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HomeMy WebLinkAbout06/16/2009 Z-110ex. 0 S A K E R S F I E L D Staff: John W. Stinson Rick Kirkwood Harold Hanson, Chair Irma Carson Ken Weir SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Tuesday, June 16, 2009 — 12:00 p.m. City Hall North 1600 Truxtun Avenue, Bakersfield, CA First Floor, Conference Room A A G E N D A 1. ROLL CALL 2. ADOPT MARCH 30, 2009 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. NEW BUSINESS A. Request for Financial Assistance from the Kern Soccer Park Foundation — Smiley B. Acceptance of 2007-08 Transportation Development Act Funds Financial Statements - Rojas 5. COMMITTEE COMMENTS 6. ADJOURNMENT ZL 0 B A K E R S F I E L D John W. Stinson, Assistant City Manager Harold Hanson, Chair Ken Weir For: Alan Tandy, City Manager Irma Carson Rick Kirkwood, Management Assistant AGENDA SUMMARY REPORT REGULAR MEETING OF THE BUDGET AND FINANCE COMMITTEE Monday, March 30, 2009 — 12:00 p.m. City Hall North 1600 Truxtun Avenue, Bakersfield, CA First Floor, Conference Room A The meeting was called to order at 12:17:10 PM 1. ROLL CALL Committee members present: Councilmember Harold Hanson, Chair Councilmember Ken Weir Councilmember Irma Carson Absent: None Staff present: Alan Tandy, City Manager John W. Stinson, Asst. City Manager Rick Kirkwood, Management Assistant Steve Teglia, Administrative Analyst Ginny Gennaro, City Attorney Rhonda Smiley, Asst. to the City Manager Joshua Rudnick, Deputy City Attorney Nelson Smith, Finance Director Lyle Martin, Asst. Police Chief Raul Rojas, Public Works Director Donna Kunz, EDCD Director Bethelwel Wilson, Associate Attorney John Wilburn, Solid Waste Supervisor Arnold Ramming, Civil Engineer Brad Underwood, Asst. Public Works Director Janet Wheeler, Public Relations — TRIP Ted Wright, Program Manager— TRIP Kevin Barnes, Solid Waste Director Sal Moretti, Solid Waste Superintendent Luda Fishman, Business Manager Geogina Lorenzi, Asst. to the Public Works Director Others present.- Nancy Ewert, Kern County Waste Management District Suzanne Grant, KUZZ News AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, March 30, 2009 Page 2 2. ADOPT FEBRUARY 23, 2009 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS None. 4. NEW BUSINESS A. Discussion Regarding Billing Blue Cart Recycling Program on Tax Roll — Rojas Public Works Director Raul Rojas stated the current billing procedure for the voluntary blue cart recycling program is to send a bill quarterly to individuals enrolled in the program. The proposed billing procedure would have the fee added to the tax roll; which would be paid by the homeowner. Solid Waste Director Kevin Barnes stated that a phone survey of about 250 current customers was conducted with positive results, more than half of the customers wishing to proceed with the new billing option. Staff stated notices would need to be mailed to residents currently enrolled in the voluntary program because it is a property tax related issue. Committee chair Harold Hanson asked how this would affect renters who wish to continue in the program. Mr. Rojas clarified that this fee would be added to the property taxes, making the homeowner responsible. It would be up to the homeowner and renter to make arrangements amongst themselves. Committee member Ken Weir made a motion to bring this matter to Council at the following scheduled Council meeting. 5. DEFERRED BUSINESS A. Discussion regarding Participation of Local Contractors and Minority Businesses in Federal Stimulus Construction Projects and Bid Preference — Stinson Assistant City Manager John Stinson provided a memorandum regarding the discussions between himself, City Manager Alan Tandy, and Marvin Dean of Kern Minority Construction. In these discussions Mr. Dean indicated that he is working with Employers Training Resource on job training issues relative to local contracting and with the County. Mr. Dean also requested that the City look at its redevelopment agreements to see if language can be included to address hiring within the community for local projects. During these discussions, Mr. Dean indicated that he would like to request approximately $50,000 from the City for the purposes of providing an outreach and referral service. Assistant City Manager Stinson recommended that the Committee defer any further action to allow staff the opportunity to research and meet again with Mr. Dean and get additional AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Monday, March 30, 2009 Page 3 information regarding his proposal, as well as determine what potential funding might be available. In regards to the low-income, Section 3 requirements, Committee member Irma Carson asked what type of reporting exists to measure the successfulness of the "good faith" effort. Economic and Community Development Director Donna Kunz responded that the City has in place a formal checklist when the bids are received that outlines the Section 3 requirements. Staff will then call the contractors and follow up on these requirements prior to the award of the bid. Ms. Kunz added that currently contractors are not penalized if they do not meet the Section 3 requirements as long as they follow the federal guidelines. Committee member Carson asked if there is outreach to identify if minority contractors are bidding on Public Works projects. Public Works Director Raul Rojas responded that Purchasing and Public Works carry a list of contractors who request notification of Public Works projects. Mr. Rojas added that there is an extra step with federally funded projects where outreach is required. Ms. Kunz commented that the majority of developers use local contractors for the City's infrastructure projects. The contractors in turn use local sub-contractors. However, developers are not subject to the Section 3 requirement on private development as they would be on federally funded projects. Committee member Carson also inquired if the federal stimulus money can be utilized for the outreach effort. Mr. Rojas advised that the federal stimulus money may only be used for construction and that each contractor must have an outreach program of their own to satisfy the Section 3 requirement. However, it is not mandatory that they meet those required goals. Marvin Dean of Kern Minority Construction thanked staff and the Committee for giving this issue much discussion and that he will assist the City with its efforts. Mr. Dean provided a brief summary of recommendations he received from the County to meet this goal. He also asked that the City put a mechanism in place that mirrors the County. Committee member Carson asked that staff research possible funding sources and meet with Mr. Dean again to discuss. 6. COMMITTEE COMMENTS None. 7. ADJOURNMENT The meeting adjourned at 1:05:04 P.M. cc: Honorable Mayor and City Council &\Council Committees\2009\Budget and Finance\March\March 30 Agenda Summary.doc 0 B A K E R S F I E L D CITY MANAGER'S OFFICE MEMORANDUM l May 11, 2009 TO: Alan Tandy, City Manager FROM: Rhonda Smiley, Assistant tot 0 City Manager SUBJECT: Budget and Finance Committee Referral - Referral # 77 Request for Financial Assistance from the Kern Soccer Park Foundation ECouncilm'ember Hanson referred a request for financial assistance from the Kern ark Foundation to the Budget and Finance Committee for review. Paul Ricker, representing the Kern Soccer Park Foundation, made a request at the April 1, 2009 City Council meeting for financial assistance from the City of Bakersfield to install lighting at the Kern County Soccer Park. Background The Kern County Soccer Park, consisting of 24+ fields, is located on Alfred Harrel Highway, outside of the Bakersfield city limits. It is operated by the Kern County Soccer Foundation, a non-profit organization. Although it is not a City facility, the City has already provided significant financial assistance to the soccer complex in the past. In 1995, Destec Energy donated $500,000 to the City for the development of additional recreational facilities in northeast Bakersfield. The City Council approved an allocation of $100,000 of tho Soccer Foundation for construction of field lighting. se funds to the Kern County In addition, when the Northeast Water Treatment Plant was being developed, the City entered into an operational agreement with Kern County in 1998 to provide to the County, at no cost, up to a maximum of 648 feet of City water annually for use on Count property in that area, which includes the Kern County Soccer Park. Water Resources Director Florn Corn estimates the value of the water used at the soccer facility as $40,000 to $50,000 annually. Budget and Finance Committee Referral#77—Request from Kern Soccer Park Foundation May 11, 2009 Page 2 Mr. Ricker has indicated that the installation of additional lighting at the soccer fields would make it possible to hold regional and state tournaments that presently do not come to the area. Mr. Ricker did not state the amount of funding the Soccer Association is seeking from the City, but he provided the City Council with some statistics he prepared showing the potential economic benefit the City could receive from hotel tax. His report is based on the assumption of 15 annual tournaments at the facility that would draw out of town participants who would presumably seek local lodging and restaurants. Mr. Ricker has also had discussions with staff at the Convention and Visitors Bureau. CVB staff did an economic impact analysis of Mr. Ricker's report, which is attached for your information. Staff has concluded that his estimate of $438,480 of annual TOT to the City could be a reasonable number, within a broad range, based on the assumptions he provided. However, as with any estimate of TOT revenue, there are numerous variables and that can affect actual TOT received. It is also significant to note that the City is continuing to advance the Sports Village project at Taft Highway, between Gosford and Ashe Roads. It will be a City facility with 16 soccer fields, as well as 8 baseball/softball fields and 4 football fields. Plans are for the AYSO soccer league that currently uses the fields at CSUB to move to Sports Village. They will be displaced when CSUB builds additional dormitories on their campus. In an effort to have the fields available when that occurs, we have made construction of the soccer fields the first priority. We expect to begin construction on Phase 1, which includes 8 of the 16 soccer fields, in July. We will continue to search for grants and other alternative sources, to fund the future phases and eventual completion of Sports Village. Recommendation The City is facing unprecedented financial challenges. It has been necessary to make significant expense reductions in FY 08/09, and we go into FY 09/10 with a very lean budget and the threat of a "take" from the State. Any funding that might become available to the City through non-General Fund sources for recreational facilities should be allocated to facilities within our jurisdiction. The City has already provided a sizeable contribution to the County soccer facility for lighting. For over a decade, we have and will continue to donate their water, which equates to a significant dollar amount on an annual basis. We recognize the challenges the Kern County Soccer Foundation faces as a non-profit, particularly in the current economic environment. Their desire to install additional field lighting to improve their facility to attract more and larger tournaments is a worthy goal, but the City does not have the ability to provide any additional funding at this time. Attachments �YSC'(0 tj Kern noufli 70 k SoCcer POr a v3S' k KERN SOCCER PARK FOUND ATION P.O.Box 2595 Bakersfield,CA 93303 Park Phone(661)872-3855 Fax(661)392-0103 April 1, 2009 Average number of soccer tournaments annually at the Park: 15 Average number of hotel nights annually attributed to soccer tournaments: 40,600 Average price per room night in Bakersfield: $90.00 Average annual hotel room economic benefit for the City of Bakersfield: $3,654,000.00 Average annual hotel tax income for the City of Bakersfield x 12%: $438,480.00 Example: April 4`h and 5`h, 2009 Cal-South State Cup 96 teams: 92 teams from Southern Calif. Average players per team: 15 Average hotel nights 4`h and 5th: 2,500 room per night x 2 =5,000 hotel room nights Average hotel room economic benefit to the City: 5,000 x$90.00 per room avg. =$450,000.00 Average hotel tax income for the City: $54,000.00 Average income for the Park for the tournament: $12,500.00 AYSO National tournament: July 7 nights 96 teams=2,500 rooms nights x 6= 15,000 City Room economic income: $1,350,000.00 City Tax income: $162,000.00 • B A K E R S F I E L D 3 Economic and Community Development Department M E M O R A N D U M TO: Alan Tandy, City Manager May 8, 2009 FROM: Don I. Cohen, Manager, Convention & Visitors Bureau A!Z2�e SUBJECT: Kern County Soccer Park Economic Impact Analysis In response to the item set forth by the Kern Soccer Park Foundation to the City Council, the Bakersfield Convention and Visitors Bureau (CVB) has constructed an Economic Impact Analysis. Based on the average number of tournaments provided, which has been verified through the Soccer Parks current calendar and the CVB's historical calendar, this analysis was constructed taking into consideration 15 annual events. Each tournament has between 48-96 teams, each team consisting on average of 15 players. An estimated 95 percent of teams that participate in regional and statewide tournaments will travel from a distance that requires them to find lodging in a local Bakersfield hotel. We have found from the number of participants, coaches, family and referees, that the average number in attendance for each event can range anywhere between 1,500-3,500. Using the Estimated Economic Impact (EEI) formula from the California Travel and Tourism Commission, which states that each party consisting of 2.33 persons will spend on average $175 for each day of their stay, we can calculate the total EEI. This figure includes lodging meals and other purchases, but does not include gasoline purchases. For tournaments that bring in a total attendance of 1,500, the City of Bakersfield will see an estimated economic impact of $194,000 and 3,500 would bring in an estimated $453,000. These numbers are based on an average stay of 1.81 days. From the figures above, the annual estimated economic impact to the city for 15 events would range from $2.9 million to $6.79 million respectively. In speaking with our hotel partners, the room rates for participants will vary depending on the time of year from $80 - $120. Many agreed that an annual average rate would be very close to $90.00 per night. From the average number of participants the CVB estimates that the peak night room pickup for this groupiis between 1000 and 3000 rooms per night. With an average room C Soccer Park Lights.doc rate of $90.00 this means a total of $90,000-$270,000 per night is spent on lodging. The city's transient occupancy tax (TOT) is 12% of the room rate. This means that city is collecting on average between $22,000 - $65,000 in TOT per tournament, and $324,000 - $972,000 annually. In the CVB's opinion the figure submitted by the Kern Soccer Park Foundation of an annual TOT for the city of $438,480, seems reasonable. The Kern Soccer Park Foundation also states in their figures that the average income to the Park for each tournament is approximately $12,500. This income is presumably from parking fees and concession sales. The CVB currently has no way to verify these figures without analyzing the foundation's financial reports. P:%CVB%Economics%KC Soccer Park Lights.doc BA ADMINISTRATIVE REPORT to MEETING DATE: June 10, 2009 AGENDA SECTION: Consent Calendar ITEM: TO: Honorable Mayor and City Council APPROVED FROM: Raul Rojas, Public Works Director DEPARTMENT HEAD DATE: May 26, 2009 CITY ATTORNEY CITY MANAGER SUBJECT: Acceptance of 2007-08 Transportation Development Act Funds Financial Statements. RECOMMENDATION: Staff recommends referral to Budget and Finance Committee. BACKGROUND: In compliance with the Kern Council of Governments Rules and Regulations, the California Public Utilities Code section 99245, and the California Code of Regulations section 6664, the attached financial statements for the Transportation Development Act Funds were prepared for the fiscal year ending June 30, 2008. The financial statement summarizes fiscal activity for the Bikeway and Pedestrian Fund, and the Public Transit Fund. The accuracy and the fairness of the presentation is the responsibility of the City. The audit firm of Brown Armstrong Paulden McCown Starbuck Thornburgh & Keeter Accountancy Corporation has issued an unqualified opinion. G;IGR0UPDATIADMINRPT12009106-101Transp Dev Act Funds Financial Stm.doc 91 CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS INDEPENDENT AUDITOR'S REPORTS, FUND FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION FOR THE FISCAL YEARS ENDED JUNE 30,2006 AND 2007 CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS FOR THE FISCAL YEARS ENDED JUNE 30, 2008 AND 2007 TABLE OF CONTENTS Paae Independent Auditor's Report...................................... Fund Financial Statements Balance Sheets—Bikeway and Pedestrian Special Revenue Fund.................................................. 3 Statements of Revenues, Expenditures and Changes in Fund Balance— Bikeway and Pedestrian Special Revenue Fund........................................................................... 4 Balance Sheets—Amtrak Operations Special Revenue Fund................................... Statements of Revenues, Expenditures and Changes in Fund Balance— Amtrak Operations Special Revenue Fund................ Notes to the Fund Financial Statements........... Supplementary Information Budgetary Comparison Schedule—Bikeway and Pedestrian Special Revenue Fund...................... 9 Budgetary Comparison Schedule—Amtrak Operations Special Revenue Fund.................... Note to Supplementary Information.............. Other Report Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Governmental Auditing Standards and the Transportation Development Act............................. x r �? Andrew J.Paulden,CPA w Peter C.Brown,CPA Burton H.Armstrong,CPA,MET INDEPENDENT AUDITOR'S REPORT Steven R.Starbuck,CPA Aileen K.Keeter,CPA To the Board of Directors Chris M.Thornburgh,CPA Kem Council of Governments Eric H.Xin,MBA,CPA Bakersfield, California Richard L.Halle,CPA,MST To the City Council City of Bakersfield Bakersfield, California Harvey J.McCown,MBA,CPA Lynn R.Krausse,CPA,MST We have audited the accompanying financial statements of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund of the City of Rosalva Flores,CPA Bakersfield, California (City), as of and for the fiscal years ended June 30, 2008 and Connie M.Perez,CPA 2007, as listed in the table of contents. These financial statements are the responsibility r H.Branthoover,CPA of the City's management. Our responsibility is to express an opinion on these financial statements based on our audits. Thomas M.Young,CPA Alicia Dias,CPA,MBA We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Matthew R.Gilligan,CPA Government Auditing Standards, issued by the Comptroller General of the United States Hanna J.Sheppard,CPA of America. Those standards require that we plan and perform the audit to obtain Ryan L.Nielsen,CPA reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting JianOu-Yang,CPA as a basis for designing audit procedures that are appropriate in the circumstances, but Jialan Su,CPA not for the purpose of expressing an opinion on the effectiveness of the City's internal Ariadne S.Prunes,CPA control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting Samuel 0.Newland,CPA the financial statements, assessing he accounting the amounts and disclosures in significant estimates made by management, as well as evaluatiing the overall financ al stat ment Brooke N.Witham,CPA presentation. We believe that our audit provides a reasonable basis for our opinions. Kenneth J.Witham,CPA Clint W.Baird,CPA As discussed in Note 1, the financial statements present only the Bikeway and Adrian Rich,CPA Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund of the City and are not intended to present fairly the financial position of the City and the Craig A.Rickett,CPA changes in its financial position and its cash flows in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund of the City as of June 30, 2008 and 2007, and the respective changes in financial position and cash flows, where applicable, thereof for the fiscal years then ended in conformity with accounting principles generally accepted in the United States of America. 1 R(blN@ wilh the Public(ampany Accounting Ovenighf 6aard and MEMBER 0 the American Ins me al(erged Public Accountant In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2008 on our consideration of the City's internal control over financial reporting as it relates to the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund and our tests Of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the financial statements of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund taken as a whole. The supplementary information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund. Such information has been subjected to the auditing procedures applied in the audit of the fund financial statements and, in our opinion, is fairly stated in all material respects in relation to the fund financial statements taken as a whole. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK THORNBURGH & KEETER ACCOUNTANCY CORPORATION Bakersfield, California October 31, 2008 2 i i CITY OF BAKERSFIELD BIKEWAY AND PEDESTRIAN SPECIAL REVENUE FUND BALANCE SHEETS JUNE 30,2008 AND 2007 ASSETS 2008 2007 Current assets: Due from other governments $ - $ 2,400 Total current assets $ - $ 2,400 LIABILITIES AND FUND BALANCE Current Liabilities: Due to City's General Fund $ - $ 2,400 Total current liabilities - 2,400 Fund balance Total liabilities and fund balance $ - $ 2,400 The accompanying notes are an integral part of these financial statements. 3 CITY OF BAKERSFIELD BIKEWAY AND PEDESTRIAN SPECIAL REVENUE FUND STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEARS ENDED JUNE 30, 2008 AND 2007 REVENUES 2008 2007 Local transportation fund $ - $ 2,400 EXPENDITURES Bikeway and pedestrian - 2,400 Change in fund balance Fund balance, beginning Fund balance, ending $ - $ - The accompanying notes are an integral part of these financial statements. 4 CITY OF BAKERSFIELD AMTRAK OPERATIONS SPECIAL REVENUE FUND BALANCE SHEETS JUNE 30,2008 AND 2007 ASSETS 2008 2007 Current assets: Cash and investments $ 146,187 $ 161,137 Accrued interest receivable 1,831 1,886 Total current assets $ 148,018 $ 163,023 LIABILITIES Current Liabilities: Accounts payable $ 16,267 $ 12,562 Unearned revenue 131,751 150,461 Total current liabilities 148,018 163,023 Fund balance Total liabilities and fund balance $ 148,018 $ 163,023 The accompanying notes are an integral part of these financial statements. 5 CITY OF BAKERSFIELD AMTRAK OPERATIONS SPECIAL REVENUE FUND STATEMENTS OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEARS ENDED JUNE 30,2008 AND 2007 REVENUES 2008 2007 Local transportation fund $ 141,392 $ 223,747 Recognition of deferred revenue 18,710 Interest and other 8,424 8,135 Total revenues 168,526 231,882 EXPENDITURES Public transit 168,526 231,882 Change in fund balance Fund balance, beginning Fund balance, ending $ _ $ The accompanying notes are an integral part of these financial statements. 6 CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS NOTES TO THE FUND FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED JUNE 30, 2008 AND 2007 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund (collectively, the Transportation Development Act (TDA) Funds) of the City of Bakersfield (City) have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. A. Reoorting Entity The TDA provides funding of public transportation through regional planning and programming agencies. Funds are allocated to the City through the county transportation planning agency, Kem Council of Governments. The TDA Funds account for the City's share of the TDA allocations, which are legally restricted for specific purposes as detailed in applicable sections of the Public Utilities Code. The TDA Funds of the City are the Streets and Roads Special Revenue Fund (no activity in recent years), the Amtrak Operations Special Revenue Fund and the Bikeway and Pedestrian Special Revenue Fund, and are included in the basic financial statements of the City. The TDA Funds are presented combined as a nonmajor governmental fund (State (TDA) Transportation Special Revenue Fund) in the City's basic financial statements. The accompanying financial statements present only the TDA Funds of the City and are not intended to present fairly the financial position, changes in financial position or cash flows of the City in conformity with accounting principles generally accepted in the United States of America. B. Fund Accounting The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The Bikeway and Pedestrian Fund and the Amtrak Operations Fund are governmental funds specifically categorized as special revenue funds. Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. C. Measurement Focus and Basis of Accounting The Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when they become measurable and available. Local Transportation Fund revenue is recognized when all eligibility requirements imposed by the provider have been met. Revenues are accrued when their receipt occurs within sixty days after the accounting period so as to be both measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. Revenues that are susceptible to accrual include local transportation fund allocations and interest income. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then unrestricted resources as they are needed. 7 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Deferred Revenue The Amtrak Operations Special Revenue Fund reports deferred revenue on their balance sheet. Deferred revenue for this fund arises when potential revenue does not meet both the "measurable" and "available"criteria for recognition in the current period or when funds have been received prior to eligibility requirements being met. In subsequent periods, when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the liability for deferred revenue is removed from the balance sheet and revenue is recognized. E. Interfund Transactions The City's General Fund allocates payroll and payroll related expenditures incurred to the Amtrak Operations Special Revenue Fund. Amounts allocated to the Amtrak Operations Special Revenue Fund for fiscal years ended June 30, 2008 and 2007 were $20,874 and $34,841, respectively. In addition, premiums paid for various risk management programs to the Self Insurance Internal Service Fund by the Amtrak Operations Special Revenue Fund for the fiscal years ended June 30, 2008 and 2007 were$0 and $7,000, respectively. F. Ris_gement The City administers various risk management programs, some of which relate to the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund. The Finance Department transfers funds from the Amtrak Operations Fund to the Self Insurance Fund for the purchase of property insurance for the Amtrak Station per direction from the City's Risk Manager. The City's risk management programs are reported in the governmental activities and internal service funds in the City's basic financial statements. NOTE 2-CASH AND INVESTMENTS Cash balances of the TDA funds are pooled with those of other funds of the City. Investment income resulting from this pooling is allocated among the funds based upon each respective fund's average cash balance in relation to the aggregate investment balance. Cash and investments for the Amtrak Operations Special Revenue Fund include a fair value adjustment for the fiscal years ended June 30, 2008 and 2007 of$560 and $1,640, respectively. Further information regarding the City's cash and investment pool may be found in the City's basic financial statements. NOTE 3-UNEARNED REVENUE The Local Transportation Fund (LTF) and State Transit Assistance Fund (STA) are administered by the Kern Council of Governments, which allocates funds to the City to fund its TDA operations. The TDA requires that any funds not used may be returned to their source. LTF and STA allocations are considered earned when they are properly spent for eligible projects. Allocations received are recorded as unearned revenue. but not earned Changes in the unearned revenue account for the fiscal years ended June 30, 2008 and 2007 are summarized as follows: Amtrak Operations Special Revenue Fund 2008 2007 Unearned revenue, July 1 $ 150,461 $ 159,806 TDA allocations received 141,392 214,402 TDA allocations earned (160,102) - (2-23,747) Unearned revenue, June 30 $ 131,751 $ 150,461 8 SUPPLEMENTARY INFORMATION CITY OF BAKERSFIELD BIKEWAY AND PEDESTRIAN SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED JUNE 30,2008 Original Variance With REVENUES Budget Final Budget 2008 Final Budget --- Local transportation fund $ - $ 291,494 $ - $ (291,494) EXPENDITURES Bikeway and pedestrian - 291,494 - 291,494 Change in fund balance $ _ $ _ - $ - Fund balance, beginning Fund balance, ending $ - See note to supplementary information. 9 CITY OF BAKERSFIELD AMTRAK OPERATIONS SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED JUNE 30,2008 Original Variance With Budget Final Budget REVENUES 2008 Final Budget Local transportation fund $ 280,800 $ 280,800 $ 141,392 $ (139,408) Recognition of deferred revenue - 18,710 Interest and other 18,710 3,000 3,000 8,424 5,424 Total revenues 283,800 283,800 168,526 — (115,274) EXPENDITURES Public transit 285,247 285,247 168,526 116,721 Change in fund balance $ (1,447) $ (1.4471 _ $ 1,447 Fund balance, beginning Fund balance, ending $ See note to supplementary information. 10 CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS NOTE TO SUPPLEMENTARY INFORMATION FOR THE FISCAL YEARS ENDED JUNE 30,2008 AND 2007 NOTE 1 —BUDGETARY INFORMATION Annual budgets are adopted on a basis consistent with principles generally accepted in the United States of America for the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund. The City Manager is authorized to transfer budgeted amounts between departments within any fund and approve reductions of budgeted amounts. Since expenditures may not exceed budgeted appropriations at the fund level, any decisions that alter the total appropriations of any fund are to be approved by City Council. Projects budgeted within the fiscal year but not yet completed can be reappropriated the following fiscal year with City Manager approval. All other unencumbered appropriations lapse at year-end. Encumbered amounts are reappropriated in the ensuing fiscal year budget. 11 OTHER REPORT WM Andrew J.Paulden,CPA _: : •... < Peter C.Brown,CPA Burton H.Armstrong,CPA,MST REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Steen It Starbuck,CPA AND ON COMPLIANCE AND OTHER MATTERS BASED ON Aileen K.Keeter,CPA AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS AND THE Chns M.Thornburgh,CPA TRANSPORTATION DEVELOPMENT ACT Eric H.Xin,MBA,CPA Richard L.Halle,CPA,MST To the Board of Directors Kern Council of Governments Harvey J.McCown,MBA,CPA Bakersfield, California Lynn R.Krausse,CPA,MST To the City Council Rosalva Flores,CPA City of Bakersfield Cr M.Perez,CPA Bakersfield, California Dl—A.Branthoover,CPA Thomas M.Young,CPA We have audited the accompanying financial statements of the Bikeway and Pedestrian Alicia Dias,CPA,MBA Special Revenue Fund and the Amtrak Operations Special Revenue Fund of the City of Matthew R.Ci Bakersfield (City), California, as of and for the fiscal years ended June 30, 2008 and lligan,CPA 2007, and have issued our report thereon dated October 31, 2008, which included an Hanna J.Sheppard,CPA explanatory paragraph describing that the financial statements only present the Bikeway Ryan L.Nielsen,CPA and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund. We conducted our audit in accordance with auditing standards generally accepted Jian Ou-Yang,CPA in the United States of America and the standards applicable to financial audits contained Jialan Su,CPA in Government Auditing Standards, issued by the Comptroller General of the United AnadneS.Prunes,CPA States. We considered the City's internal control over financial reporting (internal control) as it relates to the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Samuel 0.Newland,CPA Operations Special Revenue Fund as a basis for designing our auditing procedures for Brooke N.DeCuir,CPA the purpose of expressing our opinion on the financial statements, but not for the purpose Kenneth J.Witham,CPA of expressing an opinion on the effectiveness of its internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Clint W.Baird,CPA Adrian Rich,CPA A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, Craig A.Rickett,CPA to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. 12 MEW with&Mir 6nanv Arminhd aW41 Beard and A10 2.1 6m4.,h cr,a..r r-.,i.j a.u:. Our consideration of internal control was for the limited purpose described in the first paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Our audit was further made to determine that Transportation Development Act (TDA) funds allocated to and received by the City were expended in conformance with applicable statutes, rules and regulations of the TDA and the allocation instructions and resolutions of the Kern Council of Governments as required by Sections 6666 and 6667 of Title 21 of the California Code of Regulations. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and the Transportation Development Act. This report is intended solely for the information and use of the Kern Council of Governments, City management, the City Council, and the State Controller's Office and is not intended to be and should not be used by anyone other than these specified parties. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK THORNBURGH & KEETER ACCOUNTANCY CORPORATION Bakersfield, California October 31, 2008 13 �F BAftK�R ADMINISTRATIVE REPORT MEETING DATE: June 10, 2009 AGENDA SECTION: Consent Calendar ITEM: TO: Honorable Mayor and City Council APPROVED FROM: Raul Rojas, Public Works Director DEPARTMENT HEADf DATE: May 26, 2009 CITY ATTORNEY CITY MANAGER K� SUBJECT: Acceptance of 2007-08 Transportation Development Act Funds Financial Statements. RECOMMENDATION: Staff recommends referral to Budget and Finance Committee. BACKGROUND: In compliance with the Kern Council of Governments Rules and Regulations, the California Public Utilities Code section 99245, and the California Code of Regulations section 6664, the attached financial statements for the Transportation Development Act Funds were prepared for the fiscal year ending June 30, 2008. The financial statement summarizes fiscal activity for the Bikeway and Pedestrian Fund, and the Public Transit Fund. The accuracy and the fairness of the presentation is the responsibility of the City. The audit firm of Brown Armstrong Paulden McCown Starbuck Thornburgh & Keeter Accountancy Corporation has issued an unqualified opinion. G 1GR0UPDATIADMINRPT 12009106-101Transp Dev Act Funds Financial Stm.doc 9� CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS INDEPENDENT AUDITOR'S REPORTS, FUND FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION FOR THE FISCAL YEARS ENDED JUNE 30,2008 AND 2007 CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS J FOR THE FISCAL YEARS ENDED JUNE 30,2008 AND 2007 TABLE OF CONTENTS 1' Page IndependentAuditor's Report............................................................................................................. 1 Fund Financial Statements Balance Sheets—Bikeway and Pedestrian Special Revenue Fund.................................................. 3 Statements of Revenues, Expenditures and Changes in Fund Balance— Bikeway and Pedestrian Special Revenue Fund........................................................................... 4 Balance Sheets—Amtrak Operations Special Revenue Fund........................................................... 5 Statements of Revenues, Expenditures and Changes in Fund Balance— Amtrak Operations Special Revenue Fund................................................................................... 6 Notes to the Fund Financial Statements............................................................................................ 7 Supplementary Information Budgetary Comparison Schedule—Bikeway and Pedestrian Special Revenue Fund...................... 9 Budgetary Comparison Schedule—Amtrak Operations Special Revenue Fund............................... 10 Note to Supplementary Information.................................................................................................... 11 Other Report Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Governmental Auditing Standards and the Transportation Development Act........................................................ 12 I I i i Olin R T+) a�. BROWN, T --,..,a. .... is x- Andrew J.Paulden,CPA Peter C.Brown,CPA Burton H.Armstrong,CPA,MST INDEPENDENT AUDITOR'S REPORT Steven R.Starbuck,CPA Aileen K.Keeter,CPA To the Board of Directors Chris M.Thornburgh,CPA Kern Council of Governments Eric H.Xin,MBA,CPA Bakersfield, California Richard L.Halle,CPA,MST To the City Council City of Bakersfield Bakersfield, California Harvey J.McCown,MBA,CPA Lynn R.Krause,n, MST We have audited the accompanying financial statements of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund of the City of Rosalva Flores,CPA Bakersfield, California (City), as of and for the fiscal years ended June 30, 2008 and Connie M.Perez,CPA 2007, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial ■ Di0masM.Young,verA statements based on our audits. „Xmas M.Young,CPA Ja Dias,CPA,MBA We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in IMatthew R.Gilligan,CPA Government Auditing Standards, issued by the Comptroller General of the United States Hanna J.Sheppard,CPA of America. Those standards require that we plan and perform the audit to obtain Ryan L.Nielsen,CPA reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting JianOu-Yang,CPA as a basis for designing audit procedures that are appropriate in the circumstances, but Jialan Su,CPA not for the purpose of expressing an opinion on the effectiveness of the City's internal AriadneS.Prunes,CPA control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in Samuel 0.Newland,CPA the financial statements, assessing the accounting principles used and significant Brooke N.DeCuir,CPA estimates made by management, as well as evaluating the overall financial statement Kenneth J.Witham,CPA presentation.We believe that our audit provides a reasonable basis for our opinions. Clint W.Baird,CPA As discussed in Note 1, the financial statements present only the Bikeway and Adrian Rich,CPA Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund of the City and are not intended to present fairly the financial position of the City and the Craig A.Rickett,CPA changes in its financial position and its cash flows in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund of the City as of June 30, 2008 and 2007, ' and the respective changes in financial position and cash flows,where applicable, thereof for the fiscal years then ended in conformity with accounting principles generally r accepted in the United States of America. 1 1 IRK'glPID wdh fhe UK(RaDy Accounhng N41 Rod and AWFIR of lk AWcan InsliMe of lerhf W NbIK kouitimh g i In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2008 on our consideration of the City's internal control over financial reporting as it relates to the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the financial statements of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund taken as a whole. The supplementary information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund. Such information has been subjected to the auditing procedures applied in the audit of the fund financial statements and, in our opinion, is fairly stated in all material respects in relation to the fund financial statements taken as a whole. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK THORNBURGH & KEETER ACCOUNTANCY CORPORATION I Bakersfield, California October 31, 2008 2 CITY OF BAKERSFIELD BIKEWAY AND PEDESTRIAN SPECIAL REVENUE FUND BALANCE SHEETS JUNE 30, 2008 AND 2007 ASSETS 2008 2007 Current assets: Due from other governments $ $ 2,400 Total current assets $ $ 2,400 LIABILITIES AND FUND BALANCE Current Liabilities: Due to City's General Fund $ - $ 2,400 Total current liabilities - 2,400 Pund balance Total liabilities and fund balance $ � $ 2,400 The accompanying notes are an integral part of these financial statements. 3 I CITY OF BAKERSFIELD BIKEWAY AND PEDESTRIAN SPECIAL REVENUE FUND STATEMENTS OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEARS ENDED JUNE 30,2008 AND 2007 REVENUES 2008 2007 Local transportation fund $ - $ 2,400 EXPENDITURES Bikeway and pedestrian 2,400 Change in fund balance _ Fund balance, beginning Fund balance, ending $ _ $ _ The accompanying notes are an integral part of these financial statements. 4 t CITY OF BAKERSFIELD AMTRAK OPERATIONS SPECIAL REVENUE FUND BALANCE SHEETS JUNE 30,2008 AND 2007 f ASSETS 2008 2007 Current assets: Cash and investments Accrued interest receivable $ 146,187 $ 161,137 1,831 1,886 Total current assets $ 148,018 $ 163,023 LIABILITIES Current Liabilities: $ Accounts payable Unearned revenue $ 16,267 $ 12,562 131,751 150,461 Total current liabilities 148,018 163,023 Fund balance Total liabilities and fund balance $ 148,018 $ 163,023 The accompanying notes are an integral part of these financial statements. 5 CITY OF BAKERSFIELD AMTRAK OPERATIONS SPECIAL REVENUE FUND STATEMENTS OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEARS ENDED JUNE 30, 2008 AND 2007 REVENUES 2008 2007 Local transportation fund $ 141,392 $ 223,747 Recognition of deferred revenue 18,710 Interest and other 8,424 8,135 Total revenues 168,526 231,882 EXPENDITURES Public transit 168,526 231,882 I Change in fund balance Fund balance, beginning _ Fund balance,ending $ _ $ The accompanying notes are an integral part of these financial statements. 6 CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS NOTES TO THE FUND FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED JUNE 30, 2008 AND 2007 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund (collectively, the Transportation Development Act(TDA) Funds) of the City of Bakersfield (City) have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. A. Reporting Entity The TDA provides funding of public transportation through regional planning and programming agencies. Funds are allocated to the City through the county transportation planning agency, Kern Council of Governments. The TDA Funds account for the City's share of the TDA allocations, which are legally restricted for specific purposes as detailed in applicable sections of the Public Utilities 1 Code. The TDA Funds of the City are the Streets and Roads Special Revenue Fund (no activity in recent years), the Amtrak Operations Special Revenue Fund and the Bikeway and Pedestrian Special Revenue Fund, and are included in the basic financial statements of the City. The TDA Funds are presented combined as a nonmajor governmental fund (State(TDA)Transportation Special Revenue Fund) in the City's basic financial statements. 'The accompanying financial statements present only the TDA Funds of the City and are not intended to present fairly the financial position, changes in financial position or cash flows of the City in conformity with accounting principles generally accepted in the United States of America. B. Fund Accounting The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The Bikeway and Pedestrian Fund and the Amtrak Operations Fund are governmental funds specifically categorized as special revenue funds. Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. C. Measurement Focus and Basis of Accounting The Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when they become measurable and available. Local Transportation Fund revenue is recognized when all eligibility requirements imposed by the provider have been met. Revenues are accrued when their receipt occurs within sixty days after the accounting period so as to be both measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. Revenues that are susceptible to accrual include local transportation fund allocations and interest income. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then unrestricted resources as they are needed. 7 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Deferred Revenue The Amtrak Operations Special Revenue Fund reports deferred revenue on their balance sheet. Deferred revenue for this fund arises when potential revenue does not meet both the "measurable" and "available"criteria for recognition in the current period or when funds have been received prior to eligibility requirements being met. In subsequent periods, when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the liability for deferred revenue is removed from the balance sheet and revenue is recognized. E. Interfund Transactions The City's General Fund allocates payroll and payroll related expenditures incurred to the Amtrak Operations Special Revenue Fund. Amounts allocated to the Amtrak Operations Special Revenue Fund for fiscal years ended June 30, 2008 and 2007 were $20,874 and $34,841, respectively. In addition, premiums paid for various risk management programs to the Self Insurance Internal Service Fund by the Amtrak Operations Special Revenue Fund for the fiscal years ended June 30, 2008 and 2007 were$0 and $7,000, respectively. F. Risk Management The City administers various risk management programs, some of which relate to the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund. The Finance Department transfers funds from the Amtrak Operations Fund to the Self Insurance Fund for the purchase of property insurance for the Amtrak Station per direction from the City's Risk Manager. The City's risk management programs are reported in the governmental activities and internal service funds in the City's basic financial statements. NOTE 2—CASH AND INVESTMENTS Cash balances of the TDA funds are pooled with those of other funds of the City. Investment income resulting from this pooling is allocated among the funds based upon each respective fund's average cash balance in relation to the aggregate investment balance. Cash and investments for the Amtrak Operations Special Revenue Fund include a fair value adjustment for the fiscal years ended June 30, 2008 and 2007 of$560 and $1,640, respectively. Further information regarding the City's cash and investment pool may be found in the City's basic financial statements. NOTE 3—UNEARNED REVENUE The Local Transportation Fund (LTF) and State Transit Assistance Fund (STA) are administered by the Kern Council of Governments, which allocates funds to the City to fund its TDA operations. The TDA requires that any funds not used may be returned to their source. LTF and STA allocations are considered earned when they are properly spent for eligible projects. Allocations received but not earned are recorded as unearned revenue. Changes in the unearned revenue account for the fiscal years ended June 30, 2008 and 2007 are summarized as follows: Amtrak Operations Special Revenue Fund 2008 2007 Unearned revenue, July 1 $ 150,461 $ 159,806 TDA allocations received 141,392 214,402 TDA allocations earned (160,102) (223,747) Unearned revenue, June 30 $ 131,751 $ 150,461 8 I SUPPLEMENTARY INFORMATION i CITY OF BAKERSFIELD BIKEWAY AND PEDESTRIAN SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED JUNE 30,2008 I Original Variance With REVENUES Budget Final Budget 2008 Final Budget Local transportation fund $ - $ 291,494 $ - $ (291,494) EXPENDITURES Bikeway and pedestrian - 291,494 - 291,494 I! Change in fund balance $ _ $ _ _ $ Fund balance, beginning _ Fund balance, ending $ _ I i See note to supplementary information. 9 } f CITY OF BAKERSFIELD AMTRAK OPERATIONS SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED JUNE 30,2008 i Original Variance With REVENUES Budget Final Budget 2008 Final Budget Local transportation fund $ 280,800 $ 280,800 $ 141,392 Recognition of deferred revenue $ (139,408) Interest and other - 18,710 18,710 3,000 3,000 8,424 5,424 Total revenues 283,800 283,800 168,526 (115,274) EXPENDITURES Public transit 285,247 285,247 168,526 116,721 Change in fund balance $ (1,447) $ (1,447) _ $ 1,447 Fund balance, beginning Fund balance, ending $ See note to supplementary information. 10 OTHER REPORT CITY OF BAKERSFIELD TRANSPORTATION DEVELOPMENT ACT FUNDS NOTE TO SUPPLEMENTARY INFORMATION FOR THE FISCAL YEARS ENDED JUNE 30, 2008 AND 2007 NOTE 1 —.BUDGETARY INFORMATION Annual budgets are adopted on a basis consistent with principles generally accepted in the United States of America for the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund. The City Manager is authorized to transfer budgeted amounts between departments within any fund and approve reductions of budgeted amounts. Since expenditures may not exceed budgeted appropriations at the fund level, any decisions that alter the total appropriations of any fund are to be approved by City Council. Projects budgeted within the fiscal year but not yet completed can be reappropriated the following fiscal year with City Manager approval. All other unencumbered appropriations lapse at year-end. Encumbered amounts are reappropriated in the ensuing fiscal year budget. 11 N E� n .-�: s _e,y: .. z�x -x � �..�'`�"i'}S ea,.a•.. ti A_, _ Andrew J.Paulden,CPA Peter C.Brown,CPA Burton H.Armstrong,CPA,MST REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Steven R.Starbuck,CPA AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN AleenK.Keeter,CPA ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS AND THE Chris M.Thornburgh,CPA TRANSPORTAT16N DEVELOPMENT ACT Eric H.Xin,MBA,CPA Richard L.Halle,CPA,MST To the Board of Directors Kern Council of Governments Harvey J.McCown,MBA,CPA Bakersfield, California Lynn R.Krausse,CPA,MST To the City Council Rosalva Flores,CPA City of Bakersfield Connie M.Perez,CPA Bakersfield, California Diana H.Branthoover,CPA Thomas M.Young,CPA We have audited the accompanying financial statements of the Bikeway and Pedestrian Alicia Dias,CPA,MBA Special Revenue Fund and the Amtrak Operations Special Revenue Fund of the City of Bakersfield (City), California, as of and for the fiscal years ended June 30, 2008 and Matthew R.Gilligan,CPA 2007, and have issued our report thereon dated October 31, 2008, which included an Hanna J.Sheppard,CPA explanatory paragraph describing that the financial statements only present the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Ryan L.Nielsen,CPA Fund. We conducted our audit in accordance with auditing standards generally accepted JianOu-Yang,CPA in the United States of America and the standards applicable to financial audits contained Jialan Su,CPA in Government Auditing Standards, issued by the Comptroller General of the United States. We considered the City's internal control over financial reporting (internal control) Ariadne S.Pnmes,CPA as it relates to the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Samuel O.Newland,CPA Operations Special Revenue Fund as a basis for designing our auditing procedures for Brooke N.DeCuir,CPA the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of its internal control. Accordingly, we do Kenneth J.Witham,CPA not express an opinion on the effectiveness of the City's internal control. Clint W.Baird,CPA A control deficiency exists when the design or operation of a control does not allow Adrian R ch CPA management or employees, in the normal course of performing their assigned functions, Craig A.Rickett,CPA to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. 12 RMIREB wdh the Public(ompmy Accaunfinq Oversight Board and MEMBER DI the Awican Inshfule of(ertihed Public Aaomtonh Our consideration of internal control was for the limited purpose described in the first paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Bikeway and Pedestrian Special Revenue Fund and the Amtrak Operations Special Revenue Fund financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Our audit was further made to determine that Transportation Development Act (TDA) funds allocated to and received by the City were expended in conformance with applicable statutes, rules and regulations of the TDA and the allocation instructions and resolutions of the Kern Council of Governments as required by Sections 6666 and 6667 of Title 21 of the California Code of Regulations. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and the Transportation Development Act. This report is intended solely for the information and use of the Kern Council of Governments, City management, the City Council, and the State Controller's Office and is not intended to be and should not be used by anyone other than these specified parties. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK THORNBURGH &KEETER ACCOUNTANCY CORPORATION Bakersfield, California October 31, 2008 13