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HomeMy WebLinkAboutMINUTES - 06111996 - SD1 NEW ISSUE-BOOB ENTRY RATING: NOT APPLIED FOR PRELIMINARY LIMITED OFFERING MEMORANDUM DATED 06/_/96 In the opinion of Dorsey& Whitney, LLP, Special Tax Counsel, according to existing law, assuming compliance with certain covenants,.the portion of the rental payments designated as and constituting interest paid by the County under the Master Lease/Purchase Agreement and received by the registered owners of the Certificates is not includable in gross income for federal tax purposes, is exempt from present State of California personal income taxes and is not an item of tax preference in detemtining the federal alternative minimum tax applicable to individuals. (See "Tax Exemption and Related Considerations"). $1,235,000.00* CERTIFICATES OF PARTICIPATION Evidencing Proportionate Interest of the Owners Thereof in Rental Payments to be Made by the COUNTY OF CONTRA COSTA,CALIFORNIA (Oak Grove Project) Dated Date: July 1, 1997 Due: January 1 and July 1,as shown below THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE LIMITED OFFERING MEMORANDUM TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Certificates of Participation (the "Certificates") are being delivered to finance the acquisition of certain facilities (the "Project") described herein. The Certificates represent proportionate interests of the registered owners of the Certificates (the "Owners") in rental payments to be made by the County of Contra Costa, California (the"County"),under a Master Lease/Purchase Agreement dated as of July 1, 1996 (the"Lease"),by and between the County, as lessee, and Transocean Funding, Inc. (the "Corporation"), as lessor, pursuant to which the County is leasing the Project from the Corporation. The Certificates will be issued in fully registered book-entry form only in denominations of $5,000 or any integral multiple thereof and, when executed and delivered,_will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository for the Certificates. DTC will act as securities depository for the Certificates. Purchasers will not receive securities certificates representing their interests in the Certificates purchased. Interest due with respect to the Certificates is payable semi-annually on each January 1 and July 1, commencing January 1, 1997. Payment of principal and interest with resepct to the Certificates will be paid by the Cypress Coast Bank, as paying agent ("Paying Agent") to DTC for subsequent disbursement to DTC Participants (as defined herein) which will remit such payments to the beneficial owners of the Certificates. (See "THE CERTIFICATES- Book-Entry Only System.") The Certificates are subject to redemption prior to maturity as described herein. MATURITY SCHEDULE AND YIELD Maturity Maturing Coupon Payment Date Principal Rate Price Yield 01/01/97 $ % % -------% ---- -_---- ---- 07/01/97 ....... ---- 01/01/98 _-_01/01/98 ------- ---- ------- 07/01/98 ------- ---- ....... 01/01/99 ....... ---- ------- 07/01/99 ....... __-- ------- 01/01/00 ------ ---- ------- . 07/01/00 ------- ---- 01/01/01 ------ ---- ------- 07/01/01 ------ ---- ------- 01/01/02 ------ ---- ------- 07/01/02 ...... ---- ------- 01/01/03 ------ ---- ------- 07/01/03 ------ ---- ------- • (Plus Accrued Interest,If Any) ® IV EU UNION BANK OF CALIFORNIA,N.A. 1� Date:July ', 1996 JUN ,1 0 1896 "`Estimated CLERK 43e:ARD Cr CONTRA COSTA t;t;.4soks ccoakgroveproj6-6.96 THE CITY HAS DEEMED THIS_PRELIMINARY OFFICIAL STATEMENT FINAL AS OF ITS DATE WITHIN THE MEANING OF RULE 15c2-12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT FOR INFORMATION OMITTED IN ACCORDANCE WITH THE PROVISIONS OF SUCH RULE. The Certificates are offered when, as and if delivered and received by Union Bank of California, N. A. (the "Underwriter"),upon receipt of the opinion of Dorsey&Whitney,LLP,Special Tax Counsel,as set forth above. The Certificates,in definitive form,will be available for delivery in New York,N.Y.on or about July_, 1996. No dealer,broker,salesperson,or other person has been authorized by the County to give any information or to i make any representations other than those contained herein and, if given or made, such other informaiton or representation must not be relied upon as having been authorized by the County. This Limited Offering Memorandum does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Certificates by a person in any jurisdiction in which it is unlawful for such person to make an offer, solicitation or sale. This Limited Offering Memorandum is not to be construed as a contract with the purchasers of the Certificates. Statements contained in this Limited Offering Memorandum which involve estimates, forecasts or matters of opinion,whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of facts. The information set forth herein has been obtained from official sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriter. The information and expressions,of opinion herein are subject to change without notice and neither delivery of this Limited Offering Memorandum nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County since the date hereof. This Limited Offering Memorandum is submitted with respect to the sale of the Certificates referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the County. All summaries of documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions. WITH RESPECT TO THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING,IF COMMENCED,MAY BE DISCONTINUED AT ANY TIME. THE CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE CERTIFICATES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. t r r COUNTY OF CONTRA COSTA BOARD OF SUPERVISORS i Tom Torlakson,Chair Gayle Bishop Mark De Saultier Tom Powers Jeff Smith COUNTY OFFICIALS Phil Batchelor,County Administrator DeRoyce Bell,Deputy County Administrator Bart Gilbert,Director of General Services Carol Chan,Capital Facilities Analyst Alan Pfeiffer,Lease Manager PROFESSIONAL SERVICES Dorsey&Whitney,LLP Pillsbury Centre 220 South Sixth Street Minneapolis,Minnesota 55402 (612) 343-7983 Special Tax Counsel Transocean Funding,Inc. 111 Anza Boulevard-Suite 107 Burlingame,California 94010 (415)342-2266 Lessor/Issuer Union Bank of California,N.A. Investments Division 400 California Street,9th Floor San Francisco,California 94104 (415)765-2131 Underwriter Cypress Coast Bank 228 Reservation Road Marina,California 93933 (408)384-6900 Paying Agent/Escrow Agent r TABLE OF CONTENTS r Page SUMMARY STATEMENT (i) INTRODUCTION 1 TRANSOCEAN FUNDING,INC. 2 THE CERTIFICATES 2 General Terms 2 w Optional Redemption 2 Special Redemption 2 SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES 3 Rental Payments 3 Repair and Maintenance;Insurance 3 Covenant to Budget 3 r THE EQUIPMENT 4 Description of the Equipment Acquisition Program 4 Sources and Uses of Funds 4 Rental Payments Schedule 4 RISK FACTORS 5 Lease Payments Not Debt of the County 5 Non-Appropriation 5 Late Rental Payments 5 Obligations of the County 6 Utilization of Equipment 6 Limited Recourse on Default 6 No Acceleration on Default 6 Resale of the Certificates 6 Equipment Segregation 7 CONSTITUTIONAL AND STATUTORY TAX LIMITATIONS 7 Property Tax and Spending Limitations 7 COUNTY FINANCIAL INFORMATION 9 TAX EXEMPTION 22 LEGAL OPINION 23 f NO LITIGATION 23 UNDERWRITING 23 CONTINUING DISCLOSURE OBLIGATION 24 AVAILABILITY OF DOCUMENTS 24 MISCELLANEOUS 24 Appendix A: COUNTY OF CONTRA COSTA-ORGANIZATION AND FINANCES A-1 Appendix B: COUNTY OF CONTRA COSTA-ECONOMY&GENERAL INFORMATION B-1 Appendix C: THE LEASE,PAYING AGENCY AGREEMENT,ESCROW AGREEMENT AND CONTINUING DISCLOSURE CERTIFICATE C-1 Appendix D: COMBINED FINANCIAL STATEMENTS OF THE COUNTY OF CONTRA COSTA FOR THE FISCAL YEAR ENDED JUNE 30, 1995 D-1 Appendix E: FORM OF SPECIAL COUNSEL TAX OPINION E-1 SUMMARY STATEMENT THIS SUMMARY STATEMENT IS SUBJECT IN ALL RESPECTS TO THE MORE COMPLETE INFORMATION CONTAINED IN THIS LIMITED OFFERING MEMORANDUM AND THE OFFERING OF THE THE CERTIFICATES TO POTENTIAL PURCHASERS IS MADE ONLY BY MEANS OF THE ENTIRE LIMITED OFFERING MEMORANDUM. County of The County of Contra Costa (the "County") is the ninth largest Contra Costa County in the state with an estimated population of 855,000 and encompasses a land area of approximately 733 square miles. The County continues to be a leading center for banking and finance activity in the Bay Area. The petroleum refining industry remains one of the largest taxpayer sectors to the County. The County serves as a social and cultural center to the eastern part of the San Francisco Bay Area region, which region in total has a population of over 6.0 million. The County's Budget for the general fund for fiscal year 1995-96 is approximately$800 million. The Certificates Transocean Funding,Inc. as lessor/issuer (the"Lessor/Issuer")will will arrange issuance of the Certificates in a private limited offering. The Certificates will be issued in the aggregate principal amount of $1,235,000.00. The Certificates will be delivered as fully registered certificates at a minimum purchase price in the aggregate of the outstanding principal balance due respecting such Certificates. The Certificates are subject to redemption annually at its remaining principal balance plus accrued interest and a prepayment premium ` of 2% upon the County's exercise of its purchase option under the Master Lease/Purchase Agreement dated as of July 1, 1996, by and between the Lessor/Issuer and the County (the "Lease"). The Certificates are subject to acceleration upon sale or disposition of the Equipment following an event of default or nonappropriation under the Lease, or upon loss, destruction, or damage to the j Equipment and receipt of insurance proceeds related to such loss, destruction or damage. Ratings The Certificates have not been rated. Use of Proceeds The proceeds from the sale of the Certificates will be applied to the acquisition of certain property located at 1034 Oak Grove in Concord, California which is currently used for (and will continue use as) a child psychiatric center (the"Facility") which is essential to the governmental functions of the County. Security The Certificates are secured by Rental Payments to be made by . by the County under the Lease. The County has covenanted under the Lease that it will take such action as may be necessary to include the Rental Payments in its annual budget and to make the necessary annual appropriations. Pursuant to the Lease,the Lessor/Issuer will assign to the Paying Agent for the benefit of the owners of the Certificates the Lessor/Issuer's rights and remedies under the Lease, including (i) its right to receive Rental Payments, (u) its right to receive and collect any proceeds of any insurance maintained under the Lease, and (iii) its right to enforce amounts payable upon default. To further secure Rental Payments, the Lessor/Issuer will grant to the Paying Agent for the benefit of the owners of the Certificates all of Lessor/Issuer's right, title and interest in and to the Equipment. Insurance The Lease requires the County to maintain property and casualty insurance on the Facility(or to self-insure in certain circumstances) for full replacement cost. See"CERTIFICATES OF PARTICIPATION","MASTER LEASE/PURCHASE AGREEMENT",AND "PAYING AGENCY AGREEMENT"herein. 1 i LIMITED OFFERING MEMORANDUM $1,235,000.00(Est.) CERTIFICATES OF PARTICIPATION Evidencing Interests of the Owners Thereof in Rental Payments to be made by the COUNTY OF CONTRA COSTA,CALIFORNIA As Payments for Acquisition of Certain Facilities INTRODUCTION This Limited Offering Memorandum, which includes the cover page and appendices hereto (the "Limited Offering Memorandum"), provides certain information concerning the issuance of $1,235,000.00 principal amount of Certificates of Participation (the "Certificates"). The Certificates are being issued under arrangements coordinated by the Lessor/Issuer with respect to the Master Lease/Purchase Agreement, dated as of July 1, 1996 (the "Lease'), by and between the County of Contra Costa (the "County') and Transocean Funding,Inc., Burlingame,California (the"Lessor/Issuer"). The Certificates are being sold in a private limited offering to provide funds to finance the acquisition of a child psychiatric center located in Concord, California (the "Facility") to be leased to the County under the Lease. The County has consented to the issuance of the Certificates by the Lessor/Issuer. The County is required to pay Cypress Coast Bank(the"Paying Agent")pursuant to that certain Paying Agency Agreement dated as of July 1, 1996 (the "Paying Agency Agreement") between the Lessor/Issuer and the Paying Agent, specified Rental Payments in amounts designed to be sufficient to both time and amount to pay, when due, the principal of, and interest on the Certificates for use and possession of the Facility. (See "SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES"). Principal of and interest on the Certificates are payable from appropriations of the County. Under the Lease,the County has covenanted to take such action as may be necessary to include all Rental Payments in its annual budgets and make the necessary annual appropriations therefor. Pursuant to the Lease, the Lessor/Issuer has assigned to the Paying Agent, for the benefit of the Owners, substantially all of its rights under the Lease, including its right to receive and collect the Rental Payments from the County under such Lease, and its right as may be necessary to enforce payment of the Rental Payments. Pursuant to that certain Escrow Agreement dated as of July 1, 1996, among the County, the Lessor/Issuer and Cypress Coast Bank as escrow agent (the "Escrow Agreement"), the Lessor/Issuer will deposit into a Property Acquisition Fund an amount necessary to acquire.the Facility, including necessary repairs as dictated by the County. THE OBLIGATION OF THE COUNTY TO MAKE RENTAL PAYMENTS UNDER THE LEASE IS AN OBLIGATION PAYABLE FROM THE COUNTY'S GENERAL FUND OR ANY OTHER SOURCE OF FUNDS LEGALLY AVAILABLE TO THE COUNTY FOR THE PAYMENT OF RENTALS. THE OBLIGATION OF THE COUNTY TO MAKE RENTAL PAYMENTS UNDER THE LEASE DOES NOT CONSTITUTE A DEBT OR INDEBTEDNESS OF THE COUNTY OF CONTRA COSTA,THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS OF THE STATE ® WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. For certain financial information with respect to the County, see "APPENDIX A - COUNTY OF CONTRA COSTA ORGANIZATION AND FINANCES." For a discussion of certain amendments to the Constitution and statutes of the State of California and their impact on the County, see "CONSTITUTIONAL AND STATUTORY TAX LIMITATIONS." For a discussion of demographic and economic information with respect to the County, see "THE COUNTY OF CONTRA COSTA". See also "APPENDIX C, the Lease, the Paying Agency Agreement, Escrow Agreement � t and Continuing Disclosure Certificate," for copies of the Lease,Paying Agency Agreement, Escrow Agreement and Continuing Disclosure Certificate and terms defined therein. TRANSOCEAN FUNDING,INC. Transocean Funding, Inc. is a corporation duly organized and existing under the laws of the State of California specializing in providing financing programs to municipalities to acquire, construct, improve, and install real and personal property. The corporation was formed in 1988. THE CERTIFICATES General Terms The Certificates are being sold in the aggregate principal amount of$1,235,000.00(est.) and will initially be dated as of July 1, 1996. Principal is payable on January 1 and July 1 of each year, commencing January 1, .1997,pursuant to the Schedule set forth on the cover page of this Limited Offering Memorandum. Interest on the Certificates, until the maturity or earlier redemption thereof, is payable on January 1 and July 1 of each .year, commencing on January 1, 1997 (each a "Payment Date"). Each Certificate shall represent interest from the Payment Date to which interest has been paid; or duly provided for, next preceding its date of authentication.Unless such date of authentication is a date during the period from the close of business on the .% 15th day of the month preceding each Payment Date(the"Record Date"),whether or not such day is a Business Day, to and including such Payment Date, the Certificate shall represent interest from such Payment Date. If such date of authentication is on or before December 15, 1996, such Certificate shall represent interest from July 1, 1996. The principal and interest represented by the Certificates are payable by check mailed to the Owners at the addresses appearing on the Certificate registration books as of the close of business on the Record Date. The principal payable upon maturity or redemption with respect to the Certificates are payable upon surrender of such Certificates at the principal office of the Lessor/Issuer in Burlingame,California. Optional Redemption The Certificates may be redeemed annually on each July 1, commencing July 1, 1997,with respect to a specific Rental Payment schedule at the principal outstanding plus a prepayment premium of 2%; whereupon and provided the County is not in default under the Lease,the Lessor/Issuer shall deliver to the County a full release of the Lessor/Issuer's right,title,and interest in the Facility. Special Redemption The Certificates are subject to special redemption on any date prior to their maturity, as a whole,or in part, from prepaid Rental Payments made by the County from the net proceeds of any commercial insurance, self-insurance or condemnation award with respect to the Facility (the "Net Proceeds"), if such Net Proceeds are not used to repair, replace or restore the Facility in accordance with the provisions of the Lease. In the event of such a redemption, Certificates would be redeemed at a redemption price equal to the sum of the principal amount of the Certificates to be redeemed plus accrued interest thereon to the date fixed for redemption,without premium. Whenever less than all the outstanding Certificates of any maturity are to be redeemed on any one date,the Paying Agent shall select the Certificates of such maturity to be redeemed by lot in any manner that the Paying Agent deems fair, and the Paying Agent shall promptly notify the Corporation and the County in writing of the numbers of the Certificates so selected for redemption on such date. When redemption is authorized or required, the Paying Agent must give to the Owners notice of the redemption of the Certificates. Information provided by the Paying Agent may include (a) the Certificates or designated portions thereof-which are to be redeemed, including the series designations of such Certificates, (b) the date of redemption, (c) the place where the redemption will be made, including the name and address of any paying agent, (d) the redemption price, (e) the CUSIP numbers assigned to the Certificates to be 2 redeemed,(f)the numbers of the Certificates to be redeemed,and(g)the interest rate and stated maturity date of each Certificate to be redeemed in whole or in part. Such notice shall further state that on the specified date there shall become due and payable upon each Certificate or portion thereof being redeemed the redemption price,and that from and after such date interest represented thereby shall cease to accrue and be payable. Such notice of redemption shall be given by first class mail, postage prepaid, to the Owners of the Certificates designated for redemption at their addesses appearing on the Certificate register,at least 30 days but not more than 60 days prior to the redemption date. Neither the failure to give or receive such notice nor any defect in such notice shall affect the sufficiency of the proceedings for the redemption of such Certificates. a SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES The Certificates are secured by and payable from Rental Payments received under the Lease. The obligation of the County to make Rental Payments when due is a general fund obligation of the County and does not constitute a debt of the County for which the County is obligated to pledge or levy any form of taxation or for which the County has levied or pledged any form of taxation. The Certificates constitute special obligations,and evidence a special indebtedness, of the Lessor/Issuer. The Certificates are a charge upon and are payable, as to principal and interest, solely from the amounts specified in the Lease and in the proceedings for the issuance of the Certificates, and do not constitute a debt of the County, the State of California, or any of its political subdivisions. The Certificates do not constitute an indebtedness of the County within the meaning of any constitutional or statutory debt limitation or restriction. *1 Rental Payments The County has agreed in the Lease that it will make Rental Payments which are calculated to be at least sufficient, in both time and amount, to meet debt service requirements on the Certificates. The Paying Agent shall collect and receive all of the Rental Payments, and any Rental Payments collected or received by the Lessor/Issuer must immediately be paid by the Lessor/Issuer to the Paying Agent. Any Rental Payments shall be held by the Paying Agent in the Rental Payment Fund to be used: first, for payment of interest on the Certificates;second,for payment of the principal of the Certificates as it becomes payable. Repair and Maintenance; Insurance The Lease requires the County, at its own cost and expense, to maintain the Facility in good working order and to make or cause to be made all necessary and proper repairs, replacements and renewals in connection with the Facility. In addition, the County is required to purchase and maintain as fire, theft, vandalism,flood and extended coverage insurance on the Facility.The County has also agreed to insure or self- insure against claims based on comprehensive general liability, automobile liability and physical property damage which result from its operations, including but not limited to its use of the Facility. See"APPENDIX C - The Lease,Paying Agency Agreement,Escrow Agreement and Continuing Disclosure Certificate". Covenant to Budget The County has covenanted in the Lease to take such action as may be necessary to include the Rental Payments in its annual budgets and to appropriate funds sufficient to make all Rental Payments under the . Lease. IF THE COUNTY DEFAULTS ON ITS COVENANTS IN THE LEASE TO INCLUDE ALL RENTAL PAYMENTS IN THE APPLICABLE ANNUAL BUDGETS, THE PAYING AGENT MAY TERMINATE THE LEASE AND RELET OR SELL THE FACILITY OR ANY COMPONENT THEREOF,AND HOLD THE COUNTY LIABLE FOR ALL AMOUNTS DUE PRIOR TO THE DATE THE NON-APPROPRIATION IS EFFECTIVE. SUCH OBLIGATION TO BUDGET AND MAKE SUCH LEASE PAYMENTS DO NOT CONSTITUTE A DEBT OF THE COUNTY OF CONTRA COSTA, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION, NOR DO SUCH OBLIGATIONS 3 CONSTITUTE OBLIGATIONS FOR WHICH THE COUNTY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE COUNTY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE FACILITY Description of the Facility Acquisition Program Under the Lease, the County will lease a facility and land located at 1034 Oak Grove in Concord, California which is currently used as a child psychiatric facility from the Lessor/Issuer for the general governmental purposes of the County. At commencement of the Lease Term, title to such Facility will vest in the Lessor/Issuer, subject to the rights of the County under the Lease. The cost of the Facility is estimated at $1,200,000,which includes the purchase price,title and settlement fees and costs of remodeling. The Facility is currently leased by the County from Century Healthcare,and the current lease contains an option to purchase for benefit of the County exercisable on July 15, 1996. The County as part of this financing will assign the purchase option to the Lessor/Issuer, who will exercise it and acquire the Facility on behalf of and for use by the County. The County currently contracts with FamiliesFirst, Inc. to provide psychiatric services at the Facility, and the County intends following the financing to retain either FamiliesFirst, Inc. or another entity to fulfill these services at the Facility. _e. Sources and Uses of Funds The proceeds to be received from the sale of the Certificates will be applied as shown below: SOURCES AND USES OF FUNDS Sources of Funds Proceeds from the Certificates.......................$1,235,000.00(est.) Total.....................................$1,235,000.00(est.) Use of Funds Facility Acquisition Account............................$1,200,000.00(est.) Underwriting Concession................................$ f Costs of Issuance..............................................S Total.....................................$1,235,000.00(est.) Rental Payments Schedule The Lease requires the County to make Rental Payments on each January 1 and July 1 during the term of the Lease. The Paying Agency requires that Rental Payments be deposited in the Rental Payment Fund maintained by the Paying Agent. Pursuant to the Paying Agency Agreement, on January 1 and July 1 of each year,commencing on January 1, 1997, the Paying Agent will apply such amounts in the Rental Payment Fund as are necessary to make principal and interest payments with respect to the Certificates as the same shall become IV due and payable,as shown below. 4 CERTIFICATE OF PARTICIPATION DEBT SERVICE AV Payment Date Principal Interest Total 01/01/97 $---------- $--------- $---------- 07/01/97 ---------- --------- ---------- 01/01/98 ---------- --------- ---------- 07/01/98 ---------- ------ ---------- 01/01/99 ---------- --------- ---------- 07/01/99 ---------- --------- ---------- 01/01/00 --------- --------- --------- 07/01/00 --------- -------- --------- 01/01/01 --------- -------- --------- 07/01/01 ------ --------- --------- 01/01/02 07/01/02 --------- -------- --------- 01/01/03 --------- -------- --------- 07/01/03 --------- ------ --------- Total $1,235,000.00 RISK FACTORS The following factors, which represent major risk factors, should be considered, along with all other information in this Limited Offering Memorandum,by potential investors in evaluating the risks inherent in the purchase of the Certificates.There can be no assurance that other major risk factors will not become evident at any future time. Lease Payments Not Debt of the County. The obligation of the.County to pay the Rental Payments does not constitute an obligation of the County for which the County is obligated to levy or pledge any form of taxation or for.which the County has levied or pledged any form of taxation.The obligation of the County to pay Rental Payments does not constitute a debt or indebtedness of the County of Contra Costa, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction. Subject to certain County restrictions, the County may incur other obligations which may constitute additional charges against its revenues. To the extent that the County incurs additional obligations, the funds available to make Rental Payments may be decreased. The County is currently liable on other obligations payable from general revenues. See "APPENDIX A - THE COUNTY OF CONTRA COSTA ORGANIZATION AND FINANCES. Non-appropriation. The Lease is automatically terminated at the time sufficient funds are not appropriated by the County for payment of Rental Payments due during the County's fiscal year. In the event of such a nonappropriation, there may not be sufficient funds to make the payments due on the Certificates, and there may be a very limited market for the Facility upon disposition, providing proceeds insufficient to pay the Certificate owners all amounts due. See "CERTIFICATES OF PARTICIPATION" and "MASTER LEASE/PURCHASE AGREEMENT"herein. Late Rental Payments. The County is required to make semi-annual Rental Payments to the Paying Agent,which are remitted to the Certificate owners semi-annually. If the amounts due on the Certificates are to be paid in full on each Certificate Payment Date, all the semi-annual Rental Payments due by each Certificate Payment Date must be paid as of the Certificate Payment Date. The County cannot be assessed a `1 late charge or penalty under the Lease. The County has ten(10) days after the due date of a Rental Payment to make the payment before any remedies for the breach of the terms of the Lease can be exercised. If there are any Rental Payments due but unpaid as of a Certificate Payment Date,there may not be sufficient funds to pay 5 all amounts due on the Certificates as of the Certificate Payment Date. Payments may be delayed in the event a budget is not enacted or other applicable requirements are not met in a timely manner. Obligations of the Countv. The obligation of the County to make Rental Payments will be satisfied from the funds of the County which are appropriated for such use. No specific revenues of the County are pledged for the benefit of the Certificate owners. The County may enter into other purchase agreements or other obligations which may constitute additional charges against its revenues. To the extent additional obligations are incurred by the County, the funds available to make Rental Payments are decreased. Furthermore, to the extent the County does not receive sufficient revenues to fund its obligations, a shortfall may occur,which may result in delayed payments,default or non-appropriation. In the event the County fails to enact a budget for a fiscal year in a timely manner, Rental Payments cannot be made until completion of the budget process. Utilization of Facility. Deterioration of general economic conditions may reduce or eliminate the County's ability to utilize or pay for the Facility. The Facility in such circumstances could be declared as obsolete or no longer necessary for use by the County, which could result in a non-appropriation of funding. The Facility is also subject to heavy usage and depreciation, as well as to changing state or local rules respecting such Facility and the fair market value may decline rapidly. Limited Recourse on Default. The enforcement of any remedies provided in the Lease could prove both expensive and time-consuming. Although the Lease provides that, if there is a default by the County, the Paying Agent may take possession of the Facility and release the Facility, there can be no assurance that the amounts received from such releasing would be sufficient to pay the principal and interest on the Certificates when due. Furthermore, due to the essential nature of the governmental function of most of the Facility, it is not certain whether a court would permit the exercise of the remedies of repossession, leasing, or sale with respect thereto. The Lease provides that any remedies on default shall be exercised by the Paying Agent, as"assignee" of the Lessor/Issuer. Upon the occurrence and continuance of the County's failure to deposit with the Paying Agent any Rental Payments when due, or in the event that the County breaches any other terms, covenants, S conditions or agreements contained in the Lease (and does not remedy such breach within any applicable cure period),the Paying Agent may proceed (and upon written request of the Owners of not less than a majority in aggregate principal amount of Certificates then Oustanding shall proceed), without any further notice to take whatever action at law or in equity that may appear necessary or desireable to collect the payments then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the County under the Lease,or (ii) following thirty days written notice and upon court order, enter the premises and take possession of the Facility, enforcing the Lease,and repossess the Facility and sell or lease the Facility or sublease it for the account of the County,holding the County liable for all Rental Payments up to the effective date of repossession. In addition to the limitations on remedies contained in the Lease, the rights and remedies provided in those documents may be limited by and are subject to provisions of federal bankruptcy laws, as now or hereafter enacted,and to other laws or equitable principles that may affect creditors'rights. No Acceleration on Default. In the event of a default,acceleration of the Rental Payments is limited to the remaining term of the County's fiscal year. Any suit for money damages would be subject to the legal limitations on remedies against counties in the State of California, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest as described above. Resale of the Certificates. There is no established secondary market for the Certificates. At this time in the secondary market for securities similar to the Certificates, the difference between the bid and asked price may be greater than the bid and asked spread for more traditional types of municipal securities. Also, as i 6 unrated Certificates, the number of potential purchasers may be diminished. The Certificates will be sold in a direct private placement, which may also impact distribution and remarketing of the Certificates. Due to the secondary market conditions,the Certificates may be illiquid and require extensive efforts to sell. Facility Segregation. The County will pay Rental Payments on each Lease Schedule separately. The Certificate owners of each Lease Schedule will not be entitled to share in proceeds obtained on a separate Lease Schedule,and failure to fund one schedule will not affect the other schedules. Loss of Tax Exemption. The exemption from taxation of the interest paid on the Certificates for federal and California purposes is conditioned upon satisfaction by the County of certain statutory tests and administrative regulations and rules, and compliance with certain requirements imposed by federal and state laws and rules and regulations, including Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended. While the County has agreed in the Lease to take actions to preserve the exemption from taxation, no assurances can be given that such actions will be taken or that the County will not take other 4Q. actions or omissions that will jeopardize the exemption from taxation. Should the exemption not be available, the beneficial owners of the Certificates will be required, as applicable, to include in income the amount of interest paid for federal or California purposes or both, possibly retroactive to the date of original issuance of the Certificates. Should such an event occur, the Certificates are not subject to acceleration, redemption or an increase in interest rates to accommodate the change in taxability and will remain outstanding until maturity or early redemption as outlined herein. 4 Investors are also subject to any risk of change in tax law, either retroactive or prospective, and change in tax rates. CONSTITUTIONAL AND STATUTORY TAX LIMITATIONS 40 Property Tax and Spending Limitations Article X111 A of the California Constitution. Section 1 (a) of Article XIII A of the California Constitution limits the maximum ad valorem tax on real property to one percent of full cash value (as defined in Section 2 of Article XIII A), to be collected by the counties and apportioned according to law. Section 1(b) of Article XIII A provides that the one percent limitation does not apply to ad valorem taxes to pay interest or redemption charges on (1) indebtedness approved by the voters prior to July 1, 1978,or (2) any bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition.Section 2 of Article XIII A defines"full cash value" to mean"the county assessor's valuation of real property as shown on the 1975/76 tax bill under full cash value or, thereafter, the appraised value of real property when purchased,newly constructed,or a change in ownership has occurred after the 1975 assessment." The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year,or reduction in the consumer price index or comparable data for the area under taxing jurisdiction or reduced in the event of declining property value caused by substantial damage, destruction or other factors. Legislation enacted by the California Legislature to implement Article XIII A provides that notwithstanding any other law, local agencies may not levy any ad valorem property tax except to pay debt service on indebtedness approved by the voters as described above. Such legislation further provides that each county will levy the maximum tax ' permitted by Article XIII A of$4.00 per$100 of assessed valuation (based on the traditional practice of using 25%of full cash value as the assessed value for tax purposes). Beginning with the 1981/82 fiscal year,assessors in California no longer record property values on the tax rolls at the assessed value of 25% of market value and now record them at full market value. Consequently, the tax of $4.00 per $100 of assessed value is now expressed as$1.00 per$100 of taxable value. In the general elections of 1986, 1988 and 1990, the voters of the State approved various measures which further amended Article XIII A.One such amendment generally provides that the purchase or transfer of (i)real property between spouses or (ii) the principal residence and the first$ 1,000,000 of the full cash value of i, other real property between parents and children, do not constitute a "purchase" or "change of ownership" triggering reassessment under Article XIII A. This amendment will reduce the property tax revenues of the r County.Other amendments permitted the Legislature to allow persons over 55 who sell their residence and on or after November 5, 1986,buy or build another of equal or lesser value within two years in the same county,to transfer the old residence's assessed value to the new residence,and permitted the Legislature to authorize each county under certain circumstances to adopt an ordinance making such transfers or assessed value applicable to situations in which the replacement dwelling purchased or constructed after November 8, 1988,is located within that county and the original property is located in another county within California.The County.has not adopted the ordinance regarding residences replacing dwellings in other counties. In the June 1990 election, the voters of the State approved additional amendments to Article XIII A permitting the State Legislature to extend the replacement dwelling provisions applicable to persons over 55 to severely disabled homeowners for replacement dwellings purchased or newly constructed on or after June 5, 1990,and to exclude from the definition of"new construction" triggering reassessment improvements to certain dwellings for the purpose of making the dwelling more accessible to severely disabled persons.In the November 1990 election, the voters approved the amendment of Article XIII A to permit the State Legislature to exclude from the definition of "new construction" seismic retrofitting improvements or improvements utilizing earthquake hazard mitigation technologies constructed or installed in existing buildings after November 6,1990. Article XIII B of the California Constitution The State and most entities of local government are subject to an annual "appropriations limit" imposed by Article XIII B of the State Constitution. Article XIII B prohibits an entity of government from spending "appropriations subject to limitation" in excess of the appropriations limit imposed. Article XIII B, originally adopted in 1979, was modified substantially by Proposition 111 in 1990. "Appropriations subject to limitation" are authorizations to spend proceeds of taxes," which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed"the cost reasonably borne by such entity in providing the regulation, product or service," but "proceeds of taxes" excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on appropriations of funds which are not "proceeds of taxes," such as reasonable user charges or fees, and certain other non-tax funds. Not included in the Article XIII B limit are appropriations for the debt service costs of bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990 levels. The appropriations limit may also be exceeded in cases of emergency. However, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and ' the expenditure is approved by two-thirds of the legislative body of the local government entity, the appropriations limit for the next three years must be reduced by the amount of the excess. The appropriations limit for each local government entity in each year is based on the limit for the prior year, adjusted annually for changes in the cost of living and changes in population, and adjusted, where applicable, for transfer of financial responsibility of providing services to or from another unit of government. As amended by Proposition 111,the appropriations limit is tested over consecutive two-year periods.Any excess of the aggregate"proceeds of taxes"received by the local govenment entity over such two-year period above the combined appropriations limits for those years is to be returned to taxpayers by reductions in tax rates or fee schedules over the subsequent two years. As originally enacted in 1979, the appropriations limit was based on 1978/79 fiscal year authorizations to expend proceeds of taxes and was adjusted annually to reflect changes in cost of living and population (using different definitions, which were modified by Proposition 111). Starting in the 1990/91 fiscal year, the appropriations limit will be recalculated by taking the actual 1986/87 limit,and applying the annual adjustments as if Proposition 111 had been in effect. 8 The Auditor-Controller of the County has estimated that for the 1995/96 fiscal year, permitted appropriations of"proceeds of taxes" are limited to $1.404 billion, with budgeted appropriations for the fiscal year at a level of approximately$655 million and appropriations subject to the limitation at approximately$153 million. Court Challenges to Proposition 13 On September 22, 1978, the California Supreme Court upheld the amendment over challenges on several State and federal constitutional grounds (Amador Valley Joint, Union High School District v. State Board of Equalization). The Court reserved certain constitutional issues and the validity of legislation implementing the amendment for future determination in proper cases. Since 1978, several cases have been decided interpreting various provisions of Article XIII A, and on June 18, 1992, the United States Supreme Court in a 8-1 decision upheld the validity of Article XIII A of the California Constitution on constitutional and statutory grounds. Richmond Unified School District Liti¢ation In April 1992,a complaint was filed in the Superior Court of Contra Costa County,California,seeking to enforce payment by the Richmond Unified School District under a lease arrangement using a financing structure which is similar to the Lease. (The action does not involve the Lease,nor is the County a party to it.) In May 1992,in an answer to the complaint,the Richmond Unified School District, through its State-appointed trustee and administrator, and the State Superintendent of Schools, also a defendant in the action, allege that Richmond's lease obligation is unenforceable as long-term debt incurred without the voter approval required by the State Constitution. Legislation which could have provided a settlement of the action was passed by the Legislature, but vetoed by the Governor. On October 9, 1992, a Contra Costa County Superior Court judge ,* denied a writ of mandate to compel payment by the Richmond Unified School District on the grounds that it was not an appropriate remedy. The Court's action was not on the merits of the litigation. The trustee for the owners of the lease obligation has indicated that other available remedies will be pursued. On December 10, 1992, the Court found in favor of the trustee in upholding the legality of the Richmond District lease and the rights of Certificate Owners secured thereby. The parties have negotiated a settlement of the litigation,which is subject to receipt of certain tax and other regulatory rulings, prior to implementation and dismissal of the action. In 1996 a coalition involving proponents of the Jarvis Gann initiative filed litigation against the County of San Diego to contest issuance of certificates of participation to remodel Jack Murphy Stadium, partially on the grounds that larger projects involving certificates of participation should be approved by voters. The Superior Court has rejected their demands,but an appeal to the appellate courts is anticipated. It is not certain what the impact of any appellate rulings adverse to issuance of those certifcates of participation would have on tN the financing contemplated by this Official Statement and whether a court's ruling would be retroactive. From time to time, other lease financings with similar features have been unsuccessfully challenged in lower court proceedings on grounds similar to those alleged in the Richmond and San Diego cases. The opinion of County Counsel, to be delivered upon delivery of the Certificates, will state, in part, that under current California law and judicial precedent,the Lease is a valid and binding obligation of the County. i COUNTY FINANCIAL INFORMATION Funding of Certain Programs by the State of California California counties administer numerous health and social service programs as the administrative agent of the State and pursuant to State law. Many of these programs have been either wholly or partially funded with State revenues which have been subject each year to the State budget and appropriation process. Due to 9 competing program priorities and the lack of available State funds, some of these programs have had reduced State support without a corresponding reduction in program responsibilities for county governments. 01 In 1991-92 the State and county governments collectively developed a program realignment system to remove State funding for certain programs from the State budget process, and at the same time, give countries enhanced program flexibility in the administration of certain health and welfare programs. Under this plan,the sales tax was increased by 1/2 cent and dedicated to the support of specific health and welfare programs administered by counties. In addition, vehicle license fees were increased and this increase was similarly dedicated to supporting these programs. Thus, counties now receive these funds under a fixed formula under State law and the flow of these funds is no longer subject to the State budget process. The program shifted approximately$2.2 billion out of the State budget process. There is risk for county governments in this program realignment if sales tax and vehicle license fee revenue are not realized as expected. If this occurs,it will be the responsibility of county government to manage these programs within available funding levels, utilizing more flexible program administrative capacity than has previously been permitted. 1993-94 Fiscal Year Background The Governor's Budget introduced on January 8, 1993 disclosed that the continuing recession made further budget cuts necessary. To balance the budget in the face of declining revenues, the Governor proposed a series of revenue shifts from local government, reliance on increased federal aid, and reductions in State spending. # The May Revision of the Governor's Budget,released on May 20, 1993,projected the State would have an accumulated deficit of about $2.75 billion by June 30, 1993, essentially unchanged from the prior year. The Governor proposed to eliminate this deficit over an 18-month period. Unlike previous years, the Governor's Budget and May Revision did not calculate a "gap" to be closed, but rather set forth revenue and expenditure forecasts and proposals designed to produce a balanced budget. 1993-94 Budget Act The 1993-94 Budget Act was signed by the Governor on June 30, 1993, along with implementing legislation. The Governor vetoed about $71 million in spending. With enactment of the 1993-94 Budget Act, the State carried out its regular cash flow borrowing program for the fiscal year,with the issuance of$2.0 billion of revenue anticipation notes maturing June 28, 1994. Revenues. The 1993-94 Budget Act was predicated on General Fund revenues and transfers estimated at $40.6 billion, about $400 million below 1992-93 (and the second consecutive year of actual decline). The principal reasons for declining revenue were the continued weak economy and the expiration (or repeal) of three fiscal steps taken in 1991 - a half cent temporary sales tax, a deferral of operating loss carry forwards, and repeal by initiative of a sales tax on candy and snack foods. .� The 1993-94 Budget Act also assumed Special Fund revenues of$11.9 billion,an increase of 2.9 percent over 1992-93. Expenditures. The 1993-94 Budget Act included General Fund expenditures of$38.5 billion (a 6.3 percent reduction from 1992-93 expenditures of$41.1 billion), in order to keep a balanced budget within the available revenues. The 1993-94 Budget Act also included Special Fund expenditures of $12.1 billion, a 4.2 -r percent increase. The 1993-94 Budget Act reflected the following major adjustments: 10 1. Changes in local government financing to shift about $2.6 billion in property taxes from cities,counties, special districts and redevelopment agencies to school and community college districts, �. thereby reducing General Fund support by an equal amount. About $2.5 billion is permanent, reflecting termination of the state's "bailout" of local governments following the property tax cuts of Proposition 13 in 1978. Litigation by local governments challenging this shift has so far been unsuccessful. The property tax revenue losses for cities and counties were offset in part by additional sales ,+ tax revenues and mandate relief. The temporary 0.5 percent sales tax was extended through December 31, 1993, for allocation to counties for public safety programs. Upon approval by the voters of Proposition 172 on the November 1993 ballot the 0.5 percent sales tax was extended permanently for local public safety purposes. Legislation also was enacted to eliminate state mandates in order to provide local governments flexibility in making their programs responsive to local needs. Legislation provides mandate relief for local justice systems which affect county audit requirements, court reporter fees, and court consolidation; health and welfare relief involving advisory boards, family planning, state audits and realignment maintenance efforts; and relief in areas such as county welfare department self- evaluations,noise guidelines and recycling requirements. 2. The 1993-94 Budget Act projected K-12 Proposition 98 funding on a cash basis at the same per-pupil level as 1992-93 by providing schools a $609 million loan payable from future years' Proposition 98 funds. 3. The 1993-94 Budget Act assumed receipt of about$692 million of aid to the State from the federal government to offset health and welfare costs associated with foreign immigrants living in the State, which would reduce a like amount of General Fund expenditures. About $411 million of this amount was one-time funding. Congress ultimately appropriated only$450 million. 4. Reductions of$600 million in health and welfare programs and $400 million in support for higher education (partly offset by fee increases at all three units of higher education) and various miscellaneous cuts (totally approximately$150 million) in State government services in many agencies, up to 15 percent. 5. A two-year suspension of the renters' tax credit ($390 million expenditure reduction in 1993-94). 6. Miscellaneous one-time items, including deferral of payment to the Public Employees' Retirement Fund($339 million) and a change in accounting for debt service from accrual to cash basis, saving$107 million. The 1993-94 Budget Act contained no General Fund tax/revenue increases other than a two-year. suspension of the renters' tax credit. The 1993-94 Budget Act suspended the 4 percent automatic budget reduction"trigger,"as was done in 1992-93,so cuts could be focused. .� Subsequent Developments Budget. Administration reports during the course of the 1993-94 Fiscal Year indicated that while economic recovery appeared to have started in the second half of the fiscal year, recessionary conditions continued longer than had been anticipated when the 1993-94 Budget Act was adopted. Overall, revenues for the 1993-94 Fiscal Year were about $800 million lower than original projections, and expenditures were about _ $780 million higher, primarily because of higher health and welfare caseloads, lower property taxes which required greater State support for K-14 education to make up the shortfall, and lower than anticipated federal government payments for immigration-related costs. The reports in May and June, 1994, indicated that �` 11 r revenues in the second half of the 1993-94 Fiscal Year were very close to the projections made in the . Governor's Budget of January 10,1994,which was consistent with a slow turnaround in the economy. The Department of Finance's July 1994'Bulletin, including the final June receipts, reported that June revenues were $114 million (2.5 percent) above projection,with final end-of-year results at $377 million (about 1 percent) above the May Revision projections. Part of this result was due to end-of-year adjustments and reconciliations. Personal income tax and sales tax continued to track projections very well. The largest factor in the higher than anticipated revenues was from bank and corporation taxes, which were $140 million (18.4 percent) above projection in June. While the higher June receipts are reflected in the actual 1993-94 Fiscal Year cash flow results, and help the starting cash balance for the 1994-95 Fiscal Year, the Department of Finance has not adjusted any of its revenue projections for the 1994-95 or 1995-96 Fiscal years. During the 1993-94 Fiscal Year,the State implemented the Deficit Retirement Plan,which was part of the 1993-94 Budge Act, by issuing $1.2 billion of revenue anticipation warrants in February 1994 maturing ;r December 21, 1994. This borrowing reduced the cash deficit at the end of the 1993-94 Fiscal Year. Nevertheless, because of the $1.5 billion variance from the original 1993-94 Budget Act assumptions, the General Fund ended the fiscal year at June 30, 1994 carrying forward an accumulated deficit of approximately $2 billion. Because of the revenue shortfall and the State's reduced internal borrowable cash resources, in addition to the $1.2 billion of revenue anticipation warrants issued as part of the Deficit Retirement Plan. the State issued an additional $2.0 billion of revenue anticipation warrants, maturing July 26, 1994, which were needed to fund the State's obligations and expenses through the end of the 1993-94 Fiscal Year. Northridge Earthquake. On January 17, 1994, a major earthquake measuring an estimated 6.8 on the Richter Scale struck the Los Angeles metropolitan area, centered in the Northridge area of the City of Los Angeles. Significant property damage to private and public facilities occurred in a four-county area including a northern Los Angeles County, Ventura County, and parts of Orange and San Bernardino Counties,which were declared as State and federal disaster areas by January 18. Current estimates of total property damage (private and public) are in the range of$20 billion,but these estimates are still subject to change. Despite such damage, on the whole, the vast majority of structures in the areas, including large manufacturing and commercial buildings, and all modern high-rise offices, survived the earthquake with minimal or no damage, validating the cumulative effect of strict building codes and thorough preparation for such an emergency by the State and local agencies. Damage to State-owned facilities included transportation corridors and facilities such as Interstate Highways 5 and 10 and State Highways 14, 118 and 210. Most of the major highways(Interstates 5 and 10)have now been reopened. The campus of California State University at Northridge (very near the epicenter) suffered an estimated $350 million damage, resulting in temporary closure of the campus. It has reopened using borrowed facilities elsewhere in the area and many temporary structures. There was also some damage to the University of California at Los Angeles and to an office building in Van Nuys (now open after a temporary closure). Overall,except for the temporary road and bridge closures, and CSU-Northridge, the earthquake did not and is not expected to significantly affect State government operations. -* The State in conjunction with the federal government is committed to providing assistance to local governments,individuals and businesses suffering damage as a result of the earthquake, as well as to providing for the repair and replacement of State-owned facilities. The federal government will provide substantial earthquake assistance. The President immediately allocated some available disaster funds, and Congress has approved additional funds for a total of $9.5 billion of federal funds for earthquake relief, including assistance to homeowners and small businesses, and costs for repair of damaged public facilities. The Governor originally proposed that the State pay about $1.9 billion for earthquake relief costs, including a 10 percent match to some 12 .r of the federal funds, and costs for some programs not covered by the federal aid. The Governor proposed to cover$1.05 billion of these costs from a general obligation bond issue which was on the June 1994 ballot,but it was not approved by the voters. The Governor subsequently announced that the State's share for transportation projects would come from existing Department of Transportation funds (thereby delaying other, non- earthquake related projects), that the State's share for certain other costs (including local school building repairs) would come from reallocating existing bond funds, and that a proposed program for homeowner and small business aid supplemental to federal aid would have to be abandoned. Some other costs will be borrowed from the federal government in a manner similar to that used by the State of Florida after Hurricane Andrew; pursuant to Assembly Bill 2383(Chapter 151,Statutes of 1994),repayment will have to be addressed in 1995-96 or beyond. CURRENT STATE BUDGET The discussion below of the 1994-95 Fiscal Year budget and the table under"Summary of State Revenues and Expenditures"below are based on estimates and projections of revenues and expenditures for the current fiscal year and must not be construed as statements of fact. These estimates and projections are based upon various assumptions which may be affected by numerous factors, including fitture economic conditions in the State and the nation, and there can be no assurance that the estimates will be achieved. Periodic reports on revenues and expenditures during the fiscal year are issued by the Administration, the State Controller's Office and the Legislative Analyst's Office. The Department of Finance issues a monthly Bulletin which reports the most recent revenue receipts, comparing them to Budget projections, and reports on other current developments affecting the Budget. The Administration also formally updates its budget projections twice during each fiscal year,generally in January and May. 1994-95 Fiscal Year �! Background The 1994-95 Fiscal Year represents the fourth consecutive year the Governor and Legislature were faced with a very difficult budget environment to produce a balanced budget. Many program cuts and budgetary adjustments have already been made in the last three years. The Governor's Budget Proposal, as updated in May and June, 1994, recognized that the accumulated deficit could not be repaid in one year, and proposed a two-year solution. The budget proposal sets forth revenue and expenditure forecasts and revenue and expenditure proposals which result in operating surpluses for the budget for both 1994-95 and 1995-96, and lead to the elimination of the accumulated budget deficit, estimated at about $2.0 billion at June 30, 1994, by June 30, 1996. 1994-95 Budget Act Revenues. The 1994-95 Budget Act, signed by the Governor on July 8, 1994, projects revenues and transfers of $41.9 billion, $2.1 billion higher than revenues in 1993-94. This reflects the Administration's forecast of an improving economy. Also included in this figure is a projected receipt of about$360 million from the federal government to reimburse the State's cost of incarcerating undocumented immigrants. The State will not know how much the federal government will actually provide until the.federal Fiscal Year 1995 Budget is completed. Completion of the federal budget is expected by October 1994. The Legislature took no action on a proposal in the January 1994-95 Governor's Budget to undertake an expansion of the transfer of certain programs to counties,which would also have transferred to counties 0.5 percent of the State's current sales tax. The 1994-95 Budget Act projects Special Fund revenues of$12.1 billion,a decrease of 2.4 percent from 1993-94 estimated revenues. Expenditures. The 1994-95 Budget Act projects General Fund expenditures of$40.9 billion,an increase of$1.6 billion over the 1993-94 Fiscal Year. The 1994-95 Budget Act also projects Special Fund expenditures of t 13 r $12.3 billion, a 4.7 percent decrease from the 1993-94 Fiscal Year estimated expenditures. The principal features of the 1994-95 Budget Act were the following: S 1. Receipt of additional federal aid in the 1994-95 Fiscal Year of about $400 million for costs of refugee assistance and medical care for undocumented immigrants, thereby offsetting a similar General Fund cost. The State will not know how much of these funds it will receive until the federal Fiscal Year 1995 Budget is passed. 2. Reductions of approximately $1.1 billion in health and welfare costs. A 2.3 percent reduction in AFDC payments (equal to about $56 million for the entire fiscal year) has been temporarily suspended by court order. 3. A General Fund increase of approximately $38 million in support for the University of California and $65 million for California State University. It is anticipated that student fees for both the University of California and California State University will increase up to 10%. 4. Proposition 98 funding for K-14 schools is increased by $526 million from 1993-94 Fiscal Year levels, representing an increase for enrollment growth and inflation. Consistent with previous budget agreements,Proposition 98 funding provides approximately$4,217 per student for K-12 schools, equal to the level in the past three years. 5. Legislation enacted with the 1994-95 Budget Act clarifies laws passed in 1992 and 1993 which require counties and other local agencies to transfer funds to local school districts, thereby reducing State aid. Some counties had implemented a method of making such transfers which provided less money for schools if there were redevelopment agency projects. The new legislation bans this method of transfer. If all counties had implemented this method, General Fund aid to K-12 schools would have been$300 million higher in each of the 1994-95 and 1995-96 Fiscal Years. 6. The 1994-95 Budget Act provides funding for anticipated growth in the State's prison inmate population, including provisions for implementing recent legislation (the so-called "Three Strikes"law)which requires mandatory life prison terms for certain third-time felony offenders. 7. Additional miscellaneous cuts ($500 million) and fund transfers ($255 million) totaling in the aggregate approximately$755 million. The 1994-95 Budget Act contains no tax increases. Under legislation enacted for the 1993-94 Budget Act, the renters' tax credit was suspended for two years (1993 and 1994). A ballot proposition to permanently restore the renters'tax credit afer this year failed at the June, 1994 election. The Legislature enacted a further one-year suspension of the renters'tax credit,for 1995,saving about$390 million in the 1995-96 Fiscal Year. The 1994-95 Budget Act assumes that the State will use a cash flow borrowing program in 1994-95 which combines one-year notes and two-year warrants, which have now been issued. Issuance of the warrants allows the State to defer repayment of approximately$1.0 billion of its accumulated budget deficit into the 1995- 96 Fiscal Year. The Budget Adjustment Law, described above, enacted along with the 1994-95 Budget Act is designed to ensure that the warrants will be repaid in the 1995-96 Fiscal Year. Subsequent Developments The 1995-96 Governor's Budget, issued January 10, 1995, contains a reforecast of revenues and expenditures for the 1994-95 Fiscal Year. The Department of Finance Bulletins for February and March 1995 report that combined General Fund revenues for February, 1995 were.about $356 million below forecast, but combined revenues for January and February were only about $82 million (or 0.3 percent) below the 1995-96 Governor's Budget forecast. The largest component of the decrease is attributable to personal income tax receipts, which were about $131 million (or 1.1 percent) below the two months' forecast. This decrease in 14 personal income tax receipts appears to be largely attributable to fourth quarter 1994 activity, probably in the anticipation of tax reform, with some taxpayers shifting income into 1995 to the extent possible. The withholding component comprised $77 million of this shortfall, but the Department of Finance does not yet view this as significant. Additionally, sales and use tax receipts were very close to forecast for the two-month period,while bank and corporation tax receipts were about$42 million (or 1.5 percent) below the two months' forecast. Miscellaneous revenues were about $117 million (or 6.2 percent) above forecast for the two months, but the Department of Finance is not yet able to determine whether this gain is real,or is instead attributable to cash flow factors. Initial analysis of the federal Fiscal Year 1995 budget by the Department of Finance indicates that about $98 million was appropriated for California to offset costs of incarceration of undocumented immigrants, less than the $356 million which was assumed in the State's 1994-95 Budget Act. Because of timing considerations in applying for these federal funds, the Department of Finance estimates that about $33 million of these funds will be received during the State's 1994-95 Fiscal Year,with the balance received in the following fiscal year. It does not appear that the federal budget contains any of the additional$400 million in funding for refugee assistance and health costs which were also assumed in the 1994-95 Budget Act,but the Department of Finance expects the State to continue its efforts to obtain some or all of these federal funds. i' IF is Summary of State Revenues and Expenditures STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-GENERAL FUND (Modified Accrual Basis)(a) FISCAL YEARS 1991-92 THROUGH 1995-96 (Millions) Estimated(b) 1991-92 1992-93 1993-94 1994-95 1995-96 Fund Balance-Beginning of Period..........$(1,315.8) $(3,307.0) $(2,240.0) $(1,619.3) $ (667.1) Restatements Prior Year Revenue,Transfer,Accrual Adjustments............................................. 39.3 (125.3) 72.0 ------ ------ Prior Year Expenditure,Accrual Adjustments............................................. 183.3 ------ 27:0 ------ ------ Adjustment for Chapter 703,Statutes of 1992.............. ------ 1.083.0 ------ ------ ------ ...................................... Fund Balance-Beginning of Period,as Restated.....................................................$(1.093.2 $(2,349.3 $(2,141.0 1619.3 667.1 Revenues.....................................................$41,332.4 $40,238.8 $39,196.2 $41,501.8 $45,174.0 Other Financing Sources Transfers from Other Funds................. 755.1 715.2 624.9 389.7 268.0 Other Additions...................................... 134.7 78.3 ------ ------ ------ Total Revenues and Other Sources........$42,222 $41,0323 39 821. $41,891.5 45 442.0 Expenditures............................................. State Operations.....................................$10,048.3 $9,555.9 $10,160.5 $11,074.7 $12,263.9 Local Assistance..................................... 34,134.1(d)(e) 31,155.1(e) 29,138.9(e) 29,853.9 32,129.7 Capital Outlay ........ 7.0 28.0 10.7 Other Uses Transfers to Other Funds...................... 246.6 184.0 ------(f) ------(f) ------(f) Total Expenditures and Other Uses......$44,436.0 40 923. $39,299.4 40 9.39 $44,393.6 Revenues and Other Sources Over or (Under) Expenditures and Other Uses...........................................$ (2.213.8) 1093 521.7 952.2 1,048. Fund Balance........................................... Reserved for Encumbrances(c).............$ 410.4 $ 372.0 $ 352.0 $ 352.0 $ 352.0 t♦ Reserved for Unencumbered Balances of Continuing Appropriations(g)............. 39.7 45.0 ------ ------ ------ Reserved for Article XVI,Section 8 of the State Constitution (Proposition 98). 171.0 150.9 ------ ------ ------ Unreserved--Undesignated(h)............... (3,928.1 (2,807.9 1971.3 1019.1 29.3 Fund Balance-End of Period................$(3,307.0)(c) $(2,240.0)(1) $(1,6193)(i) $ (667.1)(i) $ 3813 16 v (a) These statements have been prepared on a modified accrual basis in accordance with State law and some modifications would be necessary in order to comply with generally accepted accounting principles ("GAAP"). Pursuant to Chapter 92 Statutes of 1991,starting in the 1991-92 Fiscal Year,the accounting treatment of sales taxes and Medi-Cal programs was changed to a full accrual basis. This results in an increase in revenues of$1.7 billion and an increase in expenditures of$0.8 billion in 1991-92. (b) Estimates are shown net of reimbursements and abatements. These estimates have been prepared based upon the 1993-94 Budget Act,the 1994-95 Budget Act and the 1995-96 Projected Budget but without adjustment for the Governor's debt retirement plan or reduction plan. See"Deficit Retirement and Deficit Reduction Plans"below. (c) The State's accounting policy was changed September 1990 to exclude the amounts of unliquidated encumbrances from the liabilities and to establish reserve for encumbrances in the fund balance as required by Chapter 1238. Statues of 1990. This change is in accordance with generally accepted accounting principles. (d) Approximately$1.2 billion of local school aid actually distributed in the 1990-91 Fiscal Year is not included in budget authority for that year but is instead reflected in the budget authority in the 1991-92 Fiscal Year as "repayment"of a loan made to school districts for the prior year. (e) A reduction of budget authority and loan repayment totally$1.1 billion was made between the 1991-92 and 1992-93 Fiscal Years in the same manner as described in footnote(d). Because of a technical drafting error which was not corrected until after June 30,1992,the Controller's financial report shows no reduction of 1991-92 budgeted expenditures;the inter-year shift is reflected as an adjustment in the 1992-93 financial report. The 1993-94 Budget Act contains a similar"repayment"in 1993-94 for a loan of$190 million of Proposition 98 funds in 1992-93. (f) "Transfer to Other Funds"is included either in the expenditure totals detailed above or as"Transfer from Other Funds." (g) Pursuant to Chapter 1238, Statutes of 1990, the unencumbered balances of continuing appropriations which exist when no commitment for an expenditure is made should be an item of disclosure,but the amount shall not be deducted from the fund balance. Accordingly,the General Fund condition included in the Governoes_Budget includes the unencumbered balances of continuing appropriations as a footnote to the statement(including$180.0 million in 1992-93,$48.1 million in 1993-94 and$9.7 million in 1994-95). However, the State Controller's financial statements continue to reflect a specific reserve for the unencumbered balance of continuing appropriations. (h) Includes Special Fund for Economic Uncertainites. (i) The 1993-94 Budget Act contains a plan to retire the projected $2.8 billion accumulated deficit over an 18-month period, to December, 1994, by using external borrowing. The 1994-95 Budget Act reflects a further deferral of $1.025 billion of accumulated deficit to the 1995-96 Fiscal Year. These plans are not reflected in this table. See"Deficit Retirement and Deficit Reduction Plans"below. (j) The 1994-95 Budget Act contains a plan to retire a $1.025 billion deficit in the 1995-96 Fiscal Year. See "Deficit Retirement and Deficit Reduction Plans"below. SOURCE: State of California,Office of the Controller. Deficit Retirement and Deficit Reduction Plans A key feature of the 1993-94 Budget Act was a plan to retire by December 31, 1994 the $2.8 billion budget deficit which had been accumulated by June 30, 1993 (the "Deficit Retirement Plan"). This 18-month plan used existing statutory authority to borrow$2.8 billion externally. The 1993-94 Budget Act provided that $1.6 billion of the deficit elimination loan would be repaid by December 23, 1993 from a portion of the proceeds of the $2.0 billion 1993 Revenue Anticipation Warrants issued on June 23, 1993. Legislation enacted with the 1993-94 Budget Act (Chapter 63, Statutes of 1993) directed the State Controller to issue $1.2 billion of registered reimbursement warrants in the 1993-94 Fiscal Year to fund the balance of the accumulated deficit. Pursuant to this directive, the State issued $1.2 billion of 1994 Revenue Anticipation Warrants, Series A (the "Series A Warrants") in February 1994, to mature December 21, 1994. The law also created in the State Treasury a Deficit Retirement Fund,The State Controller is directed to transfer from the General Fund to the Deficit Retirement Fund the sum of$1.2 billion in two equal installments on September 15, 1994 and December 15, 1994,which moneys will be used to retire the Series A Warrants. The Deficit Retirement Plan anticipated a combined program to balance the budget over the 1993-94 and 1994-95 Fiscal Years, and projected a General Fund balance of$260 million on June 30, 1995. Because fiscal conditions did not improve as projected in the 1993-94 Fiscal Year,the revenue assumptions of the Deficit 17 Retirement Plan could not be met, and the Governor indicated in the June 1994 Revisions that the General Fund condition would be about $1 billion worse at June 30, 1994 than was projected at the start of the year. ,* Accordingly,the 1994-95 Budget Act anticipates deferring retirement of about$1 billion of the carryover budget deficit to the 1995-96 Fiscal Year,when it is intended to be fully retired. This 22-month Deficit Reduction Plan uses existing statutory authority to borrow$4 billion externally of which approximately$1 billion is the carryover budget deficit. In addition, Chapter 136, Statutes of 1994, created in the State Treasury the Warrant Payment Fund. The State Controller is directed to transfer from the General Fund to the Warrant Payment Fund in September 1995, November 1995,January 1996 and April 1996 in four equal installments the amount necessary to retire the$4.0 billion of revenue anticipation warrants maturing on April 25, 1996. DEFICIT RETIREMENT AND DEFICIT REDUCTION PLANS (Millions) 1992-93 1993-94 1994-95 1995-96 RESOURCES Prior Year Balance.................................. $(2,287) $ 511 $ (419) $ 359 Prior Year Adjustment.......................... ------- 148 ------- ------- Revenues and Transfers........................ 40,946 39,821 41,892 45,442 Deficit Retirement Plan(a)............... 2,800 ------- ------- ------- Deficit Reduction Plan(a)................. ------- ------- 1,025 ------- Loan Repayments.............................. ------- 1600 1200 1025 10 TOTAL RESOURCES.................... $41,459 $38,880 $41,298 $44,776 EXPENDITURES............................ $40,948 $39,299 $40,939 $44,394 FUND BALANCE(Year End)............. $ 511 $ (419) $ 359 $ 382 Reserve for Encumbrances(b)............. 393� --352 --352 ---352' Reserve for Proposition 98(b).............. 149 Reserve for Economic Uncertainties.,.................................... (31) (771) 7 30 (a) The "Summary of State Revenues and Expenditures" table, which is prepared in accordance with generally accepted accounting principles,does not take into consideration the 1993-94 Deficit Retirement Plan nor the 1994-95 Deficit Reduction Plant. (b) These reserves are required by law and account for the difference between Fund Balance and the Reserve for Economic Uncertainties. SOURCE: State of California,Department of Finance. County Budget Process The County is required by State law to adopt a balanced budget by August 30 of each year, a process that involves number of steps, provided that the Board of Supervisors may extend the deadline until as late as November 1 of each year. First, upon release of the Governor's Proposed Budget in January, the County Administrator prepares a preliminary forecast of the County's budget based on current.year expenditures, the Governor's budget and other projected revenue trends. Second,the County Administrator presents the Proposed Budget to the Board of Supervisors. Absent the adoption of a final County budget by June 30,the current existing budget is continued into the new fiscal year until a final budget is adopted. Third,between January and the time the State adopts its own budget,legally due no later than June 15, representatives of the County Administrator monitor, review and analyze the State budget and all 18 adjustments made by the State legislature. Upon adoption_of the final State budget, the County Administrator recommends revisions to the Proposed Budget to align County expenditures with 'M approved State revenue. After conducting public hearings and deliberating the details of the budget, the Board adopts the County's Final Budget by August 30. The 1993-94 State Budget was signed by the Governor in June 30, 1993 and the County adopted its Final budget for 1993-94 September 28, 1993. 4 The 1995-96 State Budget was signed by the Governor in August 1995 and the County adopted its final budget in October. In order to ensure that the budget remains in balance throughout the fiscal year, each month the County Administrator monitors actual expenditures and revenue receipts. In the event of a projected year-end deficit, immediate steps are taken, in accordance with the State Constitution, to reduce expenditures. The +, County's ability to increase its revenues is limited by State laws which prohibit the imposition of fees to raise general revenue,except to recover the cost of regulation or provisions of services. Revenues and Expenditure Trends State and federally mandated expenditures in justice, health and welfare have grown at a greater rate *' than the County's discretionary general purpose revenues over the last several years'. At the same time, decreased State revenues have resulted in fewer State funds being available to the County. The result has been that the County has increased its contribution to maintain mandated services while optional local services have been reduced. The Board has responded to this trend in part by instituting measures to improve management, thereby reducing costs and increasing productivity and maintaining services with diminished funding. This County has implemented a number of programs to reduce costs,maximize revenues and maintain sound business practices. The Board of Supervisors has committed to maintain established reserves and to spend "one time revenues" on "one time expenditures". In order to ensure that the budget remains in balance throughout the fiscal year, periodic reviews are made of actual receipts and expenditures. On a quarterly basis, the County Administrator's staff prepares a report that details the activity within each budget category and provides summary information on the status of the budget. Actions which are necessary to ensure a healthy budget status at the end'of the fiscal year are recommended in the quarterly budget status reports. Other items which have major fiscal impacts are also reviewed quarterly. Set forth below is a description of the County's comparative budgetary and expenditure experience since fiscal year 1992-93. For a summary of the actual audited financial results of the County for fiscal year 1994-95, see"COMBINED FINANCIAL STATEMENTS OF THE COUNTY FOR THE FISCAL YEAR ENDED JUNE 30, 1995"in Appendix D attached hereto. Fiscal Year 1992-93. The County's fiscal year 1992-93 Final Budget was based in part on an assumed increase of 5 percent in the gross assessed value of land, improvements, and personal property on the local-secured roll. Using this assumption,property taxes account for approximately 23.1 percent ($145.2 million) of the expected $628.2 million of revenues (which excludes budgeted fund balance available of$18.8 million)during the fiscal year. State and federal aid continue to provide the greatest portion of revenues (54.6 percent,or $342.8 million). In the aggregate, budgeted fiscal year 1992-93 revenues of$628.2 million represent a decrease of 2.7 percent over fiscal year 1991-92 revenues. Including projected $18.8 million fund balance,the decrease in fiscal year 1992-93 available funds was 4.5 percent over fiscal year 1991-92. Budgeted expenditures for fiscal year 1992-93 indicate that close to 37.6 percent of the budget is spent on public assistance, approximately equal to its 36.0 percent share in 1991-92. Approximately 25.5 percent.of the budget is spent on law enforcement and the justice system compared to 25.2 percent in 1991-92, and 18.9 percent of the budget is allocated for health care services, compared to 18.7% in 1991-92. 19 w Fiscal Year 1993-94. As a result of the 1993-94 State Budget Act, a total of $2.1 billion of property tax revenue will be shifted from counties to public schools. In addition, counties and cities are expected to receive approximately$700 million from the extension of the temporary 1/2-cent sales tax through December 31, 1993,an amount has been doubled with approval by the voters of a permanent extension of the 1/2- cent sales tax at a special statewide election in November, 1993. In order for the County to maintain maximum budget flexibility in light of the property tax shift and the uncertainty over the long-term status of the 1/2-cent sales tax, the County had a three-phased budget cycle for the 1993-94 fiscal year. Phase I occurred during May, 1993 and included, among other things, $20.5 million of budget cuts adopted by the Board on May 25 in anticipation of reduced State funding sources. The County is in the process of implementing an additional $26 million of budget cuts during Phase II as a result of the known reductions in county funding contained in the 1993-94 State Budget Act. Phase II is being accomplished under the County's Final Budget as adopted by the County on September 28, 1993. As the 1/2-cent sales tax measure on the statewide ballot in November, 1993 was approved by the voters,Phase III budget hearings were not required. Fiscal Year 1994-95. The County faced a $24.2 million budget deficit in fiscal year 1994-95. The deficit was caused \ by state action shifting property tax revenue from the County to the schools, reducing state financing for some programs, and because of other uncontrollable cost increases and recession driven revenue decreases included in the County budget. In response to the budget problem, the Board held hearings in July and August and balanced the budget by a combination of appropriation reductions and revenue increases to the extent of$24.2 million. The Board adopted the budget on September 20, 1994. A follow-up Board meeting was held on October 11, 1994 to slightly adjust the adopted budget as required by the state budget and local priorities. Fiscal Year 1995-96 In January 1995 a preliminary budget gap of$25.4 million was identified for the 1995-96 fiscal year. To address the potential deficit, the Board adopted an accelerated budget schedule so that budget reductions would occur in early June 1995 rather than in August 1995, thereby lessening the number of employee layoffs by taking advantage of twelve months of cost savings. Additionally, three budget workshops were held during April and May 1995 so that Board members could review the intricacies of the County budget and further evaluate the options available to balance the budget. The County balanced the budget by a combination of appropriation reductions and revenue increase,and the Board adopted the budget in October 1995. 20 COUNTY OF CONTRA COSTA r FINAL GENERAL FUND(')BUDGET FOR FISCAL YEARS 1994-95 AND 1995-96 (IN THOUSANDS) Change from Final 1994-1995 Budget Final Final Amount of Percent 1994-95 1995-96 Increase Increase Budget, Budgeter Decrease Decrease REQUIREMENTS General Government $ 80,836 $ 77,332 <$3,504> <4.3> Public Protection 199,100 166,619 <32,481> <16.3> Health and Sanitation 151,729 150,233 < 1,496> <1.0> Public Assistance 246,995 236,585 <10,410> <4.2> Education 133 135 2 1.5 Public Ways and Facilities 12,250 7,847 < 4,403> <35.9> Recreation and Culture 1 1 0 0.0 Reserves and Debt Service 14,710 14528 <182> <1.2> Total Requirements $705,752 $653,230 <$52,547> <7.4> AVAILABLE FUNDS Property Taxes $78,066 $ 84,094 6,028 7.7 Funds balance available 25,633 29,045 6,028 13.3 Taxes other than current property 11,600 6,863 <3,412> <40.8> Licenses,permits and franchises 5,329 5,553 <4,737> 4.2 Fines,forfeitures and penalties 18,534 17,862 224 <3.6> Use of money and property 10,021 9,957 <627> <.6> Aid from other governmental agencies 385,854 376,305 <64> <2.5> Charges for current services 134,047 97,029 <27.6> Other revenue 36.668 26,532 <9,549> <27.6> Total Available Funds $705,752 $653,230 <$37,018> <7.4> 1. The table presents budget information for the General Fund only. 2. Final Budget adopted October, 1995,as amended through November 13, 1995. Source: County Auditor-Controller Ad Valorem Property Taxes Taxes are levied for each fiscal year on taxable real and personal property that is situated in the County . * as of the preceding March 1. For assessment and collection purposes, property is classified either as "secured" or"unsecured," and is listed accordingly on separate parts of the assessment roll. The"secured roll'is that part of the assessment roll containing State assessed,property and property secured by a lien on real property which is sufficient, in the opinion of the Assessor, to secure payment of the taxes. Other property is assessed on "Unsecured roll." Property taxes on the secured roll are due in two installments,on November 1 and February 1 of each fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a ten percent penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to which taxes are delinquent is declared to be in default on or about June 30 of the fiscal year. Such property may 21 thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty of one and one half percent per month to the time of redemption. If taxes are unpaid for a period of five years or more, the tax-defaulted property is declared to be subject to the Treasurer-Tax Collector's power of sale and may be subsequently sold by the County Treasurer-Tax Collector. Legislation established the "supplemental roll" in 1984 which directs the Assessor to reassess real property, at market value, on the date the property changes ownership or upon completion of construction. Property on the supplemental roll is eligible for billing 30 days after the reassessment and notification to the new assessee. The resultant charge (or refund) is a one-time levy on the increase (or decrease)in value for the period between the date of the change in ownership or completion of construction and the date of the next regular tax roll upon which the assessment is entered. Billings are made on a monthly basis and due on the date mailed. If mailed between the months of July through October, the first installment becomes delinquent on December 10th and the second installment becomes delinquent on the last day of the fourth month following the date the first installment is delinquent. a . Property taxes on the unsecured roll are due as of the March 1 lien date and become delinquent, if unpaid, on August 31. A ten percent penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of one and one-half percent per month begins to accrue commencing November 1. The taxing authority has four ways of collecting unsecured personal property taxes: (1) by filing a civil action against the taxpayer; (2)-by filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) by filing a certificate of delinquency for recordation in the County Recorder's office, in order to obtain a lien on certain property of the taxpayer; and (4) by the seizure and sale of personal property,improvements or possessory interest,belonging to the taxpayer. The County and its political subdivisions operate under the provisions of Sections 4701-4717 of the California Revenue and Taxation Code. Pursuant to those sections, the accounts of all political subdivisions that levy taxes on the County tax rolls are credited with 100 percent of their respective tax levies regardless of actual payments and delinquencies. The County Treasury's cash position (from taxes) is protected by a special fund (the "Tax Losses Reserve Fund") into which all countywide delinquent penalties are deposited. The County has used this method since,fiscal year 1950-51. Historically, the County has borne the full cost of property assessment and revenue collection and R distribution. Senate Bill 2557, passed in 1990, allowed counties to charge cities, schools, special districts and redevelopment agencies for their share of property tax administrative costs. This legislation was subsequently repealed as to charges against school districts. In 1992, Senate Bill 1559 was passed which reinstated the authorization for counties to charge a property tax administrative fee to schools, but the amount of the fee is limited and is determined by State formula. In addition, the legality of the property tax administrative charge has been challenged by the other affected taxing entities. While the County is unable to predict the ultimate outcome of such litigation, the County has prevailed at the Court of Appeals level on the issue of the viability of tax administrative charges to redevelopment agencies and at the Superior Court level as to all other challenged fees. The amount in question, approximately$4 million per year,does not represent a large proportion of the County's annual General Fund Budget,which exceeds$650 million. f 22 A recent history of Contra Costa County tax levies, delinquencies and the Tax Losses Reserve Fund cash balances as of June 30 is shown below. COUNTY OF CONTRA COSTA SUMMARY OF ASSESSED VALUATIONS AND AD VALOREM PROPERTY TAXATION FOR FISCAL YEARS 1985-86 THROUGH 1995-96 Secured Current Percentage Tax Losses Property Levy Current Levy Reserve Fund Fiscal Assessed Tax Delinquent Delinquent Balance Year Valuation Levies June 30 June 30 June 30 1985-86 32,341,318,373 403,053,585 11,865,967 2.94 22,766,159 1986-87 35,941,605,782 436,570,280 12,330,764 2.82 17,393,902 1987-88 40,083,490,940 487,158,795 13,955,266 2.86 18,430,198 1988-89 44,101,311,276 535,212,918 13,387,564 2.50 20,125,551 1989-90 48,641,369,485 593,937,412 14,746,710 2.48 21,797,766 1990-91 54,114,860,918 669,071,124 19,762,687 2.95 24,093,615 1991-92 58,422,186,087 714,963,082 24,787,991 3.47 26,558,333 1992-93 61,393,320,088 760,559,294 24,239,204 3.19 29,042,152 1993-94 63,427,696,578 794,435,830 20,652,106 2.6 31,225,565 1994-95 65,294,364,749 823,495,651 20,640,379 2.51 24,709,211 1995-96 67,146,461,590 850,000,000(1) 21,250,000(1) 2.5(t) 14,400,000(1) 1996-97 68,500,000,000(1) ` (1) Estimated Source: County Auditor-Controller During each fiscal year, the Tax Losses Reserve Fund is reviewed and when the amount of the fund reaches a certain percentage of the levy, the excess is credited to the County General Fund as provided by Section 4703 of the California Revenue and Taxation Code. Section 4703 allows any county to draw down the Tax Losses Reserve Fund to a balance equal to three percent of the total of all taxes and assessments levied on the secured roll for that year. Investments The County invests surplus funds on its behalf and on behalf of certain issuers located in the County. According to the County Treasurer, the County is not a participant in the pooled investment account managed by Orange County, California. The County also does not generally invest in the types of investments (e.g.,financial contracts,inverse floaters)present in the Orange County pool. The County does not leverage its investment portfolio. The County is not involved in this regard in the bankruptcy petition of Orange County or the pooled investment account managed by Orange County. TAX EXEMPTION In the opinion of Dorsey& Whitney, LLP, Minneapolis,Minnesota, Special Tax Counsel, based upon an analysis of existing laws,regulations,rulings and court decisions, interest on the Certificates is excluded from gross income for federal income tax purposes and is exempt from personal income taxes in the State of * California. The Internal Revenue Code of 1986, as amended (the"Code") imposes various restrictions, conditions, and requirements.relating to the exclusion from gross income for federal tax purposes of interest on obligations i 23 such as the Certificates. The County has covenanted to comply with certain restrictions designed to ensure that interest on the Certificates will not be included in federal gross income. Failure to comply with these covenants may result in interest on the Certificates being included in federal gross income, possibly from the date of issuance of the Certificates. The opinion of Special Tax Counsel assumes compliance with these covenants. Special Tax Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Certificates may adversely affect the tax status of interest on the Certificates. Special Tax Counsel is further of the opinion that interest on the Certificates are not a specific i preference item for purposes of the federal individual and corporate alternative minimum taxes, although Special Tax Counsel observes that interest on the Certificates are included in adjusted current earnings in calculating corporate federal alternative minimum taxable income. Certain agreements, requirements and procedures contained or referred to in the Lease, and other i relevant documents may be changed and certain actions (including without limitation, defeasance of the Certificates) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Special Tax Counsel expresses no opinion as to the effect on any Certificate or the interest thereon if any such change occurs or action is taken upon the advice or approval of Special Tax Counsel other than themselves. Although Special Tax Counsel has rendered an opinion that interest on the Certificates are excluded s from federal income gross income, the ownership or disposition of, or accrual or receipt of interest on the Certificates may otherwise affect an Owner's federal income tax liability. The nature and extent of these other tax consequences will depend upon each Owner's particular tax status and the Owner's other items of income or deduction.Special Tax Counsel expresses no opinion regarding any such other tax consequences. The opinion of Dorsey& Whitney, LLP, Special Tax Counsel, is available for inspection at the offices of the Lessor/Issuer, 111 Anza Boulevard,Suite 107,Burlingame,CA 94010. LEGAL OPINION The legal opinion of the Office of Victor Westman, County Counsel, Martinez, California, approving the validity of the Lease will be made available to the purchasers of the Certificates at the time of the original delivery of the Certificates. The County Counsel takes no responsibility for the accuracy, completeness or fairness of the Limited Offering Memorandum. NO LITIGATION No litigation is pending or threatened concerning the validity of the Certificates,.the Lease or the Lease,and an opinion of the County Counsel to that effect will be furnished to the purchaser at the time of the original delivery of the Certificates. The County is not aware of any litigation pending or threatened questioning the political existence of the County or contesting the County's ability to appropriate or make Rental Payments. There are a number of lawsuits and claims pending against the County. In the opinion of the County Counsel, the aggregate amount of liability that the County might incur as a result of adverse decisions in such cases are covered under the County's self-insurance and other insurance programs and should not ' adversely affect the ability of the County to make Rental Payments. UNDERWRITING The Certificates are being purchased by Union Bank of California, NA. (the "Underwriter"). The Underwriter has agreed to purchase all Certificates at a price of$ , plus accrued interest and less any applicable discount. The Underwriter will purchase all of the Certificates, if any are purchased, the obligation to make such purchase being subject to the approval of certain legal matters by counsel and certain other conditions. The Underwriter will receive a concession of$ per$1000.00 face value of the Certificates. 24 The Underwriter may offer and sell Certificates to certain dealers and others at prices lower or higher 7 than the respective offering prices stated on the Cover Page hereof. The respective offering prices may be changed from time to time by the Underwriter. CONTINUING DISCLOSURE OBLIGATION The County has agreed to provide such annual financial statements and other information in the i manner required by Rule 15c2-12 of the Securities and Exchange Commission (17 C.F.R. Section 240.15c2-12) ("Rule 15c2-12"). The County has entered into an undertaking for the benefit of the holders and beneficial owners of the Certificates to send certain financial information and operating data to certain information repositories annually and to provide notice to the Municipal Securities Rulemaking Board and to certain information repositories of certain events,purusant to the requirments of section(b)(5)(i) of Rule 15c2-12. See "APPENDIX C-Lease, Paying Agency Agreement, Escrow Agreement and Continuing Disclosure Certificate" 01 herein for a copy of the County's continuing disclosure certificate. AVAILABILITY OF DOCUMENTS Copies of this Limited Offering Memorandum, the Lease and the Paying Agency Agreement, will be available, upon written request, from the office of the Supervising Purchasing Manager, 1220 Morello Avenue, Martinez, California 94553 and Transocean Funding, Inc., 111 Anza Boulevard, Suite 107, Burlingame, California 94010. MISCELLANEOUS References made herein to certain documents and reports are brief summaries thereof that do not purport to be complete or definitive, and reference is made to such documents and reports for full and ` complete statements of the contents thereof. Any statements in this Limited Offering Memorandum involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Limited Offering Memorandum is not to be construed as a contract or agreement between the County and the purchasers or . holders of any of the Certificates. 25 The County has not participated in the preparation, production or dissemination of the information contained in this Limited Offering Memorandum other than the information provided respecting the County, and the County does not take any responsibility for its content other than the information provided respecting the County; and the County disclaims any responsibility or liability. The County is not responsible for the authentication, delivery or issuance of the Certificates set forth herein. The role of the County is as Lessee under the Lease. The preparation and distribution of this Limited Offering Memorandum,and the Certificates being issued hereunder, have been authorized by the County. Neither the Lessor/Issuer, the County or the i Underwriter is under any obligation to update or supplement this Limited Offering Memorandum respecting any events which may affect the County or the Certificates following the date of this Limited Offering Memorandum. TRANSOCEAN FUNDING,INC. Lessor/Issuer ACKNOWLEDGED AND ACCEPTED. COUNTY OF CONTRA COSTA By. Authorized Officer 26 1 S APPENDIX A COUNTY OF CONTRA COSTA- ORGANIZATION AND FINANCES t M ~ APPENDIX A COUNTY OF CONTRA COSTA- ORGANIZATION AND FINANCES General Contra Costa County was incorporated in 1850 as one of the original 27 counties of the State, with the City of Martinez as the County Seat. It is one of the nine counties in the San Francisco- Oakland Bay Area. The County covers about 733 square miles and extends from the northeastern shore of San Francisco Bay easterly about 50 miles to San Joaquin County. Contra Costa is bordered on the south and west by Alameda County and on the north by Suisun and San Pablo Bays. The western and northern shorelines are highly industrialized, while the interior sections are suburban/residential,commercial and light industrial. • A large part of the interior of the County is served by the Bay Area Rapid Transit District ("BART"), a situation that has encouraged the expansion of both residential and commercial development. In addition, economic development along the Interstate 680 corridor in the County has been so substantial that three cities--Concord, Walnut Creek and San Ramon--placed among the top four cities accounting for the greatest percentage increases in jobs in the entire Bay Area from 1985 through 1990. r County Government The County has a general law form of government. A five-member Board of Supervisors,each of whom is elected to a four-year term, serves as the county's legislative body. Also elected are the County Assessor, Auditor-Controller,Clerk-Recorder, District Attorney-Public Administrator, Sheriff- Coroner and Treasurer-Tax Collector. A County Administrative Officer appointed by the Board of Supervisors runs the day-to-day business of the County. Accounting Policies,Reports and Audits The County's accounting policies used in preparation of its audited financial statements conform to generally accepted accounting principles applicable to counties. The County's governmental funds and fiduciary funds use the modified accrual basis of accounting. This system recognizes revenues when they become available and measurable. Expenditures, with the exception of unmatured interest on general long-term debt, are recognized when the fund liability is incurred. Proprietary funds use the accrual basis of accounting, and revenues are recognized when they are earned and become measurable,while expenses are recognized when they are incurred. The County Treasurer also holds certain trust and agency funds not under the control of the Board of Supervisors,such as those of school districts,which are accounted for on a cash basis. The California Government Code requires every county to prepare an annual financial report. The Auditor-Controller prepares the Comprehensive Annual Financial Report for the County. This annual report covers financial operations of the County, County districts and service areas, local autonomous districts and various trust transactions of the County Treasury. Under California law, independent audits are required of all operating funds under the control of the Board of Supervisors. S ccamend8.app4.11.0&2 The County has had independent audits for more than 40 years. Additionally, the County Grand Jury may also conduct management audits of certain-offices of the County. Funds accounted for by the ` County are categorized as follows: General County Funds. The general County funds consist of the General Fund and other operating funds. The General Fund is used to account for the revenues and expenditures of. the County that are not accounted for by other funds. The other operating funds are used to account for the proceeds from specific revenue sources (other than special assessments) or to account for the financing of specific activities as required by law or administrative regulations. Special District Funds Under Control of Board of Supervisors. These funds are used to account for the transactions of fire protection districts, flood control and storm drainage districts, sanitation districts and county service areas under the control of the Board of Supervisors. Special District Funds Under Control of Local Boards and School District Funds. These funds are used to account for cash received and disbursed and cash and investments held by the County for districts controlled by local boards. These districts maintain their own accounting records supporting their separate financial statements which are subject to separate audit under California law. Trust and Agency Funds. Trust and Agency funds are used to account for money and other assets received and held as trustee, custodian or agent for individuals and governmental agencies. Presented on the following pages are the County's General Fund Balance Sheets for the three • most recent fiscal years and the Schedule of Revenues,Expenditures and Changes in Fund Balances as of June 30, 1995,with comparative totals for June 30, 1994. ! i 2 r COUNTY OF CONTRA COSTA GENERAL FUND BALANCE SHEET JUNE 30,1995 (WITH COMPARATIVE TOTALS FOR JUNE 30,1993 AND 1994) (IN THOUSANDS) 1995 1994 1993 * ASSETS: Cash and investments $117,317 $236,514 $222,616 Accounts receivable and accrued revenues 56,268 45,654 43,419 Due from other funds 35,380 45,533 36,791 Inventories 1,627 1,598 1,602 Prepaid expenses and deposits 2,854 3,901 8,037 Advances to other funds 598 783 1.441 TOTAL ASSETS $21 $333,983 $313,906 LIABILITIES Short term obligations $ 95,000 $ 140,000 $117,000 Accounts payable and accrued liabilities 27,990 31,576 22,341 Due to other funds 14,768 18,642 25,972 Welfare program advances 14,639 12,809 11,640 Obligations under reverse repurchase agreements 0 74,050 81,502, Deferred revenue 10.077 6.693 7.853 TOTAL LIABILITIES $162,474 $283,770 $266,308 FUND EQUITY: t Fund Balance Reserved For: Encumbrances $ 10,239 $ 11,639 $ 7,225 Inventories 1,627 1,598 1,602 Prepaid items and other assets 2,379 3,654 7,639 Advances to other funds 598 . 783 1,441 Fund Balance-Unreserved: 1! Designated for future use 5,679 4,316 2,238 Undesignated 31,048 28,223 26,453 TOTAL FUND EQUITY $51,570 $50.213 47 598 TOTAL LIABILITIES AND FUND EQUITY $214,044 $333,983 $313,906 Source: County Auditor-Controller • 3 COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL-BUDGETARY BASIS YEAR ENDED JUNE 30,1995 (WITH COMPARATIVE TOTALS FOR JUNE 30,1994) (IN THOUSANDS) 1995 Variance 1995 1995 Favorable 1994 Budizet Actual (Unfavorable) Actual REVENUES Taxes $89,666 $.89,992 326 $97,743 Licenses,permits&franchises 5,329 4,978 (351) 6,229 Fines,forfeitures&penalties 18,534 18,371 (163) 9,789 Use of money&property 10,021 12,693 2,672 12,279 Aid from other government agencies 385,854 383,118 (2,736) 375,371 Charges for services 134,047 116,447 (17,600) 77,835 Other revenue 12.403 11.635 768 10.446 TOTAL REVENUES $655,854 $637,234 $(18,620) $589,692 ! EXPENDITURES General government $ 79,992 $ 67,825 $ 12,167 $ 63,890 Public protection 165,463 157,135 8,328 . 152,161 Health&sanitation 116,317 114,585 1,732 112,659 Public assistance 245,568 238,859 6,709 231,162 • Education 126 122 4 102 Public ways and facilities 11,461 9,454 2,007 11,768 Recreation and Park 1 ------ 1 ------- Interest 4,469 4,469 5,017 Capital outlay(1) 3.477 3.477 3.384 TOTAL EXPENDITURES $626,874 $595,926 $30,948 $580,143 Excess(deficiency) of revenues over (under)expenditures 28,980 41,308 12,328 9,549 OTHER FINANCING SOURCES (USES) Operating transfers in 24,266 24,266 ------ 28,022 Operating transfers out (79,147) (71,628) 7,519 (37,405) Proceeds from issuance of debt ------ 270,036 Retirement of Debt ------ --------- --------- (270,036) Capital lease financing* - --- 3.477 3.477 3.384 TOTAL OTHER FINANCING SOURCES (USES) (54,881) (43,885) 10,996 (5,999) Excess(deficiency) of revenues and other financing sources over(under) expenditures and other financing uses (25,901) (2,577) 23,324 3,550 Fund Balances at Beginning of Year As Previously Reported 50,213 50,213 ------ . 47,598 Adjustment to beginning fund balance 4.664 4.664 098 Fund Balances at Beginning of Year, • 4 • as Restated 50,213 54,877 47,598 Residual equity transfers in 5 5 Residual equity transfers out 735 73 (5371 FUND BALANCE AT END OF YEAR $51,570$51,570 $27,258 $50,213 (1) These entries are required by NCGA Statement 5 to disclose the value of fixed assets acquired during the year under lease purchase agreements. The County does not appropriate these amounts since they apply to future years. Source: County Auditor-Controller County Employees A summary of County employment follows: COUNTY OF CONTRA COSTA COUNTY EMPLOYEES(') Number of Number of As of Permanent As of Permanent June 30 Employ June 30 Employs 1982 6,063 1989 6,463 1983 5,915 1990 6,718 1984 5,743 1991 7,008 1985 5,791 1992 7,080 1986 5,968 1993 6,689 1987 6,111 1994 6,658 • 1988 6,317 1995 6,822 (1) Excludes temporary or seasonal employees. Source: County Personnel Department County employees are represented by 30 bargaining units of 11 labor organizations, the principal ones being Local 1 of the County Employees Association and the Clerical Employees Union which, combined, represent approximately 34 percent of all County employees in a variety of classifications. The County has had a positive employee relations program, and has enjoyed successful negotiations of cost effective agreements over the years. The current labor agreements covering the majority of county employees expired on September 30, 1995, with future agreements' currently being negotiated. Retirement Programs The County has a retirement plan administered by the Employees' Retirement System of the ` County that covers substantially all employees and to which contributions are made by both the County and the employees. The plan provides basic death, disability and service retirement benefits based on speed percentages of monthly salaries and, in addition, provides annual cost-of-living adjustments after retirement. As of January 1, 1995 there were 6,047 active general members and 1,471 active safety members (police and fire)including employees of certain other governmental agencies. Retired members total 4,485. • County contributions are based on percentages of salaries as determined by an actuary and adopted by the Board. The County's policy is to fund expected basic benefits over the average working • 5 • lifetime of present members, except that unfunded prior service costs arising from plan amendments, actuarial gains and losses or other factors are paid in full. Beginning August 1, 1980 the County ' Retirement System implemented a new system whereby new general employees participate in a reduced program, paying roughly half of the premiums and receiving half of the benefits at retirement. Existing general employees were permitted to transfer to the new program for future credit only. Pursuant to the County Employees' Retirement Law of 1937, actuarial valuations of the retirement system are required at least every three years. The County's Employees' Retirement Association's actuaries determined the minimum contributions required for the year ended December 31,1994, were approximately$ million. Contributions made by employers and employees for the year ended December 31, 1994, were $29.2 million and million respectively. The Retirement Board transferred$21.8 million from its undistributed earnings account against contributions from employers and employees for the cost of living program. For the year ended December 31, 1994, total contributions to and earnings of the Employees' • Retirement Association were $454.1 million,which included$333.8 million from Contra Costa County as proceeds from the issuance of a pension obligation bond. The Association's pension benefit obligation is approximately 93.4%funded after the County paid its share of the UAAL. Long Term Obligations The County has never defaulted on the payment of principal or interest on any of its indebtedness. Following is a brief summary of the County's general obligation debt, lease obligations, and direct and overlapping debt. General Obligation Debt. The County has no direct general obligation bonded indebtedness, the last issue having been redeemed in fiscal year 1977-78. The County has no authorized and unissued debt. Lease Obligations. The County has made use of various lease arrangements with joint powers authorities, nonprofit corporations, and the County Employees' Retirement Association for the development of capital projects. These projects are for facilities in general, and are of a long-term nature. The projects are then leased to the County for a period of 15 to 30 years. The longest capital lease ends in 2023. As of July 1, 1995,total base rentals payable as pledged security over the remaining life of these issues was $242,802,000. A summary of base rental payments for the next five fiscal years is as follows. • a e 6 COUNTY OF CONTRA COSTA SUMMARY OF LEASE RENTAL OBLIGATIONS (in thousands) CAPITAL LEASE OBLIGATIONS(') ' Fiscal Principal Interest Total Debt Year Due Due Service 1995-96 $2,288 $2,127 $4,415 1996-97 1,889 1,997 3,886 1997-98 1,565 1,873 3,438 ! 1998-99 1,429 1,762 3,191 1999-00 1,334 1,648 2,982 (1) Excludes all capital lease obligations funded through the County Enterprise Funds or through the County Public Facilities Corporation. Source: County Auditor-Controller PUBLIC FACILITIES CORP.OBLIGATIONS(t) Fiscal Principal Interest Total Debt Year Due Due Service 1995-96 $5,910 $7,207 $13,117 1996-97 6,255 6,781 13,036 1997-98 5,310 6,327 11,637 1998-99 5,230 5,934 11,164 1999-00 5,735 5,540 11,275 f 1. Excludes obligations funded through the Hospital Enterprise Fund. Source: County Auditor-Controller Direct and Overlapping Debt. The County contains numerous municipalities, school districts and special purpose districts, as well as the overlapping Bay Area Rapid Transit District and the East Bay Municipal Utility District,which have issued general obligation bonded and lease r indebtedness. Set forth below is a direct and overlapping debt report (the "Debt Report") prepared by California Municipal Statistics Inc. that summarizes such indebtedness as of December 1, 1995. The Debt report is included for general information purposes only. The County has not reviewed the Debt Report for completeness or accuracy and makes no representations in connection therewith. The Debt Report generally includes long-term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the County. Such long term obligations generally are not payable from revenues of the County (except as indicated) nor are they necessarily obligations secured by land within the County. In many cases, long-term obligations issued by a private agency are payable only from the general fund or other revenues of such public agency. 7 CONTRA COSTA COUNTY 1995-96 Assessed Valuation: $61,808,669,364(after deducting$5,337,792,226 redevelopment increment;includes unitary utility valuation) OVERLAPPING TAX AND ASSESSMENT DEBT: %Annlicable Debt 04/01/96 San Francisco Bay Area Rapid Transit District 31.804% S S3,295,553 ' East Bay Municipal Water District and Special District#1 48.806&5.946 9,463,069 Martinez Unified School District 100. 36,264,914 Acalanes and Liberty Union High School District 100. 65,835,000 Brentwood Union School District 100. 9,469,699 Other School Districts 100. 9,700,000 Cities 100. 7,965,000 Sanitation and Sanitary Districts 100. 1,735,000 East Bay Regional Park District 46.021 72,871,952 Other Special Districts 100.(1) 4,226,908 Community Facilities Districts 100. 151,795,000 1915 Act Assessment Bonds(Estimate) 100. 348,443.681 TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $771,065,776 Less:East Bay Municipal Utility District and Special District#1 (100%self-supporting) 9.463.069 TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $761,602,707 DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT: Contra Costa County Authorities 100. % $279,911,012(2) Contra Costa County Pension Obligations 100. 336,775,000 Contra Costa County Board of Education Certificates of Participation 100. 4,315,000 Contra Costa County Mosquito Abatement District Certificates of Participation 100. 2,203,000 Alameda-Contra Costa Transit District Certificates of Participation 12.011 3,167,301 Antioch Unified School District Certificates of Participation 100. 12,203,809 San Ramon Valley Unified School District Educational Facilities Corporation 100. 76,405,000 Other School Building Corporations and Certificates of Participation 100.(1) 40,199,881 City of Concord Authorities 100. 32,710,208 City of Richmond General Fund Obligations 100. 12,770,000 City of Antioch General Fund Obligations 100. 18,799,599 City of Pleasant Hill General Fund Obligations 100. 15,430,000 City of San Ramon General Fund Obligations 100. 24,975,585 Other City Authorities 100. 19,862,002 Hospital Authorities 100. 10,750,000 San Ramon Valley Fire Protection District Certificates of Participation 100. 10.900.000 TOTAL NET DIRECT AND OVERLAPPING LEASE OBLIGATION DEBIT $900,594,397 Less: San Ramon Unified School District Certificates of Participation (self-supporting from GIC from Bayerische Landesbank) 16,115,000 City of Concord Lease Bonds(100010 self-supporting) 2,240,000 TOTAL NET DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $882,239,397 GROSS COMBINED TOTAL DEBT $1,671,660,173(3) NET COMBINED TOTAL DEBT $1,643,842,104 8 d (1) Various,but mostly 1000/c applicable. S (2) Includes$1,318,000 lease purchase bonds to be sold. (3) Excludes tax and revenue anticipation notes,revenue,mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Ratios to Assessed Valuation: Combined Direct Debt($616,686,012)..................................................1.00% • Total Gross Direct and Overlapping Tax and Assessment Debt......1.25% Total Net Direct and Overlapping Tax and Assessment Debt..........1.23% Gross Combined Total Debt...................................................................2.70% Net Combined Total Debt.......................................................................2.66% STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/95: $0 . SOURCE: California Municipal Statistics,Inc. 9 • • APPENDIX B COUNTY OF CONTRA COSTA- ECONOMY&GENERAL INFORMATION • i • • Tri COUNTY Genera! Contra Costa County was incorporated in 1850 as one of the original 27 counties of the State, with the City of Martinez as the County Seat- It is one of the nine counties in the San Francisco-Oakland Bay Area_ The County covers about 733 square miles and extends from the northeastern shore of San Francisco Bay easterly about 50 miles to San Joaquin Counry. Contra Costa is bordered on the south and west by Alameda County and on the north by Suisun and San Pablo Bays. The western and northern shorelines are highly industrialized, while the interior sections are suburban/residential,commercial and light industrial. A large part of the interior of the County is served by the Bay Area Rapid Transit District ("BART'), a situation that has encouraged the expansion of both residential and commercial development. In addition,economic development along the Interstate 680 corridor in the County has been so substantial that three cities—Concord,Walnut Cmek and San Ramon--placed among the top four cities accounting for the greatest percentage increases in jobs in the entire Bay Area from 1985 through 1990. County Government The County has a general law' form of government- A five-member Board of Supervisors, each of whom is elected to a four-year term, serves as the.county's legislative body. Also elected • are the County Assessor, Auditor-Controller, Clerk-Recorder, District Attorney-Public Administrator, Sheriff-Coroner and Treasurer-Tax Collector. A County Administrative Officer appointed by the Board of Supervisors runs the day-today business of the County. Population 1980 Through 1990. Contra Costa County's population grew 21.5 percent during the 1980's, a moderate acceleration from the 17.7 percent growth rate achieved in the decade of the 1970's. The County's population growth ranked first among the nine Bay Area counties for the 1980 - 1990 period and was slightly below the 24.9 percent growth rate for the entire state of California As detailed in the table on the next page,population growth within the County was positive during the 1980's in every city except Olinda. Cities experiencing the strongest growth include Hercules, Brentwood, Clavton, Antioch, Pleasant Hill, San Ramon and Martinez. Population growth in Concord, the County's largest city, was relatively static by comparison during the 1980's. • Of particular significance is the resumption of population increases in the western portion of the County, particularly in Pinole, Richmond and San Pablo. Each of these older cities experienced population declines during the 1970's, but a number of factors have gradually reversed the population erosion. The availability of rapid transit, close proximity to the major employment hubs in San Francisco and Oakland, and relatively affordable existing and new housing have combined to atvact more residents to these cities. • The unincorporated regions of the County registered a 17.8 percent increase in population during the 1980's after having dropped by 21.2 percent during the 1970's. Most Recent Annual Performance. The California State Department of Finance reported that the County's population stood at 855,100 as of January 1993, an increase of 7.2 • percent since 1990. The strongest growth is concentrated in the eastern portions of the Count}', particularly in Clayton, Antioch and Brentwood, although very strong growth was noted in Hercules and Richmond in the western part of the County. • • COLN-n' OF COSTA CONTRA POPULATIONM S,xcal Censors • 1960 1970 1975 1950 1990 1993 Antioch 17,305 28.060 33.215 42.653 60,900 69,600 Br=wuod 2,186 2.649 3.662 4,434 7500 9.675 Clavton 1.385 1,790 4.325 7,150 8.375 Concord 36,208 85.16: 94,673 103,763 110,900 113.200 Danville• 26,143 31,200 34,100 El Ccrrito 25,437 25.190 22,950 22731 22,850 23,450 Hacuks 310 252 121 5,963 16,400 18,600 lsfayeae 20,484 19.628 20,837 23,450 23,700 MZ&WZ 9.604 16.506 18,702 22582 31.700 35.W) Moraga 14.205 14,418 15,014 ' 15.850 16,550 Clnrda• 17,070 16,650 17.050 Pinole 6,064 15.850 15.337 14,253 17.000 18,150 Piasbu rg 19,062 20,651 24,347 33,465 47.250 50,400 • Pleasant Hill 24.610 25,398 25547 31.550 31,850 Richmond 71.594 79.043 70,126 74,676 86,600 92200 Sar Pablo 19.687 21,461 19.392 19,750 25.000 26.150 Sar Ramon* 20.511 35,100 38,900 WaInut Creel: 9,903 39,844 46,0+4 54,033 60,400 61400 Unirnaorporatd 191,680 163,035 173,036 12S.55,1 150,100 165,700 Total 409,030 558389 582,829 656.331 797,600 855,100 • California 15,717.201 18.130015 21,185,002 23,668,145 2E.558,000 31.552000 Totals may no;equsl sums due to independent roweling. • Dates of incorporation: Danville (7/1/82);Orarda(7/1185);San Ra.-non(7/1/83). The 1990 Census Report crc=4 1980 population levels for these cities prior to official aroorpora.ion. Sour«: United Stairs Census: 1960-1990;Stan Depa.-uneru of Finance:1993 • Largest Taxpayers The ten largest,taxpayers in the County,as shown on the fiscal year.1992-93 secured tax roll;and the approximate amounts of their property tax payments are shown below. These ten largest taxpayers paid a total of$87.5 million in taxes,or about 11.7 percent of the County's 1992- 93 secured tax collection. COMM OF CONTRA COSTA TEN LARGEST PROPERTY TAXPAYERS Total Taxes Paid Company 1992-93 Chevron USA 525,916,291 Pacific Gas&Electric Company 16,488.902 Pacific Bell 11,338.875 Shell Oil Company 8,317.318 Tosoo Corporation 5,454,696 Union Oil Company of California 5,295280 USS POSCO 4,837,445 Presley 4213,806 Bank of America 2,980,575 Gaylord Container 2,516,316 70TAL $87,459,504 Soma: County Trea=cr-Tax Collecror • r tndustry and Employment Contra Costa County has one of the fastest-growing wort: forces among Bay Area counties, with growth in its employment base being driven primarily by the need to provide services to an increasing local population. Concomitantly, the County has experienced an immigration of white-collar jobs due to the relocation of companies from costlier locations in the S Bay Area. The combined impact of population growth and immigration has resulted in significant job creation in the County, with the job base having grown 50 percent since 1980. Due to the recent economic recession in California, however, the County's job base fell by 6,000 jobs in 1991. As shown below,the County's labor force stood at 430,000 in 1992. With average 1992 unemployment rates of 6.7 percent and 9.1 percent for the County and the State,respectively,the County has achieved a lower unemployment rate than the State in four of the past five years. COUNTY OF CONTRA COSTA EMPLOYMENT AN'D UNEMPLOINENT OF RESIDENT LABOR FORCE WAGE AND SALARY WORKERS BY INDUSTRY AN-%-UAL AVERAGES (IN THOUSANDS) 1988 1989 1990 1991 1992{1> Ci%ilian Labor Force('-) 410.8 421.9 418.6 419A 430.0 Employ-ment 392.3 404.4 401.2 396.1 401.4 County Unemployment 18.5 17.5 17.4 23.3 28.6 Unemployment Rate: County 4.5% 4.2% 4.2% 5.6% 6.7% State of California 4.3`ic 4.81ic 5.6% 7.5% 9.1% United States 5.5% 5.3% 5.3% 6.7% 7.4% Wage and Salary-EmployrnentO> 1988 1989 1990 1991 Agriculture 1.3 1.2 1.3 1.2 Mining 3.0 3.4 2.8 2.6 Construction 21.2 21.1 21.4 18.6 Manufacturing 30.5 31.7 31.7 31.1 Transportation and Public Utilities 19.2 18.9 20.0 20.0 Wholesale Trade 11.0 10.9 11.1 11.0 Retail Trade 57.0 57.7 61.6 58.8 Finance,Insurance,and Real Estate 26.6 269 27.3 26.8 Services 68.2 73.2 77.3 78.2 Government -� 7.0 7.1 7.1 6.9 State and Logi 34.0 35.6 36.6 37.0 TOTALM 279.0 287.7 2987 2923 0) hebmkzry estimate;subject to revision._ The 1992 estimates are based upon new beadnnalc dau and are not comparable to dau published prior to 1992. The Depsrtsneu of Employment Development will be releasing revised data for 1992 and earlier yeas later in 1993. Based on place of residence;because of a chsmge in storey methods,the 1990 labor fora dau at not strictly comparable to the 1988 and 1989 dao. ts> Based on place of work:1992 data for the County will be available on approximately August 1,1993 (4) 'Tool"may not be precise due to independent roundrn& Source: Employment Development Department.Stare of California Health and Welfare Agency • Major Employers • Major industries in the County include petroleum refining, steel manufacturing, prefabricated metals, chemicals, electronic equipment, paper products, services and food processing. Most of the County's heavy manufacturing is located along the County's northern boundary fronting on the Suisun and San Pablo Bays leading to San Francisco Bay and the Pacific Ocean. Descriptions of major employers in selected industries follow. • Petroleum and Petroleum Products. The production of petroleum products formed the initial basis of industrial development in the County. Currently, four companies manufacame products from crude oil. The largest in terms of capacity is Chevron Corporation's (Standard Oil Company of • California) Richmond Refinery, which began operations in 1902 and is the company's oldest and fourth-largest refinery. The Richmond refinery,located on 3,000 acres,has a capacity of 365,000 barrels per day although typical production is between 230,000 and 250,000 barrels per day. The refinery produces a complete line of petroleum products and imports the bulk of the crude oil from Alaska. Shipping facilities include the company's own wharf,which is capable of handling four tankers at a time,making it the largest in the Bay Area in terms of tonnage. Chevron operates a fleet of 53 tankers, of • which nine are for intrastate business. Petroleum products are also shipped by truck and by two railroad carriers as well as distributed by pipeline. The company is presently constructing a $160 million natural-gas-fired cogeneration plant to fulfill its own requirements for electricity and steam. A number of Chevron's divisions are located throughout the County. Chevron Research • and Technology Company is in Richmond and is the only non-geological research arm of the company. This facility is used by Chevron Research in its continuing program to improve the efficiency of conventional auto, aircraft and marine fuels. Chevron Accounting Division is located in a 400,000 square foot building in Concord and serves as a finance and computer center for Chevron's entire domestic operations. In 1987, a San Ramon facility was opened and houses 3,900 employees involved in computer, • marketing,consumer services and other administrative functions. Chevron currently has the fifth largest workforce of any employer in the Bay Area and the largest employer in the County, reporting approximately 49,277 people on its worldwide payrolls as of December, 1992.The company has nearly 10,000 employees located among its various facilities in the County. Due to a corporate consolidation of Chevron's domestic exploration and production subsidiary, Chevron U.S.A.Production Company, approximately 200 positions were eliminated in the finance division in Concord during 1992 and 1993. Shell Oil Company ("Shell") began operating in Martinez in 1915. The Shell Oil and Chemical Martinez Manufacturing Complex,located on 1,100 acres, is a combined oil refinery and industrial chemical production plant. It is one of three Shell facilities on the • West Coast which supply all Shell products to the western states. The complex has the capacity to process about 145,000 to 160,000 barrels of crude oil per day. About 70-80 percent of this crude oil is transferred via the company's pipeline from California oil fields,while the remainder is shipped from Alaska. Shell's docking facilities can handle two tankers and two barges simultaneously. Finished petroleum products are shipped via truck- company owned pipeline, Southern Pacific Railroad's pipeline, and by rail car and • • Shell employees in the County total approximately 850, of whom approximately 800 work at the Martinez complex and 50 work at a retail district office in Concord Union Oil Company ("Unocal")operates an oil refinery at Rodeo between the cities of Richmond and Martinez,and a distribution terminal for Northern California at Richmond. The oil refinery,which began operations in 1896,occupies 1,100 acnes and processes up to 100,000 barrels of raw materials per day. There are 600 full-time employees at the refinery and 75 at the distribution terminal. Unocal also operates a chemical plant on Franklin Canyon Road near Highway 4 in the County. Tosco Corporation operates a refinery with a capacity of 140,000 barrels per day. The refinery,which has been in operation since 1913,uses crude oil from the North Slope of i Alaska,as well as the heaviest crude oil from California oil fields,and refines it into high grade light fuel products. It is located on a 2,2Macre site and employs approximately 700 people. Tosco moved its corporate headquarters from Bakersfield to Concord in the fall of 1990. The relocation added another 80 employees to payrolls in the County. Grocery Stores. Safeway, the Bay Area's largest employer, reported 104,900 employees worldwide as of becember 1992, a reduction of 5,200 jobs compared to i 1991. Most of the employment decline came as a result of replacement of part-time with full-time workers. Health. Care. One of the Bay Area's largest private employers, Kaiser Permanente Medical Group, has approximately 3,300 employees in the County. Kaiser provides medical coverage to about one in three Bay Area residents and operates hospital and clinic facilities in Richmond,Martinez, Antioch and Walnut Creek and is exploring other sites in the County for future construction. Telephone Services. Pacific Telesis Group, the Bay Area's fourth largest employer, reported 61,346 worldwide employees as of December 1992. The company has been trimming its worldwide workforce over the past three years and is expected to eliminate approximately 8,000 more jobs by 1995, largely a result of further cost reductions, restructuring, and buyouts. The San Ramon Chamber of Commerce reported in earl= 1993 that the company's employment totals approximately 7,500 at its Bishop Ranch offices in the County. The following table provides a listing of large companies headquartered in the County and employers who account for at least 1,000 jobs in the County. i i i • COU'\TY OF CONTRA COSTA • MAJOR COMPANIES HEADQUARTERED 1T THE COUNTY AND EMPLOYERS WITH MORE THAN 1,000 EMPLOYEES Firm Primary Locarions Product Employment' Longs Thugs Store(3) Walnut Creek Drug Stores 12,000 Chevron Corporation Richmond,Concord,San Ramon Petroleum Products 10.504 Pacific Telesis San Ramon Telecommunications 7.540ct • County of Contra Costae Mard= County Government 6,764 Bank of America<`r Concord Financial Services 6,500 Kaiser Permanente Medical Group Martinez,Walnut Creel: Health Care Service 3,300 Safewray Countywide Retail Food Outlets 3,000 Rbadr't Hcrcuks Clinical Testing Equipment 2.500 Fbeboardm Concord Wood Products 2,000 Village Resorts La&yeae Resort Condominiums 1,800 Lesher Communications Inc. Walnut CYeeh Newspapers 1.267 Naval Weapons Stationm Cancad Munitions Depot 1,175 Notch American Title Co. Walnut Creek True Ltsurance 1,140 City of Concordm Concord City Government 1,025 Central Garden Supply Lafayeue — Wholesale Garden Supplies 1,000 —C&H Sugar Co. Concord SugarRefinery 1.000 • may include entire Bay Area workforce As of April. 1992. ts) Headgw aed in the Cou nry. Compam•made acquisition du iM 1992. Sam= The San Francisco Chronicle,'The Chrornick 1007.April 1993;San Ramon Chamber of Commerce;Contra Costa T—cs.Top 50%July,1992. • Impact of Military Base Closings The U.S. Congress enacted legislation in 1990 to close a number of domestic and international military bases,including several in the Bay Area.. The list of bases with scheduled closure dates included San Francisco's Presidio and Letterman Hospital, Fort Ord in Seaside, Sacramento Army Depot, Hunters Point Annex of Treasure Island Naval Air Station in San • Francisco and Moffen Field Naval Air Station in Sunnyvale. The second phase of major military base closures began with the release on March 12, I993 of the Department of Defense's list of thirty one additional facilities to be shut do'Am. Included on the list were five Bay Area bases including Marc Island Shipyard (Solan County), Treasure Island Naval Station (San Francisco County), Alameda Naval Air Station (Alameda • County),Alameda Naval Supply Center(Alameda County),and Oakland Naval Hospital(Alameda County). Approximately 17,000 military positions and 10,000 civilian jobs are expected to be lost as these facilities are gradually closed beginning in 1995. In addition,a number of small military support facilities located throughout the Bay Area have been placed on a list of facilities recommended to be realigned or relocated- These elocatedThese cutbacks in nearby facilities are not expected to significantly affect the County's economy. Furthermore,any negative economic impacts in the affected counties may be lessened if the President's plan to provide transition relief and job training for affected personnel is implemented. The only military installation located in Contra Costa County is the Naval Weapons Station in Concord,a facility that is not slated for closure. • • Median Income As a consequence of its strong employment sector, the County achieves high ranl,-ings among all California counties on a variety of income measurements. As reported in the 1990 U.S. Census, the County ranked fifth in terms of median family income ($51,651), sixth in terms of Median household income ($45,087), and third in terms of per capita income ($20,748). The medians for the State of California were $40,559 (family income), $35,798 (household), and S16,409(per capita). Commercial Activity • Commercial activity forms an important pan of Contra Costa County's economy,with total dollars generated by taxable transactions:rising by 15.9 percent between 1988 and 1991. Sales rose annually during that period until the economic recession in California triggered a decline commercial activity in 1991 when sales fell 1.4 percent from 1990 levels. The data available for the first three quarters of 1992 indicate that the annualized level of transactions may be slightly higher than in 1991. COUVTY OF CONTRA COSTA TAXABLE TRANSACTIONS 1988 TO 1992 (IN THOUSANDS) 1988 1989 1990 1991 19920' • Apparel Stores S 227,202 S 250.721 $ 268,874 S 270.580 S 187,699 Cmaal Merchandise Steres 974,820 1,081,849 1,300,383 1,154.519 839,489 Speczalry Stores 561.585 599.770 700,909 684.931 478954 Food Stores 383.373 415,268 432,071 479,104 372,129 Packaged liquor Stares 50,082 49.993 48.669 47,049 36,898 Eating and Drinking Places 465,809 474,132 513,257 533,763 409,822 • Hoose Furnishings and Appliances 272,75= 277.961 268,755 257,102 184,680 Building Materials and Farm Implements 404,283 480,531 497273 443,869 332.585 Service Stations 451.661 414.623 528,802 481,101 392.28 Automotive and Vehicle • Dealers,Parts and Supplies 785,864 $36,470 853,970 796.285 608.457 Total Retail Outlets 5477.433 54.881318 $5,242.963 S5.148.303 $5.562,234 Dwiness gad Personal Services $ 246,422 S 298.832 S 333.588 S 323.284 S 232,727 AU Other Outlets $1.539,235 $1.596.291 $1.888.513 $1.888.979 $1,486.566 Total All Outlets $6,363,090 $6.776.441 57,465,064 S7.360.566 $5.562.234 Tbrvugh the tbtrd quarter of 1992 Saw= State Board of Equalization Taxable transactions are skewed toward the largest cities in the County, where the concentration of retail establishments is greatest_ Through the third quarter of 1992,the top five cities accounted for 51 percent of taxable transactions while comprising only 46 percent of the • County's population. COUNTY OF CONTRA COSTA ! TAXABLE TRANSACTIONS OF TOP FIVE CITIES (1N THOUSANDS) 1991 Taxable 1992 Taxable City Transactions ThnsacdonsP) Conc d S1,467383 $1,084.696 • Walnut Creels 919,273 680,951 Richmond 737,520 550,834 Antioch 374,119 291,509 Pittsburg 241,654 206" TOTAL 53,739949 52,814,494 «? Figum represents transactions duough she third quarter of 1992 only. • Source: State Board of Fqualiuuion Much of the County's commercial activity is concentrated in central business districts of the cities and unincorporated towns. In addition, four regional shopping centers and numerous smaller centers serve County residents. The regional centers located in the cities of Richmond, Concord,Walnut Creek and Antioch each are anchored by at least three major department stores. • The largest regional shopping center in the County is Sun Valley Shopping Center which features 130 stores including Macy's, Sears, Penney's, Mervyn's and Emporium-Capwell. In addition, two large discount warehouse stores(Costco and Price(Dub)are located in Richmond. The County is served by all major banks including Bank of America NT&SA,Wells Fargo Bank, and First Interstate Bank. In addition there are numerous local banks and branches of • smaller California and foreign banks. There are over'30 savings and loan associations in the County,including Home Savings,Great Western, San Francisco Federal and California Federal. Construction Activity White construction sectors in other counties continued to decline in California in 1992, • building activity increased in Contra Costa to its highest level since 1989. Building permit valuations increased 24 percent in 1992,led by a resurgence in single-family home construction. Multi-family housing permits declined in 1992, however, while nonresidential construction was little changed from the prior year. The following table provides a summary of building permit valuations and number of new dwelling units authorized in the County since 1981. • COL\-n' OF CONTRA COSTA BUILDING PERNUT VALUATIONS 1981 - 1992 Valuation (S millions) Number of New Dwelling Units Residential multiple Year (New) Nowmidential Total Single Family Family Total 1981 S 227.924 S 205.905 S 433.829 2.523 585 _3._108 1982 201,256 218.496 419,752 1,930 858 2,798 1983 432,291 362,939 795.230 4,588 1.968 6.556 1984 408,562 445,00 953,565 4,162 2.255 6,417 1985 579,867 511,120 1,090.987 4,650 4.672 9.322 1986 808,639 325.046 1.133.685 6.186 6,766 12,952 1987 670.747 305,953 976.700 5,481 2.950 8,431 1988 785,925 214.201 1,000,126 5,853 2.171 8,02.4 1989 963,313 264.020 1,127,333 5;504 2,219 7.723 1990 560,193 252,443 812.636 3.132 1,149 4XI 1991 488,939 196.165 685,104 2,705 1,275 3,990 1992 638,714 207,099 945,812 3,279 614 3,893 Note; Totals mzy not be precise due to bArpendem roundig Sources: Data Resources Inc..1981 -1958; Economic Sciences Corporsd=1989-1992. In the last few years,office construction and leasing has been a much-publicized engine of the County's economy,especially in the Bishop Ranch area of San Ramon along Interstate 680. It is estimated that over 8.5 million square feet of office space will be constructed in Bishop Ranch by 1996 and that the 585-acre business park will be the workplace for 26,000 employees. Six million square feet have already been completed and are occupied by companies such as Pacific Bell, Chevron Corporation, Toyota, United Parcel Service, American Express, and Marriott Hotels. Bishop Ranch offers lower land and labor costs than San Francisco and the East Bay and is surrounded by communities that provide a large labor pool to immigrating companies. Transportation Availability of a broad transportation network has been one of the major factors in the County's economic and population growth. Interstate 80 connects the western County to San Francisco, Sacramento and points north to Interstate 5, the major north-south highway from Mexico to Canada. Interstate 680 connects the central County communities to the Test of the Bay Ana via State Routes 4 and 24,the County's major east-west arteries. On April 23, 1992, Northern California's largest freeway interchange reconstruction project began at the intersection of Interstate 680 and Highway 24 in Walnut Creek- The 5310 million project will add traffic lanes,an elevated bypass,and redesigned access patterns. With the majority of the work being conducted at night,the pmject,is scheduled to finish in 1996. In addition to private automobiles, ground transportation is available.to county residents from the following service providers: • central Contra Costa Transit Authority CCCCTA")provides local bus service to the central area of the County including Walnut Cieck,Pleasant Hill and Concord. • Bay Area Rapid Transit ("BART"') connects the County to Alameda County, San Francisco and Daly City in San Mateo with two main lines, one from the San Francisco area to Richmond and the other to the Concord/Walnut Creek area. In May, 1992,BART announced plans to extend service to Pittsburg and Antioch in the eastern portion of the County. Construction of above-ground access down the i . f middle of Highway 4 and the widening of Highway 4 in the affected region will provide approximately 5,000 jobs during the construction period. In addition,BART has ordered an additional eighty transit cars,fifty of which are expected to be used in both the Pittsburg extension and the Dublin extension in a nearby county. The eighty transit cars will be built in a former steel facility in Pittsburg,adding an estimated 200 to 500 jobs in the County. • AC Transit, a daily commuter bus service based in Oakland,provides local service and connects Contra Costa communities to San Francisco and Oakland. • Other bus and rail passenger service is provided by Greyhound,Trailways Bus,and * Amtrak. In 1991,Amtrak introduced a special commuter line between Oakland and Sacramento that makes several daily stops at the Martinez station. • The Santa Fe and Southern Pacific Railroads'main lines service the County,both in the industrial coastal areas and the inland farm section. Commercial water transportation and docking facilities are available through a number of port and marina locations in the County. The Port of Richmond on San Pablo Bay and several privately owned industrial docks on both San Pablo and Suisun Bays serve the heavy industry located in the area The Port of Richmond,owned and operated by the City of Richmond, covers 202 acres and handled 25,964,983 metric tons in 1992. The majority of the shipments are bulk liquids with the remainder consisting of scrap metal,autos,and gypsum rock. Major scheduled airline passenger and freight transportation for County residents is available at either Oakland or San Francisco Inter national Airports,located about 20 and 30 miles, respectively,from the County. In addition there are two general aviation fields,one at Antioch and the other az Concord. Agriculture Ranking thirty-sixth among California counties in agricultural crop production in 1992,the County has posted farm revenues between$61 and$70 million over the past five years. Output of fruit and nut crops has been gradually increasing in importance in the County's agricultural sector, reflecting the productivity of farm land in the eastern portions of the County near Brentwood. The value of agricultural production since 1988 is illustrated in the table below. COUNTY OF CON?RA COSTA AGRICULTURAL PRODUCTION, 1988 • 1992 1988 1989 1990 1991 1992 Nursery products $20,401,000 $21,594,000 $22.539,000 523,464,000 SI-7,W,000 « Livestock&poultry 5,975,000 4,652,000 7,045,000 5.262.500 4,065,100 FId crops 8.139,500 9.745,400 8,890,400 6.385,000 10,064,200 Vegetable&seed crops 14„506,600 13947,000 12,390,400 16,722,000 16234,270 Fruit and nut crops 8.05$,557 9,821,900 8,566,100 12,756,100 13,191,100 Livestock.Apiary& poul,y products 4,410,095 5,424,920 5,537,060 5,328.833 5.569,350 Total $61,490,752' $65,185,220 565,067.560 $69,918,443 567,008,020 Source: Contra Costa County Department of A&rkulnuc Environmental Control Services Water. The Fast Bay Municipal Utilities District("EBMUD")and the Contra Costa County Water District ("CCCWD") supply water to the County. EBMUD, the second largest retail water distributor west of the Mississippi,supplies water to the western part of the County. Ninety-five percent of its supply is the Mokelumne River stored at the 68 billion gallon capacity Pardee Dam.EBMUD is entitled to 325 M trillion gallons per day under a contract with the State Water Resources Control Board,plus an additional 325 million gallons per day under a contract with the U.S. Water and Power Resources Service (formerly the U.S. Bureau of Reclamation). EBMUD does not plan to draw on its federal entitlement for the foreseeable future. CCCWD obtains its water from the Sacramento-San Joaquin Delta and serves 400,000 customers in Concord, Pleasant Hill, Martinez, Clayton, Pittsburg and. Antioch. It is entitled under a contract with the U.S. Water and Power Resources Service to 195,000 acre-feet per year. Water sold has ranged between 80,000 and 110,000 acre-feet annually. In addition, a number of industrial users and several municipalities draw water directly from the San Joaquin River under their own riparian rights, so that actual water usage in the service area averages about 125,000 acre-feet annually. Since 1987, and up until this year,Northern California experienced below average rainfall. Beginning as early as 1989,EBMUD's and CCCWD's Boards of Directors implemented voluntary and mandatory water conservation programs to compensate for short-term deficiencies in supply. The programs succeeded due to vigorous * public information campaigns,the implementation of rate incentives and excess use charges,the adoption of conservation ordinances,'and the promotion of water reuse and reclamation for appropriate purposes. All of California has experienced above-average rainfall in the current rain season, resulting in EBMUD's declaration in early 1993 that the drought is officially ended. # Sewer. Sewer services for the County are provided by approximately 20 sanitation districts and municipalities. Federal and State environmental requirements, plus grant money available from these two sources, have resulted in about 14 agencies upgrading, expanding and/or building new facilities. Flood Control. The Contra Costa County Flood Control District has been in # operation since 1951 to plan, build, and operate flood control projects in unincorporatedareas of the County except for the Delta area on its eastem border. The Delta is interspersed with inland waterways which fall under the jurisdiction of the U.S. Corps of Engineers and the State Department of Water Resources. The County has experienced no major flooding in urbanized areas since October 1962. Having completed a number of projects since its inception,the District is currently working on the West Antioch Capacity Improvement Project and recently awarded a construction contract for the Miranda Cock Project. Education and Community Services Graded public school education in the County is available through 9 elementary school districts, 2 high school districts, and 7 unified school districts. These districts provide 121 elementary schools, 29 middle,junior high, and intermediate schools, 23 high schools, and a number of preschool, adult school, and special education facilities. In addition, there are 104 private schools with six or more students in the County. School enrollment in the fall of 1992 numbered approximately 132,000 students in public schools and 15,000 students in regular graded private schools. • Higher education is available in the County through a combination of two-year community colleges and four-year colleges. The Contra Costa County Community College District has campuses in Richmond, Pleasant Hill and Pittsburg. California State University at Hayward opened a branch campus, called Contra Costa Center, in the City of Pleasant Hill where late afternoon and evening classes in business,education and liberal ans are offered. In addition, the California State University currently has a campus under construction in Concord. St. Mary's ! College of California, a four-year private institution, is located on a 100-acre campus in Moraga. Also located within the County, in Orinda, is John F. Kennedy University. In addition, County residents are within easy commuting distance of the University of California at Berkeley. There are nine privately operated hospitals and one public hospital in Contra Costa County, with a combined total of 1,900 beds. Three of the private hospitals are tun by Kaiser Permanente, the largest health maintenance organization in the United States. The public hospital is Merrithew Memorial Hospital, a 192-bed facility that the County is currently preparing to replace on the existing campus in Martinez. f ! i a APPENDIX C THE LEASE,PAYING AGENCY AGREEMENT,ESCROW AGREEMENT AND CONTINUING DISCLOSURE CERTIFICATE f APPENDIX D COMBINED FINANCIAL STATEMENTS OF THE COUNTY OF CONTRA COSTA FOR THE FISCAL YEAR ENDED JUNE 30,1995 w County of Contra Costa, California i' COMPREHENSIVE ANNUAL FINANCIAL REPORT a� Fiscal Year Ended June 30, 1995 Kenneth J. Corcoran, Auditor-Controller • COUNTY OF CONTRA OOSTA COM 13 NED BALANCE SBEEz'-ALL FUND TYPES AND ACCOUNT GROUPS t JUNE 30,1995 (In Thousands) t Govemmental Fund Types Special Debt Capital. Assets&Other Debits Gencral Revenue Service Projects Cash and investments $ 117,317 75,937 19,440 26,296 . Land held for sale 2,189 Accounts receivable and accrued revenue 56,2M 13,755 2,125 1,113 Inventories 1,627 Due from other funds 35:380 5,975 797 203 Taxes receivable Advances to other funds 598 10,484 { Notes receivable 2,.372 i Prepaid items and deposits 2,854 4,807 Fixed assets,nct 1 Amount available in debt scrvicc funds Amount ID be provided for retirement of long term obligations i Total Assets&Other Debits $ 214044 115 S19 22362 27612 � Liabilities,.Equity& Other Credits !' Liabilities: Warrants outstanding Short term notes 95;000 Accounts payable and accrued liabilities 27,90 9,214 5,278 831 Employee benefits payable Due to other funds 14,768 10,739 1 529 Wclfarc program advances 14,639 _ ' Capital lease obligations Unapportioned taxes Tax loss guarantees Due to other agencies and districts Certificates of participation,net Advances from other funds 2,603 Deferred revenue and credits. 10,077 7,056 82 4 Deferred compensation Notcs payable Pension and other bonds payable Special assessment debt with go vernmcnt,commitmc nt Other non-current liabilities Total Liabilities 162,474 29,612 5,361 1'164 ; I.-Auity &Other Credits: C"Lributcd capital Investment in general fixed assets Retained earnings(deficit): Reserved for debt service Unreserved Fund balances: I Rcscrvcd 14,843 26.345 17 f)n l 9,096 Unrescrved llcsignated 5,679 5,052 14,966 lhxicsignatcd 31.048 54,410 2,186 Total Equity& Other Credits 51,570 85,907 17,001 26,248 Total Liabilities, i%Iuity & Other Credits $ 214,044 115.519 22362 27,(,12 See accompanying notes to genera l-punlose financial statements. 2 Fiduciary Proprietary Fund Types Fund Types Account Groups (� General (Memorandum Internal Trust and General Long-Term only) Enterprise Service Agency Fixed Assets Obligations Totals 139,519 70,813 2,028,889 2,478211 2,189 11,682 328 29,702 114,973 837 2,464 14236 . 2,313 41,873 100,777 71,266 71,266 2 500 13,582 2,372 1,770 40 9,471 63,862 65 515,596 579,523 17,001 17001 504,733 504,733 231,9061 73,454 2,174,135 515596 521,734 3,896 562 59,851 59,851 95000 16,110 57,137 23,783 140,343 4,148 41 20,(149 24,838 10,973 703 63,094 100,807 14,639 3,808 31,347 35,155 66,414 66,414 24,709 24,709 481,214 481,214 122,773 105,455 228,228 Zrj 10,979 13,582 16,793 34,012 88,028 88,028 1,555 1,555 55,435 317,726 373,161 34,023 34,023 1,031 1,031 231,071 57 40 807,134 521,734" 1,816590 30X,7 30,067 515,596 515,596 1123) c 11249 (40,481) 15,014 (24,867) 1,3,7 201 1,434,480 25,697 87,744 835 15.014 1,.3617 20 I 515,596 2.079.972 231.9X), 73.454 2,174135 515.596 521.734 3.8961562 V } V, , i x Nt , 2L�Rlllh\\\`oi>l'lii?`:1:.u.�"'-�}�.t�: .:S:tv- !>,`."•,t:f�i2 3A COUNTY OF CONTRA COSTA COMBINED S7rATEMD5N`r OF REVENUES,EXPENDrFURES AND CHANGES IN FUND BALANCES-ALL GOVERNMENTAL FUND TYPES YEAR ENDO)JUNE 30,1995 (In Thousands) (Memorandum Special Debt Capital Only) General Revenue -Service projects Totals Revenues: Taxes 89,992 69,323 5,462 2,408 167,185 Licenses,permits and fiarr-hisc fees 4,978 8,301 53 13,132 Fines,forfeitures and penalties 18371 2,935 21,306 Use of mcmy and property 12,693 4,655 12,131 1,121 30,600 Intergovernmental M,118 93,676 416 1,140 478,350 Charges for services 116,447 23,389 518 140,154 Other revenue - 11,635 3288 14,923 Total Revenues 637,234 205,507 18,009 5,240 8(,(),050 Expenditures: Current: General govemmcnt 67,825 2,003 69,828 Public protection 1.57,135 112,964 270,099 licalth and sanitation 114,585 8,972 12.3,557 Public assistance 238,859 54,435 293,294 Education 122 9,272 9,394 Public vvays and facilities 9,454 25,882 3.5,136 Recreation and culture 326 326 Debt Service-- Principal 7,742 7,742 Interest 4,469 30,221 34,690 Capital outlay 3,477 4,159 20,974 8,887 37,197 Total 1---xpcnditurcs 595926 218,013 58,837 8,887 881,663 Excess(deficiency)of rcvcnucs over (under)expenditures 41,308 (12,446 (40,,(28) (3,647) (15,613) Other Financing Sources (Uses): Operating transfers in 24,266 19,075 19,543 448 63,332 Operating transfers out (71,628) (2,001) (192) (73,821) Advances from other funds 1,425 1,425 Repayment of advances (1289) pq (I,589) Proceeds from issuance of debt 1,342 22,992 2,226 26,560 Capital lease financing 3,477 3,477 'I'otal Other Financing Sources(Uses) (43,885) 18,552 42.535 2j82 19,I84 Excess(deficiency)of revenues and other financing sources over(under) cxfxnditurcs and other financing uses (2,577) 6,106 1,707 (1,465) 3,771 'Fund Balances at Beginning of Year, as Previously Reported .50,21.3 78,076 9,043 24,663 161,995 Adjustments to beginning fund balance 4,004 990 6.018 3,2-bs 14,%0 Fund Balances at Beginning of Year, as Restated 54,877 79,066 15,(1()1 27,951 170,955 ltcsidual equity transfer in 5 735 238 978 lZesiidualcquity transfer out (735) (5) (2.38) (978) Fund Balance.-, at End of Year S 51,570 85,907 17.(x11 26,246 19026 S(x:.icconifiinx,ingnotes togencrakfurTx).,zfinaincialstatements. COUNTY OF CONTRA COSTA COMBINED STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES--BUDGET AND ACTUAL-GENERAL, SPECIAL REVENUE,AND CERTAIN DEBT SERVICE AND CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30,1995 ' (In Thousands) General Fund Variance Favotable Budget Actual LUntavorable) Revenues: Taxes $ 89,666 89,992 326 Licenses,permits and hanchise fees 5,329 4,978 (351) Fines,forfeitures and penalties 18,534 18,371 (163) Use of money and property 1OP21 12,693 2,672 Intergovernmental 385,854 3833,118 (2,736) Charges for services 1.34,047 116,447 (17,600) Other revenue 12 403 11b35 (768) Total Revenues 655,854 637;.34 (18,620) i Expenditure: Current: I General govemrnent 79,992 67,825 12,167 Public protection 165,463 157,135 8,328 t .�. Health and sanitation 116,317 114,585 1,732 Public assistance 245,568 2_38,859 6,709 Education 126 122 4 Public ways and facilities 11,461 9,454 2,007 Recreation and culture I I Dcbt service 4,469 4,469 Capital outlay 3,477 3,477 Total Expenditures , 626,874 595,926 10,948 Excess(deficiency)of revenues over (under)expenditures 28980 41,308 12,428 Other Financing Source (Uses): ' Qperating transfers in 24,x66 24,2.66 Operating transfers out (79,147) (71 fi28) 7,519 Advances from other funds Rcptuymcnt of advances i Proceeds from issuance of debt Capital lease financing 3,477 3,477 `l'otal Other Financing Sources(Uses) (54,881) (43,885) 10,996 Excess(deficiency)of revenues and other financing sources over(under)expenditures and other financing uses (25901) (2,577) 23;324 Fund Balances (Deficits) at Beginning of Year, as Previously Reported 50,213 50,213 Adjustments to beginning fund balance 4,664 4,064 Fund Balances (Deficits)at Beginning of Year, as Restated 50213 54 377 4,604 Residual equity transfer In 5 5 Residual equity transfer out _ (735) (735) Fund Balances (Deficits)at End of Year S 24,312 51,570 272;8 See accontlxunying notes to gcncrrl-purpersc financial statements. 6 Special Revenue Funds Debt Service Funds Capital Projects Funds Variance Variance Variance Favorable Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) 63,395 69,323 5,928 2,291 2,140 (151) 2,340 2,408 68 8,434 8,301 (133) 53 53 3,029 2,935 (94) 3,433 4,655 1,722 819 1,133 514 382 1,006 624 90x53 93,676 2,723 405 416 11 1,412 1,140 (172) 26249 23,;89 (2W) 6,991 3288 (3,703) 10525 (10.525) 202,483 205,567 3,OS3 3,515 3,b,19 374 14,559 4,607 (9952) 2,803 2,003 800 146,952 1 12,964 33,988 11632 8,972 2,060 54,230 54,435 (205) 12,551 9,272 3,279 45,697 25,882 19,815 2,.302 326 1,976 22,596 22,105 428 3,007 4,159 (1,152) 45 7 38 19,413 5,170 14243 279,174 218,013 61,161 22,041 22,175 400 19,413 5,170 14,243 76,690 1( 2,446) 642.441( 9,126) (18286) 840 (4,854) (563) 4291 26,587 19,075 (7,512) 18,973 18,962 (111) 448 448 (2,001) (2,001) (185) (185) 1,425 1,425 (1289) (1289) (.300) (300) 1,342 1,342 _ 24,722 18,552 (6,170) 18,973 18,862 (111) (37) (37) (51968) 6,106 58,074 (153) 570 729 (4391) ((800) 4,291 78,076 78,076 (14) (14) 24,063 24,663 990 9(X) 36 36 (1) (1) 79,070 79.086 9(X) (14) 22 36 24.063 24,062 (1) 735 735 2().1O` 85 x)07 59.709 (1(,7) LOS_ 765 19.772 24,062 4290 ------------- i COUNTY OF CONTRA COSTA COMBINED STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN RETAINED EARNINGS (DEFTCITS)/FUND BALANCES-ALL PROPRIETARY FUND TYPES AND PENSION TRUST FUND YEAR T?JDI D JUNE 30,1995 (In Thousands) (Memorandum Proprietary Fiduciary Only) Fund Types Fund Type Totals Internal Pension Enterprise Service Trust 1995 Operating Revenue's. Charges for services S 180,119 27,126 207,245 Earnings on investments 51p66 51p66 Net loss on investments (10,486) (10,486) Contributions 372,668 372,668 Total Operating Revenues 180,119 27,126 413,248 620,493 i Operating Expenses: Salaries and employee benefits 89,573 302 909 90,784 Services and supplies 91,723 5,470 1,.339 98,532 Other charges 5,637 5,637 Benefit and claim Rayments 15,545 77,895 93,440 Depreciation 2,619 2,619 Total Operating Expenses 189,552 21,317 80,143 291,012 Operating Income(Loss) (9433) 51809 . 333,105 329,481 Nonoperating Revenue(Expenses): Interest income 1,621 3,933 5,554 Interest expense (3520) (3,520) Loss on disposal of fixed assets (135) (135) 'Total Nonoperating Revenues(Expenses) (2,434) 3,933 1,899 Income(Lass)Before Operating.Transfcrs (11,467) 9,742 333,105 331,W Operating transfers in 34,102 34,302 l Operating transfers out (23,815) (2-1,815) Net Income(Loss) (98)) 9,742 333,105 341,867 t Add dclwciatk)n on contributed capital 381 381 Incrcasc(Decrease)in Retained E2rnings/ Fund Balance (599) 9,742 333,105 342,248 Retained Earnings (Deficit)/ Fund Balance at Beginning of Ycar as Previously Reported (28,617) 3,642 1,0.34,053 1,009,078 Adjustment to beginning retained earnings (1 2,230 43 2257 I Retained Earnings (Deficit)/Fund Balance at Beginning,of Year, as Restated (28,(>33} 5,872 1,034,096 1,011,335 Retained Earnings (Deficit)/ Fund Balance at End'of Year S (29,232) 15f,14 1.367201 13 5 3,_M)3 Six acwmfrtnying rx)tcs to gcncraF purfx7sc:financial statenx nts. b t r , COUNTY OF CONTRA COSTA COMBINED STATEMENT OF CASH FLOWS-- ALL PROPRIETARY FUND TYPES YEAR ENDED JUNE 30,1995 (In Thousands) Proprietary Fund Types (Memorandum Internal only) r Enterprise Service Totals crating Income(Loss) S (9,433) 5,809 (3,624) justments to Reconcile Operating Income(Loss) Net Cash Provided by(Used for)Operating Activities: )epreciation 2,619 2,6I9 'hangcs in assets and liabilities: Decreasc(increasc)in accounts receivablcand accrued revenue 13,467 722 14,189 Dccrcas c(i ncrcas c)i n i nwntotics (40) (40) Dccrcas c(i ncrcas c)in amounts duc from other funds (3,854) (334) (4,188) Ikcreasc(incrcasc)in prepaid items and deposits (730) (730) Increase(dornase)inaccounts payablcand accrued liabiIitics 697 (1,464) (767) 1 ncrcase(decreasc)i n employee brne6ts payable 401 401 I ncreasc(decrease)i n amounts due to other funds (6,509) 17 (6,492) 1 ncrrcase(docrcas e)i n deferred rcvcnuc and crcdits 1,021 1,021 �t Gish Provided by(Us cd far)Operating Activities (2,361) 4,750 2,389 ' sh Flows from Noncapital Financing Activities: )ccreasc in advances from other funds (3I5) (315) )perating transfers in 34,302 34,302 )perating transfers out (21815) (23,815) + _t Cash Provided by Noncapital I=tnancing Activities 10,172 20,172 SIR sh Flows from Capital and Related Financing Activities: ayments on state loans .case purchase obligation principal payments (305) (305) 'aymcni on URAL obligation (99) (99) merest paid on bonds payable (3,520) (3,520) :apiW contributions 5,910 5,910 \cquisitions of fixed assets (15,082) (15,082) ,t Gish Used for Capital and Related Financing Activities (13,096) (13,096) ish Flows from Investing Activities: merest income 1,621 3.933 5,554 Vet Gish Provided by Investing Activities 1,621 3,933 5,554 :t increase(decrease) in cash and cash equivalents (3,664) 8,683 5,019 tsh and Cash Equivalents—July 1, 1994 143,183 62„130 205.313 tsh and Cash Equivalents—June 30, 1995 S 139,519 70.813 210,332 encash Investing, Capital and Financing Aetivitit-s: cx lease purchase obligation $ 2 2 scrcise in ccnific:atrs of participation payable S 104 104 :ztJ assets acqusrcd through lease purchase S 929 929 _ apilaliicdinicrut S 7,775 7,775_ onc::sh rrtai::ed c rnings adjustment S 2.230 2.230 acccrn:i:=.nti�n r to,encral—purfxtsc financial statements. c� � j i i i M ; COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS June 34,1995 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES "3 The amounting Policies of the County of Contra Costa (the "County") conform to generally accepted accounting principles as applicable to governmental entities. The following is a summary of the more significant policies: 4 A. Definition of Reporting Entity The County of Contra Costa is a political subdivision created by the State of California. As such, it can exercise the powers specified by the Constitution and statutes of the State. The County is governed by a five member elected Board of Supervisors. These financial statements present all the fund types and account groups of the County and its component units. Blended component units, although legally separate entities, are, in substance, part of the County's operations. Blended Component Units r The Housing Authority of the County of Contra Costa was established to provide housing for the County's low and moderate income residents. Its board members are the same as the County Board of Supervisors. The financial activities of the Authority are reported in special revenue and debt service funds. The fiscal year of the Authority ends on March 31 st and its financial activities are reported as of that date. The Contra Costa County Public Facilities Corporation was established to provide financing for the acquisition, construction, improvement and remodeling of public buildings and facilities for the County. The County appoints a voting majority of the governing board and is able to impose its will on the Corporation. The activities of the Corporation are reported in a debt service fund. The Contra Costa County Redevelopment Agency was established for the purpose of redeveloping certain areas of the County designated as project areas. Its board members 2re' the same as the County Board of Supervisors. The financial activities of the Agency are reported in special revenue, debt service and capital projects funds. The County has 4l agencies referred to as County Service Areas. Each is established by the County 10 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS for the purpose of providing specific services in a defined geographic area. Their board members are the same as the County Board of Supervisors. These agencies are reported in Special Revenue Funds. a' County Service Areas and the special revenue fund in which each is reported include: Fire Protection - Bethel Island Fire Protection, Contra Costa Fire Protection, Crockett-Carquinez Fire Protection, East Diablo Fire Protection, Moraga Fire Protection and Orinda Fire Protection; Flood Control - Flood Control District, Storm Drainage District, Storm Drain Maintenance District #4 and Storm Drain District #Z-16; Health and Sanitation -Sanitation Districts 45,#6,#15 and #19; Service Areas -Service Areas D-2, EM-1, L-100, 1,113-2, 1-I13-10, LIB-12, LIB-13. M-1, M-8, M-16, M-17, M-20, M-23, M-25, M-26, M-27, M-28, R-4, R-7, It-8, R-9, R-10 and RD4; Law Enforcement - Service Areas P-1, P-5 and P-6; Other Special Revenue -Contra Costa County Water Agency. Complete financial statements for each of the individual component units may be obtained at the unit's administrative offices as follows: Housing Authority of the County of Contra Costa, 3133 Estudillo St., Martinez, CA 94553 Contra Costa County Public Facilities Corporation, 651 Pine Street, I Itlt Floor, Martinez, CA' 94553 41 Contra Costa County Redevelopment Agency, 651 Pine Street, 5th Floor North Wing, Martinez, CA 94553 County Service Areas, County Auditor-Controller, 625 Court Street, Room 103, Martinez, CA 94553 B. Fund Accounting Tlie County uses funds and account groups to report its financial position and the results of its operations. Favid accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. Funds arc classified into three categories: (,overnmental. proprietary and fiduciary. Each category, in turn, is divided into separate "Bund types". Governmental funds are used to account for all or most of the County'sgeneral government activities. including the collection and disbursement of earmarked monies (special revenue funds), the acquisition or construction of general fixed assets (capital projects funds), and the servicing of general long-term ! 1 r t COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS obligations (debt service funds). The General Fund is used to account for all activities of the County not accounted for in one of the other fund types. Proprietary funds are used to account for activities similar to those in the private sector, where the measurement focus is upon determination of net income and capital maintenance. Goods or services 1 from such activities can be provided either to outside parties (enterprise funds) or to other departments or agencies primarily within the County (internal service funds). { Fiduciary funds are used to account for assets held by the County in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. These include pension trust and agency funds. The pension trust fund is accounted for in essentially the sante manner as proprietary funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. C. Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using the flow of current financial resources measurement focus. Only current assets and current liabilities generally are included on the balance sheet. Fixed assets purchased with governmental funds are recorded in the General Fixed Assets Account Group. Liabilities, which are estimated to be payable within the next year, are considered current liabilities and are recorded in the governmental fund types; remaining amounts are reported in t the General Long-Term Obligations Account Group. Operating statements of the governmental funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and otter financing uses) in net current assets. All proprietary funds and the pension trust fund are accounted for using the flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet. Fund equity (i.e., net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund type operating r statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. The modified accrual basis of accounting is used by all governmental fund types and agency funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures, other than inter4st on long-term obligations, are recorded when the related fund liability is incurred. Principal and interest 12 M COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS on general long-term obligations are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. The County considers property taxes as available if they are collected within 60 days after year end. A one-year availability period is used for revenue recognition for all other governmental fund revenues. The County has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement Number 22 (GASB 22) Accounting for Taxpayer Assessed Tax Revenues in Governmental Funds as it relates to sales tax revenues collected by the State on behalf of the County. Under this new standard, sales tax revenues are recorded using the modified accrual basis of accounting. Prior to adoption of GASB 22, sales tax revenues were accounted for as received. The cumulative effect of applying this Statement has been reported retroactively as a restatement of fund balance at lune 30, 1994 in the accompanying financial statements in the amount of$4,664,000 and $1,085,000 in the General and Special Revenue Funds, respectively. (Note 10). Other major revenues susceptible to accrual are franchise fees, intergovernmental, interest revenue and charges for services. Vehicle license fees reported to the State on behalf of the County for the period ending lune 30th, are also recognized as revenues. Fines, fees and permits are not susceptible to accrual as they generally are not measurable until received in cash. The accrual basis of accounting is utilized by proprietary fund types and the pension trust fund. Under this method, revenues are recorded when earned and expenses are recorded when liabilities are incurred. The County reports deferred revenue on its combined balance sheet. Deferred revenue arises when a potential revenue transaction does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenue also arises when resources are received by the County before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the County has a legal claim to the resources, the liability for the deferred revenue is removed from the combined balance sheet and revenue is recognized. �' 13 i 5> COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS i D. Government Accounting Standards Board Statement Number 20 (GASB 20) The County has elected under Governmental Accounting Standards Board (GASB) Statement 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that Use Proprietary Fund Accounting, to not apply Financial Accounting Standards Board (FASB) statements a and interpretations issued after November 30, 1989. As required under GASB Statement 20, the County will continue to apply all applicable GASB pronouncements, as well as statements and interpretations of FASB, the Accounting Principles Board (APB) Opinions and Accounting Research I Bulletins (ARBs) of the Committee on Accounting Procedure issued on or before November 30, 1989, i unless those pronouncements conflict or contradict GASB pronouncements. E. Budgets and Budgetary Accounting In accordance with the provisions of Sections 29000 through 29144 of the Government Code and other statutory provisions, commonly known as the County Budget Act, the County prepares and legally adopts a budget each fiscal year after a series of Public Hearings. Budgets are adopted for the general, special revenue, required debt service and required capital projects funds on the modified accrual basis. The results of operations as presented in the budget-to-actual comparison statements are on the generally accepted accounting principles (GAAP) basis. A reconciliation between those funds which are budgeted and those which are not follows (in thousands). i Debt Service Capital Projects Excess (Deficiency) of revenues and other financing sources over expenditures and other financing uses (Budgeted,Funds) S 576 (600) ;r .I. Adjustment: Budgets not adopted for the: j Public Facilities Corporation 2,174 I Assessment Districts (1,043) 865 !I �. Excess (Deficiency) of revenues and other financing sources over expenditures and * other financing uses (All Budgeted and Non-Budgeted Funds) S 1.707 1.465 14 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS Expenditures are controlled at the object level within departments for all adopted budgets. Any amendments of appropriations for a department, or transfers of appropriations between departments, are approved by the Board of Supervisors, as are supplemental appropriations normally financed by unanticipated revenues received during the year. Approximately $137,984,000 in supplemental appropriations were added to the budgets for all governmental fund types during the fiscal year, of which, $60,240,000 was for the General Fund. The Board has delegated authority to the County Administrator to approve transfers of appropriations between object level classifications within a department. Budgeted amounts are reported as amended. Individual amendments were not material in relation to the original appropriations, except for a Trial Court Funding related adjustment required to conform to new State reporting requirements. This adjustment added $26,376,000 of appropriations in the General Fund and $38,307,000 of appropriations in a new special revenue fund, all of which i represented increases for interfund transactions. All appropriations lapse at year end. F. Cash Flows For the purposes of the statement of cash flows, the County considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. G. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies arc recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the general, special revenue, debt service and capital projects funds. Encumbrances outstanding at year end are reported as reservations of fund balances since they do not constitute expenditures or liabilities. 1-1. Inventories Inventories are valued at cost on a first-in, first-out basis. The cost is recorded as an expenditure/expense at the time individual items are withdrawn from inventory (consumption method) in both governmental and proprietary funds. 1. Fixed Assets r Fixed assets are valued at historical cost. Contributed fixed assets are recorded at fair market value at the time received. Certain assets, for which actual costs are not available, have been valued on the hrtsis cif a professional valuation which determined their approximate historical cost. I� COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS i Fixed assets used in governmental fund type operations (general fixed assets) are accounted for in the general fixed assets account .group rather than in the governmental funds. ' Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings such as roads, bridges, streets and sidewalks, curbs.and gutters, drainage systems, and lighting systems are not capitalized as these assets are immovable and of value only to the County. No depreciation has been provided on general fixed assets. Depreciation has been provided on all proprietary fund fixed assets using the straight-line method over the following estimated useful lives: buildings, 25-40 years; improvements, 10-20 years; and equipment, 3-20 years. Depreciation recognized on assets acquired or constructed through resources externally restricted for capital acquisitions is closed to the appropriate contributed capital account and reported on the operating statement as an adjustment to retained earnings. J. Vacation and Sick Leave Under terms of union contracts, County employees arc granted vacation and sick leave in varying # amounts. In the event of termination, an employee is reimbursed for accumulated vacation hours. Employees are not reimbursed for accumulated sick leave except management employees who are eligible for a payoff of unused sick leave accruals at resignation. Management employees must have a balance of at least 70% of their sick leave accruals and have been employed three years or more to be eligible for this benefit. The maximum amount payable under this Sick Leave Incentive Plan is 50% of accrued sick leave, however, the amount of sick leave payable is di minimus. Accordingly, no accrual for sick leave has been made in the accompanying financial statements. Accrued vacation at June 30, 1995, equals $24,838,000 which includes $20,649,000 attributable to the General and Special Revenue funds, $4,148,000 recorded in the Enterprise Fund, and $41,000 recorded in the Pension Trust Fund. Amounts attributable to the General and Special Revenue Funds are not expected to be fully .liquidated in the following year with expendable or available financial resources. Accordingly, this liability is reflected in the General Long-Term Obligations Account Group. In proprietary funds, accumulated vacation is recorded as an expense and liability as the benefits accrue to employees. In compliance with GASB Statement 16, the amounts reported include estimated employer liability for taxes and workers' compensation premiums. K. Total Columns on Combined Statements 7'otal columns on the accompanying combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analvsis. Data in these columns does not present financial position, results of operations, or cash flows in conformity with generally accepted 16 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS accounting principles. Such data is not comparable to a consolidation since interfund eliminations have not been made. t 2. CASH AND INVESTMENTS The cash balances of substantially all funds except the pension trust fund are pooled and invested by the County Treasurer. As permitted by the Government Code, depositing entities may direct the County Treasurer to make specific investments separate from the pool. The Retirement Board directs the investment activity of tite pension trust fund. Income from pooled investments is allocated to the funds based on average daily balances. Cash and investments at June 30, 1995, (December 31, 1994, for the pension trust fund and March 31, 1995, for the Housing Authority) are as follows (in thousands): County & Pension Trust Agencies Fund Total Deposits $ 293,197 92,566 385,763 Investments 808,440 1.284,008 2,092,448 Total $1,101,637 1,376,574 2,478,211 A. Deposits The carrying amount of deposits includes a bank balance of 574,530,000. The Government Code �s requires California banks and savings and loan associations to secure the County's bank balance not covered by federal deposit insurance. The County does not rely on FDIC insurance, and banks fully collateralize all balances by pledging mortgages or government securities as collateral. The market value of mortgages must equal at least 150%, and the market value of government securities must equal at least 110% of the value of the bank balance. Such collateral must be held in the pledging bank's trust department or in a separate depository in an account for the County. The remaining deposits of S311,233,000 include uninsured and`or uncollateralized deposits being held by trustees for the benefit of the County, agencies and the pension trust fund, including deferred compensation assets. 17 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS B. Investments Investments are stated at cost or amortized cost,except for assets of deferred compensation plans which are reported at market value and investments in real estate held by the Employees' Retirement Association (pension trust fund) which is reported on an adjusted cost basis. The pension trust has the ability and intent to hold real estate investments long term and recognizes a loss from these investments only if the loss is deemed other than temporary or if the property is being offered for sale at a price less than book value. It is the policy of the pension trust to have bi-annual appraisals performed on real estate holdings. Statutes authorize the County to invest in obligations of the United States Treasury, federal agencies, municipalities, commercial paper rated A-1 by Standard & Poor's Corporation or P-I by Moody's Commercial Paper Record, banker's acceptances, repurchase agreements and reverse repurchase agreements. Pension trust fund investments are authorized by the County Employees Retirement Law of 1937. Statutes authorize a "prudent investor" guideline as to the farm.and types of investments which may .be purchased. The County's investments and those of the pension trust fund are categorized separately on the following page to give an indication of the level of credit risk assumed by each investment portfolio for their respective year ends. Category I includes investments that are insured or registered, or securities are held by the County or its agent in the County's name. Category 2 includes uninsured and unregistered investments with the securities held by the countcrparty's trust department or agent in the County's name or in agent's nominee name with subsidiary records listing the County as the legal owner. Category 3 includes uninsured and unregistered investments, with the securities held by the counterparty or by its trust department or agent but not in the County's name. Investments not evidenced by securities that exist in physical or book form cannot be categorized. Investments (at carrying amount) and related market values as of June 30, 1995, (December 31, 1994, for the pension trust fund and March 31, 1995 for the Housing Authority) are shown on the following page (in thousands): r IS r COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS Category Carrying Market 1 2 3 Amount Value County & Agencies Negotiable C.D.s $ 117,487 117,487 116,515 Certificates of Deposit 11,839 11,839 11,839 U.S. Government Securities 237,224 237,224 229,907 Commercial Paper 80,431 80,431 80,382 Medium Term Notes 20,834 20,834 21,010 Banker's Acceptances 9,050, 9,050 8,990 Repurchase Agreements 179,534 179,534 179,534 Total $ 476,865 179,534 656,399 648,177 State Treasurer's Investment Pool. 113,448 113,448 Bank Asset Management Funds 28,626 28,626 Joint Power-Asset Management Program Funds 9,967 9,967 Total Investments $808,440 800,218 i Pension Trust Fund Common & Preferred Stocks $ 617,921 617,921 701,326 Corporate & Government Bonds 548,477 548,477 520,045 Repurchase Agreements 8.000 8,000 8,000 Total $1,166,398 8,000 1,174,398 1,229,371 Real Estate 109,572 102,977 Mortgages 38 38 Total Investments $1.284,008 1.332.386 19 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS C. Derivative Financial.instruments r In accordance with California statutes, the County may invest in a wide variety of investment instruments, including asset backed securities, such as collateralized mortgage obligations and principal- only strips, forward contracts and reverse repurchase agreements. Asset backed securities and forward contracts held at June 30, 1995, are reported at cost or amortized cost in the balance sheet. Reverse repurchase agreements expired without replacement during the fiscal year. Collateralized mortgage obligations are based on cash flow from mortgage payments on underlying mortgages. They may be adversely affected by mortgage defaults and declines in collateralized property values. Principal-only strips arc instruments purchased at a discount to face value. At j maturity, principal repayment is received at full face value. The Treasurer holds collateralized mortgage obligations and principal-only strip instruments for the benefit of some County Schools. Those Schools utilize the services of an independent financial advisor in determining their investment strategy. The County Employees' Retirement Association has investments with trustees who hold part of their portfolio in collateralized mortgage obligations. The County has entered into one forward contract to obtain a fixed rate of interest on money held for future debt payments. The investments discussed above, which are included in the accompanying financial statements, represent 4% of total investments. Effective January 1, 1996, state law will require. the County to * establish an investment oversight' committee. The County is currently in the process of appointing committee members. 20 COUNTY OF CONTRA'COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 3. PROPERTY TAX The County is responsible for assessing, collecting, and apportioning property ytaxes. Taxes are levied for each fiscal year on taxable real and personal property situated in the County. The levy is based on the assessed values as of the preceding March Ist, which is also the lien date. State code requires tax.rates to be set no later than the first workday in September unless the Board of Supervisors elect to.extend the deadline to October 3rd. Property taxes on the secured roll are due in two installments: November Ist and February Ist and become delinquent after December 10th and April 10th, respectively. Supplemental property taxes are 1.levied based on changes in assessed values between the date of real property sales and construction and the next normal assessment date. The additional supplemental property taxes are prorated from the first day of the month following the date of such occurrence. Property taxes on the unsecured roll are due on the lien date (March 1), and become delinquent if unpaid by August 31st. Secured property taxes are recorded as revenue when apportioned, in the fiscal year of the levy. The County apportions secured property tax revenue in accordance with the alternate method of distribution prescribed by Section 4705 of the State Revenue and Taxation Code. This alternate method provides for crediting each applicable fund with its total secured taxes upon completion of the secured tax roll,approximately October 1 st of each year. Under the alternate apportionment method, specified amounts of penalties, interest collected on delinquent * secured taxes, and funds from sales of tax-deeded properties are held in trust in the secured tax losses reserve fund. This reserve is used to offset the impact of accumulated delinquency remaining at year end. Property taxes which have been collected in advance of the levy year are reported in unapportioned taxes in the fiduciary Fund. �l rl� i i r - ! t COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 4. FIXED ASSETS f Following is a summary of changes in general fixed assets for the year ended June 30, 1995, (March 31, 1995 for the Housing Authority) (in thousands): Balance Balance July 1, June 30, . 1994 Additions Deletions Transfers 1995 Land $ 31,597 570 516 31,651 Buildings & Improvements 261,349 16,672 8,593 58 269,486 `. Building & Improvements- Lease Purchase 110,897 25,147 (58) 135,986 Equipment 63,735 6,174 3,289 278 66,898 Equipment-Lease Purchase 10,433 1,420 278 11,575 • Total $ 478,01 1 49�983 12,398 515,596 Enterprise fund fixed assets at June 30, 1995, were as follows (in thousands): Employee Health Total Fitness County Maintenance Enterprise Aimort Center Hospital Organization Funds Land $ 8,806 426 9,232 Buildings & Improvements 24,540 27 17,773 73 42,413 Buildings & Improvements- Lease Purchase . 3,074 3,074 Construction in Progress" 18,044 18,044 Equipment 599 83 15,426 304 16,412 Equipment-Lease Purchase 47 _ 994 15 1,056 Total 37,066 110 52,663 392 90,231 Less Accumulated Depreciation 5,948 56 20.085 280 26,369 Net Fixed assets $ 31,118 54 32,578 112 63,862 "Hospital replacement project. ! COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 5. SHORT TERM NOTES On June 30, 1995, the County had tax and revenue anticipation notes outstanding in the amount of $95,000,000 with interest at 4.25% per annum. The notes were issued July 5, 1994, and redeemed July 7, 1995. The redemption monies were from taxes and other revenues transferred to a fiscal agent during the fiscal year. Total interest incurred on these notes during 1994-95 was$3,981,000 with an additional $79,000 incurred in July, 1995. 6. LEASE COMMITMENTS A. Operating Leases Total rental expense for the year ended June 30, 1995, (March 31, 1995, for Housing Authority) for all operating leases and month-to-month lease arrangements amounted to$5,173,000 for the general fund, $1,235,000 for the special revenue funds, and $871,000 for the enterprise funds. At June 30, 1995, (March 31, 1995, for housing Authority) the future minimum rental payments required under noncancelable operating leases for buildings and equipment, other than month-to-month lease arrangements, are as follows (in thousands): Special Fiscal Year Revenue Enterprise ending, June 30 General Fund Funds funds 1996 $ 1,945 217 165 1997 1,349 169 170 1998 576 87 106 * 1999 290 8 86 2000 240 4 59 Thereafter 3,028 Total $ 7,428 485 586 ! COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS S. op" Leases Th: Comr% has capital lease purchase agreements with the Contra Costa County Public Facilities izM1XM _ With the Employees' Retirement Association, and with third parties. The assets acquired ahs iease aereements are included in the County's general fixed assets. The obligations related i=cst it--s: purchase agreements are included in the County's general long-term obligations, and are r-,-- in \"-qe :i I � 1♦ i i 24 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 7. LONG-TERM OBLIGATIONS Following is a summary of changes in long-term obligations for the year ended June 30, 1995, (March 31, 1995, for Housing Authority) (in thousands): Balance Balance . July 1, June 30, 1994 Additions Retirements 1995 General Long-Term Obligations Employee benefits payable $ 19,612 1,069 (32) 20,649 Capital lease obligations 31,149 3,695 (3,497) 31,347 i Advances from other funds 11,248 1,477 (1,746) 10,979 Certificates of participation, net 86,765 23,090 (4,400) 105,455 Notes payable 6,112 117 (4,674) 1°,555 Pension bonds payable 281,538 (492) 281,046 Other bonds payable 37,320 (640) 36,680 Special assessment debt with government commitment (1) 36.160 (2,137) 34,023 * ' Total $473.744 65,608 (17,618) 521,734 Enterprise Funds Employee benefits payable $ 3,747 418 (17) 4,148 Capital lease obligations 4,111 2 (305) 3,808 Certificates of participation, net 122,669 104 122,773 Advances fromi othcr funds 315 (315) Pension bonds payable 55.534 _ 9) 55,435 Total $186.376 524 736 186,164 (1) Debt of Assessment Districts unreported in the prior year general-purpose financial statements (see note 10). * 2i t� COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS Following is a schedule of debt payment requirements to maturity for long-term obligations, excluding advances . from other funds and employee benefits payable that have indefinite maturities, outstanding at June 30, 1995, (March 31, 1995, for,Housing Authority) (in thousands): General Long-Term Obligations Enterprise Funds Fiscal Year Capital Bonds & Special Gond** Ending Lease Notes C.O.P. Assessment & Lease C.O.P* June 30, Obligation Payable Obligations Debt Obligations Obligations Total ~ 1996 $ 4,415 24,672 13,117 4,574 4,632 7,775 59,185 1997 3,886 27,127 13,036 4,261 4,780 7,775 60,865 1998 3,438 27,216 11,637 3,794 4,938 7,775 58,798 1999 3,191 28,452 11,164 3,720 5,985 10,578 63,090 2000 2,982 29,794 11,275 3,733 6,270 10,567 64,621 2001-2005 11,054 172,817 50,288 17,011 33,055 52,720 336,945 2006-2010 10,115 208,414 30,984 9,747 38,934 49,451 347,645 Thereafter 20,912 46,444 41,308 10,515 2,961 119,930 242,070 Total 59,993 564,936 182,809 57,355 101,555 266,571 1,233,219 Less Amount Representing Interest 28,646 245,655 77,354 23.332 42,018 140,987 557,992 Liability at June 30, 1995 $ 31,347 319,281 105,455 34.023 5, 537 125,584 675.227 * Enterprise Certificates of Participation (C.O.P.) Obligations are reported before discount of$2,811,000 and reflect the Hospital Replacement Project C.O.P. debt payment requirements. ** Enterprise Bond reported before discount of$294,000. i 26 • • COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS Individual issues of bonds, notes and certificates of participation payable at June 30, 1995, are as follows (in thousands): Outstanding Original Annual Final Interest at June 30, Issue Issue Installments Payment Rates 1995 Public Facilities Corporation 1) • 1988 Consolidated Capital Projects $ 61,690 2,0854,395 2008 7.0-7.8% 43,635 1992 Consolidated Capital Projects 37,300 1,080-2,220 2019 5.5-9.5 35,185 Hospital Replacement Project 125,584 2,885-9,995 2022 5.7-7.05 125,584 1992 Municipal Project 4,750 415-590 2002 4.4-5.5 3,545 1995 Various Capital 23,090 270450 2004 5.2-6.5 23,090 231,039 Special Revenue General Obligation Bonds 2) • Sanitation 1,475 40-120 1998 6.00 345 Recreation and Park 4,485 340-510 2004 3.25.-5.10 4,190 Storm Drainage 200 5 2005 4.25 50 i 4,585 Redevelopment Agency Notes and Bonds Payable Tax Allocation Bonds(3) 29,315 295-15,500 2023 5.25-7.02 29,315 • Property(2) 1,200 1997 9.0 1,200 30,515 Special Revenue Notes Payable 4) Sanitation District 5 75 3-8 2000 7.4 40 Flood Control 50 50 1996 4.11-6.29 50 Storm Drain 15 A 80 1996 NONE 80 Service Arca D=2 36 10 1996 NONE 26 196 • 27 a COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS Outstanding Original Annual Final interest at June 30, Issue Issue Installments Payment Rates 1995 Housing Authority (at March 31, 1995) Notes Payable 539 60 1997 6.6 159 Bonds 3,480 230 2007 3.18-5.0 2,780 2,939 Pension Obligation B2nds(5) 337,365 3,24544,560 2011 4.90-6.85 336,775 Special Assessment Debt with Government Commitment 6) Central Sanitary District #55 53 5 1996 7-7.25 5 Stcge Sanitary District 109 12-13 2001 7.75 68 # Crow Canyon East 79-5 2,918 302 1996 8.0 290 Crow Canyon West 794 4,507 413 1996 9.1 395 East Bates Ave. 93-1 2,105 238-248 2006 4.36-6.98 2,020 Hidden Pond Road 93-2 757 73-83 2009 4.36-7.20 735 Kensington 91-1 4,684 178-967 2012 5.0-6.35 4,590 Mrack Road 92-1 2,313 159-226 2013 6.1-7.9 2,298 Pleasant Hill 87-1 8,785 837-860 2004 4.5-7.3 6,085 Pleasant Hill BART 93-5 1,530 99-145 2014 4.89-6.93 1,472 * Rancho Paraiso 93-4 5,905 489-654 2016 4.48-7.74 5,905 San Pablo Creek 91-3 540 73-104 1999 5.3-6.4 405 San Ramon 73-3 9,149 316 1996 6.5-6.7 305 San Ramon Valley 93-3 2,191 346-352 2001 4.56-6.61 1,985 San Ramon 89-1 980 104-113 2004 6.25-7.85 775 San Ramon 89-2 481 77-78 1997 6.25-6.9 210 Wayside Plaza 91-2 2,010 212-225 2006 6.75-7.20 1,765 * Pleasant Hill [SART CFDI 91-1 4,555 385-584 2016 6.25-8.125 4,545 Pleasant Hill BART CFD 92-1 171 15-22 2015 8.0 170 Total 34.023 28 • COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS NOTES: (1) Debt service payments are made from lease payments by the County General and Special Revenge funds to the Public Facilities Corporation. (2) Debt service payments are made from restricted property taxes and other revenues recorded in the debt service funds. • (3) Debt service payments are made from tax increment financing. (4) Debt service payments are made from drainage fees and sanitation fees. • (5) Debt service payments are made from retirement contributions. (6) Debt service payments are made from special assessments levied on property owners in each assessment district. The County administers the assessment and repayment of these bonds. Since • early redemption is allowed, there may be differences between the earnings on money received from property owners wishing to pay off their debt early and the interest obligation that accumulates on their debt between the time they submit funds to the County and the next available redemption date, as stated in the bond's Official Statement. The County has historically funded this difference, and to that extent may be obligated in some manner for this debt. • There are a number of limitations and restrictions contained in the various bond indentures. County management believes that the County is in compliance with all significant limitations and restrictions. • A. Issuance of Ne-*v. Debt and Advance Refunding On August 23, 1994, the Public Facilities Corporation sold certificates of participation aggregating $23,090,000 to purchase four buildings: for Health Service's occupancy and use - 591 Center Ave, . Martinez and 205 41 st Street, Richmond; for Social Service's occupancy and use - 1305 MacDonald, Richmond and 151'Linus Pauling Drive, Hercules. Certificates mature annually from August 1, 1995, through 2024, and will incur interest at rates ranging from 5.20% to 6.50%. At June 30, 1995, the amount of outstanding obligations considered defeased, including obligations defeased in prior years is 5:9.550,000. • -)q COUNTY OF CONTRA COSTA :4 NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 8. INTERFUND BALANCES Account balances at June 30, 1995, are as follows (in thousands): Due From Due to Advances Frem Advances to Other Funds Other Funds Other Funds Other Funds General Fund S 35,380 14,768 598 Special Revenue Funds: Road 877 2,222 Library 26 176 Fire Protection 530 581 Health and Sanitation 87 898 Service Areas 496 730 26 1,122 Flood Control 375 1,498 7,259 Law Enforcement 51 331 Courts & Criminal Justice 1,811 3,134 400 Recorder/Clerk Modernization 6 1 Other Special Revenue 15 47 2,103 * Land Development 1,027 619 Redevelopment (RA) 275 75 2,177 Housing Authority 256 Child Development 143 427 Debt Service: Pension Bond 797 Assessment Districts I Capital Projects Funds: Redevelopment Agency 200 311 West County 3 7 Assessment Districts 211 Enterprise Funds: Airport 11 120 Employee Fitness Center 3 14 County Hospital 11,007 6,137 Health Maintenance Organization 3,201 41673 Major Risk Medical Insurance 14 29 Subtotal $ 56,591 37,010 2,603 11,082 30 e COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS Due From Due to Advances From Advances To Other Funds Other Funds Other Funds Other Funds Balance Forward from previous page: $ 56,591 37,010 2,603 11,082 Internal Service Funds: Self-Insurance 2,313 703 Trust and Agency Funds: Tax Distribution 5,388 7,831 Schools and Special Districts 29,089 24,064 2,500 Other Agencies 5,875 31,199 Employees' Retirement Association 1,521 Long-Tcrm Obligations: 10,979 Subtotal 100,777 100,807 13,582 13,582 . Adjustments: Housing Authority reported as of March 31, 1995 256 Pension Trust reported as of December 31, 1994 290 4 Total $ 101,067 101,067 13,582 13.582 • 31 COUNTY OF CONTRA COSTA ! NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 9. RESERVES AND DESIGNATIONS OF FUND BALANCE Following is a summary of reserved and designated fund balances at June 30, 1995, (in thousands): Special Debt . Capital General Revenue Service Projects Pension Fund Funds* Funds* Funds Trust Fund* Total ! Reserved for: Encumbrances $ 10,239 7,969 146 18,354 Inventories 1,627 1,627 Debt Service 17,001 17,001 * Advances to other funds 598 10,484 11,082 Prepaid items and deposits** 2,379 4,807 7,186 Land held for sale 2,189 2,189 Employee retirement benefits 1,367,201 1,367,201 Redevelopment Projects*** 8,950 8,950 General reserve 896 896 Total $ 14,843 26,345 17,001 9,096 1,367,201 1,434,486 Designated for: Authorized expenditures $ 2,726 2,189 4,915 Equipment replacement 2,953 2,863 5,816 ! Future redevelopment projects 14,966 14,966 Total $ 5,679 5,052 14,966 25,697 ' Pension Trust Fund reported as of December 31, 1994. Housing Authority reported as of March 31, 1995. '* Reserves are less than total prepaid items and deposits because the General Fund advanced $475,000.to subgrantecs who will use the funds for federal programs during the first quarter of fiscal year 95/96. As funds are spent, the County is reimbursed by the federal government. *** Of this reserve $6,780,000 was used for the bond redemption which occurred on August 1, 1995 (see ! note 21). 32 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 10. ADJUSTMENTS TO FUND BALANCES . Adjustments to fund balances as previously reported at June 30, 1994 are as follows (in thousands): Special Debt Capital Internal Trust & General Revenue Service Projects Enterprise Service Agency Fund Fund Fund Fund Fund Fund Fund • Fund Balance at June 30; 1994, as previously reported $ 50,213 78,076 9,043 24,663 (28,617) 3,642 1,034,053 Adjustments: Effect of GASB 22: Gencral Fund 4,664 [toad Fund 1,085 Recording of Assessment Districts capital projects and debt service 5,634 3,289 Adjustment to closeout accrual of medical plan 2,230 Recording of proceeds of prior debt issuance 348 r Other adjustmcnts (95) 36 (1) (I6) 43 Total adjustments 4,664 990 6,018 3.288 (I6) 2.230 43 Fund Balance (Deficit) at - June 30, 1994, as Restated $ 54.877 79.066 15,061 27.951 (..8.033) 5,872 1,034.096 The General Fund and Special revenue Fund had an increase to fund balance of$4,664,000 and $1,085,000 respectively, resulting from the implementation of GASB 22. 0 Capital projects and related debt service of several Assessment Districts, previously unreported other than in the Fiduciary Fund, are now reported in the Debt Service Fund and Capital'Projects Fund with an increase to fund balance of$5,634,000 and $3,289,000, respectively. The Employee Medical Self Insurance fund had an increase to fund balance of 52,230,000 relating to an 0 accrual I'or the final closeout of the Ist Choice Employee Medical Plan terminated in 1993-94 which was subsequently paid but the accrual was not relieved. • 33 COUNTY OF CONTRA COSTA ! NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS The Assessment District's debt service fund had an increase to fund balance of$348,000 to record proceeds of a prior year debt issuance held by a trustee in a reserve fund. t ! 11. RESIDUAL EQUITY TRANSFERS Fiscal 1994-95 residual equity transfers are as follows (in thousands): Special Debt Capital ! General Revenue Service Projects Fund Fund Fund Fund Residual equity transfers: Excess support enforcement funds $ (735) 735 Excess funds of completed capital projects 238 (23$) Other transfers 5 (5) Total residual equity transfers $ 730 735 233 (2381 A residual equity transfer of$735,000 was made to transfer excess support enforcement funds restricted by statue to family support collection efforts from the General Fund to the Special Revenue Fund. A $238,000 residual equity transfer was made from the Assessment District capital projects group of funds to the Assessment District debt service group of funds for unspent construction proceeds remaining at completion of the projects. The money will be refunded to the appropriate parcel owners_ 12. DEFICIT FUND BALANCES The Courts and Criminal Justice special revenue group of funds had an $11,000 deficit fund balance. The deficit will be eliminated in fiscal year 1995-96 by increasing the General Fund subsidy of Trial Court operations by the deficit amount. The Pension Obligation Bond debt service fund had a deficit fund balance of$78,000, reduced from last year's deficit of S475,000. Annually, rates charged to dcpartments and funds to repay the pension obligation bond will be actuarially determined as a percentage of payroll. The rate developed will take into account any deficit or surplus from the prior year. 34 1♦ COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS The Airport enterprise fund had a retained deficit of $1,261,000 due to costs associated with capital improvements to Buchanan Airport and construction of Byron Airport. Once construction is completed, increased fee revenue will eliminate the deficit. The Employee Fitness Center enterprise fund had a retained deficit of $145,000. Cost containment measures implemented in 1993-94 were not sufficient to offset declining revenues and increased occupancy costs experienced in 1994-95. It is management's opinion that this condition is temporary, and that during the next few years the Center will begin eliminating its deficit. The County Hospital enterprise fund had a retained deficit of$28,615,000. This deficit will be eliminated as the pension bond obligation is liquidated. The Regency Hills enterprise fund had a $20,000 retained deficit and has been funded with contributed capital received from a special district at the time the fund was established. The Workers' Compensation insurance County General internal service fund had a deficit of$960,000 resulting from an increase in estimated claims liabilities. Funding from investment earnings and from rates charged to other funds will be sufficient to cover disbursements as claims are paid. 13. EXCESS OF EXPENDITURES OVER APPROPRIATIONS A The County has reported expenditures in excess of appropriations in two special revenue funds: Redevelopment and Housing Authority. The Redevelopment Agency reported an,unbudgeted $2.1 million decline in the value of land held for sale, which was offset entirely by a reduction in its related fund balance reserve. The Housing Authority reported $2.3 million of expenditures in excess of appropriations. The « expenditures were offset in full by increased revenues. i r ! i5 a i i f COUNTY OF CONTRA COSTA i NOTES TO GENERAL.,-PURPOSE FINANCIAL STATEMENTS 14. CONTRIBUTED CAPITAL CHANGES • Changes in contributed capital of the enterprise funds for the year are as follows (in thousands): Health County Maintenance Regency Airport Hospital Organization Hills Total Balance as of July 1, 1994 $ 22,684 894 1,000 24,574 Contributions from other special district SO4 504 Federal and State construction grants 4,858 4,858 Depreciation related to grants (346) (36) (382) Other Federal Contributions 517 517 Balance as of June 30, 1995 $ 27,709 858 1,000 500 30.067 36 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 15. SEGMENT INFORMATION FOR ENTERPRISE FUNDS Financial data for the enterprise funds for the year ended June 30, 1995, are as follows (in thousands): Major Employee Health Risk Fitness County Maintenance Medical Regency Airport Center Hospital Omanization Insurance Hills Total Operating Revenues S 203 140 142,521 34,255 240 2,760 180,119 Operating expenses (other than depreciation) 1,852 180 129,005 52,900 216 2,780 186,933 Depreciation 489 12 2,088 30 2,619 Operating income (loss) (2,138) (52) 11,428 (18,675) 24 (20) (9,433) Nonoperating revenues, expenditures, net 1,404 18 (3,357) (99) (2,034) Operating transfers, net8( 270) 18.757 10.487 Net (toss) income 734I (34) (199} 1724 X980} Fixed asset acquisitions 5,936 9,093 53 15,082 Net working capital (480) (199) 132,377 4,470 165 480 . 136,813 Total assets 33,460 83 201,176 12,189 194 480 247,582 Capital lease obligations 3,495 308 5 3,808 Certificates of participation, net 122,773 122,773 Pension bond payable 695 53,122 1,618 55,435 'total equity (deficit) $26,448 (145) (27,757) 1,644 165 480 835 The County pays a subsidy to the County Hospital and Health Maintenance Organization enterprise funds to provide resources for operating costs which are in excess of operating revenues. Subsidies for the last three years are as follows (in thousands): Year Ended.June 30 Total Subsidy 1993 S 30,854 1994 32,555 ! 1995 34,230 37 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 16. DEFERRED COMPENSATION PLAN The County and the Housing Authority offer their employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. These plans, available to all employees, permit them to defer a portion of their annual salary until future years. Monies in the deferred compensation plan are 1 not available to employees until termination, retirement, death, or unforseen emergency. i All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the County or Housing Authority(without being restricted i to the provisions of benefits under the plan),subject only to the claims'of the County or Housing Authority's i general creditors. Participants' rights under the plan are equal to those of general creditors of the County in an amount equal to the fair market value of the deferred account for each participant. i It is the opinion of the County's legal counsel that the County has no liability for losses under the plan but r. #, does have the fiduciary duty of due care that would be required of an ordinary prudent investor. County management believes that it is unlikely the County will use the assets to satisfy the claims of general creditors in the future. The Housing Authority takes the same position in regards to their plan. �j As of June 30, 1995, the assets of the County plan, recorded in an agency fund at their market value, amounted to $87,262,000. At March 31, 1995, the assets of the Housing Authority's plan, recorded in an {, agency fund at their fair market value, amounted to $766,000. 17. MORTGAGE REVENUE BONDS Home mortgage revenue bonds have been issued in the County's name to provide mortgage loans secured by first trust deeds on newly constructed and existing residences. The program provides low interest rate mortgage loans to persons who find it difficult to qualify for conventional mortgages at market rates. The bonds do not constitute an indebtedness of the County. They are payable solely from payments made * on and secured by a pledge of the acquired mortgage loans and certain funds and other monies held for the benefit of Lhe bondholders pursuant to the bond indentures. These bonds are not payable from any revenues or assets of the County, and neither the full faith and credit nor the taxing authority of the County, the State, or any political subdivision thereof is obligated for the payment of the principal or interest on the bonds. Accordingly, no liability has been recorded in the General Long-Term Obligations account group. I i The total amount of mortgage revenue bonds outstanding at June 30, 1995 was $49,006,000. 38 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCLAL STATEMENTS 18. RISK MANAGEMENT The County fully self-insures its unemployment, dental, management long-!erm disability and medical malpractice exposures. The County is self-insured up to $500,000 per occurrence for workers' compensation, and maintains excess insurance coverage from $500,000 to$10 million per occurrence with a commercial insurance carrier. The County is self-insured up to$2 million per occurrence on public liability (excluding the airport, which is fully insured for catastrophic losses by a commercial insurance carrier up to $75 million per occurrence) and automobile liability, and maintains excess insurance coverage from $2 million to$10 million per occurrence with a commercial insurance carrier. All claims are administered by the County, except for dental which is administered by outside parties. In addition, the County maintains $200 million "All Risks" and Flood insurance coverage with a $50,000 deductible, and $50 million earthquake insurance coverage on specific locations with a commercial insurance carrier. internal service funds are used to account for the County's self-insurance activities. It is the County's policy to provide in each fiscal year, by charges to affected operating funds,amounts sufficient to cover the estimated expenditures for self-insured claims. Charges to operating funds are recorded as expenditures of such funds and revenues of the internal service funds. Accrual and payment of claims are recorded in the internal service funds. The County has accrued a liability of$57.1 million at lune 30, 1995 for all self-insured claims in the Internal Service Fund which includes an amount for incurred but not reported claims. The self- insurance reserve is based on actuarially determined amounts for workers' compensation, public liability, and medical malpractice liability and based on management's estimates for all other reserves. in the opinion of the County, the amounts accrued are adequate to cover claims incurred but not 8 reported in addition to known claims. Changes in the funds' claims liability amount in fiscal years 1994-95 and 1993-94 were (in thousands). Qi Beginning of Current Year Claims Balance at Fiscal Year and Changes in Claim Fiscal Year Liability Estimates Payments End 1994-95 $60,831 13,451 17,145 57,137 1993-94 $60,026 17,994 17,189 60,831 0 39 Q COUNTY OF CONTRA COSTA 0 NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 19. COMMITMENTS AND CONTINGENCIES A. Grants The County participates in a number of Federal and State grant programs subject to financial and compliance audits by the grantors or their representatives. Audits of certain grant programs through Q June 30, 1995, have not yet been conducted. Accordingly, the County's compliance with applicable grant requirements will be established at some future date. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The County believes that such disallowances, if any, would not have a material effect on the general-purpose financial statements. B. Health Insurance Health care benefits for active and retired employees are jointly financed by the beneficiaries and by the County. Employees have a choice of participation in three medical plans: Kaiser Permanente, a private health maintenance organization (HMO); Qual-Med Health Plan, with both a preferred provider plan (PPO) and a HMO; and the Contra Costa Health Plan (CCHP), operated by the County Health Services Department. The County subvents 79% of Kaiser and Qual-Med HMO, 77% of Qual-Med PPO and 98% of CCHP premiums for health plan members. A dental plan is also offered to all 40 employees. The County's contribution to health and dental plans during I994-95 for active employees was $27,146,088. The County's liability for health care benefits is limited to its annual contribution. C. Post-Employment Benefits Other Than Pensions « In addition to providing retirement benefits as described in Note 20 below, retired employees are allowed to continue participation in the medical and dental plans described above. As of June 30, 1995, there were 2,950 retired employees participating in the health plans, and the County contributed $7,753,000 toward payment of the premiums of which $7,500,000 was reimbursed by the Employees' Retirement Association. The cost of retiree health care is recognized when the County makes its contribution on a pay-as-you-go basis and is accounted for in the General Fund, Library Fund, Fire District Funds, or Enterprise Funds as appropriate. This post-employment benefit was approved by Board of Supervisors resolution number 264 on August 22, 1961 with an effective date of October 1, 1961. To be eligible, the retiring employee must have been a member of a participating health plan for at least 5 consecutive years. 40 COUNTY OF CONTRA COSTA r NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS D. Pending Legal Matters Numerous lawsuits are pending or threatened against the County. The County has recorded actuarially determined reserves in the Internal Service Fund to adequately cover estimated potential material adverse losses at June 30, 1995. E. Proposition No. 62 The California Supreme Court recently upheld the constitutionality of Proposition 62, a 1986 initiative which required voter approval of all new or increased taxes. The Court's ruling may invalidate certain taxes previously collected by the County and disallow these taxes from being collected in the future. The likelihood and amount of such an adverse effect upon the financial position of the County is currently unknown and has not been reflected for in the general purpose financial statements. Management does not believe this ruling will materially effect the County's financial position. 20. EMPLOYEES' RETIREMENT ASSOCIATION A. Plan Description and Provisions The Contra Costa County Employees' Retirement Association is a cost-sharing multiple-employer ` defined benefit pension plan governed by the County Employees' Retirement Law of 1937,as amended. The plan covers substantially all of the employees of the County, its special districts, the Housing Authority and fourteen other member agencies. The total membership of 13,054 is divided among general and safety members, and retired members as follows: ' Retirees and beneficiaries currently receiving benefits 4,485 Terminated employees entitled to benefits but not yet receiving them 1,051 Active members with vested benefits 5,632 • Active members without vested benefits 1.886 Total membership 13,054 ' The plan provides for retirement, disability, death and survivor benefits. Annual cost-of-living adjustments (C.O.I.) to retirement allowances can be granted by the Retirement Hoard as provided by State statutes. Service retirements are based on age, length of service and final average salary. Subject 41 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS to vested status, employees can withdraw contributions plus interest credited or leave them as a deferred retirement when'they terminate or transfer to a reciprocal retirement system. Specific provisions are as follows: I. - �, General Membership This membership is divided into two tiers. Tier 11 includes all employees who became members >� after August 1, 1980, and those Tier 1 members who elected to transfer to Tier 1I. Tier 11 members contribute less and receive lower benefits than Tier 1 members. All members may elect service retirement at age 50 with 10 years of service or with 30 years of service regardless of age. Disability retirement may be granted as service-connected with no years of employment requirement, or, for members enrolled prior to August 1, 1980, non-service-connected with five years of service credit required. The definition of disability is stricter for Tier If than for Tier 1. The retirement benefit is based on a one year (three for Tier 11) final average salary. Safety Membership Safety membership covers all members who are in active law enforcement, active fire suppression work or certain other"safety" classifications as designated by the Retirement Board. Members may elect service retirement at age 50 with 10 years of service, or with 20 years of service regardless of age. Disability retirements may be granted as service-connected with no years of employment requirement or non-service-connected with five years of service credit required. The retirement benefit is based on a one year final average salary. Q. Funding Status and Progress ~ The amount shown below as "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and any step-rate benefits, estimated to be payable in the future as a result of employee service to date. The.measure is intended to help users assess the funding status of the system on a going-concem basis, assess progress made in accumulating sufficient assets to pay benefits when due and make comparisons among employers. The measure is the ratio of assets available to pay benefits to the actuarial present value of credited projected benefits and is independent of the funding method used to determine contributions to the system. The pension benefit obligation was computed as part of an actuarial evaluation performed as of December 31, 1994. Significant actuarial assumptions used in the valuation include (a) a rate of return on the investment of present and future assets of 8.0 percent per year, (b) projected salary increases of 4.5 percent per year compounded annually, attributable to inflation, (c) additional projected salary 42 ---------- COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS increases of I percent per year, attributable to longevity and merit, and (d) annual post-retirement benefit increases of up to 3 percent for Tier. I and Safety and up to 4 percent for Tier 11, attributable to inflation as measured by the Consumer Price Index. The 1983 Croup Annuity Mortality tables are used as part of the assumptions for actuarial valuation for service retirements, and the 1981 Disability Mortality table for valuation for disability retirements. Total unfunded pension benefit obligation applicable to the association's members was $95.9 million at December 31, 1994, as follows (in millions): Pension benefit obliZation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $ 698.0 Cur-rent employees: Accumulated employee contributions including allocated investment income 166.9 Employer-financed vested 551.8 Employer-financed.nonvested 42.1 Other reserves (post-retirement death benefit and C.O.L. supplement) 4.3 Total pension benefit obligation 1,463.1 Net assets available for benefits, at cost (market value is $1,400.2 million) 1,367.2 Unfunded pension benefit obligation (all member entities) 95.9 The pension benefit obligation increased by $3.5 million due to changes in noneconomic actuarial assumptions. On March 1, 1994, the Retirement Association received $333.7 million from the County as proceeds from the issuance of Pension Obligation Bonds. The proceeds were used to reduce the County's unfunded actuarial accrued liability. C. Contributions Required and Contributions Made New contribution rates based on the actuarial study of January 1, 1994, became effective July 1, 1994. The employer rates were calculated on the alternate funding method permitted by Section 31453.5 of the Government Code. The "entry age normal funding" method is used to calculate the rate required to provide all the benefits promised to a new member. Unfunded costs resulting from this calculation are amortized over 16.5 years from the January 1, 1994, valuation date. 'Ilie significant actuarial assumptions used to compute the actuarially determined contribution requirements are the same as those used to comptite the pension benefit obligation as described in "Funding Status and Progress`'. Total covered payroll for all employers part icipat i n- in tile plan was S340_5 million. The total payroll 16r the Countv was $.3,41.3 million, of which 5294.0 million was for County employees covered by the 43 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS I plan. I� � l Contributions for all participating agencies, totaling$38.9 million for 1994, were made in accordance with actuarially determined contribution requirements determined through actuarial valuations performed at January 1, 1994, and January 1, 1993, and adopted by the Retirement Board. The County's contribution of$249 million and the employees' contribution of$8.4 million were 8.5% and 2.9% respectively of the$294.0 million covered payroll. The County's contribution was 85.3% of the $29.2 million total contributions of all participating employers. Contributions by all employers consisted of normal costs of$21,766,000 (6.61% of current covered payroll) and amortization of the unfunded actuarial accrued liability of$7,458,000 (2.26% of current covered payroll). The 1937 Act statutes require employees to pay 50% of the basic retirement benefit (Tier 11 -40% of Tier 1 rate) and 50% of future C.O.L. costs, with employers making up the balance of the basic and C.O.L. contributions needed. Pursuant to agreements reached during salary negotiations, the County generally pays 50% of employees' basic contributions which amounted to $6.4 million in 1994. D. Historical Trends ,I Historical trend information designed to provide information about the Association's progress made in accumulating sufficient assets to pay benefits when due is presented as statistical information'. This trend information is summarized for the three most recent calendar years as follows: 1992 1993 1994 Ratio of net assets available for benefits to 67.2% 69.9% 93.4%(1) pension benefit obligation Ratio of unfunded pension benefit obligation to 138.0% 135.2% 28.2%(1) annual covered payroll * Ratio of employer contributions to annual 14.8% 13.5% 8.6% covered payroll (1)Changes primarily due to the reduction in unfunded liability, resulting primarily from the County's issuance of a Pension Obligation 13ond in March, 1994- 44 r� t COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS 21. SUBSEQUENT EVENTS 1995-96 Tax and Revenue Anticipation Notes On July 5, 1995, the County issued short-term tax and revenue anticipation notes of$90,000,000. The notes bear interest at 4.5% and will mature July 3, 1996. Court Facilities Fires On August 28, 1995 and September 14, 1995, two of the County's court facilities experienced fires believed to be acts of arson. The damage was significant. The County is insured for such events, and rp the financial impact, while not yet completely determined, is limited to the amount of its deductible: $50,000 per occurrence. Legal Matters Settled The County has settled two lawsuits, one in State Court and one in Federal Court, brought by the operator of a local landfill in connection with,and with the costs associated, the closure-of that landfill. The County has agreed to pay $2.74 million for dismissal of both the State and Federal actions, which has been accrued for in the accompanying financial statements. The County is seeking substantial ! recovery from its former liability insurance carriers. In 1993, a class action suit was brought against the County challenging the County's "family budget unit" used in calculating general assistance aid to recipients in shared housing. The Superior Court upheld the County's standards, however the Court of Appeals reversed the Superior Court's decision, ruling against the County. In October 1995, the Court approved a plan agreed to by the County and plaintiff for retroactive general assistance for eligible welfare recipients and entered a judgement to execute the plan. The amount of corrective payments and the number of class action members who will apply for corrective payments is unknown at this time, although the amount could be significant. Redevelopment Bonds Redeemed On August 1, 1995, tilt Agency redeemed $6,780,000 of the Tax Allocation Revenue Bonds with proceeds held in escrow. The redemption was made because of a delay in a project, which the proceeds would have funded. 45 COUNTY OF CONTRA COSTA NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS Redevelopment Bonds Issued On July 17, 1995,the Agency borrowed $1,645,000 from the County of Contra Costa Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California, to fund ongoing costs for the North Richmond project. Principal will be paid annually beginning August 1, 1996 and maturing August 1, 2025. r S' 46 GENERAL FUND s The General Fund accounts for legally authorized activities of the County not provided for in other restricted funds. General Fund revenues are derived from taxes, licenses, permits, franchise fees, fines, forfeitures and penalties, use of money and properly, aid from other governmental agencies, charges for current services, and other revenue. General Fund expenditures and encumbrances are classified by the functions of general government, public protection, public ways and facilities, health and sanitation, public assistance, education, and recreational and cultural services. Tlie resources of the General Fund are generally expended and replenished on an annual basis. The fund will continue to exist indefinitely. M r' 47 -------------- COUNTY OF OONTRA COSTA GENERAL FUND BALANCE SHEET JUNE 30,1995 (With comparative totals for June 30,1994) (In'IItousands) 1 Assets 1995 1994 Cash and investments $ 117,317 236,514 . Accounts receivable and accrued revenue 56,268 45,654 Inventories 1,627 1,598 Due from other funds 3580 45,533 Advances to other funds -598 783 Prepaid items and deposits 2,854 3,901 Total Assets $ 214,044 333,983 Liabilities and Fund Equity Liabilities: Short term notes 95,000 140,000 Accounts payable and accrued liabilities 27,990 31,576 Due to other funds 14,768 18,642 Welfare program advances 14,639 12,809 i Obligations under reverse repurchase agreements 74,050 Deferred revenue and credits 10,077 6,693 i Total Liabilities 162,474 283,770 Fund Equity: Fund Balance Reserved For: Encumbrances 10,239 11,639 Inventories 1,627 1,598 Advances to other funds 598 783 Prepaid items and deposits 2,379 3,654 V. Total Fund Balance-Reserved 14,843 17,674 Fund Balance-Unreserved: Designated for future use 5,679 4,316 Undesignated 31,048 28,223 Total Fund Balance-Unreserved 36,727 32,539 Total Fund Balances 51,570 50,213 Total Liabilities and f=und Balances S 214,044 333,9,93 48 COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND MANGES IN FUND BALANCE-BUDGET AND ACTUAL ; YEAR ENDED JUNE.30,1995 (With comparative totals for June 30,1994) (In Thousands) 1994-95 Variance Favorable 1993-94 Budget Actual (Unfavorable) Actual Revenues: Taxes $ 89,666 89,992 326 97,743 Licenses,permits and franchise fees 5,329 4,978 (351) 6,229 Fines,forfeitures and penalties 18,534 18,371 (163) 9,789 Use of money and.property, 10,021 12,693 2,672 12,279 Intergovernmental 385,854 383,118 (2,736) 375,371 Charges for services 134,047 116,447 (17,600) 77,835 Othcr rcvcnue 12,403 11,635 (768) 10,446 "fatal Revenues 655,854 637,234 (18,620) 589,692 Expenditures- Current: xpenditures:Current: General government 79,992 67,825 12,167 63,890 Public protection 165,463 157,135 8,328 152,161 licalth and sanitation 116,317 114,585 1,732 112,659 Public assistance 245,.56S 238,859 6,709 231,162 Edwation 126 122 4 102 Public ways and facilities 11,461 9,454 2,007 11,768 Recreation and culture 1 1 Interest 4,469 4,469 5,017 Capital outlay 3,477 3,477 3,384 Total Expenditures 626,874 595,926 30,948 580,143 ,* Excess of revenues over expenditures 28,980 41,V8 12,128 9,549 Other Financing Sources (Uses): Operating trdnsfcrs in 24266 24266 28,022 Operating transfers out (79,147) (71,628) 7,519 (37,405) Proceeds from issuance of debt 270,0.36 Retircmdnt of UAALobligation (270,036) Capital lease financing 3,477 3,477 3,384 'I'otai Other financing Sources(Uscs) (54,8,51) (43,685) 10,996 _('5,999) Excess(deficiency)of revenues and other financing sources over(under) expenditures and other financing uses (25,901) (2,577) 23,324 3,550 Fund Balances at Beginning of Year, as Previously Reported 50213 50,213 47,598 Adjustment to beginning fund balance 4,664 4,664 (398) Fund Balances at Beginning of Year, as Restated .50.213 54,877 4,664 47,200 Rcsijual equity transfers in 5 5 Residual equity transfers out (735) (735) (537) Fund 13alancc at End of Year S 24312 51.570 27.258 50,213 49 COUNTY OF CONTRA COSTA GENERAL FUND SCHMULE OF EXPENDITURES, COMPARED To BUDGET YEAR ENDED JUNE 30,1995 # (In Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual i GENERALGOVERNNIENT Board of Supervisors ' Salaries and benefits S 1,082 1,082 1,075 �`✓ Services and supplies 530 514 16 488 Fixed assets 15 10 5 3 Expenditure transfers (98) (100) 2 (118) j Total 1,529 1,506 23 1,448 Clerk of the Board Salaries and benefits 326 287 39 280 Services and supplies 30 28 2 27 I I Fixed assets 2 Expenditure transfers (24) (24) (19) { Total 332 291 41 290 Administrator Salaries and benefits 1,828 1,827 1 1,793 Services and supplies 886 825 61 812 Other charges 8 8 8 Fixed assets 158 137 21 77 i ; Expenditure transfers (94) (95) 1 (72) Total i Total 2,786 2,702 84 2,618 I Auditor—Control ler j Salaries and benefits 4,134 3,938 196 3,883 * Services and supplies 1,687 1,371 316 1,085 Fixed assets' 8 8 21 Expenditure transfers (697) (697) (744) i Total 5,132 4,620 512 4,245 M (continued) 50 ------------ COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE`OF EXPENDITURES, CJOWAED TO BUDGET YEAR ENDED JUNE 30,1995 * (In Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual Treasurer—Tax Collector Salaries and benefits 1,612 1,603 9 1,517 Services and supplies 735 625 110 596 Other charges 9 9 39 Fixed assets 2 2 36 Total 2,358 2,239 119 2,188 Assessor Salaries and benefits 7,015 6,905 110 6,692 Services and supplies 1,08I 974 107 849 Other charges 5 I 4 2 Fixed assets 44 40 4 60 « Expenditure transfers (21) �(22) 1 (30) Total 8,124 7,898 226 7,573 Purchasing * Salaries and benefits 347 347 313 Services and supplies 80 78 2 73 Other charges 4 4 4 Fixed assets 3 Expenditure transfers (32) (32) (40) Total 399 397 2 353 Management Information Systems Services and supplies 780 239 541 549 Fixed assets 194 48 146 73 Total 974 287 687 622 (continued) �l COUNTY OF CONTRA OOSTA GENERAL FUND SCHEDULE OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED RJNE 30,1995 (In Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual Revenue Collections Salaries and benefits 1,168 1,168 1,110 I Services and supplies 248 245 3 224 Other Charges 3 3 Fixed assets 2 2 4 Expenditure transfers (378) (378) (353) i Total 1,043 1,040 3 985 County Counsel Salaries and benefits 2,713 2,670 43 2,431 N Services and supplies 277 263 14 231 Fixed assets 10 10 3 40 Expenditure transfers 0,2L)9) (1,010) 1 (( Total 1,991 1,933 58 1,775 i . i i j Personnel E Salaries and benefits 2,580 2,387 193 2,262 Services and supplies 2,204 1,552 652 1,453 Other charges 18 3 15 18 i Fixed assets 3 2 1 47 Expenditure transfers (413) (428) 15 (415) z . Total 4,392 3,516 876 3,365 F i . Personnel Merit Board ! ; Salaries and benefits 42 41 1 41 f Services and supplies 56 35 21 24 Expenditure trdnsfers {11} 11 (5) I Total 98 65 33 60 I I I (continued) 52 COUNTY OF CONTRA COSTA . GENERAL FUND SCHEDULE 4F EXPENDMJRES, COMPARED TO BUDGET YEAR ENDED JUNTE 30,1995 (in Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual Elections Salaries and benefits 1,014 945 69 971 Services and supplies 1,637 1,525 112 1,939 Fixed assets 88 85 3 117 Expenditure transfers (50) (50) (50) Total 2,6,89 2.505 184 2,977 Telephone Exchange Salaries and benefits 800 800 957 Services aryl supplies 2,514 2,444 70 2,197 Other charges 297 297 303 Fixed assets 2 2 17 Expenditure transfers (2,057) (2,679) 22 (2,821) Total 956 864 92 653 Fleet Services Salaries and benefits 1,130 1,130 1,250 Services and supplies 3,804 3,770 34 3,790 Other charges 775 51 724 319 Fixed assets 1,169 967 202 552 Expenditure transfers (5,377) j5,382 5 -1) (5,79 Total 1,501 536 965 118 Building Occupancy Cost Services and supplies 14,383 14,245 138 13,695 Other charges 58 58 59 Fixed asset,, 50 49 1 36 Expenditure transfers (462) (464) 2 (416) Total 14,029 13, 141 13,374 (continued) 53 LN'-OF WN RA ODSTA >' G 'ERAL FUND i; SCHEDULE OF , COMPARED TO BUDGET'` .Z�JED JUNE 30,1995 m Thousands) 1994-95 Variance- Favorable 1993-94 y: Budget Actual (Unfavorable) Actual Building Maintenance i' Salaries and bcnefie 8,961 8,957 4 7,956 Services and supplies 15,792 15,753 39 15,470 * Other charges 10,931 10,916 15 10,702 Fixed assets 93 53 40 6 Expenditure transfers (31,658) (31,693) 35 (30,038) Total 4,119 3,956 133 4,096 Plant Acquisition Fixed assets 12,165 8,284 3,881 4,128 Economic Development Services and supplies 63 63 40 Employee Benefits Salaries and benefits 7,653 5,616 2,037 6,092 Services and suppliL-: 191 21 170 3 Other Charges 492 492 14 { Total 8,336 5,637 2,699 6,109 Data Processing Salaries and bencfh 4,639 4,628 11 4,464 * Services and suppli6 3,315 2,484 831 2,473 Other charges 442 440 2 132 Fixed assets 227 205 22 141 Expenditure transfer (7,700) (8,182) 482 6,841 Total 923 (425) 1,348 369 (continued) 54 COUNr.OF CONTRA COSTA GENERAL FUND ND SCHEDULE OF EXPENDrrURES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) 1994-95 Variance— Favorable 1993-94 . Budge Actual (Unfavorable) Actual Central Service/Microfilm Salaries and benefits 733 731 2 738 Services and supplies 951 926 25 944 Other charges 57 55 2 133 Expertditurc transfers (1,628) (1,641) 13 (1,646) Total 113 71 42 169 r General Servicrs Administration Salaries and benefits 904 904 853 Services and supplies 167 162 5 142 Other charges 2 2 2 Fixed assets 10 10 12 Expenditure transfers 1,070 ,071) 1 (999) Total 13 7 6 10 Insurance Salaries and benefits 1,249 1,249 1,192 Services and supplies 6,869 6,857 12 5,277 Other charges 61 61 403 Fixed assets 6 6 2 Expenditure transfers 1 i Total 8,185 8,173. 12 6,875 URAL pension band debt service transfers Salaries and benefits (2,261) (2,261) (550) (continued) 55 1 COUNTY OF CONTRA COSTA GENERAL FUND OF E CPENDTI'(TRES, COMPARED TO BUDGET YEAR ENDED NNE 30,1995 (In Thousands) � 1 > j 1994-95 variance- Favorable 1993-94 ? Budget Actual jinfavorable) Actual Total General Government Salaries and benefits 47,669 44,954 2,715 45,320 Services and supplies 58,280 54,999 3,281 52,381 «, Other charges 13,165 11,911 1,254 12,138 Fixed assets 14,246 9,920 4,326 5,340 Expenditure transfers (53,368) (53,959) 591 (51,289) Total 79,992 67,825 12,167 63,890 PUBLIC PROTECTION Superior Courts Salaries and benefits 4,5.30 4,528 2 4,163 # Services and supplies 2,072 1,991 81 2,496 Other Charges 23 23 23 Fixed assets 114 61 53 98 Expenditure transfers (53) (87) 34 (55) Total 6,686 6,516 170 6,725 Municipal Courts Salaries and benefits 10,987 .10,292 695 10,147 Services and supplies 3,244 2,882 362 2,579 Other charges 153 152 11 (32) Fixed asses 181 71 110 80 Total 14,565 13,397 1,168 12,774 (continued) 56 COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF EXPENDMJRFS, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) 1994-95 Variance— Fayorable 1993-94 • Budget Actual (Unfavorable) Actual Law and Justioe Systems Salaries and benefits 143 143 139 Services and supplies 566 271 295 248 Fixed assets 6 6 Expenditure transfers (47) (47) (43) Total 668 367 301 344 Grand Jury Services and supplies 61 60 1 49 Criminal Grand Jury Services and supplies 102 102 112 • County Clerk Salaries and benefits 4,031 4,031 3,797 Services and.supplies 787 751 36 602 Other charges 6 6 5 amu' Expenditure transfers (26) (26) (16) Total 4,798 4,762 36 4,388 District Attorney Salaries and benefits 11,398 11,177 221 10,121 Services and supplies 1,573 1,182 391 1,053 Other charges 128 99 29 2 Fixed assets 95 40 55 254 Expenditure transfers (135) (136) 1 (126) Total 13,059 12,362 697 11,304 (continued) 57 COUNTY OF CONTRA COSTA GENERAL FUND scHEDULE OF EXPENDrniRES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 • (1n Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual Public Defender Salaries and benefits 8,216 8,214 2 7,459 Services and supplies 923 917 6 827 f Fixed assets 71 38 33 16 Expenditure transfers (1) Total 9,210 9,169 41 8,301 District Attorney Family Support Salaries and benefits 8,766 8,725 41 7,856 Services and supplies 2,609 2,587 22 2,381 Fixed assets 49 47 2 115 Expenditure transfers (927) (927) (844) Total 10,497 10,432 65 9,508 Conflict Defense Services Services and supplies 1,868 1,679 189 1,999 Sheriff Salaries and benefits 36,252 36,201 51 32,337 Services and supplies 4,286 3,519 767 3,174 Other charges 366 357 9 300 Fixed assets 154 118 36 172 Expenditure transfers (135) (186) 51 (136) Total 40,923 40,009 914 35,913 s (continued) 5S COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 . (In Thousands) 1994-95 Variance- Favorable 1993-94 Budget Actual (Unfavorable) Actual Jail Salaries and benefits 23,427 23,086 341 21,442 Services and supplies 4,339 4,221 118 3,725 Other charges 398 279 119 237 Fixed assets 56 23 33 120 Expenditure transfers (9) (9) (142) Total 28,211 27,600 611 25,382 Jail-Hcalth Services Salaries and benefits 3,762 3,762 3,540 Services and supplies 2,255 2,245 10 1,981 Other charge. 9 5 4 Expenditure transfers (474) (474) (311) Total 5,552 5,538 14 5,210 Probation Salaries and benefits 16,651 16,651 15,159 Services and supplies 2,441 2,373 68 1,960 Other charges 5,577 5,577 5,479 Fixed assets 123 109 14 27 Experxiiturc transfers (20) (21) 1 (21) Total 24,772 24,689 83 22,624 Justice;System Programs Services and supplies 188 170 18 132 . Other charges 2,216 53 2,163 176 Total 2,404 223 2,181 308 (continued) 59 ------------------ COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 . (In Thousands) t 1994-95 ! Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual Flood Control Services and supplies 484 253 231 296 Agriculture Salaries and benefits 1,624 1,624 1,506 Services and supplies 129 97 32 74 Fixed assets 124 85 39 142 Total 1,877 1,806 71 1,722 Land Information System Salaries and benefits 34 Services and supplies 6 Fixed assets 5 Expenditure transfers (35) Total 10 Recorder Salaries and benefits 1,224 1,009 215 975 Serviocs and supplies 456 288 168 356 Other charges 1 1 Expenditure transfers (5) (12) 7 (3) Total 1,676 1,285 391 1,328 Local Agency Formation Salaries and benefits 140 139 1 114 Services aril supplies 82 62 20 64 Total 222 201 21 178 • (Contillued) 60 COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) 1994-95 Variance— Favorable . 1993-94 Budget Actual (Unfavorable) Actual r Community Development ' Salaries and benefits 3;446 3,048 398 3,045 Servioes and supplies 1,208 970 238 1,012 Other charges 18 15 3 12 Fixed assets 40 8 32 33 Expenditure transfers (3,007) (3,012) 5 (3,093) ;1 Total 1,705 1,029 676 1,009 Coroner Salaries and benefits 806 786 20 743 Services and supplies 441 366 75 328 Fixed assets 6 Total 1,247 1,152 95 1,077 Crossing Guards s Services and supplies 25 Emergency Services Salaries and benefits 271 260 11 233 Services and supplies 84 83 1 67 Fixed assets 2 2 Expenditure transfers (3) 3 Total 357 340 17 300 j Public Administrator . Salaries and benefits 138 138 133 Services aryl supplies 5 3 2 4 Fixed assets 1 Total 143 141 2 138 (continued) 61 COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) 1994-95 1 Variance- Favorable 1993-94 Budget Actual (Unfavorable) Actual .knin r?:Seniees Se�and benefits 2,955 2,759 196 2,760 40 S�icr_-and supplies 530 423 107 417 58 8 50 21 Mai 3,543 3,190 353 3,198 0 "'AAL mien bond debt service transfers Llarie<and benefits (9,167) (9,167) (2,061) Tcxa1 Pnbtie Protection tlari�and benefits 129,600 127,406 2,194 123,642 Senices and supplies 30,733 27,495 3,238 25,987 Other changes 8,895 6,566 2,329 6,268 meted assets 1,073 608 465 1,090 Expenditure transfers _4�) (4,940) 102 (4,826) Total 165,463 157,135 8,328 152,161 HF-ALTHANDSANITATION . _t2rics and benefits 20,949 20,944 5 19,(x19 Ix".ice:and supplies 7,709 7,494 215 6,334 cr_ r charges 4 4 4 =xed asses 128 61 67 31 ^irdlltdClydrlSfCfS (1,935) (1,935) (2,092) • 0121 26,855 26,568 287 23,356 (continued) 62 r. . COUNTY OF OONTRA OOSTA GENERAL FUND SCHEDULE OF EXPENDI'T'URES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual Environmental Health Salaries and benefits 4,247 4,246 1 3,778 Services and supplies 2,940 2,796 144 2,450 Other charges 2 2 2 Fixed asses 36 36 90 _ Expcndjturc transfers (1) (1) (2) Total 7,224 7,079 145 6,318 Childrons Services Salaria—,and benefits 2,495 2,495 2,347 Services and supplies 1,640 1,637 9 1,612 Other charges 2 2 2 i Fixcq assets 1 1 3 t Total 4,144 4,134 10 3,964 Alcohol Abuse Salaries and benefits 1,584 1,584 1,779 40 Services and supplies 3,502. 3,354 148 3,511 Other charges 1 1 1 Fixed assets 14 14 2 Expenditurc transfers (I,()91) (1,091) 1,148 , i Total 4,010 3,862 148 4,145 1 1 i r (continued) 63 COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF EXPENDMJRES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (in Thousands) 1994-95 Variance— Favorable 1993-94 _Budget Actual — _(Unfavorable) Actual D.-L,-r A-�--e Sa�---iL--and benefits 2,078 2,078 1,938 and supplies 6,765 6,212 553 5,498 2sets 46 46 6 1--%=iturc transfers (48) 8,8sq 94 8,336 553 7,3 and benefits 9,225 9,224 1 8,967 and supplies 29,632 29,353 279 25,636 Cwti=charges 4,021 4,021 4,790 assets 38 38 16 42,636 280 39,409 42,916 Ce-=,i Sc--tr Planning •,xs andsupplies 26 25 1 29 Mit:�-'D--proportionate Share r- Cr-�I=-charges. 23,047 23,047 27,671 S:)jf---��:,::,t.Managerncm and supplies 1,034 784 250 713 assets 2M 142 58 - 99 1,234 926 308 812 x�: im bond debt service transfers and benefit% (2,028) (2,028) (439) (wntinued) o4 • COUNTY OF CONIRA COSTA GENERAL FUND SCHEDULE OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) • 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual • Total Health and Sanitation Salaries and benefits 38,550 38,543 7 37,449 Services and supplies 53,254 51,655 1,599 45,783 • Other charges 27,077 27,077 32,470 Fixed assets 463 337 126 247 Expenditure transfers (3,027) (3,027) (3,2`x) Total 116,317 114,585 1,732 112,659 • PUBLIC ASSISTANCE Social Services r Salaries and benefits 48,485 48,4.45 44,787 Services and supplies 26,391 25,520 871 21,806 • Other charges 149,455 149,310 145 145249 Fixed assets 851 761 90 138 Expenditure transfers (44) (44) Total 225,138 224,032 1,106 211,942 • Veterans Services Salaries and benefits 254 254 227 Scrviw,,and supplies 12 12, 13 I • Total 266 266 240 i (continue,d) 65 • COUN'T'Y OF CONTRA COSTA GENERAL FUND SCHEDULE OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED JUNE 30, 1995 S' • (In Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual Private Industry Council Salaries and benefits 922 871 51 750 Services and supplies 5,612 5,165 447 3,595 Other charges 107 63 44 63 Fixed assets 163 17 146 23 1 Expenditure transfers (15) (17) 2 (48) Total 6,789 6,099 690 4,383 Community Services Salaries and benefits 5,503 2,545 2,955 5,153 Services and supplies 5,304 4,628 676 5,935 Other charges .3 }1 Fixed assets 14 8 6 233 Expenditure transfers (82) (106) 24 121 Total 10,739 7,075 3,664 11,203 • Community Development Salaries and benefits 1 1 Services and supplies 5,334 4,102 1,232 3,814 Fixed assets 25 12 13 9 ` Total 5,360 4,115 1,245 3,823 Housing Rehabilitation Salaries and benefits 179 178 1 173 Services and supplies 72 fig 3 90 Total 251 247 4 263 i i (Continued) 66 • COUNTY OF CONTRA ODSTA GENERAL FUND i SCHEDULE OF EXPENDITURES,COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual • UAAL pension bond debt service transfers Salaries and benefits (2,975) (2,975) (692) • Total Public Assistance Salaries and benefits 52,369 49,359 3,010 50,395 Services and supplies 42,725 39,496 3,229 35,253 Other charges 149,562 149,373 159 145,315 Fixed assets 1,053 795 255 403 . Expmditure transfers 141 (167) 26 (207) Towl 245,565 238,559 6,709 231,162 EDUCATION • Cooperative Extension Scrvioc Salaries and benefits 107 107 55 Services and supplies 23 22 1 11 Other charges 3 Fixed assets 3 3 • Total 133 129 4 102 URAL pension bond debt service transfers Salaries and benefits (7) (7) Total Education Salaries and benefits 100 100 58 Services and supplies 23 22 1 11 Other charges 3 • Fixed assets 3 3 Total 126 122 4 102 • (continued) 67 • COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE`OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) 1994-95 Variance- Favorable 1993-94 Budget Actual (Unfavorable) Actual PUBLIC WAYS AND FACILITIES Public Works « Salaries and benefits 15,124 15,124 14,917 Services and supplies 4,658 4,619 39 4,247 Other charges 42 38 4 36 Fixed assets 184 101 83 354 Expenditure transfers14,2I8 1( 4,218) 14,110 * Total 5,790 5,664 126 5,444 Road Construction Services and supplies 2,602 1,325 1,277 2,730 Other charges 3,924 3,320 604 3,808 Total 6,526 4,645 1,881 6,538 UAAL pension bond debt service transfers Salaries and benefits (855) (855) (214) Total Public Ways and Facilities Salaries and benefits 14,269 14,269 14,703 Services and supplies 7,200 5,944 1,316 6,977 Other charges 3,960 3,358 608 3,844 Fixed assets 184 101 83 354 Expenditure transfers (14,218) (14,218) (14,110) Total 11,461 9,454 2,007 11,768 RECREATION AND CULTURE Parks Administrawn Services and supplies I 1 (contirn(�d) 68 i1 * COUNTY OF CONTRA COSTA GENERAL FUND SCHEDULE OF EXPENDITURES, COMPARED TO BUDGET YEAR ENDED JUNE 30,1995 (In Thousands) 1994-95 Variance— Favorable 1993-94 Budget Actual (Unfavorable) Actual INTEREST Servioes and supplies 89 89 120 Other charges 4,380 4,380 4,897 Total 4,469 4,469 5,017 CAPITAL OUTLAY Fixed assets 3,477 3,477 3,384 GRAND TOTAL Salaries and benefits 282,557 274,631 7,926 271,6(() Services and supplies 192,365 179,700 12,665 166,512 + Other charges 207,045 202,665 4,350 204,935 Fixed assets 20,499 15,241 5,258 1(),818 Expenditure transfers7( 5,592) 76,311) 719 (73,722) Total S 626,874 595,926 30'A8 580,143 (concluded) 69 APPENDIX E FORM OF SPECIAL COUNSEL TAX OPINION