

CITY OF BERKELEY

Notes to Required Supplementary Information June 30, 2012

REQUIRED SUPPLEMENTARY INFORMATION (Continued)

Budgetary Information

Prior to June 1, the City Manager submits to the City Council a proposed operating budget for the upcoming fiscal year. The proposed budget includes a summary of the proposed expenditures and forecasted revenues, and available cash balances (i.e. budget basis fund balance/net assets for the City's General Fund, Special Revenue Funds; Capital Project Funds; all Enterprise Funds, and all Internal Service Funds. The City of Berkeley adopts an annual appropriated budget for its General fund, special revenue funds (except CA Housing Finance Agency fund; Special Gas Tax fund 2107.5; Community Workforce; Inclusionary Housing Program), capital project funds (Park Acquisition Development), and debt service funds (except 2010 COP Animal Shelter fund).

The City Council adopts an annual budget by resolution prior to July 1 of each fiscal year. The annual budget indicates appropriations by fund. The Council may adopt supplemental appropriations during the year. At the fund level, expenditures may not legally exceed appropriations. The City Manager is authorized to transfer budgeted amounts between departments or programs within any fund. Any revisions or transfers that alter the total appropriations of any fund must be approved by the City Council. The City utilizes a five-year capital plan, which is updated annually. Capital Project Funds are appropriated annually as part of the regular budget process. Any unused funds are re-appropriated to the following fiscal year until the project is completed.

The City Council approved an original annual appropriation ordinance of $314,053,925 and made supplementary budget appropriations totaling $69,966,994 during the year. The supplementary budget appropriations consisted of the following: (1) FY2011 outstanding encumbrances of $23,856,019; (2) unencumbered carryovers of $16,428,047; and (3) other budget adjustments of $29,682,928. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of money are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in governmental fund types.

Encumbrances outstanding at year-end are reported in assigned fund balance unless the purchase order relates to restricted or committed resources. They do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year.

Budgetary Results Reconciled to Results in Accordance with GAAP

The adopted budget and actual results reported in the governmental funds’ budgetary schedules are on a modified cash basis, which is inconsistent with generally accepted accounting principles (GAAP). Under this budget basis, revenues are recorded when received, and interfund loans and repayments are recorded as other financing sources/uses, instead of increases and decreases in the due to/due from accounts.

142

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

143

THIS PAGE LEFT INTENTIONALLY BLANK

144

Variance withFinal Budget

Original Final Actual PositiveBudget Budget Amount (Negative)

Revenues:Charges for services -$ -$ 190,199$ 190,199$ Investment income 25,000 25,000 9,919 (15,081) Miscellaneous 5,000 5,000 272,201 267,201

Total revenues 30,000 30,000 472,319 442,319

Expenditures:Capital outlay:

General government 400,677 1,489,024 281,461 1,207,563 Highway and streets 3,917,317 5,173,569 3,299,209 1,874,360 Culture-recreation 392,499 401,002 260,966 140,036 Community development/housing 1,105,475 1,705,924 1,189,302 516,622

Total expenditures 5,815,968 8,769,519 5,030,939 3,738,580

Excess (deficiency) of revenues over (under) expenditures (5,785,968) (8,739,519) (4,558,620) 4,180,899

Other financing sources (uses):

Transfers in 5,637,000 5,637,000 5,637,000 - Transfers out (1,240,483) (1,240,483) (828,483) 412,000

Total other financing inflows (outflows) 4,396,517 4,396,517 4,808,517 412,000

Net change in fund balance (1,389,451) (4,343,002) 249,897 4,592,899

Fund balances, beginning of year 9,834,156 9,834,156 9,834,156

Fund balance, end of year 8,444,705$ 5,491,154$ 10,084,053$ 4,592,899$

Explanation of differences between budgetary basis to modified accrual basis:Net change in fund balances - budgetary basis 249,897$

Due to/from repayments ($44,235)Accounts Payable Accrual ($107,096)Loan Receivable Adjustments $32,330Note receivable reclass $277,851Receivable accrual $13,800

Net change in fund balances - GAAP basis 422,549$

For the Fiscal Year Ended June 30, 2012

CITY OF BERKELEYBudgetary Comparison Schedule

Capital Projects FundSchedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

145

Variance withFinal Budget

Original Final Actual PositiveBudget Budget Amount (Negative)

Revenues:Indirect cost reimbursement -$ -$ -$ -$ Investment income 6,000 6,000 4,508 (1,492) Miscellaneous Revenue 1,000

Total revenues 6,000 6,000 5,508 (1,492)

Expenditures:Capital outlay:

Culture-recreation 2,003,516 8,809,412 8,409,374 400,038

Debt service:Cost of Issuance - -

Total expenditures 2,003,516 8,809,412 8,409,374 400,038

Excess (deficiency) of revenues over (under) expenditures (1,997,516) (8,803,412) (8,403,867) 399,545

Fund balances, beginning of year, as restated 22,130,717 22,130,717 22,130,717

Fund balance, end of year 22,130,717$ 22,130,717$ 13,726,850$ 399,545$

Explanation of differences between budgetary basis to modified accrual basis:Net change in fund balances - budgetary basis (8,403,867)$

Accounts Payable Accrual 7,749

Net change in fund balances - GAAP basis (8,396,116)$

For the Fiscal Year Ended June 30, 2012

CITY OF BERKELEYRequired Supplementary Informaiton

Budgetary Comparison ScheduleCapital Projects Fund

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

Measure FF Branch Renovation- Budgetary Basis

146

Nonmajor Governmental Funds

SPECIAL REVENUE FUNDS

Special Revenue funds are used to account for proceeds of specific revenue sources (other than capital projects) that are legally restricted to expenditure for specific purposes. The use of special revenue funds is required if legally or otherwise mandated. ______________________________________________________________________ Asset Forfeiture

Fund established to account for monies received from the seizure and forfeiture of assets acquired by the City as a result of narcotics related law enforcement.

Special Tax for Disabled

Fund established to account for special tax, which is solely for providing emergency services and incidental case management for severely physically disabled persons.

Workforce Investment Act Fund established to account for funds provided by allocation of Workforce Investment Act grant funds

Community Workforce Fund Fund established to account for funds provided by allocation of adult employment workforce

Sec 108 HUD Loan Grant Assistant

Fund established to account for funds for Sec 108 HUD loan and its disbursement. Fund Raising Activities

Fund established to account for food and meal donations for Berkeley Senior Centers.

California Housing Finance Agency Fund established to account for funds for operating a local housing program. Gilman Sports Field Fund established to account for funds for Gilman sports field. Animal Shelter

Fund established to account for funds donated for providing animal shelter and related services.

Paramedic Assessment District Fund established to account for special tax assessed for paramedic service

Tieback Mitigation R-O-W

Fund established for the collection of mitigation fees from developers for the future potential cost associated in removing tiebacks or any other cost associated in the Public right of way.

147

Domestic Violence Prevention Vital Statistics Fund established to account for the surcharge for birth and death certificates that are issued by the Berkeley Public Health Vital Statistics unit to be used in the administration and coordination of domestic violence and family violence prevention activities.

Affordable Child Care Fund established from fees collected from developers of large scale commercial development to assist low-income families with monthly child care payments. Inclusionary Housing Program

Fund established to account for the administration of the Inclusionary Housing Program, whereby 20% of new units in apartment projects in the City of Berkeley must be offered at a rent or sale price that is affordable to low income households. The City charges fees for the administration and monitoring of this program.

Condo Conversion Program

Fund established to account for the administration of the affordable housing. Housing department can charge 10% of the revenue for program delivery costs.

Library Fund

Major source of money is the Library Tax Relief Act, but any gifts, bequests or donations received by the City for use by the Library are also deposited in to this fund. All monies in this fund shall be expended for library purpose.

Playground Camp Fund received from registration and miscellaneous fees for the purpose of operating

the City's vacation camp and day camps. Special Gas Tax Fund (30) Fund established to account for City’s gasoline tax apportionment revenues. Gas tax

funds are restricted to maintenance and construction of certain City street. This fund does not have much activity at the present.

Special Gas Tax Fund - Disc Fund established to receive monies from City’s gasoline tax apportionment revenue

for discretionary use. State - 2106 Fund established to receive monies from City’s gasoline tax apportionment revenue

per Section 2106, Streets and Highway Code. State - 2107

Fund established to receive monies from City’s gasoline tax apportionment revenue per Section 2107, Streets and Highway Code

State - 2107.5 Fund established to receive monies from City’s gasoline tax apportionment

revenue per Section 2107.5, Streets and Highway Code. State – SB300 Fund established to account for the money received under the state’s SB300

program.

148

State – Prop 111 Fund established to receive monies from State Proposition 111 for the highway traffic

congestion relief and spending. State Proposition 172 Fund established to receive monies from sales tax to be used for public safety. Traffic Congestion Relief Fund established to receive monies from State to be used for highway and street

purpose. State - 2103

Fund established to receive monies from City’s gasoline tax apportionment revenue per Section 2103, Streets and Highway Code

CDBG Fund

Established pursuant to Housing & Community Development Act of 1974 to consolidate monies for several Federal programs (Model Cities, Urban Renewal, Open Space & Water and Sewer) under a single block grant designed to allow the City to finance developmental activities (especially housing) on a minimally restricted basis.

Rental Housing Safety Program

Fund established to receive monies by charging an annual per unit fee to the rental housing property owner, imposing fines to all related violations. The purpose of this fund is to provide and streamline the Rental Housing Safety Program (RHSP) while maintaining the overall goal of having owners, tenants, and the City work together to increase the safety of all residential rental units.

CA Endowment Foundation

Fund established to receive monies from State to improve the health of Californians.

Measure B: Local Streets and Roads Fund established to account for the tax assessed for local streets and roads. Measure B: Bike and Pedestrians Fund established to receive monies used for the maintenance of bike and pedestrian

lanes. Measure B: Paratransit

Fund established to account for the revenue assessed from property tax to be used for expenses related for paratransit services.

Measure F Alameda County VRF Street and road

Fund established to account for the revenue assessed from vehicle registration fee to be used for expenses related for road and street services

One Time Funding Fund established to account for the revenue in relating to Ed Roberts Campus.

149

Park Tax Fund Fund established to account for the receipt and expenditure of the special tax approved by two thirds of the voters on May 6, 1997 and re-authorized in November 2000 and November 2008. It is used for the direct cost of acquisition and maintenance of improvements related to parks and landscape in the City

Downtown Berkeley Property and Improvement District

Fund established to account for the revenue assessed from the Downtown Berkeley’s business district to be used for expenses related for cleaning, repairing and advertising improvement for the district in order to general aggressive sales benefit as a long term goal.

Fire Assessment District Fund established to account for the $55,000,000 Fire Protection Bond Measure

(11/92) and monies collected from the fire assessment district. These funds are to be used solely to finance the acquiring, and constructing and equipping of a new fire station, the repairing and seismic retrofitting of five existing fire stations, the replacement of deteriorated four-inch water mains with eight-inch mains and the concurrent street overlay work necessitated with the issuance of the bonds.

Measure GG Fire Preparation Tax Fund established to account for fire and disaster tax passed in Bond Measure GG in

2009. The monies collected are for emergency responses. 1st Response Advanced Life Support (ALSFR) Fund established to account for fund to set up a minimum requirements, conduct and

competency in the operation of ALSFR services Street Lighting Fund established to receive special assessment district monies used for

maintenance and or servicing of existing and future public lighting facilities, and the installation or construction of public lighting for the maintenance of servicing thereof, including grading, clearing, removal of debris, the installation of curbs and gutters, walls, sidewalks or paving or water, irrigation, drainage or electrical facilities.

Solano Avenue Bid

Fund established to account for the revenue assessed from the Solano Avenue’s business district to be used for expenses related for cleaning, repairing and advertising improvement for the district in order to general aggressive sales benefit as a long term goal.

Underground District Fund established to account for Fire District Underground property assessments. Downtown Business Improvement District Fund established to be used to contract with Downtown Berkeley association for Downtown revitalization program. Telegraph Business Improvement District

Fund established to receive special real property assessments monies, which is used to improve the commercial business district of Telegraph area. The management district provides maintenance, revitalization and marketing services above and beyond those provided by the City of Berkeley.

150

North Shattuck Business Improvement District Fund established for the purpose of collecting and accounting for bid revenues. Business Economic Development Fund established to receive monies from a federal grant (Economic Development

Administration) for the purpose of providing loans to eligible South Berkeley establishments under a program approved by the City Council.

Citywide RLF (Revolving Loan Fund) Fund established to account for Citywide Commercial revolving loan fund for

revitalization of business enterprises and job stimulation. Employee Computer Loan Fund established to account for interest free loans made to employees to purchase

computers, and for the repayment of those loans. Miles Lab Fund established to provide job training for Berkeley residents. Employee Training Fund established to provide training to city employees UC Settlement

Fund established to account for agreed upon expenses to be shared between City of Berkeley and University of California, Berkeley.

Private Party Sidewalks

Fund established to account for reimbursements from private parties, which were previously passed through Landscape Assessment District Fund, now a parks tax, and all sidewalk funding is to be removed from this fund.

Public Art

Fund established to set aside funds for the development of visual art in public places, including art developed in conjunction with city construction projects.

Lillie B. Wall Memorial

Fund established to provide day nursing care to needy children in the City of Berkeley

Vital and Health Statistics Fund established to account for monies held in trust for vital and health statistic

program. East Bay Public Utilities Commission Fund initiated to oversee expenses involved in the construction of certain public

improvements in Assessment District No. 1960-1 in the City of Berkeley. Other Special Deposits Fund established to receive monies left in trust with the City of Berkeley for specific

purposes from various sources.

151

Health State Aid Realignment Fund established to receive monies (Assembly Bill 1491) from vehicle license fees and state sales tax to support public health activities within the City's health jurisdiction. This fund provides for the ongoing fiscal relief measure in response to the local funding dilemma created by Proposition 13. These funds replace the Assembly Bill 8 allocations normally received by the city for providing Public Health Services.

Tobacco Control Fund established to receive State monies from special tax on cigarettes to provide

public health education and outreach on tobacco use prevention and cessation. Mental Health State Aid Realignment Fund established to receive monies from State sales tax for the purpose of providing

mental health services to the citizens of Berkeley and Albany. City Opt. Public Safety Trust

Fund established to receive monies from State as a result of Assembly Bill 3229 for the purpose of purchasing radio equipment for the Communications Center of the new public safety building.

Fund for Impounded and Unneutered Fund established to account for monies held in trust for impounded and unneutered

animals. Alameda County Abandoned Vehicle Abatement Authority

Fund established to provide an interest bearing abandoned and inoperative vehicle fund in accordance with requirements mandated by the California Vehicle Code, section 22710.

.

152

CAPITAL PROJECT FUNDS Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). ______________________________________________________________________ Public, Education & Government Access Facilities Fund established to account for monies received from the Cable Television

Franchise. These monies are to be used for capital expenditure for PEG studios, video production equipment, mobile production van(s), internal wiring connections, and related capital items.

Measure G: Fire Seismic Projects

Fund established to account for fire seismic projects. Measure G: Public Safety Building

Fund established to account for the retrofit of public safety building. Capital Project Administration

Fund established to account for money received for the support the administration of the capital projects group

Street Improvement Fund Fund established by Resolution 26,971 to receive shared County Gas Tax revenues

from the City of Berkeley and County of Alameda for use on specific street improvement projects. Contract is for five years, fiscal year 1988-89 through fiscal year 1992-93.

97 General Obligation Bonds Measure S Fund established to account for capital improvements in Berkeley’s Main Library,

Civil Center, and downtown Berkeley area. Park Acquisition Development Monies provided by an annual tax levy of $.20 for each $100 of assessed valuation.

This levy ended after FY 1979-80. A minimum of 75% of the revenues are used for the acquisition and development of real property which are used for recreation and open space purposes determined by the Recreation and Parks Commission and Planning Commission. The balance of the Fund (up to 25%) may be used for the renovation of existing City park properties and for associated administrative expenses.

West Berkeley Improvement Fund Fund established to account for capital improvement in the west Berkeley project

area for Berkeley Redevelopment Agency. West Berkeley: Low and Moderate Housing

Fund established to account for 20% set aside from tax increment in west Berkeley project area that is for the purpose of developing low and moderate income housing.

Savo Island Project Fund established to account for capital improvement in the Savo Island project area for Berkeley redevelopment agency.

153

Savo Island Project: Low and Moderate Housing Fund established to account for 20% set aside from tax increment in Savo Island project area that is mainly for the purpose of developing low and moderate income housing.

Animal Shelter Land/Bldg Fund established to receive monies for acquisition of facilities for animal shelter. 2010 COP Animal Shelter

Fund established to account for 2010 municipal bond measure solely for the purpose of building a new animal shelter.

Income Housing Fund – West Berkeley Improvement Project

Fund established to account for non cash portion transferred from former West Berkeley Low and Moderate Housing Fund due to AB 1X 26.

Income Housing Fund – Savo Island Project

Fund established to account for non cash portion transferred from former Savo Island Low and Moderate Housing Fund due to AB 1X 26.

154

DEBT SERVICE FUNDS Funds established to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest. ______________________________________________________________________ Pension refunding bonds

Fund established to receive monies and to make interest and debt service payments for the 1996 Pension refunding Bonds.

09 Measure FF - Library

Fund established to account for a bond measure FF in 2009– the library’s retrofitting projects, part of the monies received are for furniture and fixture.

West Berkeley Improvement Fund

Fund established to account for the west Berkeley project area’s 2005 bonds and for receiving tax increment money to pay against the indebtedness. .

Savo Island Improvement Fund

Fund established to receive tax increment money and to account for payment of debt from City’s miscellaneous retiree medical trusts.

GO 2007 Refunding Bonds

Fund established to receive monies and to make interest and principal payment on the Berkeley 2007 General obligation refunding bonds replacing the old Measure S series A, B, C.

Berkeley Repertory Theatre

Fund established to receive monies and to make interest and principal payment on the Berkeley Joint Powers Financing Authority Lease Revenue Bonds, Series 1999. The proceeds of the bonds are used to acquire a new theater facility with a park to be constructed by the Berkeley Repertory Theatre or other public facilities.

GO 2002 Refunding Bonds

Fund established to receive monies and to make interest and principal payment on the Berkeley 2002 General Obligation bonds replacing the old Measure G series A and B.

GO 2007 Refunding Bonds Proceeds

Fund established to receive Proceeds from the 2007 General Obligation Refunding bonds which replaced the old Measure G series C.

GO 2008 Animal Shelter – Measure I

Fund established to receive monies and to make interest and principal payment on the Berkeley 2002 General Obligation bond for the animal shelter.

2010 COP Animal Shelter

Fund established to receive funds to finance a portion of the acquisition and construction of an animal shelter

155

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

Special Workforce Community Sec 108 Fund Ca. Housing Gilman ParamedicAsset Tax for Investment Workforce Hud Loan Raising Finance Sport Animal Assessment

Forfeiture Disabled Act Fund Grant Asst. Activities Agency Field Shelter District

AssetsCash and investments in treasury 262,631$ 456,470$ 266,694$ 65,441$ 88,218$ 357,725$ 276,382$ 91,281$ Restricted cash and investmentsReceivables (net of allowance where applicable): Accounts 1,979 3,963 Interest Taxes Special assessments 10,043 26,298 Subventions/grants Advance to other funds Notes receivable 11,296,265 582,401 Property Held for resale

Total assets 262,631$ 468,493$ -$ -$ 11,562,959$ 65,441$ 670,619$ 357,725$ 276,382$ 121,542$

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payable 3,578 3,106 12,111 17,034 1,903 Accrued salaries and wages 264 530 10,333 52,200 Other liabilities 204,197 Due to other funds 8,736 22,090 22,494 AdvanceDeposits held 95,007 Deferred revenues 1,979 3,963

Total liability 3,578 2,243 8,736 22,620 120,608 12,111 - 10,333 221,231 58,066

Fund balances (deficits)

Nonspendable - - - - - - - - - - Restricted for 259,053 466,250 - - 11,442,351 53,329 670,619 347,392 55,151 63,475

Unassigned for - - (8,736) (22,620) - - - - - -

Total fund balances (Deficits) 259,053 466,250 (8,736) (22,620) 11,442,351 53,329 670,619 347,392 55,151 63,475

Total liabilities and fund balances (deficits) $ 262,631 $ 468,493 $ 0 $ - $ 11,562,959 $ 65,441 $ 670,619 $ 357,725 $ 276,382 $ 121,541

(continued)

Special Revenue Funds

156

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

Tieback Dom Vio Affordable Inclusionary Condo Special Gas Special GasMitigation Prevention Child Housing Conversion Playground Tax Tax StateR-O-W Vi Stat Care Program Program Library Camp Fund (30) Fund (Disc) 2106

77,199$ -$ 188,579$ 479,720$ 379,989$ 3,727,721$ 1,354,682$ 463$ 54,164$ -$

50,158 38,963

- 149,021

1,943 36,789

77,199$ -$ 190,522$ 479,720$ 379,989$ 3,926,900$ 1,354,682$ 463$ 54,164$ 75,752$

129,295 83,402 2,756 582 257,072 48,093 6,605

459 22,966 193,663

1,943 30,208 55,710

- 23,548 1,943 - - 417,033 131,495 - - 258,735

- - - - - - - - - - 77,199 - 188,579 479,720 379,989 3,509,866 1,223,188 463 54,164 -

- (23,548) - - - - - - - (182,983)

77,199 (23,548) 188,579 479,720 379,989 3,509,866 1,223,188 463 54,164 (182,983)

$ 77,199 $ 0 $ 190,522 $ 479,720 $ 379,989 $ 3,926,900 $ 1,354,682 $ 463 $ 54,164 $ 75,752

(continued)

Special Revenue Funds

157

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

Traffic State Rental CAState State State State State Congestion Transport Housing Endownment2107 2107.5 SB 300 Prop 111 Prop 172 Relief & Tax CDBG Safety Program Foundation

544,872$ 111,641$ 103,831$ -$ -$ 1,912$ 1,748,744$ -$ 399,457$ 4,241$

8,153 226,308 577,008

53,787 1,335

42,347 10,000 47,618 183,265 59,794

5,486,714

595,372$ 121,641$ 103,831$ 47,618$ 53,787$ 1,912$ 1,932,009$ 5,772,816$ 977,799$ 4,241$

12,233 7,875 237 6,144 84 4,877 5,193 19,738 18,798

147,774 19,412 67,911

43,874 5,160 26,498 270,877 577,008

62,251 5,244 - 179,149 19,412 - 5,193 366,400 596,043 -

- - - - - - - - - - 533,121 116,397 103,831 - 34,374 1,912 1,926,815 5,486,714 381,756 4,241

- - - (131,532) - - - (80,297) - -

533,121 116,397 103,831 (131,532) 34,374 1,912 1,926,815 5,406,416 381,756 4,241

$ 595,373 $ 121,641 $ 103,831 $ 47,617 $ 53,787 $ 1,912 $ 1,932,009 $ 5,772,817 $ 977,799 $ 4,241

(continued)

Special Revenue Funds

158

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

DowntownMeasure B Measure B Measure F One Time Berk. Prop. Fire Measure GG 1st Response

Local St Bike & Measure B Ala Co. VRF Funding & Improvement Assessment Fire Prep. Advanced& Roads Pedestrian Paratransit ST & Road Non-Grant Park Tax District District Tax Life Support

1,683,486$ 458,469$ 57,682$ 397,476$ 111,397$ 2,011,529$ 443,450$ -$ 929,831$ 626,899$

76,858 16,453 36,221

406,805 49,034 29,929 98,580 4,563

2,090,291$ 507,502$ 87,610$ 474,334$ 111,397$ 2,126,563$ 448,012$ -$ 966,052$ 626,899$

162,807 7,111 76,711 337,177 35,916 36,873 4,213 2,245 228,348 96,633

16,766 3,985

199,680 4,213 9,356 - - 321,825 337,177 - 136,534 -

- - - - - - - - - 1,890,611 503,289 78,254 474,334 111,397 1,804,738 110,836 - 829,518 626,899 - - - - - - - (0) - -

1,890,611 503,289 78,254 474,334 111,397 1,804,738 110,836 (0) 829,518 626,899

$ 2,090,291 $ 507,502 $ 87,610 $ 474,334 $ 111,397 $ 2,126,563 $ 448,012 $ (0) $ 966,052 $ 626,899

(continued)

Special Revenue Funds

159

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

Downtown Telegraph No.ShatckUnderground Business Business Business Business Employee

Street Solano Ave. District Improvement Improvement Improvement Economic Citywide Computer MilesLighting Bid Fund District District District Development RLF Loan Lab

17,097$ 3,010$ -$ 0.31$ 69,756$ 40,988$ 528,620$ 53,641$ 31,059$ 141,668$

6,268

13,858

245,115 648,007 -

37,222$ 3,010$ -$ 0.31$ 69,756$ 40,988$ 773,735$ 701,648$ 31,059$ 141,668$

1,364 72 25,300

108,871

7,633

34,297 - 108,871 - - - 72 - - -

- - - - - - - - - - 2,926 3,010 - 1 69,756 40,987 773,662 701,648 31,059 141,668 - - (108,871) - - - - - - -

2,926 3,010 (108,871) 1 69,756 40,987 773,662 701,648 31,059 141,668

$ 37,223 $ 3,010 $ (0) $ 1 $ 69,756 $ 40,987 $ 773,735 $ 701,648 $ 31,059 $ 141,668

(continued)

Special Revenue Funds

160

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

East Bay Employee Private Public Lillie B. Public Other

Training UC Party Art Wall Vital Health Utilities Special Health TobaccoFund Settlement Sidewalks Fund Memorial Statistic Commission Deposits State Aid Control

127,082$ 671,871$ 27,834$ 89,619$ 7,494$ 205,199$ 3,564$ 77,217$ -$ -$

45,818

57,462

127,082$ 671,871$ 73,652$ 89,619$ 7,494$ 205,199$ 3,564$ 77,217$ 57,462$ -$

1,247 602 1,055 47 5,311 142 15,467 2,615

340,929 33,933

77,217 45,818

6,558 - 45,960 602 - - - 77,217 357,451 36,595

- - - - - - - - - - 120,524 671,871 27,691 89,017 7,494 205,200 3,564 - - - - - - - - - - - (299,990) (36,595)

120,524 671,871 27,691 89,017 7,494 205,200 3,564 - (299,990) (36,595)

$ 127,082 $ 671,871 $ 73,651 $ 89,619 $ 7,494 $ 205,200 $ 3,564 $ 77,217 $ 57,462 $ 0

(continued)

Special Revenue Funds

161

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

Mental Health City Opt. Fund for Ala.Cty. Total Public Measure G Measure G CapitalState Aid Public Impounded Abandoned Special Education/ Fire Seismic Public Safety Project Street

Realignment Safety & Unneutered Veh.Abate.Auth. Revenue Funds Govt Access Fac. Projects Bldg. Administration Improvement

1,206,263$ -$ 30,968$ 157,024$ 21,252,253$ 719,080$ 1,538,574$ 666,681$ 1,611$ 108,932$ - - -

1,088,148 45,153 -

539,554 303,697

96,907 73,233 55,039 664,397 -

18,258,502 -

1,303,170$ 73,233$ 30,968$ 212,063$ 42,106,551$ 764,234$ 1,538,574$ 666,681$ 1,611$ 108,932$

5,296 1,364 904,299 442 2,704 850,807 348 44

204,657 12,984 1,001,764

- 172,225 1,611

55,039 1,146,459

- 18,722 - 59,107 4,280,212 - 348 44 1,611 -

- - - - - - - - - - 1,303,170 54,511 30,968 152,957 38,721,511 764,234 1,538,226 666,638 - 108,932 - - - - (895,171) - - - (0) -

1,303,170 54,511 30,968 152,957 37,826,340 764,234 1,538,226 666,638 (0) 108,932

$ 1,303,170 $ 73,233 $ 30,968 $ 212,063 $ 42,106,551 $ 764,234 $ 1,538,574 $ 666,681 $ 1,611 $ 108,932

(continued)

Special Revenue Funds Capital Project Funds

162

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

(except non cash) (except non cash)Park West Berk.* Transfer to * West Berk.* Transfer to* Savo* Transfer to* Savo* Transfer to*

97 GO Bonds Acquisition Improvement Private Trust Low & Moderate Private Trust Island Private Trust Island Private TrustMeasure S Development Fund per AB 1X 26 Housing per AB 1X 26 Project per AB 1X 26 Low & Moderate per AB 1X 26

631,571$ 3,458$ 784,875$ (784,875)$ 119,755$ (119,755)$ -$ 20,398$ (20,398)$ 1,188,607 (1,188,607)

- 144,314 (144,314) 245,355 (245,355)

-

83,381 (83,381) 1,825,123 (1,825,123) 275,000 (275,000) 288,960 (288,960) 211,347 (211,347)

631,571$ 3,458$ 2,412,525$ (2,412,525)$ 2,190,233$ (2,190,233)$ 275,000$ (275,000)$ 309,358$ (309,358)$

52,964 (52,964) 44 -

202,147 (202,147) -

47,440 (47,440)

- 144,314 (144,314) 245,355 (245,355)

44 - 446,865 (446,865) 245,355 (245,355) - -

- - 294,728 (294,728) 1,825,123 (1,825,123) 275,000 (275,000) 288,960 (288,960) 631,528 3,458 1,670,932 (1,670,932) 119,755 (119,755) - - 20,398 (20,398) - - - - - - - - - -

631,528 3,458 1,965,660 (1,965,660) 1,944,878 (1,944,878) 275,000 (275,000) 309,358 (309,358)

$ 631,572 $ 3,458 $ 2,412,525 $ (2,412,525) $ 2,190,233 $ (2,190,233) $ 275,000 $ (275,000) $ 309,358 $ (309,358)

* BRA accounts closeout due to AB 1X 26. Please see detailed disclosure under "Notes" (continued)

Capital Project Funds

163

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

Income IncomeAnimal 2010 COP Housing Housing Total Pension 09 Measure West Berk.* Transfer to* Savo *Shelter Animal Fund Fund Capital Refunding FF Improvement Private Trust Island

Land/Bldg Shelter WBIP SAVO Project Funds Bonds Library Fund per AB 1X 26 Improvement

13,216$ -$ 3,683,125$ 23,945$ 1,493,324$ 51,404$ (51,404)$ 292,961$ 2,421,801 2,421,801 67,796 1,680,311 (1,680,311)

- -

45,153 249,789 249,789

- 23,712 - - -

1,825,123 288,960 2,114,083 - - -

-$ 2,421,801$ 2,074,912$ 288,960$ 8,513,952$ 91,741$ 1,517,036$ 1,731,714$ (1,731,714)$ 292,961$

- 545,205 545,640

- 374,678 374,678

- 1,611

249,789 249,789

- 919,883 249,789 - 1,171,719 - - - -

- - 1,825,123 288,960 2,114,083 - - - - - 13,216 1,501,918 - - 5,228,150 91,741 1,517,036 1,731,714 (1,731,714) 292,961 - - - - (0) - - - - -

13,216 1,501,918 1,825,123 288,960 7,342,232 91,741 1,517,036 1,731,714 (1,731,714) 292,961

$ 13,216 $ 2,421,801 $ 2,074,912 $ 288,960 $ 8,513,951 $ 91,741 $ 1,517,036 $ 1,731,714 $ (1,731,714) $ 292,961 * BRA accounts closeout due to AB 1X 26.

Please see detailed discloure under "Notes".

Capital Project Funds Debt Service Funds

164

CITY OF BERKELEYCombining Balance Sheet

Nonmajor Governmental FundsJune 30, 2012

AssetsCash and investments in treasuryRestricted cash and investmentsReceivables (net of allowance where applicable): Accounts Interest Taxes Special assessments Subventions/grants Advance to other funds Notes receivable Property Held for resale

Total assets

Liabilities and Fund Balances (deficits)LiabilitiesAccounts payableAccrued salaries and wagesOther liabilitiesDue to other fundsAdvanceDeposits heldDeferred revenues

Total liability

Fund balances (deficits)

NonspendableRestricted for

Unassigned for

Total fund balances (Deficits)

Total liabilities and fund balances (deficits)

TotalTransfer to* GO 2007 GO 2002 GO 2007 GO 2008 2010 COP Total NonmajorPrivate Trust Refunding Berk Repertory Refunding Refunding Bonds Animal Shelter Animal Debt Governmentalper AB 1X 26 Bonds Theatre Bonds Series A Measure I Shelter Service Funds Funds

(292,961)$ 2,434,099$ 124,115$ 1,473,912$ 1,683,714$ 954,403$ -$ 8,187,513$ 33,122,890$ 645,874 412,975 1,126,645 3,548,446

- - - -

39,520 22,485 3,203 3,952 69,160 1,202,461 - 249,789

23,712 563,266 - 303,697 - 664,397 - - - 20,372,585 - -

(292,961)$ 2,473,619$ 769,989$ 1,496,397$ 1,686,917$ 958,355$ 412,975$ 9,407,029$ 60,027,530

1,885 1,885 906,184 - 1,396,447 - 204,657

84,796 84,796 1,461,238 - - - 173,836 - 1,396,248

- - - - - 86,681 86,681 5,538,612

- - - - - - - - 2,114,083 (292,961) 2,473,619 769,989 1,496,397 1,686,917 958,355 326,294 9,320,347 53,270,008

- - - - - - - - (895,172)

(292,961) 2,473,619 769,989 1,496,397 1,686,917 958,355 326,294 9,320,348 54,488,918

$ (292,961) $ 2,473,619 $ 769,989 $ 1,496,397 $ 1,686,917 $ 958,355 $ 412,975 9,407,029$ 60,027,530$

(concluded)

Debt Service Funds

165

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Special Workforce Community SEC 108 Fund CA Housing Gilman ParamedicAsset Tax for Investment Workforce HUD Loan Raising Finance Sport Animal Assessment

Forfeiture Disabled Act Fund Grant Asst. Activities Agency Field Shelter District

Revenues: Taxes -$ 942,149$ -$ -$ -$ -$ -$ -$ 2,461,032$ License and permits Intergovernmental 75,000 26,796 Charges for service 54,725 Fines and penalties 62,394 Rents and royalties Private contributions and donations 70,509 63,045 Investment income 103,187 22,000 Miscellaneous

Total revenues 62,394 942,149 - 103,187 70,509 22,000 129,725 89,841 2,461,032

Expenditures: Current General government 130 12,655 84,424 12,653 Public safety 111,538 3,051,476 Highway and streets Health and welfare Culture-recreation 10,333 Community development and housing 915,255 40,873 17,668 40 17,179 Economic development 5,184 Debt service: Principal repayment 187,000 Interest and fiscal charges 102,601 Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures 111,669 927,910 40,873 17,668 294,825 17,179 - 10,333 84,424 3,064,128

Excess(deficiency) of revenues over (under) expenditures (49,275) 14,239 (40,873) (17,668) (191,638) 53,329 22,000 119,392 5,417 (603,096)

Other financing sources (uses): Transfers in 40,581 464,697 Transfers out (10,712) Issuance of bonds 140 p p Premium on bonds

Total other financing sources (uses) - - 40,581 - 140 - - - - 453,985

Extraordinary Gain/(Loss)

Net change in fund balances (49,275) 14,239 (292) (17,668) (191,498) 53,329 22,000 119,392 5,417 (149,111)

Fund balances (deficits), June 30, 2011 308,328 452,011 (8,444) (4,951) 11,633,849 - 648,619 228,000 49,734 212,586

Fund balances (deficits), June 30, 2012 259,053$ 466,250$ (8,736)$ (22,620)$ 11,442,351$ 53,329$ 670,619$ 347,392$ 55,151$ 63,475$

(continued)

Special Revenue Funds

166

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

Tieback Dom Vio Affordable Inclusionary Condo Special SpecialMitigation Prevention Child Housing Connversation Playground Gas Tax Gas Tax State

R-O-W Vi Stat Care Program Program Library Camp Fund (30) Fund (DISC) 2106

-$ -$ -$ -$ -$ 14,599,308$ -$ -$ -$ -$

64,427 402,71733,468 21,318 6,000 212,700 1,783,031 34,544

254,8800 230,045

887,310140 3 15

76,911 16,822 100

- 33,468 21,318 6,000 212,700 15,882,976 2,029,898 3 15 437,361

21,161 84,972

21,776 13,300 10,771 319,066 30,412

15,076,651 2,033,852

21,776 30,412 - - - 15,097,812 2,033,852 13,300 10,771 404,038

(21,776) 3,057 21,318 6,000 212,700 785,164 (3,955) (13,297) (10,756) 33,323

88,000 (4,600)

-

- - - - - - (4,600) - - 88,000

(21,776) 3,057 21,318 6,000 212,700 785,164 (8,555) (13,297) (10,756) 121,323

98,975 (26,605) 167,261 473,720 167,289 2,724,702 1,231,743 13,760 64,920 (304,306)

77,199$ (23,548)$ 188,579$ 479,720$ 379,989$ 3,509,866$ 1,223,188$ 463$ 54,164$ (182,983)$

(continued)

Special Revenue Funds

167

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

Traffic State Rental CAState State State State State Prop Congestion Transport Housing Endownment2107 2107.5 SB 300 Prop 111 172 Relief & Tax CDBG Safety Program Foundation

-$ -$ -$ -$ 673,793$ -$ -$ -$ -$

791,838 10,000 556,444 1,418,694 3,029,546 979 889,969

35,485

31 6 2 38,646200 101

793,017 10,031 - 556,450 673,793 2 1,418,694 3,068,294 925,454 -

209,123 48,570 8,100 568 72,502 . 718,375

494,389 47,926 30,471 766,765 24,442 499,954

116,967 2,917,309 858,937

703,513 47,926 30,471 815,335 726,475 24,442 500,522 3,034,277 931,439 -

89,504 (37,895) (30,471) (258,885) (52,682) (24,440) 918,172 34,017 (5,985) -

- - - - - - - - - -

89,504 (37,895) (30,471) (258,885) (52,682) (24,440) 918,172 34,017 (5,985) -

443,617 154,292 134,302 127,353 87,057 26,351 1,008,644 5,372,399 387,742 4,241

533,121$ 116,397$ 103,831$ (131,532)$ 34,374$ 1,912$ 1,926,815$ 5,406,416$ 381,756$ 4,241$

(continued)

Special Revenue Funds

168

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

DowntownMeasure B Measure B Measure F One Time Berk. Prop. Fire Measure GG 1st ResponseLocal St. Bike & Measure B Ala Co. VRF Funding & Improvement Assessment Fire Prep. Advanced& Roads Pedestrian Paratransit ST & Road Non-Grant Park Tax District District Tax Life Support

-$ -$ -$ -$ 9,187,398$ 912,681$ -$ 3,741,157$ -$ -

2,493,157 376,008 202,738 474,33416,948 31,469 31,916

10,758

477 117 3 24,828626,899

2,493,634 376,125 202,741 474,334 16,948 9,254,454 912,681 - 3,773,073 626,899

88,496 85,715 2,656,689 25,214 2,961,996

2,870,480 408,289

9,006,691 151,209 769,206

1,167 842,583

2,958,976 408,289 151,209 - 1,167 9,886,826 842,583 - 5,618,685 -

(465,343) (32,163) 51,532 474,334 15,781 (632,373) 70,098 - (1,845,612) 626,899

40,738 (46,243) (179,003)

- - - - - (46,243) 40,738 (179,003) - -

(465,343) (32,163) 51,532 474,334 15,781 (678,616) 110,836 (179,003) (1,845,612) 626,899

2,355,954 535,453 26,722 - 95,616 2,483,354 - 179,002 2,675,130 -

1,890,611$ 503,289$ 78,254$ 474,334$ 111,397$ 1,804,738$ 110,836$ (0)$ 829,518$ 626,899$

(continued)

Special Revenue Funds

169

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

Downtown Telegraph No. Shatck Underground Business Business Business Business Employee

Street Solano Ave. District Improvement Improvement Improvement Economic Citywide Computer MilesLighting Bid Fund District District District Development RLF Loan Fund Lab

1,382,779$ -$ -$ -$ 212,761$ 163,389$ -$ -$ -$ -$ - 17,106 -

6122,603

2 5,763 15,0262,624

1,386,017 - - 17,106 212,761 163,389 5,763 17,630 - -

82,589

1,944,222 19,697

16,051 12,872

128 223,907 199,751 5,830

2,026,811 128 - - 223,907 199,751 18,702 - - 35,748

(640,794) (128) 17,106 (11,146) (36,361) (12,939) 17,630 (35,748)

528,469 (12,120) (40,738) (147,694)

-

516,349 - - (40,738) - - - (147,694) - -

(124,445) (128) (23,632) (11,146) (36,361) (12,939) (130,064) (35,748)

127,371 3,138 (108,871) 23,633 80,902 77,348 786,602 831,712 31,059 177,416

2,926$ 3,010$ (108,871)$ 1$ 69,756$ 40,987$ 773,662$ 701,648$ 31,059$ 141,668$

(continued)

Special Revenue Funds

170

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

Private Lillie B. East Bay Mental HealthEmployee UC Party Public Wall Vital Health Public Health Tobacco State AidTraining Settlement Sidewalks Art Memorial Statistic Utility State Aid Control Realignment

-$ 949,916$ -$ -$ -$ -$ -$ -$ 112,500$ -$

1,659,319 2,174,274500,000 127,977 27,566

7161

500,000 949,916 127,977 - 716 27,566 1 1,659,319 112,500 2,174,274

388,025

74,547 17,098 1,146,230 124,047

30,000 69,338

388,025 30,000 74,547 69,338 - 17,098 - 1,146,230 124,047 -

111,975 919,916 53,431 (69,338) 716 10,468 1 513,090 (11,547) 2,174,274

60,872 1,953,018 (1,175,018) (2,604,024) (1,012,449)

- (1,175,018) - 60,872 - - - (651,006) - (1,012,449)

111,975 (255,102) 53,431 (8,466) 716 10,468 1 (137,916) (11,547) 1,161,825

8,548 926,973 (25,739) 97,483 6,778 194,732 3,563 (162,073) (25,048) 141,345

120,524$ 671,871$ 27,691$ 89,017$ 7,494$ 205,200$ 3,564$ (299,990)$ (36,595)$ 1,303,170$

(continued)

Special Revenue Funds

171

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

City Opt. Fund for Ala. Cty. Total Public Measure G Measure G Capital 97 GOPublic Impounded Abandoned Special M Education/ Fire Seismic Public Safety Improvement Street BondsSafety & Unneutered Veh.Abate.Auth. Revenue Funds BGovt Access Fac. Project Bldg. Administration Improvement Measure S

-$ -$ -$ 35,338,864$ -$ -$ -$ -$ -$ -$ 17,106 182,337

184,193 13,939,485 680 113,492 3,887,395

355,363 240,804

1,021,580 3 210,251 32,213 12,883 25 11,588

723,656

184,196 680 113,492 55,734,503 182,337 32,213 12,883 - 25 11,588

5,911 3,862,284 166,204 7,034,804

7,546,094 119,954 1,437,741

26,260,545 5,730,549 137,743 1,909 1,347,887

187,000 102,601

- - - - 109,401

166,204 - 125,865 53,509,505 - 137,743 1,909 - - 109,401

17,992 680 (12,373) 2,224,998 182,337 (105,530) 10,974 - 25 (97,813)

3,176,375 1,611 6,297 (5,232,601) (6,297)

140

- - - (2,056,086) - - - 1,611 - -

17,992 680 (12,373) 168,912 182,337 (105,530) 10,974 1,611 25 (97,813)

36,519 30,288 165,329 37,657,428 581,897 1,643,756 655,663 (1,611) 108,907 729,341

54,511$ 30,968$ 152,957$ 37,826,340$ 764,234$ 1,538,226$ 666,638$ (0)$ 108,932$ 631,528$

(continued)

Sepcial Revenue Funds Capital Project Funds

172

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

(except cash) (except cash)Park West Berk.* Transfer to * West Berk. Transfer to* Save Transfer to * Savo Transfer to* Animal

Acquisition Improvement Private Trust Low & Moderate Private Trust Island Private Trust Island Private Trust ShelterDevelopment Fund per AB 1X 26 Housing per AB 1X 26 Project per AB 1X 26 Low/Mod. per AB 1X 26 Land/Bldg

-$ -$ -$ -$ -$ -$ -$ -$ -$

1,962

1,146 23 22 148

1,962 1,146 - 23 - - - 22 - 148

146 -

-

2,491

336,278 0 1,351,137

146 338,769 - - - - - - 1,351,137

1,816 (337,623) - 23 - - - 22 - (1,350,989)

1,817 672,902 -

1,817 672,902 - - - - - - - -

(1,965,660) (1,944,878) (275,000) (309,358)

3,633 335,279 (1,965,660) 23 (1,944,878) - (275,000) 22 (309,358) (1,350,989)

(175) 1,630,381 - 1,944,855 - 275,000 - 309,336 - 1,364,205

3,458$ 1,965,660$ (1,965,660)$ 1,944,878$ (1,944,878)$ 275,000$ (275,000)$ 309,358$ (309,358)$ 13,216$ * BRA closeout due to AB 1X 26

Please details of disclosure under "Notes". (continued)

Capital Project Funds

173

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

Income Income2010 COP Housing Housing Total Pension 09 West * Transfer to * Savo* Transfer to *

Animal Fund Fund Capital Refunding Measure FF Berkeley Private Trust Island Private TrustShelter WBIP SAVO Project Funds Bonds Library Impr.Fund per AB 1X 26 Improvement per AB 1X 26

-$ -$ -$ 1,588,530$ 823,410$ 71,324$ 182,337

- - -

1,962 -

58,048 24 10 30-

- - - 242,347 24 1,588,530 823,420 - 71,354 -

146 - - - -

139,652 - - - 420,000 405,000 18,000

2,491 116,066 1,151,359 2,013 20,000 - - -

3,147,561 4,944,377

3,147,561 - - 5,086,665 536,066 1,556,359 2,013 - 38,000 -

(3,147,561) - - (4,844,318) (536,042) 32,172 821,407 - 33,354 -

682,627 533,410 - (6,297) (672,902)

- -

- - - 676,330 533,410 - (672,902) - - -

1,825,123 288,960 (2,380,813) (1,731,714) (292,961)

(3,147,561) 1,825,123 288,960 (6,548,801) (2,632) 32,172 148,505 (1,731,714) 33,354 (292,961)

4,649,479 - - 13,891,033 94,373 1,484,864 1,583,209 - 259,607 -

1,501,918$ 1,825,123$ 288,960$ 7,342,232$ 91,741$ 1,517,036$ 1,731,714$ (1,731,714) 292,961$ (292,961)$ * BRA closeout due to AB 1X 26

Please details of disclosure under "Notes". (continued)

Capital Project Funds Debt Service Fund

174

CITY OF BERKELEYCombining Statement of Revenues,Expenditures, and Changes in Fund Balances (Deficits)NonMajor Governmental FundsFor the year ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Rents and royalties Private contributions and donations Investment income Miscellaneous

Total revenues

Expenditures: Current General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges Cost of Issuance Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess(deficiency) of revenues over (under) expenditures

Other financing sources (uses): Transfers in Transfers out Issuance of bonds p p Premium on bonds

Total other financing sources (uses)

Extraordinary Gain/(Loss)

Net change in fund balances

Fund balances (deficits), June 30, 2011

Fund balances (deficits), June 30, 2012

TotalGO 2007 Berk. GO 2002 GO 2007 GO 2008 2010 COP Total NonmajorRefunding Repertory Refunding Refunding Bonds Animal Shelter Animal Debt Governmental

Bonds Theatre Bonds Series A Measure I Shelter Service Funds Funds

2,647,688$ -$ 1,506,256$ 213,675$ 264,769$ -$ 7,115,652$ 42,454,516$ 199,444

13,939,485 3,887,395

355,363 242,766

1,021,580 40,952 41,016 309,315

723,656

2,647,688 40,952 1,506,256 213,675 264,769 - 7,156,668 63,133,518

3,862,430 7,034,804 7,546,094 1,437,741

26,260,545 - 5,870,201

1,347,887

1,335,000 225,000 1,005,000 45,000 140,000 3,593,000 3,780,000 1,406,367 398,326 457,466 164,042 296,345 316,360 4,328,342 4,433,434

-

- 4,944,377

2,741,367 623,326 1,462,466 209,042 436,345 316,360 7,921,342 66,517,513

(93,679) (582,374) 43,790 4,633 (171,576) (316,360) (764,674) (3,383,994)

650,000 1,183,410 5,042,412 (672,902) (5,911,800)

140 -

- 650,000 - - - - 510,508 (869,248)

(2,024,675) (4,405,488)

(93,679) 67,626 43,790 4,633 (171,576) (316,360) (2,278,841) (8,658,731)

2,567,298 702,363 1,452,607 1,682,284 1,129,931 642,654 11,599,189 63,147,649

2,473,619$ 769,989$ 1,496,397$ 1,686,917$ 958,355$ 326,294$ 9,320,348$ 54,488,918$

(concluded)

Debt Service Fund

175

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Asset Forfeiture Special Disabled Tax Workforce Investment Act Community Workforce Fund Sec 108 HUD Loan GTY Asst.------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ---------------------

Final Variance Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ---------------------Revenues: Taxes -$ -$ -$ 928,104$ 942,177$ 14,073$ -$ -$ -$ -$ -$ -$ -$ -$ -$ License and permits Intergovernmental Charges for service Fines and penalties 200,000 62,394 (137,606) Interest 51,312 103,187 51,875 Rents and royalties Franchise Private contributions and donations Miscellaneous -

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- --------------------- Total revenues 200,000 62,394 (137,606) 928,104 942,177 14,073 - - - - - - 51,312 103,187 51,875

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------Expenditures: Current: General government 130 (130) 12,849 12,655 194 Public safety 200,000 111,537 88,463 Highway and streets Health and welfare

Culture-recreation Community development and housing 923,131 915,255 7,876 52,109 40,873 11,236 17,668 (17,668) 40 (40) Economic development - 8,003 11,187 (3,184) Debt service: Principal repayment 187,000 187,000 - Interest and Fiscal Charges 27,548 102,601 (75,053)

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- --------------------- Total expenditures 200,000 111,668 88,332 935,980 927,910 8,070 52,109 40,873 11,236 - 17,668 (17,668) 222,551 300,828 (78,277)

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------Excess (deficiency) of revenues over(under) expenditures (49,274) (49,274) (7,876) 14,267 22,143 (52,109) (40,873) 11,236 - (17,668) (17,668) (171,239) (197,641) (26,402)

Other financing sources (uses): Transfers in 40,581 40,581 -

Transfers out Repayment of loan 187,000 190,963 3,963 Issuance of loan

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- --------------------- Total other financing inflows (outflows) - - - - - - 40,581 40,581 - - - - 187,000 190,963 3,963

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------

Net Change in fund balances - (49,274) (49,274) (7,876) 14,267 22,143 (11,528) (292) 11,236 - (17,668) (17,668) 15,761 (6,678) (22,439)

Fund balances (deficits) as of June 30, 2011 308,328 308,328 441,939 441,939 (8,443) (8,443) (4,951) (4,951) 152,764 152,764 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------

Fund balances (deficits) as of June 30, 2012 308,328$ 259,054$ (49,274)$ 434,063$ 456,206$ 22,143$ (19,971)$ (8,735)$ 11,236$ (4,951)$ (22,619)$ (17,668)$ 168,525$ 146,086$ (22,439)$ =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =============

(continued)

Special Revenue Funds

176

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare

Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess (deficiency) of revenues over(under) expenditures

Other financing sources (uses): Transfers in

Transfers out Repayment of loan Issuance of loan

Total other financing inflows (outflows)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Fund Rasing Activities CA Housing Agency Sport Field (Vendor Oper) Animal Shelter Fund Paramedic Assessment District------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ---------------------

Final Variance Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ---------------------

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 2,419,952$ 2,461,088$ 41,136$

75,000 75,000 17,000 17,000 - 54,725 54,725

- 22,000 22,000 -

42,001 70,509 28,508 45,000 63,045 18,045 - - -

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------42,001 70,509 28,508 - 22,000 22,000 - 129,725 129,725 62,000 80,045 18,045 2,419,952 2,461,088 41,136

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------

100,255 84,423 15,832 12,849 12,653 196 3,051,005 3,051,476 (471)

124,000 124,000 - 23,753 17,179 6,574 - - 1,947 1,947

- - -

- - - - -

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------23,753 17,179 6,574 - - - 124,000 - 124,000 102,202 84,423 17,779 3,063,854 3,064,128 (274)

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------18,248 53,329 35,081 - 22,000 22,000 (124,000) 129,725 253,725 (40,202) (4,378) 35,824 (643,902) (603,041) 40,861

464,697 464,697 -

(10,712) (10,712) - - - -

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------- - - - - - - - - - - - 453,985 453,985 -

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------

18,248 53,329 35,081 - 22,000 22,000 (124,000) 129,725 253,725 (40,202) (4,378) 35,824 (189,917) (149,056) 40,861

- 66,218 66,218 228,000 228,000 263,726 263,726 186,235 186,235 ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------

18,248$ 53,329$ 35,081$ 66,218$ 88,218$ 22,000$ 104,000$ 357,725$ 253,725$ 223,524$ 259,348$ 35,824$ (3,682)$ 37,179$ 40,861$ =========== =========== ============= =========== =========== ============= =========== =========== ============= =========== =========== =========== =========== =========== =============

(continued)

Special Revenue Funds

177

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare

Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess (deficiency) of revenues over(under) expenditures

Other financing sources (uses): Transfers in

Transfers out Repayment of loan Issuance of loan

Total other financing inflows (outflows)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

TieBack Mititgation R-O-W Dom Vio Prev-Vi Stat Affordable Child Care Inclusionary Housing Program Condo Conversion Program------------------- - ------------------- - --------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ---------------------

Final Variance Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

------------------- - ------------------- - --------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ---------------------

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- 32,500 33,468 968 11,851 21,318 9,467 3,000 6,000 3,000 80,000 212,700 132,700

------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------- - - 32,500 33,468 968 11,851 21,318 9,467 3,000 6,000 3,000 80,000 212,700 132,700

------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------

26,131 21,776 4,355 41,512 30,412 11,101

- 17,471 17,471 -

------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------26,131 21,776 4,355 41,512 30,412 11,101 - - - - - - 17,471 - 17,471

------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------(26,131) (21,776) 4,355 (9,012) 3,057 12,069 11,851 21,318 9,467 3,000 6,000 3,000 62,529 212,700 150,171

------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------- - - - - - - - - - - - - - -

------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------

(26,131) (21,776) 4,355 (9,012) 3,057 12,069 11,851 21,318 9,467 3,000 6,000 3,000 62,529 212,700 150,171

98,976 98,976 (26,604) (26,604) 167,261 167,261 473,722 473,722 167,289 167,289 ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ---------------------

72,845$ 77,200$ 4,355$ (35,616)$ (23,548)$ 12,069$ 179,112$ 188,579$ 9,467$ 476,722$ 479,722$ 3,000$ 229,818$ 379,989$ 150,171$ =========== =========== ============= =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =============

(continued)

Special Revenue Funds

178

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare

Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess (deficiency) of revenues over(under) expenditures

Other financing sources (uses): Transfers in

Transfers out Repayment of loan Issuance of loan

Total other financing inflows (outflows)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Library Playground Camp Special Gas Tax Fund Special Gas Tax Fund-Disc State 2106------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- ------------------- - -------------------

Final Variance Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - --------------------- ------------------- ------------------- - -------------------

14,425,555$ 14,606,137$ 180,582$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ - -

92,374 51,205 (41,169) 342,590 367,710 25,120 - 1,795,000 1,783,031 (11,969) - - 34,544 34,544

273,000 254,880 (18,120) - 140 140 - 3 3 16 16 -

2,000 (2,000) 240,000 230,045 (9,955) - - - - -

1,088,554 894,191 (194,363) - - - - 28,500 35,644 7,144 129,519 129,519 - - 100 100

- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ----------------------------------------- ------------------- -------------------

15,909,983 15,842,197 (67,786) 2,035,000 2,142,596 107,596 - 3 3 - 16 16 342,590 402,354 59,764 ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ----------------------------------------- ------------------- -------------------

24,997 21,161 3,836 83,350 84,972 (1,622)

13,300 13,300 - 10,771 10,771 - 400,802 319,066 81,736

17,125,322 15,161,473 1,963,849 2,677,318 2,044,676 632,642 - - - - -

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ----------------------------------------- ------------------- -------------------17,150,319 15,182,634 1,967,685 2,677,318 2,044,676 632,642 13,300 13,300 - 10,771 10,771 - 484,152 404,038 80,114

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ----------------------------------------- ------------------- -------------------(1,240,336) 659,563 1,899,899 (642,318) 97,919 740,237 (13,300) (13,297) 3 (10,771) (10,755) 16 (141,562) (1,685) 139,877

477,185 88,000 (389,185)

(4,600) (4,600) - - 2,000 34,386 32,386 90,000 (112,698) (202,698) - - - -

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ----------------------------------------- ------------------- -------------------2,000 34,386 32,386 90,000 (117,298) (207,298) - - - - - - 477,185 88,000 (389,185)

------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ----------------------------------------- ------------------- -------------------

(1,238,336) 693,949 1,932,285 (552,318) (19,379) 532,939 (13,300) (13,297) 3 (10,771) (10,755) 16 335,623 86,315 (249,308)

2,667,136 2,667,136 1,242,566 1,242,566 - 13,760 13,760 - 64,920 64,920 - (289,341) (289,341) ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ----------------------------------------- ------------------- -------------------

1,428,800$ 3,361,085$ 1,932,285$ 690,248$ 1,223,187$ 532,939$ 460$ 463$ 3$ 54,149$ 54,165$ 16$ 46,282$ (203,026)$ (249,308)$ =========== =========== ============= =========== =========== ============= =========== =========== ============= =========== =========== ========================= =========== ===========

(continued)

Special Revenue Funds

179

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare

Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess (deficiency) of revenues over(under) expenditures

Other financing sources (uses): Transfers in

Transfers out Repayment of loan Issuance of loan

Total other financing inflows (outflows)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

State 2107 State 2107.5 State SB 300 State Prop 111 State-Prop 172 Public Safety------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - --------------------- --------------------- --------------------- ------------------- ----------------------------------------- - ----------------------

Final Variance Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - --------------------- --------------------- --------------------- ------------------- ----------------------------------------- - ----------------------

749,930$ 774,250$ 24,319.99 -$ -$ -$ -$ -$ -$ -$ -$ -$ 931,227$ 670,352$ (260,875)$

- 10,000 10,000 - 528,221 524,315 (3,906) 979 979

31 31 6 6

200 200

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ----------------------------------------- ----------------------749,930 775,429 25,499 10,000 10,031 31 - - - 528,221 524,321 (3,900) 931,227 670,352 (260,875)

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ----------------------------------------- ----------------------

206,991 209,123 (2,132) 48,570 48,570 - 16,200 8,100 8,100 1,117,523 718,375 399,148

582,670 494,389 88,281 39,707 47,926 (8,219) 131,367 30,471 100,896 628,018 766,765 (138,747)

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ----------------------------------------- ----------------------789,661 703,513 86,148 39,707 47,926 (8,219) 131,367 30,471 100,896 676,588 815,335 (138,747) 1,133,723 726,475 407,248

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ----------------------------------------- ----------------------(39,731) 71,917 111,648 (29,707) (37,895) (8,188) (131,367) (30,471) 100,896 (148,367) (291,014) (142,647) (202,496) (56,123) 146,373

509,623 (509,623) 94,256 (94,256)

-

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ----------------------------------------- ----------------------509,623 - (509,623) 94,256 - (94,256) - - - - - - - - -

------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ----------------------------------------- ----------------------

469,892 71,917 (397,975) 64,549 (37,895) (102,444) (131,367) (30,471) 100,896 (148,367) (291,014) (142,647) (202,496) (56,123) 146,373

454,575 454,575 149,452 149,452 134,302 134,302 138,360 138,360 36,713 36,713 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ----------------------------------------- ----------------------

924,467$ 526,492$ (397,975)$ 214,001$ 111,557$ (102,444)$ 2,935$ 103,831$ 100,896$ (10,007)$ (152,654) (142,647)$ (165,783)$ (19,410)$ 146,373$ =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== ========================= =============

(continued)

Special Revenue Funds

180

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare

Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess (deficiency) of revenues over(under) expenditures

Other financing sources (uses): Transfers in

Transfers out Repayment of loan Issuance of loan

Total other financing inflows (outflows)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Traffic Congestion Relief State Transport & Tax Fund CDBG Rental Housing Safety CA Endownment Foundation---------------------------------------------------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - -------------------

Final Variance Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

---------------------------------------------------------------- ------------------- - ------------------- - --------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - ------------------- ------------------- - ------------------- - -------------------

-$ -$ -$ -$ -$ -$

1,285,299 1,519,417 234,118 3,233,470 3,079,534 (153,937) 2,500 2,500 982,500 897,575 (84,925)

35,485 35,485 2 2 - 25,000 38,646 13,646

- 101 101

---------------------------------------------------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------- 2 2 1,285,299 1,519,417 234,118 3,258,470 3,118,281 (140,189) 982,500 933,060 (49,440) - 2,500 2,500

---------------------------------------------------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------

568 (568) 45,755 72,502 (26,747)

26,165 24,443 1,722 530,440 534,155 (3,715) - - -

117,000 116,967 33 3,494,440 2,988,729 505,711 906,651 858,937 47,714

346,175 55,890 290,285 -

---------------------------------------------------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------26,165 24,443 1,722 530,440 534,723 (4,283) 3,957,615 3,161,587 796,028 952,406 931,439 20,967 - - -

---------------------------------------------------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------(26,165) (24,441) 1,724 754,859 984,694 229,835 (699,145) (43,305) 655,840 30,094 1,621 (28,473) - 2,500 2,500

75,157 - (75,157)

65,000 89,704 24,704

4,841 4,841

---------------------------------------------------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------- - - - - - 65,000 94,545 29,545 75,157 - (75,157) - - -

---------------------------------------------------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------

(26,165) (24,441) 1,724 754,859 984,694 229,835 (634,145) 51,239 685,384 105,251 1,621 (103,630) - 2,500 2,500

26,353 26,353 758,857 758,857 (73,897) (73,897) 378,802 378,802 1,741 1,741 ---------------------------------------------------------------- ------------------- ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------

188$ 1,912$ 1,724$ 1,513,716$ 1,743,551$ 229,835$ (708,042)$ (22,658)$ 685,384$ 484,053$ 380,423$ (103,630)$ 1,741$ 4,241$ 2,500$ ======================================= =========== =========== ============= =========== =========== =========== =========== =========== =========== =========== =========== ===========

(continued)

Special Revenue Funds

181

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare

Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess (deficiency) of revenues over(under) expenditures

Other financing sources (uses): Transfers in

Transfers out Repayment of loan Issuance of loan

Total other financing inflows (outflows)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Measure B Measure B Measure BLocal St. & Roads Bike & Pedestrian Paratransit

------------------- - ------------------- - ------------------- ------------------- - ------------------- - --------------------------------------------------------------------------------------Final Variance Final Variance Final Variance

Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)------------------- - ------------------- - ------------------- ------------------- - ------------------- - --------------------------------------------------------------------------------------

-$ -$ -$ -$ -$ -$ -$ -$

2,197,298 2,457,065 259,767 256,437 370,239 113,802 166,220 201,400 35,180 -

477 477 117 117 3 3

------------------- ------------------- ------------------- ------------------- ------------------- --------------------------------------------------------------------------------------2,197,298 2,457,542 260,244 256,437 370,356 113,919 166,220 201,403 35,183

------------------- ------------------- ------------------- ------------------- ------------------- --------------------------------------------------------------------------------------

92,900 88,497 4,403 -

3,173,828 2,870,480 303,348 555,058 408,289 146,769

- - 185,662 151,209 34,453

------------------- ------------------- ------------------- ------------------- ------------------- --------------------------------------------------------------------------------------3,266,728 2,958,977 307,751 555,058 408,289 146,769 185,662 151,209 34,453

------------------- ------------------- ------------------- ------------------- ------------------- --------------------------------------------------------------------------------------(1,069,430) (501,435) 567,995 (298,621) (37,933) 260,688 (19,442) 50,194 69,636

------------------- ------------------- ------------------- ------------------- ------------------- --------------------------------------------------------------------------------------- - - - - - - - -

------------------- ------------------- ------------------- ------------------- ------------------- --------------------------------------------------------------------------------------

(1,069,430) (501,435) 567,995 (298,621) (37,933) 260,688 (19,442) 50,194 69,636

1,985,240 1,985,240 492,187 492,187 (1,868) (1,868) ------------------- ------------------- ------------------- ------------------- ------------------- --------------------------------------------------------------------------------------

915,810$ 1,483,805$ 567,995$ 193,566$ 454,254$ 260,688$ (21,310)$ 48,326$ 69,636$ =========== =========== =========== =========== =========== ====================================================

(continued)

Special Revenue Funds

182

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Measure F Ala Co. VRF 1 Time Funding: Non Grant Parks Tax Dwtn Berk Prop&Improv Dis--------------------- - --------------------- - --------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - ----------------------- --------------------- - --------------------- - -----------------------

Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

--------------------- - --------------------- - --------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - ----------------------- --------------------- - --------------------- - -----------------------Revenues: Taxes -$ -$ -$ -$ -$ -$ 9,602,856$ 9,187,722$ (415,134)$ -$ -$ -$ License and permits 1,192,884 908,118 (284,766) Intergovernmental 397,476 397,476 Charges for service - 16,948 16,947.95 35,000 31,469 (3,531) - Fines and penalties Interest - - 48,454 24,828 (23,626) - Rents and royalties - 10,000 10,758 758 - Franchise Private contributions and donations 10,178 - (10,178) Miscellaneous - -

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- Total revenues - 397,476 397,476 10,178 16,948 6,770 9,696,310 9,254,777 (441,533) 1,192,884 908,118 (284,766)

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- -----------------------Expenditures: Current: General government 86,436 85,715 721 - Public safety 27,767 25,214 2,553 - Highway and streets - - Health and welfare - - Culture-recreation 9,782,598 9,018,233 764,365 - Community development and housing - 26,750 - 26,750 698,743 695,900 2,843 - Economic development 59,052 1,167 57,885 842,583 842,583 - Debt service: Principal repayment Interest and Fiscal Charges

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- Total expenditures - - - 85,802 1,167 84,635 10,595,544 9,825,063 770,481 842,583 842,583 -

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- -----------------------Excess over(under) expenditures 397,476 397,476 15,781 91,405 (899,234) (570,286) 328,948 350,301 65,535 (284,766)

Other financing sources (uses): Transfers in 50,000 40,738 9,262 Transfers out (46,243) (46,243) Repayment of loan Issuance of loan - -

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- Total other financing sources (uses) - - - - - - (46,243) (46,243) - 50,000 40,738 9,262

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- -----------------------

Net Change in fund balances 397,476 397,476 - 15,781 15,781 (945,477) (616,529) 328,948 400,301 106,273 (294,028)

Fund balances (deficits) as of June 30, 2011 95,616 95,616 2,396,305 2,396,305 - - --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- -----------------------

Fund balances (deficits) as of June 30, 2012 -$ 397,476$ 397,476$ 95,616$ 111,397$ 15,781$ 1,450,828$ 1,779,776$ 328,948$ 400,301$ 106,273$ (294,028)$ =========== =========== =========== =========== =========== =========== =========== =========== ============= =========== =========== =============

(continued)

Special Revenue Funds

183

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes i Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in Transfers out Repayment of loan Issuance of loan

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Fire Assessment District Measure GG Fire Prep. Tax 1st Respon. Adv Life Supp Street Lighting--------------------- - --------------------- - ----------------------- --------------------- - --------------------- - ----------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - ---------------------

Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

--------------------- - --------------------- - ----------------------- --------------------- - --------------------- - ----------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - ---------------------

-$ -$ - 3,724,352$ 3,743,979$ 19,626.59 -$ -$ - 1,359,683$ 1,386,710$ 27,027$

- 31,916 31,916.30 - 612 612

2 2 - -

459,315 626,899 167,583.58 2,624 2,624

--------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------- - - 3,724,352 3,775,895 51,543 459,315 626,899 167,584 1,359,683 1,389,948 30,265

--------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

- 2,949,413 2,656,689 292,724 - 84,729 82,589 2,140 - 2,838,151 2,961,996 (123,845) -

1,893,568 1,944,222 (50,654)

--------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------- - - 5,787,564 5,618,685 168,879 - - - 1,978,297 2,026,811 (48,514)

--------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------- - - (2,063,212) (1,842,790) 220,422 459,315 626,899 167,584 (618,614) (636,863) (18,249)

528,469 528,469 (179,003) (179,003) - (12,120) (12,120)

--------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------(179,003) (179,003) - - - - - - - 516,349 516,349 -

--------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

(179,003) (179,003) - (2,063,212) (1,842,790) 220,422 459,315 626,899 167,584 (102,265) (120,514) (18,249)

179,003 179,003 2,640,075 2,640,075 - - 110,948 110,948 --------------------- --------------------- ----------------------- --------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

-$ -$ -$ 576,863$ 797,285$ 220,422$ 459,315$ 626,899$ 167,584$ 8,683$ (9,566)$ (18,249)$ =========== =========== ============= =========== =========== ============= =========== =========== =========== =========== =========== ===========

(continued)

Special Revenue Funds

184

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes i Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in Transfers out Repayment of loan Issuance of loan

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Downtown Business Telegraph BusinessSolano Avenue Bid Underground District Fund Improvement District Improvement District

--------------------- - --------------------- - ----------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - ---------------------Final Variance Final Variance Final Variance Final Variance

Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)--------------------- - --------------------- - ----------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - ---------------------

-$ -$ -$ -$ -$ 263,000$ 217,497$ (45,503)$ - - - - 11,308 17,105 5,797

- -

- - - - -

-

- -

--------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------- - - - - - 11,308 17,105 5,797 263,000 217,497 (45,503)

--------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

- -

- -

128 (128) 125,000 125,000 - 223,907 223,907 -

--------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------- 128 (128) - - - 125,000 125,000 - 223,907 223,907 -

--------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------- (128) (128) - - - (113,692) (107,895) 5,797 39,093 (6,410) (45,503)

(40,738)

--------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------- - - - - - - (40,738) - - - -

--------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

- (128) (128) - - - (113,692) (148,633) (34,941) 39,093 (6,410) (45,503)

3,139 3,139 108,871 108,871 148,633 148,633 76,167 76,167 --------------------- --------------------- ----------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

3,139$ 3,011$ (128)$ 108,871$ 108,871$ -$ 34,941$ -$ (34,941)$ 115,260$ 69,757$ (45,503)$ =========== =========== ============= =========== =========== =========== =========== =========== =========== =========== =========== ===========

(continued)

Special Revenue Funds

185

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes i Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in Transfers out Repayment of loan Issuance of loan

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

No. Shatuck BusinessBusiness Improvement District Economic Development Citywide RLF

--------------------- - --------------------- - --------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - ---------------------Final Variance Final Variance Final Variance

Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)--------------------- - --------------------- - --------------------- --------------------- - --------------------- - --------------------- --------------------- - --------------------- - ---------------------

-$ -$ -$ -$ -$ - -$ -$ - 166,466 163,389 (3,077)

- - 2,603 2,603 - 5,763 5,763 15,026 15,026

- - -

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------166,466 163,389 (3,077) - 5,763 5,763 - 17,630 17,630

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

-

- 199,750 199,750 1 56,095 40,830 15,265 -

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------199,750 199,750 1 56,095 40,830 15,265 - - -

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------(33,284) (36,360) (3,076) (56,095) (35,067) 21,028 - 17,630 17,630

(147,694) (147,694) 50,000 18,379 (31,621) - 36,342 36,342

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------- - - 50,000 18,379 (31,621) (147,694) (111,352) 36,342

--------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

(33,284) (36,360) (3,076) (6,095) (16,688) (10,593) (147,694) (93,722) 53,972

77,348 77,348 545,237 545,237 147,364 147,364 --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------

44,064$ 40,988$ (3,076)$ 539,142$ 528,549$ (10,593)$ (330)$ 53,642$ 53,972$ =========== =========== =========== =========== =========== =========== =========== =========== ===========

(continued)

Special Revenue Funds

186

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

EmployeeComputer Loan Fund Miles Lab Employee Training FD UC Settlement

------------------ -- ----------------- -- ------------------- ---------------- - ---------------- - -------------------- ----------------------- - -------------------------- - --------------------- --------------------- - ----------------------- - ---------------------Final Variance Final Variance Final Variance Final Variance

Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)------------------ -- ----------------- -- ------------------- ---------------- - ---------------- - -------------------- ----------------------- - -------------------------- - --------------------- --------------------- - ----------------------- - ---------------------

Revenues: Taxes -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ License and permits Intergovernmental 24,006 - (24,006) Charges for service 788,419 949,916 161,497 Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

------------------ ----------------- ------------------- ---------------- ---------------- -------------------- ----------------------- -------------------------- --------------------- --------------------- ----------------------- --------------------- Total revenues - - - 24,006 - (24,006) - - - 788,419 949,916 161,497

------------------ ----------------- ------------------- ---------------- ---------------- -------------------- ----------------------- -------------------------- --------------------- --------------------- ----------------------- ---------------------Expenditures: Current: General government 43,000 43,000 20,000 19,697 303 509,818 388,026 121,792 Public safety Highway and streets 31,000 31,000 Health and welfare Culture-recreation 47,796 16,051 31,745 Community development and housing 29,819 29,819 30,000 30,000 - Economic development Debt service: Principal repayment Interest and Fiscal Charges Capital outlay: Highway and streets Community development and housing

------------------ ----------------- ------------------- ---------------- ---------------- -------------------- ----------------------- -------------------------- --------------------- --------------------- ----------------------- --------------------- Total expenditures 43,000 - 43,000 97,615 35,748 61,867 509,818 388,026 121,792 61,000 30,000 31,000

------------------ ----------------- ------------------- ---------------- ---------------- -------------------- ----------------------- -------------------------- --------------------- --------------------- ----------------------- ---------------------Excess over(under) expenditures (43,000) 43,000 (73,609) (35,748) 37,861 (509,818) (388,026) 121,792 727,419 919,916 192,497

Other financing sources (uses): Transfers in 500,000 500,000 - Transfers out (1,773,187) (1,175,018) 598,169 Repayment of loan 43,000 43,000 Issuance of loan

------------------ ----------------- ------------------- ---------------- ---------------- -------------------- ----------------------- -------------------------- --------------------- --------------------- ----------------------- --------------------- Total other financing sources (uses) 43,000 - 43,000 - - - - 500,000 500,000 - (1,773,187) (1,175,018) 598,169

------------------ ----------------- ------------------- ---------------- ---------------- -------------------- ----------------------- -------------------------- --------------------- --------------------- ----------------------- ---------------------

Net Change in fund balances - - - (73,609) (35,748) 37,861 (9,818) 111,974 121,792 (1,045,768) (255,102) 790,666

Fund balances (deficits) as of June 30, 2011 31,059 31,059 177,416 177,416 8,550 8,550 926,974 926,974 ------------------ ----------------- ------------------- ---------------- ---------------- -------------------- ----------------------- -------------------------- --------------------- --------------------- ----------------------- ---------------------

Fund balances (deficits) as of June 30, 2012 31,059$ 31,059$ -$ 103,807$ 141,668$ 37,861$ (1,268)$ 120,524$ 121,792$ (118,794)$ 671,872$ 790,666$ ========== ========== =========== ========= ========= =========== ============= =============== ============ ============ ============= ============

(Continued)

Special Revenue Funds

187

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in Transfers out Repayment of loan Issuance of loan

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Private VitalParty Sidewalks Public Art Lillie B. Wall Memorial Health Statistic

-------------------- - ----------------------- - ---------------------- ------------------ - ---------------- - ---------------------- ---------------------- -- ---------------------- -- ------------------------------------------------ - ---------------------- - ---------------------Final Variance Final Variance Final Variance Final Variance

Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)-------------------- - ----------------------- - ---------------------- ------------------ - ---------------- - ---------------------- ---------------------- -- ---------------------- -- ------------------------------------------------ - ---------------------- - ---------------------

200,000$ 127,977$ (72,023)$ -$ -$ -$ -$ -$ -$ -$ -$

- 27,566 27,566

716 716

-------------------- ----------------------- ---------------------- ------------------ ---------------- ---------------------- ---------------------- ---------------------- ------------------------- ---------------------- ---------------------- --------------------- 200,000 127,977 (72,023) - - - - 716 716 - 27,566 27,566

-------------------- ----------------------- ---------------------- ------------------ ---------------- ---------------------- ---------------------- ---------------------- ------------------------- ---------------------- ---------------------- ---------------------

244,841 74,546 170,295 17,099 (17,099)

84,433 69,338 15,095 -

-------------------- ----------------------- ---------------------- ------------------ ---------------- ---------------------- ---------------------- ---------------------- ------------------------- ---------------------- ---------------------- ---------------------244,841 74,546 170,295 84,433 69,338 15,095 - - - - 17,099 (17,099)

-------------------- ----------------------- ---------------------- ------------------ ---------------- ---------------------- ---------------------- ---------------------- ------------------------- ---------------------- ---------------------- ---------------------(44,841) 53,432 98,273 (84,433) (69,338) 15,095 - 716 716 - 10,467 10,467

60,872 60,872 - -

-------------------- ----------------------- ---------------------- ------------------ ---------------- ---------------------- ---------------------- ---------------------- ------------------------- ---------------------- ---------------------- ---------------------- - - 60,872 60,872 - - - - - - -

-------------------- ----------------------- ---------------------- ------------------ ---------------- ---------------------- ---------------------- ---------------------- ------------------------- ---------------------- ---------------------- ---------------------

(44,841) 53,432 98,273 (23,561) (8,466) 15,095 - 716 716 - 10,467 10,467

(25,740) (25,740) 97,483 97,483 6,778 6,778 194,732 194,732 -------------------- ----------------------- ---------------------- ------------------ ---------------- ---------------------- ---------------------- ---------------------- ------------------------- ---------------------- ---------------------- ---------------------

(70,581)$ 27,692$ 98,273$ 73,922$ 89,017$ 15,095$ 6,778$ 7,494$ 716$ 194,732$ 205,199$ 10,467$ =========== ============= ============ ========== ========= ============= ============= ============= ============== ============= ============ ============

(continued)

Special Revenue Funds

188

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in Transfers out Repayment of loan Issuance of loan

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Special Revenue Funds

East Bay Pub. Mental HealthUtil. Comm. Health State Aid Tobacco Control State Aid Realignment

----------------------- -- ----------------------- - ------------------------- ----------------------- -- ----------------------- -- ---------------------- ----------------------- - ---------------------- -- ------------------- --------------------- - --------------------- -- ----------------------Final Variance Final Variance Final Variance Final Variance

Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)-- ----------------------- - ------------------------------------------------- -- ----------------------- -- ---------------------- ----------------------- - ---------------------- -- ------------------- --------------------- - --------------------- -- ----------------------

-$ -$ -$ -$ -$ -$ 150,000$ 112,500$ (37,500)$ -$ -$ -$

1,650,000 1,651,535 1,535 2,080,570 2,218,712 138,142 -

1 1

----------------------- ----------------------- ------------------------- ----------------------- ----------------------- ---------------------- ----------------------- ---------------------- ------------------- --------------------- --------------------- ---------------------- - 1 1 1,650,000 1,651,535 1,535 150,000 112,500 (37,500) 2,080,570 2,218,712 138,142

----------------------- ----------------------- ------------------------- ----------------------- ----------------------- ---------------------- ----------------------- ---------------------- ------------------- --------------------- --------------------- ----------------------

-

- 1,228,921 1,146,230 82,691 178,942 124,047 54,895

----------------------- ----------------------- ------------------------- ----------------------- ----------------------- ---------------------- ----------------------- ---------------------- ------------------- --------------------- --------------------- ----------------------- - - 1,228,921 1,146,230 82,691 178,942 124,047 54,895 - - -

----------------------- ----------------------- ------------------------- ----------------------- ----------------------- ---------------------- ----------------------- ---------------------- ------------------- --------------------- --------------------- ----------------------- 1 1 421,079 505,305 84,226 (11,547) 17,395 2,080,570 2,218,712 138,142

1,953,018 1,953,018 (2,604,024) (2,604,024) (2,080,570) (1,012,449) 1,068,121

----------------------- ----------------------- ------------------------- ----------------------- ----------------------- ---------------------- ----------------------- ---------------------- ------------------- --------------------- --------------------- ----------------------- - - - (651,006) (651,006) - - - - (2,080,570) (1,012,449) 1,068,121

----------------------- ----------------------- ------------------------- ----------------------- ----------------------- ---------------------- ----------------------- ---------------------- ------------------- --------------------- --------------------- ----------------------

- 1 1 (229,927) (145,701) 84,226 - (11,547) (11,547) - 1,206,263 1,206,263

3,563 3,563 (211,750) (211,750) (25,048) (25,048) - - ----------------------- ----------------------- ------------------------- ----------------------- ----------------------- ---------------------- ----------------------- ---------------------- ------------------- --------------------- --------------------- ----------------------

3,563$ 3,564$ 1$ (441,677)$ (357,451)$ 84,226$ (25,048)$ (36,595)$ (11,547)$ -$ 1,206,263$ 1,206,263$ ============= ============= ============== ============= ============= ============ ============= ============ ========== ============ ============ ============

(continued)

189

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in Transfers out Repayment of loan Issuance of loan

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Fund forCity Opt. Impounded Alameda City Peg - Public,

Public Safety & Unneutered Abandoned Vehicle Abatement Educ & Gov't--------------------- - ------------------- -- ----------------------- -------------------- - -------------------- -- -------------------- -------------------- -- ---------------------- -- ------------------------- ---------------------- ---------------------- ---- ----------------------

Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

--------------------- - ------------------- -- ----------------------- -------------------- - -------------------- -- -------------------- -------------------- -- ---------------------- -- ------------------------- ---------------------- ---------------------- ---- ----------------------

341,228$ 131,456$ (209,772)$ -$ -$ -$ -$ -$ -$ -$

680 680 115,000 113,492 (1,508)

3 3 - -

- 182,326 182,326

--------------------- ------------------- ----------------------- -------------------- -------------------- -------------------- -------------------- ---------------------- ------------------------- ---------------------- ---------------------- ----------------------341,228 131,459 (209,769) - 680 680 115,000 113,492 (1,508) -$ 182,326 182,326

--------------------- ------------------- ----------------------- -------------------- -------------------- -------------------- -------------------- ---------------------- ------------------------- ---------------------- ---------------------- ----------------------

- - 7,705 5,911 1,794 - 346,140 166,204 179,936 -

154,683 119,953 34,730 -

-

- --------------------- ------------------- ----------------------- -------------------- -------------------- -------------------- -------------------- ---------------------- ------------------------- ---------------------- ---------------------- ----------------------

346,140 166,204 179,936 - - - 162,388 125,864 36,524 - - - --------------------- ------------------- ----------------------- -------------------- -------------------- -------------------- -------------------- ---------------------- ------------------------- ---------------------- ---------------------- ----------------------

(4,912) (34,745) (29,833) - 680 680 (47,388) (12,372) 35,016 - 182,326 182,326

-

--------------------- ------------------- ----------------------- -------------------- -------------------- -------------------- -------------------- ---------------------- ------------------------- ---------------------- ---------------------- ----------------------- - - - - - - - - - - -

--------------------- ------------------- ----------------------- -------------------- -------------------- -------------------- -------------------- ---------------------- ------------------------- ---------------------- ---------------------- ----------------------

(4,912) (34,745) (29,833) - 680 680 (47,388) (12,372) 35,016 - 182,326 182,326

16,023 16,023 30,288 30,288 165,329 165,329 536,755 536,755 --------------------- ------------------- ----------------------- -------------------- -------------------- -------------------- -------------------- ---------------------- ------------------------- ---------------------- ---------------------- ----------------------

11,111$ (18,722)$ (29,833)$ 30,288$ 30,968$ 680$ 117,941$ 152,957$ 35,016$ 536,755$ 719,081$ 182,326$ ============ =========== ============= =========== =========== ============ ============ ============= ============== ============= ============= =============

(continued)

Special Revenue Funds Capital Project funds

190

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in Transfers out Repayment of loan Issuance of loan

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

Measure G: Measure G Street 97 G.O. BDSFire Seis. Bond Public Safety Bldg. Improvement Fund Measure S CivicCtr

----------------- - ----------------------- -- ----------------------- ----------------- - ------------------- - ------------------- ------------------- --- -------------------- --- ------------------------ ------------------- -- ------------------- - ------------------- --Final Variance Final Variance Final Variance Final Variance

Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)----------------- - ----------------------- -- ----------------------- ----------------- - ------------------- - ------------------- ------------------- --- -------------------- --- ------------------------ ------------------- -- ------------------- - ------------------- -

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

- 32,213 32,213 12,883 12,883 25 25 - 20 20

-

----------------- ----------------------- ----------------------- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------- ------------------- ------------------- --------------------$ 32,213 32,213 -$ 12,883 12,883 -$ 25 25 - 20 20

----------------- ----------------------- ----------------------- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------- ------------------- ------------------- -------------------

- - -

- 632,681 137,743 494,938 168,120 113,898 54,222 - 74,251 71,311 2,940

-

- - - ----------------- ----------------------- ----------------------- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------- ------------------- ------------------- -------------------

632,681 137,743 494,938 168,120 113,898 54,222 - - - 74,251 71,311 2,940 ----------------- ----------------------- ----------------------- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------- ------------------- ------------------- -------------------

(632,681) (105,530) 527,151 (168,120) (101,015) 67,105 - 25 25 (74,251) (71,291) 2,960

108,907 (108,907) (6,297) (6,297)

-

----------------- ----------------------- ----------------------- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------- ------------------- ------------------- -------------------- - - - - - - 108,907 (108,907) (6,297) (6,297) -

----------------- ----------------------- ----------------------- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------- ------------------- ------------------- -------------------

(632,681) (105,530) 527,151 (168,120) (101,015) 67,105 - 108,932 108,932 (80,548) (77,588) 2,960

1,643,756 1,643,756 767,651 767,651 - 154,649 154,649 ----------------- ----------------------- ----------------------- ----------------- ------------------- ------------------- ------------------- -------------------- -------------------- ------------------- ------------------- -------------------

1,011,075$ 1,538,226$ 527,151$ 599,531$ 666,636$ 67,105$ -$ 108,932$ 108,932$ 74,101$ 77,061$ 2,960$ ========== ============= ============= ========== =========== =========== =========== =========== ============ =========== =========== ==========

(Continued)

Capital Project Funds

191

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and Fiscal Charges Capital outlay: Highway and streets Community development and housing

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in Transfers out Repayment of loan Issuance of loan

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

97 G.O. BDS ParkMeas S (D'town Area Acquisition Development

------------------- ---------------- -- ----------------- ---------------- - --------------- - -------------------Final Variance Final Variance

Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)---------------- - ---------------- -- ----------------- ---------------- - --------------- - -------------------

-$ -$ -$ -$ -$ -$

192 (192) - 11,568 11,568

1,962 1,962

---------------- ---------------- ----------------- ---------------- --------------- -------------------- 11,568 11,568 192 1,962 1,770

---------------- ---------------- ----------------- ---------------- --------------- -------------------

146 (146)

146,129 146,129 -

---------------- ---------------- ----------------- ---------------- --------------- -------------------146,129 146,129 - - 146 (146)

---------------- ---------------- ----------------- ---------------- --------------- -------------------(146,129) (134,561) 11,568 192 1,816 1,624

1,817 1,817 -

---------------- ---------------- ----------------- ---------------- --------------- -------------------- - - 1,817 1,817 -

---------------- ---------------- ----------------- ---------------- --------------- -------------------

(146,129) (134,561) 11,568 2,009 3,633 1,624

689,028 689,028 (175) (175) ---------------- ---------------- ----------------- ---------------- --------------- -------------------

542,899$ 554,467$ 11,568$ 1,834$ 3,458$ 1,624$ ========= ========= ========== ========= ======== ==========

(Continued)

Capital Project Funds

192

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

West Berkeley West Berkeley Savo Island Animal Shelter 2010 COP (Animal Shelter)

Improvement Fund Low & Moderate Housing Low & Moderate Land/Bldg--------------------- - ----------------- - --------------------- ----------------- - ------------------ - -------------- --------------- - ------------------- - --------------------- ------------------ -- ------------------ - ------------------- ----------------- - ------------------ - -----------------

Final Variance Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

--------------------- - ----------------- - --------------------- ----------------- - ------------------ - -------------- --------------- - ------------------- - --------------------- ------------------ -- ------------------ - ------------------- ----------------- - ------------------ - -----------------Revenues: Taxes -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ License and permits Intergovernmental - Charges for service Fines and penalties Interest 1,146 1,146 23 23 22 22 148 148 - Rents and royalties - Franchise Private contributions and donations Miscellaneous

--------------------- ----------------- --------------------- ----------------- ------------------ -------------- --------------- ------------------- --------------------- ------------------ ------------------ ------------------- ----------------- ------------------ ----------------- Total revenues - 1,146 1,146 - 23 23 - 22 22 - 148 148 - - -

--------------------- ----------------- --------------------- ----------------- ------------------ -------------- --------------- ------------------- --------------------- ------------------ ------------------ ------------------- ----------------- ------------------ -----------------Expenditures: Current: General government 22,128 22,128 Public safety Highway and streets 267,152 267,152 Health and welfare Culture-recreation - Community development and housing 360,119 360,119 - 1,478,169 1,478,170 (1) 2,721,382 2,604,303 117,079 Economic development Debt service: Principal repayment Interest and Fiscal Charges 2,491 (2,491) Capital outlay: Highway and streets - Community development and housing 336,278 (336,278)

--------------------- ----------------- --------------------- ----------------- ------------------ -------------- --------------- ------------------- --------------------- ------------------ ------------------ ------------------- ----------------- ------------------ ----------------- Total expenditures 649,398 338,769 310,629 - - - - - - 1,478,169 1,478,170 (1) 2,721,382 2,604,303 117,079

--------------------- ----------------- --------------------- ----------------- ------------------ -------------- --------------- ------------------- --------------------- ------------------ ------------------ ------------------- ----------------- ------------------ -----------------Excess over(under) expenditures (649,398) (337,623) 311,775 23 23 22 22 (1,478,169) (1,478,022) 147 (2,721,382) (2,604,303) 117,079

Other financing sources (uses): Transfers in 220,179 672,902 452,724 183,000 - (183,000) 16,871 (16,871) Transfers out (183,000) - 183,000 - Repayment of loan Issuance of loan 583 (583)

--------------------- ----------------- --------------------- ----------------- ------------------ -------------- --------------- ------------------- --------------------- ------------------ ------------------ ------------------- ----------------- ------------------ ----------------- Total other financing sources (uses) 220,762 672,902 452,140 - - - 16,871 - (16,871) - - - - - -

--------------------- ----------------- --------------------- ----------------- ------------------ -------------- --------------- ------------------- --------------------- ------------------ ------------------ ------------------- ----------------- ------------------ -----------------

Net Change in fund balances (428,636) 335,279 763,915 - 23 23 16,871 22 (16,849) (1,478,169) (1,478,022) 147 (2,721,382) (2,604,303) 117,079

Fund balances (deficits) as of June 30, 2011 1,630,381 1,630,381 1,944,855 1,944,855 309,336 309,336 1,491,238 1,491,238 4,649,479 4,649,479 --------------------- ----------------- --------------------- ----------------- ------------------ -------------- --------------- ------------------- --------------------- ------------------ ------------------ ------------------- ----------------- ------------------ -----------------

Fund balances (deficits) as of June 30, 2012 1,201,745$ 1,965,660$ 763,915$ 1,944,855$ 1,944,878$ 23$ 326,207$ 309,358$ (16,849)$ 13,069$ 13,216$ 147$ 1,928,097$ 2,045,176$ 117,079$ ============ ========== ============ ========== ========== ======== ========= =========== ============ ========== ========== =========== ========== ========== =========

(continued)

Capital Project Funds

193

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Pension 09 Measure FF West Berkeley

Refunding Bonds Library Improvement Fund Savo Island Improvement-------------------- -- --------------------- - ------------------- ---------------------- - ---------------------- - --------------------- --------------------- - ---------------------- - ----------------------- ---------------------- -- --------------------- -- -----------------------

Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

-------------------- -- --------------------- - ------------------- ---------------------- - ---------------------- - --------------------- --------------------- - ---------------------- - ----------------------- ---------------------- -- --------------------- -- -----------------------Revenues: Taxes -$ -$ -$ -$ 1,582,903$ 1,582,903$ 1,605,039$ 823,410$ (781,629)$ 147,504$ 148,609$ 1,105$ License and permits Intergovernmental Charges for service Fines and penalties Interest 24 24 5,000 10 (4,990) 30 30 Rents and royalties Franchise Private contributions and donations Miscellaneous

-------------------- --------------------- ------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------- ----------------------- ---------------------- --------------------- ----------------------- Total revenues - 24 24 - 1,582,903 1,582,903 1,610,039 823,420 (786,619) 147,504 148,639 1,135

-------------------- --------------------- ------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------- ----------------------- ---------------------- --------------------- -----------------------Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing 13,779 2,013 11,766 45,535 - 45,535 Economic development Debt service: Principal repayment 420,000 420,000 - 405,000 405,000 810,000 810,000 18,000 18,000 Interest and fiscal charges 113,410 116,066 (2,656) 1,149,669 1,151,359 (1,690) 137,780 137,780 39,280 20,000 19,280

-------------------- --------------------- ------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------- ----------------------- ---------------------- --------------------- ----------------------- Total expenditures 533,410 536,066 (2,656) 1,554,669 1,556,359 (1,690) 961,559 2,013 959,546 102,815 38,000 64,815

-------------------- --------------------- ------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------- ----------------------- ---------------------- --------------------- -----------------------Excess over(under) expenditures (533,410) (536,042) (2,632) 26,544 1,581,213 648,480 821,407 172,927 44,689 110,639 65,950

Other financing sources (uses): Transfers in 533,410 533,410 - 313,714 (313,714)

Transfers out (691,163) (672,902) 18,261 (28,922) 28,922 Repayment of loan - - 1,544,669 (1,544,669) Issuance of loanp

-------------------- --------------------- ------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------- ----------------------- ---------------------- --------------------- ----------------------- Total other financing sources (uses) 533,410 533,410 - 1,544,669 - (1,544,669) (377,449) (672,902) (295,453) (28,922) - 28,922

-------------------- --------------------- ------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------- ----------------------- ---------------------- --------------------- -----------------------

Net Change in fund balances - (2,632) (2,632) 1,544,669 26,544 (1,518,125) 271,031 148,505 (122,526) 15,767 110,639 94,872

Fund balances (deficits) as of June 30, 2011 94,373 94,373 1,466,779 1,466,779 795,200 795,200 182,322 182,322 -------------------- --------------------- ------------------- ---------------------- ---------------------- --------------------- --------------------- ---------------------- ----------------------- ---------------------- --------------------- -----------------------

Fund balances (deficits) as of June 30, 2012 94,373$ 91,741$ (2,632)$ 3,011,448$ 1,493,323$ (1,518,125)$ 1,066,231$ 943,705$ (122,526)$ 198,089$ 292,961$ 94,872$ =========== =========== =========== ============ ============ ============ ============ ============ ============= ============ =========== ============

(continued)

Debt Service Funds

194

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in

Transfers out Repayment of loan Issuance of loanp

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

GO 2007 Berkeley Repertory GO 2002 GO 2007

Refunding Bonds Theatre Refunding Bonds Refunding Bonds Series A-------------------------------- -------------------------------- --------------------- ----------------- - ----------------- -- ------------------ ------------------- - --------------------- - ------------------- --------------------- --- --------------------------- -- -------------------------

Final Variance Final Variance Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg) Budget Actual Pos/(Neg)

-------------------------------- -------------------------------- --------------------- ----------------- - ----------------- -- ------------------ ------------------- - --------------------- - ------------------- --------------------- --- --------------------------- -- -------------------------

3,309,864$ 2,635,990$ (673,874)$ -$ -$ 1,463,321$ 1,501,855$ 38,534$ 256,987$ 228,556$ (28,431)$

40,952 40,952

------------------------------ ----------------------------- --------------------- ----------------- ----------------- ------------------ ------------------- --------------------- ------------------- --------------------- --------------------------- -------------------------3,309,864 2,635,990 (673,874) - 40,952 40,952 1,463,321 1,501,855 38,534 256,987 228,556 (28,431)

------------------------------ ----------------------------- --------------------- ----------------- ----------------- ------------------ ------------------- --------------------- ------------------- --------------------- --------------------------- -------------------------

1,335,000 1,335,000 225,000 225,000 1,005,000 1,005,000 45,000 45,000 1,405,518 1,406,367 (849) 398,488 398,326 163 458,853 457,466 1,388 163,193 164,042 (849)

------------------------------ ----------------------------- --------------------- ----------------- ----------------- ------------------ ------------------- --------------------- ------------------- --------------------- --------------------------- -------------------------2,740,518 2,741,367 (849) 623,488 623,326 163 1,463,853 1,462,466 1,388 208,193 209,042 (849)

------------------------------ ----------------------------- --------------------- ----------------- ----------------- ------------------ ------------------- --------------------- ------------------- --------------------- --------------------------- -------------------------569,346 (105,376) (674,722) (623,488) (582,374) 41,114 (532) 39,389 39,921 48,794 19,514 (29,280)

650,000 650,000 -

------------------------------ ----------------------------- --------------------- ----------------- ----------------- ------------------ ------------------- --------------------- ------------------- --------------------- --------------------------- -------------------------- - - 650,000 650,000 - - - - - - -

------------------------------ ----------------------------- --------------------- ----------------- ----------------- ------------------ ------------------- --------------------- ------------------- --------------------- --------------------------- -------------------------

569,346 (105,376) (674,722) 26,512 67,626 41,114 (532) 39,389 39,921 48,794 19,514 (29,280)

2,539,476 2,539,476 56,491 56,491 1,434,523 1,434,523 1,664,200 1,664,200 ------------------------------ ----------------------------- --------------------- ----------------- ----------------- ------------------ ------------------- --------------------- ------------------- --------------------- --------------------------- -------------------------

3,108,822$ 2,434,100$ (674,722)$ 83,003$ 124,117$ 41,114$ 1,433,991$ 1,473,912$ 39,921$ 1,712,994$ 1,683,714$ (29,280)$ ================ ================ =========== ========= ========= ========== ========== =========== ========== =========== =============== ==============

(continued)

Debt Service Funds

195

CITY OF BERKELEYSchedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budget Basis)

Nonmajor Governmental FundsFor the Year Ended June 30, 2012

Revenues: Taxes License and permits Intergovernmental Charges for service Fines and penalties Interest Rents and royalties Franchise Private contributions and donations Miscellaneous

Total revenues

Expenditures: Current: General government Public safety Highway and streets Health and welfare Culture-recreation Community development and housing Economic development Debt service: Principal repayment Interest and fiscal charges

Total expenditures

Excess over(under) expenditures

Other financing sources (uses): Transfers in

Transfers out Repayment of loan Issuance of loanp

Total other financing sources (uses)

Net Change in fund balances

Fund balances (deficits) as of June 30, 2011

Fund balances (deficits) as of June 30, 2012

GO 2008 2010 COP

Animal Shelter measure I (Animal Shelter )---------------------- - --------------------- - --------------------------- ----------------------- - ----------------------- -- ---------------------------

Final Variance Final VarianceBudget Actual Pos/(Neg) Budget Actual Pos/(Neg)

---------------------- - --------------------- - --------------------------- ----------------------- - ----------------------- -- ---------------------------

305,652$ 263,599$ (42,053) -$ -

---------------------- --------------------- --------------------------- ----------------------- ----------------------- ---------------------------305,652 263,599 (42,053) - - -

---------------------- --------------------- --------------------------- ----------------------- ----------------------- ---------------------------

140,000 140,000 295,450 296,345 (895) 314,475 316,360 (1,885)

---------------------- --------------------- --------------------------- ----------------------- ----------------------- ---------------------------435,450 436,345 (895) 314,475 316,360 (1,885)

---------------------- --------------------- --------------------------- ----------------------- ----------------------- ---------------------------(129,798) (172,746) (42,948) (316,360) (1,885)

---------------------- --------------------- --------------------------- ----------------------- ----------------------- ---------------------------- - - - - -

---------------------- --------------------- --------------------------- ----------------------- ----------------------- ---------------------------

(129,798) (172,746) (42,948) - (316,360) (316,360)

1,127,149 1,127,149 229,679 229,679 ---------------------- --------------------- --------------------------- ----------------------- ----------------------- ---------------------------

997,351$ 954,403$ (42,948)$ 229,679$ (86,681)$ (316,360)$ ============ =========== =============== ============ ============ ===============

(Concluded)

Debt Service Funds

196

INTERNAL SERVICE FUNDS Internal service funds used to account for the financing of goods or services provided by one department to other departments of the City, on a cost reimbursement basis. ______________________________________________________________________ Equipment Maintenance and Replacement Fund derived from rental rates are used to maintain and replace equipments

for the Corporation yard. Building Maintenance Fund established to account for charges for service by the Public Works Building

Maintenance Division for the maintenance of City buildings. Supply Warehouse Fund Fund established for maintaining an inventory of office materials and supplies in the

City's warehouse facility. Departmental budgets are charged for this service. Computer Replacement

Fund established to systematically modernize our Citywide PC infrastructure and safeguard the efficiency of our network operations, each department is required to contribute based on annual budget times a fraction, which is the number of existing PCs within the department to the whole city. One twelfth of the annual budgeted amount was charged each month.

Workers' Compensation Self-Insurance Fund established to pay for expenditures made solely for the purpose of paying

workers' compensation insurance claims costs, legal fees attendant thereto, disability benefits, related medical benefits, payment of any settled disability claims or judgments, administrative costs and all matters relating thereto; which departmental budgets are charged.

Sick Leave & Vacation Payouts

Fund established as the sick leave and vacation leave accrual fund for the purpose of accounting for payouts of unused and terminal sick and vacation benefits.

Public Liability

Each fiscal year monies from the General Fund are deposited in this fund to restore the balance of at least $175,000. Expenditures from this fund are made solely for the purpose of paying public liability claims investigation and adjustment costs, legal defense costs, and payment of any settled public liability claim or adjustment. The General Fund reimburses expenditures for this fund.

Catastrophic Loss Fund established to protect the City from severe financial hardship and disruption of

ongoing service occasioned by the award of public liability judgment in excess of $250,000.

197

CITY OF BERKELEYCombining Statement of Net Assets

All Internal Service FundsJune 30, 2012

Equipment Sick Leave &Maintenance Building Supply Computer Workers' Vacation Public CatastrophicReplacement Maintenance Warehouse Replacement Compensation Payouts Liability Loss T o t a l

------------------------ -------------------- ---------------- ------------------ --------------------- ------------------ ------------------- --------------------- ----------------------Assets Current assets:

Cash and cash equivalents 302,042$ 3,676$ 19,938$ 417,519$ -$ 27,258$ 25,607$ 796,040$ Investments 10,138,515 124,760 - 668,628 14,444,876 - 918,346 862,870 27,157,995 Accounts receivable 52,518 2,900 45,944 101,362 Intergovernmental loan receivable 337,128 337,128 Inventory 129,295 129,295 Deposit for fixed assets 562,361 562,361 Total current assets 11,055,436 131,336 129,295 688,566 15,245,467 - 945,604 888,477 29,084,181

Noncurrent assets:Intergovernmental loan receivable 162,872 162,872 Capital assets: Fixed assets, net of accumulated depreciation 10,748,444 4,941 28,942 240,636 19,252 1,047 11,043,262 Total noncurrent assets 10,748,444 4,941 28,942 240,636 182,124 - 1,047 - 11,206,134

Total assets 21,803,880 136,277 158,237 929,202 15,427,591 - 946,651 888,477 40,290,315

LiabilitiesCurrent liabilities

Accounts payable 681,503 19,144 63,029 1,665 558 34,312 - 800,211 Accrued salaries and wages 76,759 64,203 2,293 18,473 41,035 6,553 209,316 Accrued Interest payable 59,628 59,628 Compensated absences 16,542 17,170 1,728 3,653 2,197 41,290

Due to other Funds 118,781 470,922 589,703

Other liablities 386,276 962 387,238 Claims and judgments payable 4,500,000 1,037,091 5,537,091 Capital lease - current 412,868 412,868 Total current liabilities 1,633,576 100,517 185,831 1,665 4,523,646 511,957 1,080,153 - 8,037,345

Noncurrent liabilitiesCompensated absences 201,508 209,150 21,050 44,495 26,759 502,962 Claims and judgments payable 23,874,000 - 23,874,000 Capital lease 2,890,741 2,890,741 Net OPEB obligation 52,272 40,182 2,332 12,801 6,329 113,916 Total noncurrent liabilities 3,144,521 249,332 23,382 - 23,931,296 - 33,088 - 27,381,619

Total liabilities 4,778,097 349,849 209,213 1,665 28,454,942 511,957 1,113,241 - 35,418,964

Net assetsInvested in capital assets, net of related debt 7,444,835 4,941 28,942 240,636 19,252 1,047 7,739,653 Unrestricted 9,580,948 (218,513) (79,918) 686,901 (13,046,603) (511,957) (167,637) 888,477 (2,868,302)

Total net assets 17,025,783 (213,572) (50,976) 927,537 (13,027,351) (511,957) (166,590) 888,477 4,871,351

198

CITY OF BERKELEYCombining Statement of Revenues, Expenses

And Changes in Fund Net AssetsAll Internal Service Funds

For the Year Ended June 30, 2012

Equipment Sick Leave &Maintenance Building Supply Computer Workers' Vacation Public CatastrophicReplacement Maintenance Warehouse Replacement Compensation Payouts Liability Loss T o t a l

--------------------- --------------------- ------------------- ------------------- ---------------------- -------------------- -------------------- -------------------- ------------------------Operating revenues: Equipment rentals service charge 10,695,085$ -$ -$ -$ -$ -$ -$ 10,695,085$ Building maintenance 3,593,640$ 3,593,640 Central store service charge 309,718 380,831 690,549 Workers' compensation fees 8,788,113 8,788,113 Other revenues 412 400 49,981 2,110,222 2,161,015 Total operating revenues 10,695,497 3,594,040 309,718 430,812 8,788,113 2,110,222 - - 25,928,402

Operating expenses: Personnel services 1,976,245 1,732,925 67,810 497,229 2,793,352 210,834 7,278,395 Employee benefits 1,397,000 1,171,389 42,320 290,859 208,543 126,004 3,236,115 Transportation 187,528 118,127 5,780 1,500 312,935 Repairs and maintenance 111,999 175,470 71,525 358,994 Materials and supplies 2,824,932 169,261 178,707 185,054 7,137 6,318 3,371,409 Utilities 68,082 3,102 71,184 Insurance 4,106 1,207,039 1,211,145 Specialized and professional services 634,061 380,192 716,109 600,688 2,331,050 Depreciation 2,176,038 1,911 173,789 3,971 2,355,709 Judgments and claims 7,965,776 534,989 8,500,765 Communication 2,463 4,941 161 453 8,018

Total operating expenses 9,382,454 3,757,318 366,303 358,843 9,481,534 3,001,895 1,480,333 1,207,039 29,035,719

Income (loss) from operations 1,313,043 (163,278) (56,585) 71,969 (693,421) (891,673) (1,480,333) (1,207,039) (3,107,317)

Non-operating revenues (expenses) Investment earnings (53,455) (651) (305) (3,529) (76,151) (1,000) (4,824) (4,532) (144,447) Interest expense (150,675) (150,675) Operating grants 254,620 254,620 Loss on disposal of capital assets 28,836 1,320 30,156 Total non-operating revenues (expenses) 79,326 669 (305) (3,529) (76,151) (1,000) (4,824) (4,532) (10,346)

Income (loss) before transfers 1,392,369 (162,609) (56,890) 68,440 (769,572) (892,673) (1,485,157) (1,211,571) (3,117,663)

Transfers in 403,592 250,000 1,556,325 842,799 3,052,716

Transfers out (1,150,241) (1,150,241)

Change in net assets 1,795,961 (162,609) (56,890) 68,440 (1,919,813) (642,673) 71,168 (368,772) (1,215,188)

Total net assets -beginning 15,229,822 (50,963) 5,914 859,097 (11,107,538) 130,716 0 (237,758) 1,257,249 6,086,539

Total net assets - ending 17,025,783$ (213,572)$ (50,976)$ 927,537$ (13,027,351)$ (511,957)$ (166,590)$ 888,477$ 4,871,351$

199

CITY OF BERKELEYCombining Statement of Cash Flows

All Internal Service FundsFor the Year Ended June 30, 2012

Equipment Sick Leave &Maintenance Building Supply Computer Workers' Vacation Public CatastrophicReplacement Maintenance Warehouse Replacement Compensation Payouts Liability loss T o t a l

Cash flows from operating activities: --------------------- --------------------- ---------------------- -------------------- ------------------------- ---------------------------- ----------------------- --------------------- ---------------------- Cash received from other funds for sales and services

Cash paid for goods and services 10,682,147$ 3,594,934$ 309,718$ 430,812$ 8,788,113$ 2,110,222$ -$ -$ 25,915,946$ Cash paid for employee services (3,544,748) (871,368) (225,804) (185,054) (724,581) (606,098) (1,207,039) (7,364,692) Claims and judgments paid (3,478,447) (2,996,228) (97,456) (808,829) (3,099,432) (344,533) (10,824,925)

(4,500,720) (1,531,929) (6,032,649) Net cash provided (used) by operating activities --------------------- --------------------- ---------------------- --------------------- ------------------------- --------------------------- ----------------------- --------------------- ----------------------

3,658,952 (272,662) (13,542) 245,758 2,753,983 (989,210) (2,482,560) (1,207,039) 1,693,680 --------------------- --------------------- ---------------------- --------------------- ------------------------- --------------------------- ----------------------- --------------------- ----------------------

Cash flows from non capital financing activities: Transfers in Transfers out 403,592 250,000 1,556,325 842,799 3,052,716 Grants (1,150,241) (1,150,241) Interfund loan 254,620 254,620 Interfund advances (500,000) (500,000)

13,542 470,922 484,464

Net cash provided (used) by non capital --------------------- --------------------- ---------------------- --------------------- ------------------------- --------------------------- ----------------------- --------------------- ---------------------- financing activities

658,212 - 13,542 - (1,650,241) 720,922 1,556,325 842,799 2,141,559 --------------------- --------------------- ---------------------- ---------------------- ------------------------- --------------------------- ----------------------- --------------------- ----------------------

Cash flows from capital and relatedfinancing activities: Interest paid Purchase of capital assets (157,733) (157,733) Debt repayment (2,454,559) (2,265) (40,578) - (2,497,402) Proceeds from sale of capital assets (395,361) (395,361)

80,307 1,320 81,627 Net cash provided (used) by capital and --------------------- --------------------- ---------------------- ---------------------- ------------------------- --------------------------- ----------------------- --------------------- ---------------------- related financing activities

(2,927,346) (945) - (40,578) - - - - (2,968,869) --------------------- --------------------- ---------------------- --------------------- ------------------------- --------------------------- ----------------------- --------------------- ----------------------

Cash flows from investing activities

Investment sales 252,698 - 313,092 565,789 Interest received (1,644,575) (215,043) (1,566,944) 251,842 838,777 (2,335,943)

- Net cash provided by (used) investing activities --------------------- --------------------- ---------------------- -------------------- ------------------------- ---------------------------- ----------------------- --------------------- ----------------------

(1,644,575) 252,698 - (215,043) (1,566,944) 251,842 838,777 313,092 (1,770,153) Net increase (decrease) in cash --------------------- --------------------- ---------------------- -------------------- ------------------------- ---------------------------- ----------------------- --------------------- ---------------------- and cash equivalents

(254,758) (20,909) - (9,863) (463,202) (16,446) (87,458) (51,148) (903,783)

Cash and cash equivalents, July 1, 2011 556,799 24,585 - 29,801 880,721 16,446 114,716 76,755 1,699,823

--------------------- --------------------- ---------------------- --------------------- ------------------------- --------------------------- ----------------------- --------------------- ----------------------Cash and cash equivalents, June 30, 2012

302,042$ 3,676$ -$ 19,938$ 417,519$ -$ 27,258$ 25,607$ 796,040$ ============ ============ ============ =========== ============== ============== ============= ============ ============

:: (continued)

200

CITY OF BERKELEYCombining Statement of Cash Flows

All Internal Service FundsFor the Year Ended June 30, 2012

Equipment Building Supplies Computer Worker's Sick Leave & Public CatastrophicMaintenance Maintenance Warehouse Replacement Compensation Vacation Payouts Liability loss T o t a l

--------------------- --------------------- ---------------------- -------------------- ------------------------- ---------------------------- ----------------------- --------------------- ----------------------

Reconciliation of operating income (loss)to net cash provided (used) by operating activities

Income (loss) from operations 1,313,043$ (163,278)$ (56,585)$ 71,969$ (693,421)$ (891,673)$ (1,480,333)$ (1,207,039)$ (3,107,317)$

Adjustments to reconcile income (loss) from operations to net cash provided (used) by operating activities: Depreciation

2,176,038 1,911 173,789 3,971 2,355,709 Change in: Accounts receivable Inventory (12,055) 894 (45,944) (57,105) Accounts payable (30,143) (30,143) Accrued salaries 358,690 (20,275) 60,512 - (881) 2,408 400,454 Compensated absences (118,385) (97,395) (3,432) (25,667) (97,537) (12,274) (354,690) Claim and Judgment payables 2,093 (3,659) 15,806 2,084 3,387 19,711 Net OPEB Obligation - misc retiree 3,511,000 (996,940) 2,514,060 Other liabilities 11,090 9,140 300 2,841 1,192 24,563

(71,562) - (71,562) Net cash provided (used) by operating activities --------------------- --------------------- ---------------------- --------------------- ------------------------- --------------------------- ----------------------- --------------------- ----------------------

3,658,952$ (272,662)$ (13,542)$ 245,758$ 2,753,983$ (989,210)$ (2,482,560)$ (1,207,039)$ 1,693,680$ ============ ============ ============ =========== ============== ============== ============= ============ ============

Noncash investing, capital, and financing activities:

Increase/ (decrease) in fair value of investments(53,455)$ (651)$ (305)$ (3,529)$ (76,151)$ (1,000)$ (4,824)$ (4,532)$ (144,447)$

(concluded)

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202

Fiduciary Funds Pension and Other Employee Benefit Trust Funds

Police Retirement fund

This fund is used to account for the single-employer income benefits pension plan for Berkeley police officers that retired on or after July 1, 1989.

Safety Member Pension Fund/Pension Annuity Fund

This fund is used to account for the single-employer defined benefit pension plan for fire and police officers that retired before March 1973.

Fire Medical

This fund is used to account for the single-employer defined benefit medical plan for sworn fire officers that retire on or after July 1, 1997.

Retiree Medical

This fund is used to account for the single-employer defined benefit medical plan for retirees and his/her spouse or domestic partner.

Successor Agency for former RDA

This fund is used to account for the transfer of former Berkeley Redevelopment Agency in Governmental funds to Private Trust Funds per AB 1X 26.

203

CITY OF BERKELEYCombining Statement of Fiduciary Net Assets

Trust FundsJune 30, 2012

Private Trust

FundsMiscellaneous

Safety Members Police Retiree Fire Retiree SuccessorPension/Pension Retirement Medical Medical Agency of Total

Annuity Fund Former RDAAssets Cash and cash equivalents 51,045$ 556,328$ 5,438,234$ 1,091,088$ 1,220,271$ 8,356,966$ Restricted cash 1,896,258 1,976,651 3,872,909 Investments, at fair value - Corporate notes 5,579,947 6,848,116 5,180,186 17,608,249 Interest receivable 99,361 393,081 85,861 126,718 705,021 Grants receivable - 10,000 10,000 Notes receivable - 353,540 353,540 Deferred charges 98,044 98,044 Captial assets: Land 501,966 501,966 Building,property,equipment, net 816,097 816,097 Property held for resale 211,347 211,347 Total assets 1,947,303 6,235,636 12,679,431 6,357,135 5,314,634 32,534,139

LiabilitiesAccounts payable 4,477 4,477 Accrued salaries and wages 4,519 4,519 Pension benefits payable 51,045 51,045 Interest payable 753,135 753,135 Other liabilities 57,848 57,848 Bonds payable 4,097,000 4,097,000 Total liabilities 51,045 - - - 4,916,979 4,968,024

Net AssetsHeld in trust for pension benefits 1,896,258 6,235,636 8,131,894 Held in trust for OPEB benefits 12,679,431 6,357,135 19,036,566 Held in trust for City of Berkeley Successor Agency 397,655 397,655 Total net assets 1,896,258$ 6,235,636$ 12,679,431$ 6,357,135$ 397,655$ 27,566,115$

Pension

Trust Funds

Other Post-Employment Benefit

Trust Funds

204

CITY OF BERKELEYCombining Statement of Changes in Fiduciary Net Assets

Trust FundsFor the year ended June 30, 2012

--------------------------------------------------- ---------------------------------------------------Safety Members SuccessorPension/Pension Police Retire Fire Agency of

Annuity Fund Retirement Medical Medical Former RDA Total--------------------------------------------------- -------------------------- ----------------------- -------------------------- -----------------------

ADDITIONS:Grants revenue 10,000$ 10,000 Tax increment income 517,527 517,527 Contributions: Employer 799,800$ 1,208,475$ 2,036,802$ 735,022$ 4,780,099 Investment income 184,102 209,505 260,832 232,377 3,889 890,705 Operating transfer in 4,071 4,071 Extraordinary gains 2,180,966 2,180,966 Total Additions 983,902 1,417,980 2,297,634 967,399 2,716,452 8,383,366

DEDUCTIONS:General government 23,404 23,404 Highway and streets 9,156 9,156 Community development 158,107 158,107 Benefits payment for service 908,958 1,447,947 708,028 345,101 3,410,034 Benefits payment for disability 423,642 423,642 Administrative expenses 6,200 24,108 64,279 14,491 109,078 Interest payment 139,918 139,918 Pass through to COB 62,787 62,787 Operating transfer out 4,071 4,071 Extraordinary losses 1,921,354 1,921,354 Total Deductions 1,338,800 1,472,055 772,307 359,592 2,318,796 6,261,550

Change in net assets (354,898) (54,075) 1,525,327 607,807 397,656 2,121,816

Net Assets - beginning 2,251,156 6,289,711 11,154,104 5,749,328 25,444,299

Net Assets - ending 1,896,258$ 6,235,636$ 12,679,431$ 6,357,135$ 397,656$ 27,566,115$

Other Post-EmploymentBenefit Trust Funds

PensionTrust Funds

205

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206

Agency Funds

District 47 Underground/Miller

This fund is used to account for property tax collected and bond proceeds for the District 47 residents for the underground utility.

Sustainable Energy

This fund is used to account for property tax collected and bond proceeds for the renewable solar system for the Berkeley citizens.

Thousand Oaks Undergrounding

This fund is used to account for property tax collected and bond proceeds for the Thousand Oaks District residents for the underground utility.

Measure H School Tax

This fund is used to account for property tax collected under Measure H for the Berkeley Unified School District.

CFD No. 1 Disaster Fire Protection Mello-Roos

This fund is used to account for property tax collected and bond proceeds for the Community Fire District Mello-Roos.

Sick Leave Entitlement

This fund is used to account for unused sick leave balances for retirees.

207

CITY OF BERKELEYCombining Statement of Fiduciary Net Assets

Agency FundsJune 30, 2012

-------------------------- ---------------------- -- ------------------------------------------------------------------------------------------------------ ----------------------CFD No. 1

District 47 Sustainable Thousand Oaks Measure H Disaster Fire Protection Sick LeaveUnderground/Miller Energy Undergrounding School Tax Mello-Roos Entitlement Agency Funds

---------------------------------------------------- --------------------------------------------------------------------------------------- -------------------- ----------------------Assets Cash and cash equivalents 127,482$ 36,194$ 179,002$ 174,052$ 3,251,974$ -$ 3,768,702$ Taxes receivable - 2,436 2,616 69,462 11,561 - 86,076 Other accounts receivable - - - - 1,747 364,751 366,499 Total assets 127,482$ 38,630$ 181,618$ 243,514$ 3,265,282$ 364,751$ 4,221,277$

LiabilitiesOther liabilities 364,751$ 364,751 Other agency obligations 127,482$ 38,630$ 181,618$ 243,514$ 3,265,282$ - 3,856,526 Total liabilities 127,482$ 38,630$ 181,618$ 243,514$ 3,265,282$ 364,751$ 4,221,277$

AgencyFunds

208

CITY OF BERKELEYStatement of Changes in Assets and Liabilities

Agency Funds For the year ended June 30, 2012

---------------------- -------------------------- -------------------------- -------------------------- ------------------------------- -------------------------- ------------------------CFD No. 1

District 47 Sustainable Thousand Oaks Measure H Disaster Fire Protection Sick LeaveUnderground/Miller Energy Undergrounding School Tax Mello-Roos Entitlement Total ---------------------- -------------------------- -------------------------- -------------------------- ------------------------------- -------------------------- ------------------------

Assets

Cash and cash equivalents, July 1, 2011 125,756$ 36,273$ 162,613$ 200,243$ 3,182,721$ -$ 3,707,606$ Additions 1,726 32,248 114,637 451,824 6,980,870 347,888 7,929,193 Deletions - (32,327) (98,248) (478,015) (6,911,618) (347,888) (7,868,096) Cash and cash equivalents, June 30, 2012 127,482 36,194 179,002 174,052 3,251,974 - 3,768,702

Taxes Receivable, July 1, 2011 290 2,436 2,729 138,942 12,459 156,856 Additions 2,436 2,617 642,543 19,104 666,700 Deletions (290) (2,436) (2,729) (712,023) (20,002) (737,480) Taxes Receivable, June 30, 2012 - 2,436 2,616 69,462 11,561 86,076

Other Accounts Receivable, July 1, 2011 - 3,496 422,203 425,699 Additions 177 290,436 290,613 Deletions - (1,926) (347,888) (349,814) Other Accounts Receivable, June 30, 2012 - 1,747 364,751 366,499

Total Assets, June 30, 2012 127,482$ 38,630$ 181,618$ 243,514$ 3,265,282$ 364,751$ 4,221,277$

Liabilities

Other liabilities, July 1, 2011 422,203$ 422,203 Additions 290,436 290,436 Deletions (347,888) (347,888) Other liabilities, June 30, 2012 364,751 364,751

Other agency obligations, July 1, 2011 126,046$ 38,709 165,342$ 339,185$ 3,198,676$ 3,867,958$ Additions 1,726 34,684 117,253 1,094,367 7,000,151 8,248,181 Deletions (290) (34,763) (100,977) (1,190,038) (6,933,545) (8,259,614) Other agency obligations, June 30, 2012 127,482 38,630 181,618 243,514 3,265,282 3,856,526

Total Liabilities, June 30, 2012 127,482$ 38,630 181,618$ 243,514$ 3,265,282$ 364,751$ 4,221,277$

209

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210

III. STATISTICAL

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Index to Statistical Section This part of the comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. Contents Page Financial Trends 212-218 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 219-222 These schedules contain information to help the reader assess the factors affecting the City’s ability to generate its property tax. Debt Capacity 223-227 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 228-230 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place and to help make comparisons over time and with other governments. Operating Information 231-234 These schedules contain information about the City’s operations and resources to help the reader understand how the City’s financial information relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial report for the relevant year. The City implemented Statement 34 in FY2002; schedules presenting government-wide information include information beginning in that year.

211

Schedule ICity of BerkeleyNet Assets by Component,Last Nine Fiscal Years(Accrual Basis of Accounting)

2004 2005 2006 2007 2008 2009 2010 2011 2012Governmental activities Invested in capital assets, net of related debt 120,354,829$ 118,077,829$ 116,173,114$ 119,501,487$ 128,227,860$ 137,182,940$ 127,500,179$ 135,833,582$ 140,218,431$ Restricted for Debt services 720,139 2,792,509 1,563,274 6,816,326 4,675,040 9,723,843 11,260,187 11,599,189 9,320,347 Restricted for Special purpose 66,471,646 (e) 64,496,637 (f) 74,138,620 (f) 74,074,662 Restricted for Capital project 34,096,612 (c) 34,156,310 (f) 44,913,484 (f) 27,810,334 Unrestricted 60,263,548 71,993,628 89,886,981 (a) 92,306,119 102,064,459 (a) (9,236,278) (b) 2,634,900 (f) (h) (26,481,637) (f) (9,902,509) Total governmental activities net assets (as restated) 181,338,516$ 192,863,967$ 207,623,369$ 218,623,932$ 234,967,359$ 238,238,762$ 240,048,214$ 240,003,238$ 241,521,265$

Business-type activities Invested in capital assets, net of related debt 135,601,751$ 132,931,688$ 134,279,309$ 138,876,029$ 133,301,364$ 138,112,455$ 137,156,516$ 135,560,473$ 138,673,632$ Restricted for Debt services 270,417 2,566,760 2,357,251 3,650,091 12,586,834 (c) - Restricted for Capital project (c) Unrestricted 7,788,989 19,865,598 25,253,701 (a) 26,306,174 22,860,569 (a) 29,164,995 25,636,464 (g) 27,616,182 24,796,734 Total business-type activities net assets (as restated) 143,661,157$ 155,364,046$ 161,890,261$ 168,832,294$ 168,748,767$ (d) 167,277,449$ 162,792,980$ 163,176,655$ 163,470,366$

Primary government Invested in capital assets, net of related debt 255,956,580$ 251,009,518$ 250,452,423$ 258,377,517$ 261,529,224$ 275,295,395$ 264,656,695$ 271,394,055$ 278,892,063$ Restricted 720,139 5,359,269 3,920,525 10,466,417 17,261,874 110,292,101 109,913,134 130,651,294 111,205,343 Unrestricted 68,322,954 91,859,226 115,140,682 (a) 118,612,293 124,925,028 19,928,717 28,271,364 1,134,546 14,894,225 Total primary government net assets (as restated) 324,999,673$ 348,228,013$ 369,513,630$ 387,456,227$ 403,716,126$ 405,516,213$ 402,841,193$ 403,179,893$ 404,991,631$

(a) Restated 2006, 2007 and 2008(b) Restated 2009(c) The city began to separate "Restricted assets" into different categories in FY2009 and FY2010(d) Berkeley housing Authority became Discrete Component unit in FY08, prior to that it was an Enterprise fund of the Primary Government(e) Prior to GASB54, restricted net assets is that portion of net assets that has been restricted for general use by external parties or imposed by law through constitutional provisions or enabling legislation. Unrestrticted net assets consist of all net assets do not meet the definition of either of the other two components.(f) The City implemented of GASB 54 in FY2011 and restated FY2010. GASB54 requires fund balances to be broken down into 5 categories: (i). non-spendable; (ii).Restricted; (iii) Committed; (iv) Assigned; and (v) UnassignedRestricted net assets equals (i) and (ii) and unrestricted net assets equals (iii), (iv) and (v).(g) Restated 2010 due to landfill liabilities & look back adjustment(h) Restated 2010 due to look back adjustment

Source: City of Berkeley, Finance Department

212

Schedule IICity of BerkeleyChanges in Net AssetsLast Nine Fiscal Years(Accrual Basis of Accounting)

2004 2005 2006 2007 2008 2009 2010 2011 2012

ExpensesGovernmental activities: General government 21,300,795$ 20,009,187$ 23,737,019$ 25,380,703$ 27,163,852$ 29,266,165$ 32,157,308$ 32,723,124$ 29,929,909$ Public safety 62,776,926 65,924,262 70,198,107 74,872,926 81,244,204 83,172,996 83,085,260 92,302,278 93,788,397 Highways and streets 12,734,736 14,147,769 12,618,115 13,036,473 15,755,378 13,103,246 13,628,575 13,405,466 14,700,726 Health and welfare 22,688,767 24,678,821 24,384,895 27,344,501 28,952,978 30,156,828 23,717,544 21,671,819 19,546,406 Culture and recreation 30,495,373 26,690,760 27,959,448 30,957,018 32,870,746 32,637,740 34,126,643 34,033,319 35,079,112 Community development/housing 18,404,154 14,417,831 13,162,293 15,563,578 15,433,912 19,774,724 23,998,513 19,136,705 19,413,016 Economic development 2,679,686 2,706,552 1,935,691 2,961,942 3,208,496 3,412,478 5,151,053 2,745,171 3,646,479 p Interest on long-term debt 6,102,845 4,956,438 5,368,380 6,927,491 4,380,468 4,333,851 5,209,064 4,898,759 4,088,267 Total governmental activities 177,183,281 173,531,621 179,363,947 197,044,632 209,010,035 215,858,028 221,073,960 220,916,641 220,192,312 Business-type activities: Parking related 5,541,188 5,951,064 6,582,206 6,355,523 6,741,263$ 7,579,581$ 7,403,385$ 6,984,781$ 7,360,188$ Marina operations and maintenance 3,783,046 4,426,180 4,045,602 3,895,374 4,157,414 4,561,291 5,027,085 5,099,639 5,854,093 Sewer services 8,866,172 9,713,581 10,359,961 10,023,197 10,351,107 11,024,519 11,403,889 11,687,510 12,813,186 Clean storm water 1,763,376 2,067,609 2,068,087 2,297,733 2,703,970 2,882,256 2,987,585 2,363,869 2,390,350 Refuse services 23,571,482 24,824,928 25,786,615 26,564,445 29,816,972 33,140,056 32,693,031 35,014,849 32,417,995 Permit service center 6,704,832 7,227,440 8,903,637 9,849,515 10,407,986 10,723,985 9,581,085 9,371,901 9,152,576 Building purchase and management 3,594,161 2,955,853 3,474,788 3,521,869 2,919,162 2,875,534 2,880,513 3,100,961 3,259,428 Housing authority 23,902,806 23,839,825 24,497,462 23,807,680 (b) Total business-type activities 77,727,060 81,006,480 85,718,358 86,315,338 67,097,874 72,787,222 71,976,573 73,623,510 73,247,816 Total primary government expenses 254,910,341$ 254,538,101$ 265,082,305$ 283,359,970$ 276,107,910$ 288,645,250$ 293,050,533$ 294,540,150$ 293,440,128$

Program RevenuesGovernmental activities: Charges for services: General government 6,286,727$ 1,601,178$ 3,101,701$ 2,828,121$ 2,894,176$ 4,054,674$ 2,584,744$ 3,013,989$ 2,965,332$ Public safety 11,213,917 12,940,137 12,866,468 15,974,825 15,301,222 15,514,920 15,341,433 13,808,972 16,271,404 Highways and streets 48,623 1,643,923 1,679,570 1,799,346 1,510,382 1,505,087 2,974,062 2,414,877 2,165,995 Health and welfare 1,399,349 1,016,728 1,060,604 (a) 1,104,234 1,007,647 1,142,896 1,367,591 1,401,541 1,472,907 Culture and recreation 2,641,480 2,563,785 2,577,201 (a) 2,564,813 2,878,087 3,027,156 3,037,335 3,387,609 3,122,421 Community development/housing 163,045 2,238,445 1,623,028 3,317,101 2,451,135 1,525,429 2,292,171 2,095,751 2,129,425 Economic development 268,457 289,244 459,963 492,162 714,769 771,563 480,068 736,560 1,505,706 Operating grants and contributions 23,727,264 21,783,960 32,821,127 (a) 32,328,025 32,694,861 31,338,593 31,772,355 35,975,381 31,483,965 Capital grants and contributions 268,000 1,237,230 3,196,612 3,127,042 9,223,690 5,798,539 8,102,721 3,360,193 4,191,566 Total governmental activities program revenues 46,016,862 45,314,630 59,386,274 63,535,667 68,675,969 64,678,856 67,952,482 66,194,873 65,308,721

Continued

213

Schedule IICity of BerkeleyChanges in Net AssetsLast Nine Fiscal Years(Accrual Basis of Accounting)

2004 2005 2006 2007 2008 2009 2010 2011 2012Business-type activities: Charges for services: Parking related 5,625,043 5,933,890 6,262,246 6,579,472 7,228,080 7,491,363 8,231,201 9,047,693 9,817,873 Marina operations and maintenance 3,493,512 4,428,619 3,959,829 4,403,372 4,708,412 5,343,851 4,787,137 4,736,825 5,299,039 Sewer services 13,346,848 15,791,868 14,291,484 13,214,799 15,119,555 13,864,952 12,352,405 12,677,638 12,166,250 Clean storm water 1,903,397 2,256,770 2,103,895 2,012,753 1,950,637 2,026,307 2,062,126 2,070,815 2,065,087 Refuse services 23,243,474 24,374,069 26,943,113 29,286,719 29,591,397 29,292,344 32,313,189 33,740,848 32,702,914 Permit service center 6,850,135 9,768,619 9,011,732 8,930,408 11,268,021 10,137,535 7,908,608 8,487,701 8,968,166 Building purchase and management 2,231,092 2,132,243 2,668,506 2,642,140 2,634,594 2,923,964 2,921,485 3,011,690 2,984,924 Housing authority 23,976,774 24,429,603 24,747,553 23,840,526 (b) Operating grants and contributions 382,440 590,403 20,297 14,963 139,323 29,831 Total business-type activities program revenues 80,670,275 89,115,681 90,370,799 91,500,591 72,500,696 71,100,613 70,591,114 73,912,533 74,034,084 Total primary government revenues 126,687,137$ 134,430,311$ 149,757,073$ 155,036,259$ 141,176,665$ 135,779,469$ 138,543,596$ 140,107,406$ 139,342,805$

Net (Expense)/Revenue

Governmental activities (131,166,421)$ (128,216,991)$ (119,977,673)$ (133,508,965)$ (140,334,066)$ (152,179,172)$ (153,121,478)$ (154,721,768)$ (154,883,591)$ Business-type activities 2,943,215 8,109,201 4,652,440 5,185,253 5,402,822 (1,686,609) (1,385,459) 289,023 786,268

Total primary government net expense (128,223,207)$ (120,107,790)$ (115,325,233)$ (128,323,711)$ (134,931,245)$ (153,865,781)$ (154,506,937)$ (154,432,745)$ (154,097,322)$

Continued

214

Schedule IICity of BerkeleyChanges in Net AssetsLast Nine Fiscal Years(Accrual Basis of Accounting)

2004 2005 2006 2007 2008 2009 2010 2011 2012General Revenues and Other Changes in Net AssetsGovernmental activities: Taxes Property taxes, levied for general purposes 39,129,639$ 45,298,094$ 50,862,892 (a) 54,807,757 51,184,853 49,946,421 50,488,138 50,956,374 60,233,049 Property taxes, levied for debt service 8,178,122 8,707,487 8,474,026 7,850,614 7,240,292 8,625,163 8,549,702 8,049,862 7,115,652 Property taxes for special purposes: Library 10,825,576 11,680,378 12,167,897 12,476,619 13,025,265 13,624,572 13,911,751 14,159,245 14,581,791 Parks 7,352,941 7,749,497 7,864,110 8,049,906 8,294,518 8,568,098 8,753,907 8,915,445 9,186,260 Paramedic 1,951,801 2,062,201 2,098,186 2,149,728 2,212,258 2,286,603 2,335,060 2,377,898 2,454,762 Fire 5,220,824 3,629,617 3,741,157 Sales taxes 13,267,014 13,103,459 13,983,672 14,165,288 15,310,010 13,907,221 12,733,983 14,420,383 14,844,945 Utility users taxes 13,572,268 13,619,145 14,367,544 14,091,522 15,310,895 14,669,480 14,418,851 14,411,756 14,091,347 Transient occupancy taxes 2,226,485 2,637,110 3,008,772 3,305,969 3,588,753 3,671,362 3,673,023 4,698,045 4,609,048 Business license tax 11,063,516 10,651,571 11,077,244 11,024,918 13,562,868 13,388,429 13,505,958 13,954,587 15,645,975 Other taxes 9,304,442 9,969,179 625,947 (a) 1,166,355 2,999,006 3,318,326 3,440,025 3,180,380 2,853,421

Unrestricted motor vehicle fees 4,602,571 6,555,913 5,692,685 7,748,232 8,040,640 8,453,191 8,543,643 8,739,449 - Other unrestricted state subventions 362,621 362,013 362,107 377,022 369,556 372,325 386,461 388,380 399,476 Contributions not restricted to specific programs 531,888 1,054,072 327,806 382,044 565,457 194,860 665,255 547,171 1,036,535 Interest and investment earnings 3,235,407 2,928,274 4,455,752 (a) 6,382,420 7,385,655 9,433,566 5,960,103 4,735,256 2,760,171 Miscellaneous 2,084,089 1,580,549 639,631 980,335 2,868,810 1,871,221 1,507,229 1,186,207 1,972,376 Gain/Loss on sale of capital assets 1,530,333 328,929 3,652 1,882 (594,577) 21,820 464,093 Extraordinary Gain/ (Loss) (259,613) Transfers (488,723) (731,767) (1,080,120) (452,854) (1,193,932) 707,429 837,018 304,928 671,173 Total governmental activities 127,199,657 138,757,509 135,257,082 144,509,528 150,766,785 152,443,690 154,930,931 154,676,803 156,401,619

Business-type activities Interest and investment earnings 553,696 626,497 793,604 1,303,926 1,340,949 920,612 1,066,472 394,257 176,551 Gain on sale of capital assets 3,498 51 11,171 2,109 10,742 5,324 2,068 Transfers 488,723 731,767 1,080,120 452,854 1,193,932 (707,429) (837,018) (304,929) (671,173) Total business-type activities 1,042,419 1,361,762 1,873,775 1,756,780 2,546,052 215,292 240,196 94,652 (492,554) Total primary government 128,242,076$ 140,119,272$ 137,130,857$ 146,266,308$ 153,312,837$ 152,658,982$ 155,171,128$ 154,771,456$ 155,909,065$

Change in Net AssetsGovernmental activities (3,966,764)$ 10,540,518$ 15,279,409$ 11,000,563$ 10,432,720 264,520 1,809,453 (c) (44,966) 156,401,619 Business-type activities 3,985,632 9,470,964 6,526,215 6,942,034 7,948,874 (1,471,317) (1,145,262) (c) 383,675 (492,554) Total primary government 18,868$ 20,011,482$ 21,805,624$ 17,942,598$ 18,381,593$ (1,206,797)$ 664,192$ 338,709$ 155,909,065$

Concluded

Notes: (a) The amount is restated (b) Housing authority became a discrete component unit starting FY2008 (c) restated due to "look back adjustments" in FY2011

Source: City of Berkeley, Finance Department

215

Schedule IIICity of BerkeleyFund Balance, Governmental FundsLast Nine Fiscal Years(Modified Accrual Basis of Accounting)

2004 2005 2006 2007 2008 2009General Fund Reserved 17,906,247$ 13,609,216$ 12,424,249$ 15,735,422$ (b) 16,153,120$ 12,745,878$ Unreserved 10,045,955 20,389,483 27,392,892 a 29,989,078 (b) 31,664,729 (c) 32,245,545

Total general fund 27,952,202$ 33,998,699$ 39,817,141$ 45,724,500$ 47,817,849$ 44,991,423$

All Other Governmental Funds Reserved 54,280,209$ 61,827,937$ 53,855,131$ a 56,642,985$ (b) 67,651,814$ 66,847,870$

Unreserved, reported in: Special revenue funds 10,062,899 9,760,166 17,836,391 a 12,038,775 (b) 16,158,919 26,001,665 Capital project funds 11,960,837 7,907,369 14,485,765 a 13,143,822 (b) 15,319,622 (c) 17,442,566 Total all other governmental funds 76,303,945$ 79,495,472$ 86,177,287$ 81,825,582$ 99,130,355$ 110,292,101$

2010 2011 2012General Fund Nonspendable 3,313,193 3,357,980 3,438,803 Assigned 2,762,840 2,271,366 2,343,500 Unassigned 37,211,689 36,020,731 32,286,557 Total general fund 43,287,722$ (d) 41,650,076$ (e) 38,068,859$

All Other Governmental Funds Nonspendable 2,721,715 2,638,276$ 2,114,083$ Restricted 111,973,322 128,013,017 109,091,260 Assigned 1,272,791 1,702,626 11,431,620 Unassigned (2,403,731) (3,083,091) (7,290,346) Total all other governmental funds 113,564,098$ (d) 129,270,827$ (e) 115,346,617$

(a) Restated 2006 due to change of liability in both Special Revenue and Capital Project funds(b) Restated in 2007 due to change of receivable accounts in General fund, major special revenue and capital project funds(c) Restated 2008 due to change of receivables in Capital Project funds(d) Restated for 2010 due to implement of GASB54 in FY2011 for new fund balances definition(e) The City began to implement of GASB 54 in FY2011. GASB54 requires fund balances to be broken down into 5 categories: (i). non-spendable; (ii).Restricted; (iii) Committed; (iv) Assigned; and (v) Unassigned

216

Schedule IVCity of BerkeleyChanges in Fund Balances, Governmental FundsLast Nine Fiscal Years(Modified Accrual Basis of Accounting)

2004 2005 2006 2007 2008 2009 2010 2011 2012

Revenues: Taxes 119,013,284$ 127,843,161$ 127,099,195$ (2) 130,825,668$ 135,613,099$ 135,649,038$ 139,569,452$ 141,205,937$ 144,860,044$ Licenses and permits 431,201 467,395 545,681 512,598 580,144 887,535 1,067,931 971,120 881,108 Intergovernmental 31,338,994 30,726,190 42,282,288 (2) 43,618,133 50,298,070 45,681,080 48,999,218 49,755,227 45,798,782 Charges for Service 8,533,424 7,714,470 9,064,617 9,691,836 10,474,180 11,616,513 10,933,508 12,043,388 11,929,921 Fines and Penalties 8,395,994 9,290,404 10,100,720 12,943,542 10,921,168 10,885,461 11,158,371 10,561,972 9,851,317 Rents and royalties 334,649 358,415 396,199 362,540 332,279 411,413 460,743 409,872 358,434 Franchise 1,393,504 1,436,751 1,531,999 1,685,798 1,731,548 1,848,246 1,914,871 1,771,895 1,539,773 Private contributions and donations 531,888 1,054,073 327,806 382,044 565,457 194,860 665,255 547,171 1,036,535 Indirect cost reimbursements Investment income 3,235,407 2,928,274 4,434,170 (2) 6,382,420 7,385,655 9,433,566 5,868,959 4,759,669 2,904,618 Miscellaneous 1,749,440 1,222,134 243,428 395,868 2,536,531 1,459,808 1,032,941 755,903 1,359,323

Total revenues 174,957,785 183,041,266 196,026,103 206,800,448 220,438,130 218,067,519 221,671,249 222,782,154 220,519,856

Expenditures: Current General government 18,950,823 18,711,371 23,085,194 24,523,142 25,761,628 27,736,082 27,966,597 28,566,008 28,623,928 Public safety 57,784,174 63,924,810 70,163,212 72,587,976 77,487,988 78,891,374 79,717,900 86,910,102 88,389,316 Highway and streets 7,874,308 8,962,255 9,557,307 8,731,843 11,113,003 8,308,257 8,812,452 8,510,135 9,755,984 Health and welfare 21,041,549 24,120,036 24,595,493 27,343,370 28,520,889 29,616,973 23,717,437 21,757,796 19,443,351 Culture-recreation 26,688,284 25,988,543 27,554,682 28,828,440 30,713,797 30,347,460 35,754,850 32,428,584 32,914,456 Community development/housing 16,026,430 13,213,362 11,471,892 11,988,001 13,963,017 18,338,303 19,572,531 17,753,578 18,099,040 Economic development 2,570,502 2,631,230 1,951,430 2,467,872 3,121,599 3,360,442 5,136,033 2,743,700 3,595,178 Capital outlay 6,616,033 8,654,422 8,578,941 8,824,669 9,794,468 12,993,361 12,316,245 14,195,181 23,678,415 Debt service Principal repayment 25,232,548 4,052,503 4,245,808 10,629,931 6,148,777 5,476,657 4,399,000 4,369,000 3,780,000 Interest and fiscal charges 6,102,845 4,956,438 5,368,380 6,081,191 4,380,468 4,302,026 4,983,688 4,755,777 4,560,657 Cost of issuance 286,103 794,226 41,601 74,702 206,387 190,606 57,941

Total expenditures 188,887,496 175,214,971 186,858,442 202,800,662 211,047,235 219,445,636 222,583,121 222,180,467 232,898,267 continued

217

Schedule IVCity of BerkeleyChanges in Fund Balances, Governmental FundsLast Nine Fiscal Years(Modified Accrual Basis of Accounting)

2004 2005 2006 2007 2008 2009 2010 2011 2012Excess (deficiency) of revenues

over (under) expenditures (13,929,712) 7,826,295 9,167,661 3,999,786 9,390,895 (1,378,116) (911,872) 601,687 (12,378,411)

Other financing sources(uses): Transfers in 15,194,903 21,888,814 24,101,719 25,634,974 22,152,164 22,634,032 14,552,263 19,268,482 20,022,143 Transfers out (18,113,149) (24,643,507) (24,789,155) (28,144,059) (27,005,267) (24,817,082) (16,336,520) (22,232,168) (21,253,445) Proceeds of notes and loans 500,000 459,930 55,930 9,394,000 11,894,000 6,000,000 Proceeds of bonds 16,000,000 140 Premium on notes and loans 428,536 - Issuance of certificates of participation 5,750,000 - - Premium on certificate of participation 403,977 Refunding bonds issued 7,880,000 45,585,000 Premium on refunded bond 21,582 221,927 Payment to refunded bonds escrow agent (6,040,000) (44,960,627) Refunded bonds redemption premium (846,300) Sales of capital assets 23,470 1,530,333 2,218,526 9,023 1,882 2,490 1,452 2,548 509,636

Total other financing sources(uses) (2,894,776) (724,359) 3,852,602 (2,444,132) 4,542,779 9,713,440 10,371,172 13,467,398 (721,526)

Extraordinary gain/ (loss) (4,405,488)

Net change in fund balances (16,824,487)$ 7,101,937$ 13,020,263$ 1,555,655$ 13,933,676$ 8,335,322$ 9,459,300$ 14,069,085$ (17,505,425)$

concluded

Debt service as a percentage of noncapitalexpenditures 17.19% 5.41% 5.40% 8.65% 5.23% 4.74% 4.47% 4.39% 3.99%

Notes:(1) The percentage indicated for Fiscal Year 2004 is significantly higher due to the early retirement of Lease Revenue Bonds issued in 1996. (2) The FY 2006 amount is restated.

Source: City of Berkeley, Finance Department

218

Schedule VCity of BerkeleyAssessed Value and Estimated Actual Values of Taxable PropertyLast Ten Fiscal Years(In Thousands of Dollars)

Commercial Total Taxable EstimatedFiscal Residential Utility and Industrial Institutional Less: Assessed Total Direct Actual TaxableYear Property Property Property Property Exemptions Value Tax Rate Value

2003 5,981,691$ 2,463$ 1,911,660$ 126,737$ (373,130)$ 8,395,681$ 10.73 8,395,681$ 2004 6,466,978 2,527 2,013,079 131,659 (360,677) 8,974,920 10.73 8,974,920 2005 7,005,223 3,075 1,966,680 149,092 (433,086) 9,557,156 10.65 9,557,156 2006 7,673,198 2,520 2,085,365 156,657 (415,243) 10,332,984 10.53 10,332,984 2007 8,415,411 2,335 2,235,743 212,847 (486,955) 11,353,292 10.45 11,353,292 2008 9,114,801 1,325 2,353,222 230,899 (538,391) 11,161,856 10.55 11,161,856 2009 9,762,011 474 2,498,734 228,115 (570,449) 11,918,885 10.55 11,918,885 2010 9,915,723 474 2,570,430 269,072 (669,646) 12,086,053 10.51 12,086,053 2011 9,943,462 556 2,574,960 269,634 (640,481) 12,148,131 10.48 12,148,131 2012 10,320,198 556 2,600,510 275,155 (669,934) 12,526,485 10.47 12,526,485

Note:

Source: Alameda County Auditor - Controller's Office

1. In 1978, the voters of the State of California passed Proposition 13 which limited taxes to a maximum rate of 1% based upon the assessed value of the property being taxed. Each year the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold.

219

Schedule VICity of BerkeleyDirect and Overlapping Property Tax Rates,Last Ten Fiscal Years(Rate Per $1,000 of Assessed Value)

General Total Berkeley Peralta East Bay East Bay Bay AreaFiscal Basic Obligation Direct Unified Community Municipal Regional Rapid Year Rate (1) Debt Service Rate School College Utility Dist 1 Park Dist. Transit Total Rate

2003 10.00 0.75 10.75 1.40 0.18 0.07 0.08 12.48 2004 10.00 0.73 10.73 1.73 0.16 0.06 0.08 12.75 2005 10.00 0.73 10.73 1.67 0.21 0.08 0.06 12.73 2006 10.00 0.65 10.65 1.43 0.24 0.07 0.06 0.05 12.49 2007 10.00 0.53 10.53 1.35 0.27 0.07 0.09 0.05 12.35 2008 10.00 0.45 10.45 1.41 0.22 0.07 0.08 0.08 12.30 2009 10.00 0.55 10.55 1.45 0.36 0.06 0.10 0.09 12.62 2010 10.00 0.51 10.51 1.50 0.43 0.07 0.11 0.06 12.67 2011 10.00 0.48 10.48 1.46 0.43 0.07 0.08 0.03 12.56 2012 10.00 0.47 10.47 1.48 0.44 0.07 0.07 0.04 12.56

Notes:

Source: California Municipal Statistics, Inc.

City Direct Rates Overlapping Rates

(1) In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% (or $10 per $1,000 of assessed value) fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of City, school, and other Districts' bonds.

220

Schedule VIICity of BerkeleyPrinciple Property Tax PayersCurrent Year and Ten Years Ago Percentage Percentage (In Thousands of Dollars) of Total City of Total City

Taxable Taxable Taxable TaxableAssessed Assessed Assessed Assessed

ASSESSEE NAME Value Value Value Value

Bayer Healthcare LLC 16,692$ 0.24% 268,343 2.14%Granite Library Gardens LP 60,308 0.48%GBC University Associates 33,029 0.48%SC Hillside Berkeley, INC 44,849 0.36%EQR Action Berkeley LP 111,057 0.89%Reddy Hanumandla R & Hanumandla J TRS 14,961 0.22% 34,133 0.27%SNK Captec Arpeggio LLC LLC 85,126 0.68%Essex Berkeley 4th Street LP 45,064 0.36%920 Heinz LP 35,825 0.29%1950 MLK LLC 35,569 0.28%Ed Roberts Campus 34,516 0.28%Seventh Street Properties II III & VIII 19,311 0.28%Berkeley Business Center LLC 10,326 0.15%Cutter Laboratories 264,306 3.84%First Shattuck LLC 18,312 0.27%Fifth & Potter Street Associates LLC 15,512 0.23%

Two Forty Stockton St. 16,659 0.24%Sarachan Kenneth 4,998 0.07%

Total - Principal taxpayers 414,106$ 6.01% 754,790$ 6.03%

Total - All real properties assessed by the City (1) 6,891,710$ $12,526,485

(1) Assessed value includes only net secured real properties.

Source: Alameda County Auditor - Tax Collectors Office

20122002

221

Schedule VIIICity of BerkeleyProperty Tax Levies and Collections,Last Ten Fiscal Years(In Thousands of Dollars)

FiscalYear Taxes Levied

Ended for the Percentage June 30, Fiscal Year (1) Amount of Levy Secured Unsecured (3) Total

2003 26,792 26,076 97.33% 654 87 741 2004 28,034 27,397 97.73% 688 99 787 2005 30,045 29,384 97.80% 652 22 674 2006 32,681 31,909 97.64% 695 16 711 2007 35,643 34,335 96.33% 1,189 118 1,308 2008 38,202 36,422 95.34% 1,680 100 1,780 2009 40,787 38,891 95.35% 1,757 139 1,896 2010 41,312 39,951 96.71% 1,222 139 1,361 2011 41,409 40,280 97.27% 938 191 1,129 2012 42,783 41,699 97.47%

Note:(1) Levies include Secured and Unsecured Property.

Source: Alameda County Auditor - Controller's Office

Collected within theFiscal Year of the Levy Collection in Subsequent Years(2)

(2) Collection in subsequent years is reported based on revenue received from the County for the fiscal year end shown. The City does not receive information from the County that specifies how much of the subsequent collection received belongs to each fiscal year. Subsequent collections for both tax types include penalties and interest assessed on the previously unpaid amounts. As a result, total collections for each levy year are not presented.

222

Schedule IXCity of BerkeleyRatios of Outstanding Debt by TypeLast Ten Fiscal Years(Dollars in Thousands, Except Per Capita)

General cash & Net Certificates Lease TotalFiscal Obligation Restricted G.O. of Redevelopment Revenue Capital Notes/Loans GovernmentalYear Bonds cash Bonds Participation Bonds Bonds Lease Payable Activities

2003 73,915 7,653 66,262 8,815 37,805 1,893 2,672 117,447 2004 71,885 8,641 63,244 8,236 15,495 1,623 2,629 91,227 2005 69,940 10,469 59,471 7,040 14,435 1,743 3,157 85,846 2006 a 67,915 12,012 55,903 8,110 13,455 1,343 3,546 82,357 2007 b 60,000 4,849 55,151 7,420 12,550 920 4,596 c 80,637 2008 64,255 5,534 58,721 6,705 11,715 473 5,584 83,198 2009 71,430 6,982 64,448 6,503 10,940 4,440 6,283 92,614 2010 68,700 7,934 60,766 6,154 5,210 10,215 4,077 12,631 99,053 2011 82,421 8,232 74,189 6,139 4,425 9,520 3,699 12,438 110,410 2012 79,475 6,356 73,119 6,126 - d 8,875 3,304 11,751 103,175

Lease Certificates Total Total PercentageFiscal Revenue of Notes/Loans Capital Business-Type Primary of Personal PerYear Bonds Participation Payable Lease Activities Government Income (1) Capita (1)

2003 4,650 27,950 2,541 103 35,244 152,691 4.82% 1,468 2004 4,470 27,950 3,738 53 36,211 127,438 4.02% 1,225 2005 4,280 27,950 3,428 35,658 121,504 3.83% 1,168 2006 5,290 27,950 3,319 36,559 118,916 3.75% 1,143 2007 5,040 27,685 1,954 c 34,679 115,316 3.64% 1,109 2008 4,780 27,410 4,431 36,621 119,819 3.78% 1,152 2009 4,510 26,755 4,710 35,975 128,589 4.06% 1,236 2010 4,235 26,080 6,956 37,271 136,324 4.30% 1,311 2011 3,950 25,385 11,056 40,391 150,801 4.76% 1,450 2012 3,650 24,665 10,428 38,743 141,918 3.48% 1,236

Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements

a The City issued $7 million in refunding tax allocation bonds for the Berkeley Redevelopment Agency.b The City issued over $45.5 million to defease General Obligation Bonds during the yearc Restated Amountd. Berkeley Redevelopment Agency was dissolved on January 31, 2012 per AB 1X 26. All the outstanding debts were moved to the Successor Agency, and are in Private Trust Funds.(1) See Schedule XIV for personal income and population data

Source: City of Berkeley, Finance Department

Governmental Activities

Business-type Activities

223

Schedule XCity of BerkeleyRatios of General Bonded Debt OutstandingLast Ten Fiscal Years(Dollars in Thousands, Except Per Capita)

Net General Bonds Debt as a

Percentage of OutstandingGeneral Tax Actual Taxable Debt

Fiscal Obligation Revenue Allocation Value of PerYear Bonds Bonds Bonds Total Property (a) Capita (b)

2003 73,915 37,805 8,815 120,535 1.44% 1,159 2004 71,885 15,495 8,236 95,616 1.07% 917 2005 69,940 14,435 7,040 91,415 0.96% 875 2006 67,915 13,455 8,110 89,480 0.87% 849 2007 60,000 12,550 7,420 79,970 0.70% 752 2008 64,255 11,715 6,705 82,675 0.74% 775 2009 71,430 10,940 5,970 88,340 0.74% 824 2010 68,700 16,368 5,210 90,278 0.75% 802 2011 82,421 15,659 4,425 102,505 0.84% 899 2012 79,475 12,482 73,119 ( c ) 165,076 1.32% 1,438

Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements.

(a) See Schedule V for property value data for FY2003 to 2012(b) Population data can be found on schedule 14.( c )Tax allocation Bonds belong to Berkeley Redevelopment Agency, which was dissolved on January 31, 2012. due to AB 1X 26. All the outstanding amounts were transferred to the Successor Agency as Private Trust funds.

Source: Finance Department, City of Berkeley

General Bonded Debt Outstanding

224

Schedule XI

City of Berkeley

Direct and Overlapping Governmental Activities Debt

As of June 30, 2012

(In Thousands of Dollars, except assessed valuation)

2011-12 Assessed Valuation: 12,526,485,299$

Redevelopment Incremental Valuation: 175,166,354 Adjusted Assessed Valuation: 12,351,318,945$

Estimated

Estimated Share of Direct

Debt Outstanding Percentage and Overlapping

DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2012 Applicable (1) Debt 6/30/12

Bay Area Rapid Transit District $412,540 2.99% 12,314$

East Bay Municipal Utility District, Special District No. 1 21,650 21.61% 4,679

Peralta Community College District 427,080 23.39% 99,873

Berkeley Unified School District 224,469 100.00% 224,460

City of Berkeley Community Facilities District No. 1 6,050 100.00% 6,050

East Bay Regional Park District 129,525 4.64% 6,007

City of Berkeley Thousand Oaks Heights AFUU Assessment Distrtict 1,310 100.00% 1,310

Subtotal overlapping taz and assessment debt 354,693

DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Alameda County and Coliseum Obligations $676,803 7.71% 52,182$

Alameda County Pension Obligations 131,541 7.71% 10,142

Alameda-Contra Costa Transit District Certificates of Participation 34,485 9.36% 3,227

Peralta Community College District Pension Obligations 160,149 23.39% 37,451

Subtotal overlapping General Fund debt 103,002$

Subtotal City direct debt 3,304

Total direct debt 3,304

Total overlapping debt 457,695

Total direct and overlapping debt: (2) 460,999$

Notes:

Source: California Municipal Statistics, Inc.

(1) Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.

(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease

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Schedule XIICity of BerkeleyLegal Debt Margin Information,Last Ten Fiscal Years(In Thousands of Dollars)

Legal Debt Margin Calculation for Fiscal Year 2012

Assessed Value 12,526,485$ Debt limit 1,878,973 Debt applicable to limit: 68,700

Legal Debt Margin 1,810,273$

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Debt limit 1,147,413$ 1,238,035$ 1,303,648$ 1,455,167$ 1,556,907$ 1,674,278$ 1,787,833$ 1,812,908$ 1,822,220$ 1,878,973$

Debt applicable to limit 73,915 71,885 69,940 67,915 60,000 64,255 71,430 68,700 82,421 68,700

Legal debt margin 1,073,498$ 1,166,150$ 1,233,708$ 1,387,252$ 1,496,907$ 1,610,023$ 1,716,403$ 1,744,208$ 1,739,799$ 1,810,273$

Total net debt applicable to thelimit as a percentage of debt limit 6.89% 6.16% 5.67% 4.90% 4.01% 3.99% 4.16% 3.94% 4.74% 3.80%

Note: The City of Berkeley is a charter city and, as such, does not have a debt limit. However, the debt limit computation is calculated using the 15% limit that would be in effect if the city were a general law city.

Source: City of Berkeley, Finance Department

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Schedule XIIICity of BerkeleyPledged Revenue Coverage,Last Ten Fiscal Years(In Thousands of Dollars, except coverage ratio)

Less: NetFiscal Operating Operating Available Debt ServiceYear Revenue Expenses (2) Revenue Principal Interest Total Coverage

2003 3,099 1,506 1,592 170 280 450 3.54 2004 3,408 2,011 1,396 180 271 451 3.10 2005 3,573 2,042 1,531 190 260 450 3.40

2006 (3) - - - - - - -

(1) Excludes fund balances for debt service reserve fund and project funds(2) Includes operating expenses less depreciation and amortization(3) Refunded in FY 2006 by 2005 A Lease Revenue Bonds shown below

Less: NetFiscal Operating Operating Available Debt ServiceYear Revenue Expenses (2) Revenue Principal Interest Total Coverage

2006 (3) 3,256 2,013 1,243 330 122 452 2.75 2007 3,039 1,908 1,131 250 201 451 2.51 2008 2,884 2,060 824 260 192 452 1.82 2009 2,723 2,282 442 270 184 454 0.97 2010 2,892 2,486 406 275 175 450 0.90 2011 3,166 2,090 1,076 285 166 451 2.38 2012 3,575 2,426 1,149 300 157 457 2.51

(1) Excludes fund balances for debt service reserve fund (Fund 640 named BJPFA Lease Revenue Bonds)(2) Includes operating expenses less depreciation and amortization(3) Refunded in FY 2006 by 2005 A Lease Revenue Bonds shown above

Note: Pledged revenue is the total revenue generated from the operation of two parking garages and one surface lot.

Source: City of Berkeley, Finance Department

Off-Street Parking 1994 Lease Revenue Bonds

Off-Street Parking 2005 A Refunding Lease Revenue Bonds

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Schedule XIVCity of BerkeleyDemographic and Economic Statistics,Last Ten Fiscal Years

Personal Income Per Capita Public University of City

Fiscal (thousands Personal Median School California UnemploymentYear Population of dollars) Income Age Enrollment Enrollment Rate

Ended (1) (2) (3) (4) (5) (6) (7)

2003 104,000 3,169,608 30,477 32.5 9,060 33,076 7.1%2004 104,300 3,178,751 30,477 32.5 8,843 32,814 5.8%2005 104,534 3,185,883 30,477 32.5 8,904 33,483 5.0%2006 105,385 3,887,020 36,884 (8) 34.1 9,076 33,933 4.4%2007 106,347 3,922,503 36,884 34.1 9,088 34,953 4.6%2008 106,697 3,935,412 36,884 34.1 8,954 34,953 5.9%2009 107,268 3,806,083 35,482 (8) 34.8 8,856 34,183 10.8%2010 112,580 3,994,564 35,482 33.6 8,988 35,843 11.3%2011 114,046 4,046,580 35,482 33.6 9,248 35,838 10.3%2012 114,821 (9) 4,074,079 35,482 33.6 9,324 36,142 9.0%

Source: (1) California State Dept. of Finance - Population Research Unit (2) Association of Bay Area Governments, (in constant 88 dollars), U.S. Census (3) Association of Bay Area Governments, (in constant 88 dollars), U.S. Census (4) Association of Bay Area Governments, Bay Area Census (5) Berkeley Unified School District from California Department of Education (6) University of California (7) State of California, Employment development Dept., Labor Market Info. Div. As of June 1 (8) From www.bayareacensus.ca.gov/cities/berkeley.htm (9) From State Department of Finance estimates (as of January 1, 2012)

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Schedule XVCity of BerkeleyPrincipal EmployersCurrent Year and Ten Years Ago

Percentage PercentageOf Total City Of Total City

Employer Employees Rank Employment Employees Rank Employment

University of California Berkeley 12,377 1 17.59% 13,882 1 19.77%Lawrence Berkeley National Laboratory 3,832 2 5.45% 4,200 2 5.98%Alta Bates Medical center 2,065 3 2.93% 2,665 3 3.80%City of Berkeley 1,524 4 2.17% 1,486 4 2.12%Bayer Corporation 1,101 6 1.56% 1,300 5 1.85%Berkeley Unified School district 1,200 5 1.71% 1,166 6 1.66%Kaiser Permanente Medical group 700 7 0.99% 668 7 0.95%Pacific Steel Casting Company 380 9 0.54% 470 8 0.67%Berkeley Bowl 442 9 0.63%Berkeley YMCA 371 10 0.53%State of California Department of Health 600 8 0.85%Andronico's Market 325 10 0.46%

Total 24,104 34.26% 26,650 37.96%

^ Information is not avaialble for both FY2002 and 2003

Source: City of Berkeley, Office of Economic Development

20122001^

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Schedule XVICity of BerkeleyFull-time-Equivalent City Governmental Employees by Function/ProgramLast Ten Fiscal Years

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Function/Program

General Government 226.05 214.05 196.85 189.60 190.31 197.80 206.30 203.30 191.30 182.30 Police 322.20 318.20 311.20 305.20 308.20 308.20 304.20 301.20 294.70 289.20 Fire 141.75 141.75 136.75 135.75 136.50 136.75 136.75 139.75 139.75 139.75 Health services (1) 272.58 272.63 258.26 253.98 267.73 271.48 279.30 194.54 158.28 142.35 Culture and recreation (1) 186.21 177.06 160.95 149.98 147.68 152.54 164.48 165.33 161.33 157.33 Community development/housing (3) 54.68 49.63 47.63 45.83 45.83 35.73 30.63 96.76 96.26 85.64 Economic Development 8.80 7.80 7.80 9.50 9.50 10.00 9.85 7.85 5.85 5.85 Library 125.84 126.28 116.27 121.37 127.56 124.84 120.36 115.53 113.78 109.70 Planning 64.35 61.35 59.75 66.75 72.50 73.00 74.05 65.55 59.05 58.55 Public Works/Transportation (2) 317.56 302.56 300.81 312.00 310.00 330.00 325.00 326.00 301.00 296.25 Rent Board 22.30 21.30 20.30 19.30 19.30 19.30 19.30 18.30 19.85 19.45 Transportation (2) 12.00 30.00 31.60 - -

Total 1,754.32 1,722.61 1,648.17 1,609.26 1,635.11 1,659.64 1,670.22 1,634.11 1,541.15 1,486.37 (4)

Notes: Full-time equivalent employment is calculated as one or more employee positions totaling one full year of service or approximately 2,080 hours a year.

(1) In FY2002, some divisions of Health and Welfare moved to Culture and Recreation. (2) In FY2006, Office of Transportation has been combined with Public Works. (3) In FY2010 & 2011, some divisions in Health services, Planning were moved to Community development/housing (4) Information is based on FY2012 and 2013 adpoted biennal budget

Source: City Human Resources Department

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Schedule XVIICity of BerkeleyOperating IndicatorsCurrent and last two fiscal years

Fiscal Year Fiscal Year Fiscal Year2010 2011 2012

FUNCTION/PROGRAM

General governmentBuilding Permits Issued

Residential Permits Issued 1,541 1,658 1,680 Residential Permits Value 44,137,040$ 45,029,395$ 50,815,406$ Commercial Permits Issued 350 348 344 Commercial Permits Value 40,512,824$ 47,019,292$ 54,220,981$

Residential Parking PermitsNumber of Daily Permits Issued 32,824 33,678 24,082 Number of 14 Day Permits Issued 1,286 1,321 1,299 Number of Annual Permits Issued 14,840 14,277 9,169

City Clerk Number of Council Resolutions Passed 441 343 438 Number of Ordinances Passed 52 72 61 Number of Contracts Passed 569 550 529

General ServicesNumber of Purchase Orders Issued 5,206 4,596 4,577

Police Physical Arrests 3,479 2,988 2,504 Parking Violations 251,542 232,044 207,531 Traffic (moving) Violations 15,331 11,109 6,818 DUI Arrests 197 180 149

FireStructure Fires 80 103 75 Vehicle Fire 29 24 25 Other Fires 177 133 127 Medical Calls 8,211 8,487 9,084 Haz-mat Calls 73 85 89 Other Calls 3,416 3,225 3,574 Out of City 60 55 40

Department of Health Services (e) 1)Health Inspections and Permits 7,404 7,194 7,375 Public Health Services Encounters (e) 3) 75,800 71,425 62,365 Mobile Crisis Visits 2,465 2,038 1,361

Housing and Community Services Department (e) 1) (e)2)Home Delivered Meal (e) 2) 63,858 62,393 60,480 Summer and year-round jobs provided for youth (e) 2) 498 452 415

LibraryNumber of visits made to Library Branches 1,523,017 1,363,082 1,078,045 Number of people that are registered library card holders 95,917 94,718 92,883 Number of times materials from the library circulated (items checked out) 2,081,583 1,960,906 1,757,956

(Continued)

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Schedule XVIICity of BerkeleyOperating IndicatorsCurrent and last two fiscal years

Fiscal Year Fiscal Year Fiscal Year2010 2011 2012

FUNCTION/PROGRAMBerkeley Housing Authority

Percentage of Section 8 Voucher Units Leased 96% 100% 98%Percentage of Public Housing Units Occupied 89% 88% 80%Average number of monthly Section 8 Units leased 1,763 1,836 1,766 Approved number of Section 8 Units 1,841 1,841 1,866 Total Housing Assistance Payments (HAP) 20,526,565$ 22,371,867$ 21,271,510$ Average monthly HAP per unit 970$ 1,016$ 1,004$

Solid Waste ManagementDiversion Rate (pending State Approval) (a) 0% (a) 0% (a) 0% (a)Transfer Station Customers (b) 108,068 106,642 101,142

Total incoming tons at transfer stationRefuse and C&D 77,419 73,870 71,547 Organics 34,170 34,425 34,254 Total incoming tons 111,589 108,295 105,801

Landfilled Tons (c) 63,094 53,676 60,687 Recycled /Composted Tons (d) 49,882 54,619 45,336 Total tons exiting transfer station (c) 112,976 108,295 106,023

Recycling MethodRecycled/Composted tons:Organics collection to compost facility 19,420 19,910 Organics - public to compost facility 14,750 14,515 Transfer Station Salvage 1,732 1,784 C&D Diverted at sorting facility 13,980 18,410

TOTAL TRANSFER STATION DIVERSION 49,882 54,619 - (h)

Buyback dropoff 4,018 3,825 Residential Curbside 6,741 7,613 Commercial recycling 2,927 2,699

TOTAL RECYLING COLLECTION at CCC (Not at transfer station) 13,686 14,137 - (h)

TOTAL CITY CONTROLLED DIVERSION 63,568 68,756 -

Other Public WorksStreet Resurfacing/Overlay/Reconstruction (miles) 4 2 3.86 ADA Compliance: New Curb Ramps 133 164 139 Traffic Circles - Cumulative 55 55 55 Street Poles with Lights - Cumulative 7860 7,860 7,860

Marina

Number of Berths 1,035 1,021 1,021 Number of Occupied Berths 920 920 895 Number of new berthers 157 138 143 Number of paid launchers 4,666 2,478 3,041 Launch Ramp Total Revenue (f) 51,972$ 37,175$ 45,626$

ParkingNumber of Pay and Display Meters Operating 213 217 218 Number of Duncan Meters Operating 2,045 2,169 2,112

Planning and Development DepartmentCustomers Served 23,301 22,693 19,694 Building & Safety Inspections Performed 20,154 18,605 16,349 Toxics: CUPA Inspections 260 247 Redevelopment: Number of active projects (g) 5 5 5

Sanitary Sewer Number of Customer Accounts Billed 30,948 33,284 32,162

(Concluded)

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Schedule XVIICity of BerkeleyOperating IndicatorsCurrent and last two fiscal years

Fiscal Year Fiscal Year Fiscal Year2010 2011 2012

FUNCTION/PROGRAM

1) Tons collected by private haulers and taken to other landfills2) Tons delivered by members of the public to other landfills or transfer stations

of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.(h) Items no longer tracked starting FY2012 due to change of measurements

(g) In accordance with the timeline as set forth in the BillAB 1X 26, all redevelopment agencies in the State

3) Berkeley tons recycled by the private sector

(a) California legislation SB1016 changed measurement requirements. 1)Adopting measurement requirements of pounds per person per day instead of diversion rates which are no longer in use.

2)Adopting measurement requirements of pounds per person per day instead of diversion rates which are no longer in use.

(b) "Customers" are all paying customers regardless of the town they come from.

Landfilled and recycled tons are all tons going through the transfer station. It includes SWMD collection trucks, as well as paying customers.

(c) Outside tons not included in transfer station tons:

(f) Launch Ramp Fees increased midway through each year from $5 FY2008, to $10 FY2009, then to $15 FY2010

4) Operating indicator "Health Education and linkages to services" now referred to as "Public Health Services Encounters"

(d) Recycling Method new this year provides the detail of Total City-controlled Diversion

1) Health and Human Services restructuring now named Department of Health Services, Housing Department renamed to Housing and Community Services Departent. Public Health, Housing and Community Services along with Planning and Development Department all have changes in their department composition and functions in 2010.

2) Program moved 2010 to Housing and Community Services Departments

3) Health Education and linkages to services indicator no longer measured as operating indicator

*Amending BERKELEY MUNICIPAL CODE SECTIONS 2.50.010, 2.50.020, 2.50.030, 2.50.040, 2.50.050, 2.50.060, 2.61.020, 2.62.010, 2.62.020, 2.62.030, and 2.60.040 To Reflect updated organizational changes

(e) Departmental Reorganization:

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Schedule XVIIICity of BerkeleyCapital Asset Statistics by Function/ProgramCurrent and last two fiscal years

Fiscal Year Fiscal Year Fiscal Year2010 2011 2012

Function/Program

Police Number of Stations 1 1 1 Number of Patrol Units 91 91 91 Parking Enforcement Vehicles 32 32 32

Fire Number of Stations 7 7 7 Number of Fire Trucks 12 12 12

LibraryCentral Library 1 1 1Branch Libraries 4 4 4

Berkeley Housing Authority Number of Public Housing Units BHA Run 61 61 61

Number of Public Housing Units State Run 14 14 14 total 75 75 75

Solid Waste Management Collection Vehicles 26 28 29 Support Vehicles 20 20 20 Transfer Tractors 9 9 8 Transfer Trailers 8 8 9 Other Public Works Streets (miles) 216 216 216 Streetlights 7,860 7,860 7,860 Traffic Signals 134 134 134 Sidewalks (miles) 300 300 300 Parks and Recreation Number of Parks 52 52 52 Public Swimming Pools 3 3 3 Over night Summer Camps 3 3 3 Number of Community Centers 4 4 4 Number of Club Houses 2 2 2 Community Gardens 6 6 6

Nature Center 1 1 1Adventure Playground 1 1 1

Sanitary Sewer Public Sanitary Sewer Mains (miles) 270 270 270 Public Sewer Laterals (miles) 130 130 130

Parking Number of Parking Garages 3 3 3 Number of Parking Lots 2 2 2 Number of Off Street Parking Meter Spaces 139 139 139 Number of Off Street Parking Garage Spaces 937 937 937

Source: Operating indicators were provided by the various operating departments

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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Berkeley, California (City), as of and for the year ended June 30, 2012, which collectively comprise the City’s basic financial statements and have issued our report thereon dated December 21, 2012. Other auditors audited the financial statements of the Berkeley Housing Authority, as described in our report on the City’s financial statements. This report does not include the results of the other auditors’ testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

Management of the City is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

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To the Honorable Mayor and Members of City Council of the City of Berkeley Berkeley, California Page 2

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of management, City Council, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Badawi and Associates Certified Public Accountants Oakland, California December 21, 2012

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City of Berkeley Schedule of Findings and Responses For the Year Ended June 30, 2012

1. Current Year Findings: No current year findings. 2. Prior Year Finding: FS 2011-01 Review of Journal Entries (Significant Deficiency) Criteria: All journal entries need to be properly reviewed and approved before they get posted to the financial systems. Condition: The journal entry review process is not consistent among City departments: some departments perform an independent review of all journal entries prepared, while some do not. In addition, journal entries sent to the Accounting Division do not always have supporting documents attached. Cause: The City does not have a formal written policy regarding the review and approval process of journal entries by the individual departments and the Accounting Division. Context and Effect: Unauthorized or unsupported journal entries may get posted to the financial systems which can result in a material misstatement in the City’s financial statements. Recommendation: We recommend that the City develop a formal written policy for the review and approval of journal entries. The policy should document the process required to be followed by each department to review and approve journal entries. The City should ensure that the process designed for each department will improve accuracy and ensure proper authorization of the journal entries. Management Response: We will expand the year-end closing procedures to include the timely completion of the Governmental Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting General Purpose Preparer Checklist, to ensure that all nonroutine and nonsystematic transactions are accounted for and properly disclosed in the City’s financial statements and notes to financial statements. Status: The City has drafted an Administrative Regulation on Requirements for Preparing, Reviewing, and Approving Adjusting Journal Entries.

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