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HomeMy WebLinkAboutAgenda Packet - CC - 2020.12.21City of Burlingame BURLINGAME F, Meeting Agenda - Final City Council Monday, December 21, 2020 7:00 PM BURLINGAME CITY HALL 501 PRIMROSE ROAD BURLINGAME, CA 94010 On March 17, 2020, the Governor issued Executive Order N-29-20 suspending certain provisions of the Ralph M. Brown Act in order to allow for local legislative bodies to conduct their meetings telephonically or by other means. Pursuant to the Governor's Executive Order N-33-20 issued on March 19, 2020, and the CDC's social distancing guidelines which discourage large public gatherings, the Council Chambers will not be open to the public for the December 21, 2020 City Council Meeting. Members of the public may view the meeting by logging into the Zoom meeting listed below. Additionally, the meeting will be streamed live on YouTube and uploaded to the City's website after the meeting. Members of the public may provide written comments by email to publiccomment@burlingame.org. Emailed comments should include the specific agenda item on which you are commenting, or note that comment concerns an item that is not on the agenda or is on the Consent Calendar. The length of the emailed comment should be commensurate with the three minutes customarily allowed for verbal comments, which is approximately 250-300 words. To ensure that your comment is received and read to the City Council for the appropriate agenda item, please submit your email no later than 5:00 p.m. on December 21, 2020. The City will make every effort to read emails received after that time, but cannot guarantee such emails will be read into the record. Any emails received after the 5:00 p.m. deadline which are not read into the record, will be provided to the City Council after the meeting. All votes are unanimous unless separately noted on the record. Online City of Burlingame Page 1 Printed on 1211712020 City Council Meeting Agenda - Final December 21, 2020 1. CALL TO ORDER - 7:00 p.m. - Online To join the Council Meeting on Zoom click on the link below (note that the link doesn't look like a hyerlink but it is) https://us02web.zoom.us/j/88950662703? pwd=UWZzSGVRZ2xTVjIMOXIzME91 cmtIUT09 Meeting ID: 889 5066 2703 Passcode:712844 One tap mobile +16699006833„88950662703# US (San Jose) +13462487799„88950662703# US (Houston) Dial by your location +1 669 900 6833 US (San Jose) +1 346 248 7799 US (Houston) +1 253 215 8782 US (Tacoma) +1 301 715 8592 US (Washington D.C) +1 312 626 6799 US (Chicago) +1 929 436 2866 US (New York) 2. PLEDGE OF ALLEGIANCE TO THE FLAG 3. ROLL CALL 4. REPORT OUT FROM CLOSED SESSION 5. UPCOMING EVENTS 6. PRESENTATIONS a. Presentation to the Rethink Waste Poster Contest Winner b. Police Chief Update on Changes to Use of Force Policy and Other Initiatives Attachments: Presentation 7. PUBLIC COMMENTS, NON -AGENDA Members of the public may speak about any item not on the agenda. Members of the public wishing to suggest an item for a future Council agenda may do so during this public comment period. The Ralph M. Brown Act (the State local agency open meeting law) prohibits the City Council from acting on any matter that is not on the agenda. City of Burlingame Page 2 Printed on 1211712020 City Council Meeting Agenda - Final December 21, 2020 8. APPROVAL OF CONSENT CALENDAR Consent calendar items are usually approved in a single motion, unless pulled for separate discussion. Any member of the public wishing to comment on an item listed here may do so by submitting a speaker slip for that item in advance of the Council's consideration of the consent calendar. a. Approval of City Council Meeting Minutes for December 7, 2020 Attachments: Meeting Minutes b. Adoption of the 2021 City Council Calendar Attachments: Staff Report 2021 Council Calendar C. Adoption of a Resolution Reducing the Distance a Person May Stop, Park or Leave Standing a Vehicle in Relation to a Fire Hydrant Pursuant to California Vehicle Code Section 22514(b) Attachments: Staff Report Resolution d. Acceptance of the Comprehensive Annual Financial Report for the Year Ended June 30, 2020 Attachments: Staff Report CAFR for Fiscal Year 2019-20 9. PUBLIC HEARINGS (Public Comment) 10. STAFF REPORTS AND COMMUNICATIONS (Public Comment) 11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS Councilmembers report on committees and activities and make announcements. 12. FUTURE AGENDA ITEMS 13. ACKNOWLEDGMENTS The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Safety & Parking Commission, Beautification Commission, Parks & Recreation Commission, and Library Board of Trustees are available online at www.burlingame.org. 14. CEREMONIAL a. Rotation of Councilmembers 15. ADJOURNMENT City of Burlingame Page 3 Printed on 1211712020 City Council Meeting Agenda - Final December 21, 2020 Notice: Any attendees who require special assistance or a disability -related modification to participate in this meeting, or who have a disability and wish to request an alternative format for the agenda, meeting notice, or other writings that may be distributed at the meeting, should contact Meaghan Hassel -Shearer, City Clerk, by 10:00 am. on Monday, December 21, 2020 at (650) 558-7203 or at mhasselshearer@burlingame.org. Notification in advance of the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting, the materials related to it, and your ability to comment. IzI*A go] 111WK010111zINIgq ,14:4 11111!W Monday, January 4, 2021 VIEW REGULAR COUNCIL MEETING ONLINE AT www.burlingame.org/video Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection via www.burlingame.org or by emailing mhasselshearer@burlingame.org. If you are unable to obtain information via the City's website or through email, contact the City Clerk at (650) 558-7203. City of Burlingame Page 4 Printed on 1211712020 NGAME P PARTME Review of Priority Initiatives December 21, 2020 Three Priority Areas Identified ■ Update Use of Force Policy ■ Combat Bias Based Policing (Racial Profiling) ■ Revamp Police Response to Persons in Crisis Priority - Update Use of Force Policy Changed City's Use of Force Policy in June 2020 - Banned carotid holds, choke holds, and strangleholds - Added de-escalation language - Addressed additional "8 Can't Wait" campaign suggestions Took the Oba ma Foundation's "Rei magi n i ng Policing Pledge" - Unanimous Council approval on June 15, 2020 Hosted a Town Hall &Listening Session - Discussed City's Use of Force policy and procedures on July 23, 2020 Priority - Combat Bias Based Policing ■ The Racial and Identity Profiling Act (RIPA) was formed as part of AB-953 in 2016. ■ RIPA requires agencies to collect and report stop data to Department of Justice. ■ Burlingame PD will start collecting data on January 1, 2021 for report out in 2022 (one year earlier than required). Stop Data Collected Stop Data 0® Date, time, and duration (� Location Reason := Actions taken by officer 5q Results Suspect's Information Q Perceived race or ethnicity qp Perceived gender Perceived to be LGBT Perceived age Degree of English fluency Q Perceived or known disability Officer's Information ll Identification (ID) Number Years of experience a *a Type of assignment of officer Reporting Deadline AB-953 Reporting Deadline Depends Upon Size of Agency 1, 000+ 667 - 999 334 - 666 1 - 333 April 1, 2019 April 1, 2020 April 1, 2022 April 1, 2023 Burlingame Police Department is One Year Early! ■ Pilot program this year at BPD ■ Helped beta test new software ■ Ready to "go live" on January 1, 2021(data collected in 2021 will be reported in 2022) Priority - Revamp Response to Persons in Crisis ■ Crisis Intervention Training (CIT): Police Academy and In -Service Training ■ Utilize the San Mateo County Mental Health Assessment and Referral Team (SMART) on a majority of our calls involving persons in crisis. ■ Community Response Team (CRT) attends monthly Countywide Crisis Intervention meetings to request any necessary follow up. ■ Monitoring a pilot program involving County Behavioral Health, SMPD, RWCPD, DCPD and SSFPD (licensed mental health clinicians working directly out of those police departments). ■ Partner with the non -profits LifeMoves and Star Vista for homeless outreach. r Agenda Item 8a Meeting Date: 12/21/2020 CITY C BURLINGAME q $Anreo� u[b,e BURLINGAME CITY COUNCIL Unapproved Minutes Regular Meeting on December 7, 2020 1. CALL TO ORDER A duly noticed meeting of the Burlingame City Council was held on the above date online at 7:03pm. 2. PLEDGE OF ALLEGIANCE TO THE FLAG The pledge of allegiance was led by Mayor Beach. 3. ROLL CALL MEMBERS PRESENT: Beach, Brownrigg, Colson, O'Brien Keighran, Ortiz MEMBERS ABSENT: None 4. REPORT OUT FROM CLOSED SESSION There was no closed session. 5. UPCOMING EVENTS Mayor Beach reviewed the upcoming events taking place in the city. 6. PRESENTATIONS a. BURLINGAME COLLABORATIVE PRESENTATION Robin Montoya, a member of the Burlingame Collaborative, thanked the Councilmembers for letting her talk about the organization. She explained that the Burlingame Collaborative ("Collaborative") has three main goals: 1) Build relationships and support among community leaders and organizations. 2) Identify gaps in the community's COVID-19 response and address them. 3) Help Burlingame become a more resilient community. Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 She explained that the Collaborative sent out a pre -survey to community leaders and organizations to ascertain their interest. She added that they have 60 members and 45 organizations willing to work with them. The Collaborative has met three times for one hour each. 1. At the June 15 meeting, they defined their purpose and shared COVID-19 experiences. 2. At the July 15 meeting, they identified community needs and areas of focus. 3. At the August 19 meeting, they brainstormed initiatives. The Collaborative identified the top COVID-19 challenges as: isolation, business struggles and survival, basic needs such as food and housing insecurity, health and safety messaging and information sharing, and schools and distance learning. She explained that the Burlingame Collaborative has put together a Steering Committee and a Meeting and Technical Support group. Terri Boesch, the Executive Director for CALL Primrose, talked about two initiatives set forth by the Burlingame Collaborative. The first was the Burlingame COVID-19 Community Resource Guide. She explained that they put together the Guide in order for the community to have a better understanding of who to contact for various types of support. For the second initiative, the Collaborative worked with various faith leaders in providing direction to their members on various assistance programs. Collaborative member Salah Elbakri thanked the City Council for their hard work in response to the pandemic. He explained that as the pandemic has gone on, the Collaborative has received more calls asking about rental assistance (for both residential and small businesses). He voiced concern about how this problem would be amplified in 2021. He added that the Collaborative has two guiding principles: help and don't hurt. Collaborative member John Kevranian discussed a website the organization created called SupportBurlingame.com that promotes local shops. He noted that the public can use this website to purchase gift certificates from local businesses, make donations, and find more information about local business. He stated that 16 businesses have joined the website so far. Collaborative member Sarah Simson stated that the Collaborative heard from a lot of people that they were confused about where to get information about the shut down and COVID-related news. She explained that the Collaborative helped direct people to the County Health Department and the Burlingame City website for the most accurate and up to date news. She explained that between March and now, there have been 300 new subscriptions to the City's e-newsletter, with 179 new subscribers since June, when the e-newsletter was put on Nextdoor. She noted that the City usually sees 150 new subscribers per year. She explained that they created a shared drive on Google where people can share information about what is going on in the community. Ms. Simson discussed the partnership between the Burlingame Rotary Club and the Library Foundation to purchase 2000 books to hand out to students. Rotarian Bryan Neider thanked Sarah Simson for bringing the partnership together in order to assist students. 2 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Ms. Simson explained that the Collaborative is also working on addressing the issue of isolation. The Collaborative wants to pair Burlingame senior citizens with Burlingame volunteers as pen pals or phone pals. Ms. Simson stated that the Collaborative's next meeting is on December 16 and thanked everyone for their time and effort. Councilmember Brownrigg thanked the Collaborative for their great work throughout the community. Councilmember Ortiz stated that he was grateful for everyone's work and assistance during the pandemic. 7. PUBLIC COMMENT SPHERE Institute representative Will Johnson gave an update on the Shoreline Park Project at 410 Airport Boulevard. He commented that they secured a $500,000 grant from the EPA as well as a $500,000 grant from the State Wildlife Conservation Board to fund the design and planning process. 8. CONSENT CALENDAR Mayor Beach asked her colleagues and members of the public if they would like to pull any item off the Consent Calendar. No items were pulled. Councilmember Ortiz made a motion to adopt the Consent Calendar; seconded by Vice Mayor O'Brien Keighran. The motion passed unanimously by roll call vote, 5-0. a. APPROVAL OF CITY COUNCIL MEETING MINUTES FOR NOVEMBER 4, 2020 City Clerk Hassel -Shearer requested Council approve the City Council Meeting Minutes for November 4, 2020. b. APPROVAL OF CITY COUNCIL MEETING MINUTES FOR NOVEMBER 16, 2020 City Clerk Hassel -Shearer requested Council approve the City Council Meeting Minutes for November 16, 2020. c. ADOPTION OF RESOLUTIONS FOR THE ACCEPTANCE OF BURLINGAME POINT PUBLIC IMPROVEMENTS, VACATION OF A PORTION OF AIRPORT BOULEVARD ROADWAY EASEMENT, AND ACCEPTANCE OF AN EASEMENT AGREEMENT FOR PUBLIC UTILITIES DPW Murtuza requested Council adopt Resolution Number 152-2020, Resolution Number 153-2020, and Resolution Number 154-2020. Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 d. ADOPTION OF A RESOLUTION APPROVING THE CITY OF BURLINGAME RESPONSE LETTER TO THE 2019-2020 SAN MATEO COUNTY CIVIL GRAND JURY REPORT: "RANSOMWARE: IT IS NOT ENOUGH TO THINK YOU ARE PROTECTED" Finance Director Augustine requested Council adopt Resolution Number 155-2020. 9. PUBLIC HEARING a. ADOPTION OF A RESOLUTION APPROVING AND LEVYING 2021 SAN MATEO COUNTY TOURISM BUSINESS IMPROVEMENT DISTRICT ASSESSMENTS ON HOTEL BUSINESSES WITHIN THE DISTRICT Finance Director Augustine explained that approving and levying assessments on hotel businesses within the Tourism Business Improvement District ("TBID") is an annual item. She stated that the TBID helps provide marketing for the hotels through the San Mateo County/Silicon Valley Convention and Visitors Bureau. Finance Director Augustine explained that it has been a challenging year for the hotels and the Convention Bureau due to the COVID-19 pandemic. She stated that in response to low occupancy rates, TBID reduced staffing levels to 50%, cut costs, and reduced fees for the year by 50%. Accordingly, 2020 assessments were reduced from $2.4 million to approximately $1.2 million. She stated that to help hotels recover, TIBD recommended that the Council adopt and levy the 2021 assessments on the hotel businesses based on a staggered occupancy factor that anticipates overall improvement in occupancy rates as 2021 unfolds. She stated that the assessments for all hotels in the district for 2021 total less than $1.14 million. Mayor Beach opened the public hearing. San Mateo County/Silicon Valley Convention and Visitors Bureau President John Hutar stated that the goal of the fee structure is to ensure the District does not have to come back to the City during the year for more funding. He stated that TBID is promoting the hotels but has run into the problem of more closures due to the COVID-19 pandemic. He explained that October is usually the strongest month for the hotels. Last year's occupancy for Burlingame hotels was 88%; this year it was 35%. He stated that the County has seen a roughly 45% reduction in hotel occupancy. Finance Director Augustine asked the City Clerk if any protests had been received. City Clerk Hassel - Shearer replied that there was one protest. City Clerk Hassel -Shearer read the protest that came from attorney Gregory J. Anton. However, the protest didn't address which hotel(s) it represented. (protest submitted via publiccomment(abburlin ag me.org). Mayor Beach closed public comment. Interim City Attorney Spansail stated that there was no way to conclude that the protest represented a majority. 4 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Councilmember Brownrigg made a motion to adopt Resolution Number 156-2020; seconded by Vice -Mayor O'Brien Keighran. The motion passed unanimously by roll call vote, 5-0. 10 STAFF REPORTS a. ANNUAL REPORT OF SUSTAINABILITY PROGRESS Sustainability Coordinator Sigalle Michael stated that the City adopted a new Climate Action Plan (CAP) in September 2019. This plan contains 20 measures to reduce approximately 50,000 tons of greenhouse gas emissions by 2030. She explained that roughly half of the City's emissions come from energy use, which breaks down between electricity (49,658 MTCO2e) and natural gas (59,259 MTCO2e). Sustainability Coordinator Michael stated that Peninsula Clean Energy ("PCE") is the City's driving force behind reducing greenhouse gas emissions. She explained that PCE is committed to providing the City with 100% clean energy. Sustainability Coordinator Michael reviewed the reach codes that the Council adopted October 16, 2020. The reach codes require new buildings to go beyond California Building Code requirements by requiring new buildings to be all -electric (with some limited exceptions), have solar energy, and install electric vehicle charging stations. Sustainability Coordinator Michael stated that staff has launched an Induction Cooktop Loaner Program. This program offers residents the experience of cooking with a portable induction cooktop. She explained that induction cooking is an electric, high-performance cooktop option that surpasses the performance of gas cooking and avoids emissions created from burning gas in kitchens. She explained that staff hopes this program will help people make the switch to induction cooktops in new projects. Sustainability Coordinator Michael stated that the Reach Codes are expected to apply to about 20 projects a year and will avoid approximately 3,500 MTCO2e by 2030. Sustainability Coordinator Michael explained that electric vehicles (EV's) are a big part of the CAP. She explained that there are about 2,000 electric vehicles registered in the Burlingame zip code (which is shared with Hillsborough). This is about 5% of total vehicles registered in the zip code, which is higher than the California average. Sustainability Coordinator Michael stated that currently there are 12 EV charging stations in the city, with 42 projected for 2021 and the goal of 100 by 2030. She noted Burlingame would meet its 2030 target next year with the construction of the parking garage on Lot N. Sustainability Coordinator Michael stated she has prepared a draft EV Action Plan that outlines the following recommendations for expanding and supporting EVs: • Track the number of private EV installations 5 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 • Explore curbside charging • Foster partnerships • Install signage • Engage with auto dealers and other businesses • Explore electric car sharing • Implement an EV First Resolution • Purchase EVs for municipal fleet Sustainability Coordinator Michael noted that the City has an EV first policy for its own vehicle purchases. She explained that the City must first consider an EV option when purchasing a vehicle. Sustainability Coordinator Michael stated that staff is implementing several other initiatives to reduce greenhouse emissions including: • Green Building — SunShares Program • Waste — Disposable Food Service Ware Ordinance and Bayfront clean up • Water Conservation — Rebates for smart irrigation controllers and rain barrels • Education — BAWSCA landscape classes and school programs • Outreach — Instagram account and eNews articles • Sea Level Rise — Grant partnership and property owner map • Municipal Operations — EV stations, plug-in vehicles, hydration stations, and paper reduction Vice Mayor O'Brien Keighran asked if the City knew what percent of the City's EV chargers were used and if staff tracks peak hours of usage. Sustainability Coordinator Michael responded that the City has information for City Hall and Caltrain charging stations but not for the EVgo stations. Vice Mayor O'Brien Keighran asked if staff could get information on the EVgo stations. Sustainability Coordinator Michael replied in the affirmative. She noted that the EVgo stations don't accept Teslas. However, she noted that staff would ensure that going forward, all charging stations accept Teslas as they are the number one electric vehicle purchased in the area. Vice Mayor O'Brien Keighran noted that if some of the stations aren't being utilized as much, the City should work on marketing those stations. She explained that it would be hard to justify purchasing additional charging stations if the current ones are not being used. Vice Mayor O'Brien Keighran commented that the Board of Supervisors would be discussing the disposable food ware ordinance in the near future. She explained that the County was going to use Environmental Innovations to educate the cities about the ordinance. She noted that the County wants to eventually move from disposable to reusable food ware, and that she hoped Burlingame would jump on board with that. Councilmember Colson commented that she believes that EV purchases declined in 2019 due to back -orders among automakers. She asked how the City tracks the installation of private chargers. Sustainability Coordinator Michael stated the City captures a handful of the private charger installations through the permit 6 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 process, but that most go uncaptured. However, she noted that under the reach codes, staff will be able to more easily collect this data. Councilmember Colson stated she was happy to hear about Vice Mayor O'Brien Keighran's information about the County's disposable food ware ordinance. She discussed looking into the feasibility of more app- based services for disposable food containers. Mayor Beach asked if Tesla owners could get adaptors to use at the EVgo chargers. Sustainability Coordinator Michael replied in the affirmative. However, she noted that the charger is expensive, not always available, and prone to problems. Councilmember Brownrigg voiced frustration that the EVgo stations didn't accept Teslas. Sustainability Coordinator Michael replied in the affirmative and stated that she hopes in the future that EVgo will fix this issue. Mayor Beach opened up the item for public comment. Matt Feemster discussed PCE's decision to decline PG&E's $1.2 million in energy credits for nuclear power. He stated that nuclear power was one of the cleanest power sources available and thanked Councilmember Colson and Supervisor Pine for voting to accept these credits. Mayor Beach closed public comment. Councilmember Colson thanked Sustainability Coordinator Michael for all the work she has done. She noted that PCE has a $250 rebate for small business and encouraged them to apply. Councilmember Brownrigg commented that he believes Councilmember Colson made the right vote at PCE to accept the PG&E credits. He noted that clean water and water availability are important and should be given more attention going forward. He stated that greenhouse gas emissions shouldn't be the only sustainability issue that the City focuses on. Councilmember Ortiz thanked Sustainability Coordinator Michael for all her hard work. Councilmember Colson addressed Councilmember Brownrigg's concern about weaving together the bigger picture of housing, infrastructure, and sea level rise. She stated that she has been pushing to make sure all the groups working on these issues have more community involvement and outreach. b. UPDATE REGARDING THE TERMINATION OF THE TEMPORARY BROADWAY STREET CLOSURE PROGRAM; DISCUSSION OF ALLOWING PARKLETS TO FACILITATE SAFE OUTDOOR DINING AND PEDESTRIAN ACTIVITY ON BROADWAY; ESTABLISHMENT OF AN END DATE FOR THE PARKLETS PROGRAM; AND CONSIDERATION OF PROVIDING FREE PARKING ON SATURDAYS DURING THE HOLIDAY SEASON 7 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 City Manager Goldman stated that staff is asking Council to undertake the following actions: • Approve the termination of the temporary Broadway street closure program, and replace it with a 24/7 parklet program similar to the program in place on and near Burlingame Avenue. • Continue the parklet program for the Downtown Burlingame Avenue area and Broadway commercial district until Labor Day 2021, and/or provide other direction as applicable; • Consider providing free parking in the Downtown Burlingame Avenue area and Broadway commercial district on four Saturdays during the holiday season beginning December 12, 2020. City Manager Goldman explained that earlier this year, the City Council initiated a series of measures to facilitate safe outdoor dining in the midst of the COVID-19 pandemic. She noted that until the City goes into more restricted COVID-19 measures under the Regional Stay Home Order, outdoor dining is allowed. The City's outdoor dining measures included implementing temporary street closure programs for both Burlingame Avenue and Broadway and installing parklets on side streets in the Downtown Burlingame Avenue area. She stated that subsequently, Council terminated the temporary street closure program on Burlingame Avenue and converted to a parklet program due to overcrowding, lack of public adherence to social distancing protocols, and complaints from businesses regarding parking impacts. City Manager Goldman noted that Council continued to allow the street closures on Broadway as there were no complaints of large gatherings or violations of social distancing protocols, and the Broadway Business Improvement District ("BID") was supportive of the street closures. City Manager Goldman stated that the parklets and street closure programs have worked well, with minimal complaints from the public. Many of the restaurants in the Downtown Burlingame Avenue area have built semi -permanent wood structures with lighting and heating in the parklets to make them more inviting. City Manager Goldman explained that some restaurants are hesitant to undertake the major investment of building parklet structures due to the uncertainty surrounding the duration of the parklets program since the City Council has not yet adopted an end date to the program. She added that some businesses have requested that the City provide a defined time period for the program so that they can evaluate whether investing in parklet structures makes financial sense for them. City Manager Goldman stated that she believes there will be more interest in the parklet program as it isn't known how long the pandemic will persist. She explained that there might be interest in extending the parklet program past the end of the pandemic as a result of the positive response to the program. City Manager Goldman stated that the Economic Development ("ED") Subcommittee consisting of Vice Mayor O'Brien Keighran and Councilmember Ortiz received an update regarding the overall functioning of the Broadway street closure and the Downtown parklets program at their November 13 meeting. The Subcommittee also discussed the request from Broadway BID President John Kevranian to terminate the weekend closure of Broadway and, instead, transition to a parklet program similar to that employed on Burlingame Avenue and nearby streets. 8 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 City Manager Goldman stated that BID President Kevranian felt that going into the winter months, the restaurant owners wanted something more permanent for their patrons. Staff conducted a survey of the Broadway BID Board and a sampling of Broadway merchants that indicated support to end the Broadway street closure and transition to parklets. City Manager Goldman explained that effective November 14, the City terminated the street closure program on Broadway. She explained that if Council approves of the ED Subcommittee's recommendation to allow parklets on Broadway, staff anticipates there will be a total loss of approximately 47 parking spaces on Broadway if all restaurants participated. City Manager Goldman noted that Broadway BID believes that only five restaurants will participate, which would significantly decrease the number of lost parking spots. She stated that if approved by the Council, all conditions and requirements previously authorized for parklets in the Downtown Burlingame Avenue area will also apply to Broadway. City Manager Goldman explained that several businesses requested that the City establish a defined ending date for the parklet program. Currently, the approval period is indefinite, pending changes to State or local health orders. She stated that staff recommends that the Council consider continuing the current parklet program until Labor Day 2021 or some other date of the Council's choosing. City Manager Goldman stated that the ED Subcommittee also reviewed the Broadway BID's request to consider free parking in the Broadway commercial district on Saturdays during the holiday season. The ED Subcommittee thought that free parking would help attract customers to Broadway and supported the concept. She noted that the ED Subcommittee felt that the free parking should be provided in an equitable manner benefiting both commercial districts and should include streets as well as parking lots. The desired dates would be the four Saturdays between December 12, 2020 and January 2, 2021. City Manager Goldman stated that the City has an adequate quantity of hydro -barriers in stock to provide parklets for up to five restaurants on Broadway. If all restaurants on Broadway were to request parklets, the City would have to procure additional hydro -barriers. She stated that procuring additional hydro -barriers for parklets is estimated to cost $24,000 to $30,000. City Manager Goldman stated that based on recent parking utilization and given the fact that parklets utilize a number of parking spaces, the free parking for both the Broadway and Burlingame Avenue areas is estimated to cost approximately $20,000 for four Saturdays. Vice -Mayor O'Brien Keighran asked Streets, Storm Drains and Sewer Division Manager Mike Heathcote how long it would take to order more street barriers if more than five restaurants requested parklets. Mr. Heathcote replied that he would need to get back to Council with a firm answer but that when he previously ordered barriers, it had taken a couple of weeks. 9 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Councilmember Ortiz asked how many barriers the City currently had in stock. Mr. Heathcote replied that he has 50. Mayor Beach asked if there are any examples of barriers being deployed that aren't being used. City Manager Goldman replied that Five Guys wasn't using its parklet and asked that the barriers be removed. She stated that the City requires businesses to use their parklets at least three days a week. Vice Mayor O'Brien Keighran asked if the wood structures that restaurants were putting up in their parklets were compliant with State guidelines. City Manager Goldman replied that the County has a COVID Compliance unit. She noted that retired BPD Sergeant Jim Ford is responsible for the Burlingame area. She explained that Mr. Ford had reviewed the parklets on and near Burlingame Avenue and found them to be compliant. She mentioned that Mr. Ford will be at the next ED Subcommittee meeting to discuss the issue. Councilmember Ortiz asked if there are currently any businesses that have barriers that are not being used. City Manager Goldman responded that there are parklets that have tables and chairs out that aren't being used, but she believes this is a function of the weather, not the lack of initiative by the business. Councilmember Colson voiced concern that she heard that parklets were being utilized by transient people at night for sleeping accommodations. She noted that the Police Department has been assisting businesses with this issue. Mayor Beach opened up the item for public comment. There were no public comments. Councilmember Brownrigg thanked the ED Subcommittee for their hard work. He endorsed the recommendations and stated that he thought that Labor Day was a good date to end the parklet program with the possibility of extending it. Councilmember Ortiz stated that he was initially concerned that the parklets would take up too many parking spaces, but he felt that he had been proven wrong. He stated he endorsed all of the proposed recommendations, including the Labor Day end date. Councilmember Colson approved of all the recommendations. However, she stated that she thought the Labor Day date should be treated as an evaluation date, rather than a hard stop date, as keeping the parklets in place longer will assist restaurants with recouping some of their costs from the closures. City Manager Goldman suggested that Council's motion note that the parklet program would end no earlier than Labor Day 2021. Councilmember Colson concurred with the suggestion and said that when the City evaluates the parklets program, the City should also consider whether the City should charge the businesses using parklets a fee so that the City can recover some of its costs for the program. Vice Mayor O'Brien Keighran concurred with Councilmember Colson. 10 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Interim City Attorney Spansail clarified that it might be the City's intent to extend the program in the future, but that the County and State have relaxed street regulations due to COVID-19, and if the regulations were put back in place, the City may not be able to extend the program. Councilmember Brownrigg made a motion to endorse the recommendations made by the Economic Development Subcommittee as well as ending the parklets program no earlier than Labor Day; seconded by Councilmember Ortiz. The motion passed unanimously by roll call vote, 5-0. c. ADOPTION OF A RESOLUTION APPROVING THE BICYCLE AND PEDESTRIAN MASTER PLAN DPW Murtuza introduced the Bicycle and Pedestrian Master Plan and thanked those in the community for their input into the plan. He explained that the previous Bicycle Transportation Plan was updated in 2004 as an amendment to the Circulation Element of the City's General Plan. He noted that in 2018, Council approved a consulting contract with Alta Planning + Design to update the Bicycle Master Plan. DPW introduced Otto Melara, Associate Planner, and Alta President Brett Hondorp to review the Bicycle and Pedestrian Master Plan. Mr. Melara stated that the vision statement for the updated master plan is: Improve the safety, health, and quality of life of Burlingame residents through transportation infrastructure, programs, and policy improvements that enhance the safety, comfort, and attractiveness of walking and bicycling for people of all ages. Mr. Melara reviewed some of the major highlights of the plan including: • Robust community outreach effort • 33 miles of new bikeways (44 miles total) • 82 pedestrian spot improvements • High-level cross section designs for 14 corridors • Recommended project prioritization (community support, enhanced safety, improved connectivity, increase accessibility, cost, complexity, phased implementation). Mr. Melara reviewed the public outreach that was undertaken. He stated that they engaged with various committees and groups (BPAC, TSPC), had a booth at the Farmer's Market, and conducted in -person and virtual community workshops. He explained that community engagement was crucial in providing feedback and checkpoints to keep them on track. Mr. Melara stated that they held three workshops: • April 2019 — 450 comments • November 2019 — 1,100 comments • September 2020 — 750 comments 11 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Mr. Melara explained the themes that arose from these workshops that were important to cyclists and pedestrians. For cyclists they heard: • Network expansion/improved connectivity • Low -stress network with separation from vehicles • Enhanced wayfinding • More facility maintenance/street sweeping For pedestrians they heard: • Crossing concerns (especially across arterials) • Signal timing issues • Improve the pedestrian experience in high -volume areas (Broadway, Burlingame Avenue, etc.) Mr. Melara stated that there were four themes that were voiced across all groups: • Enhanced access to schools • Improved access to parks • Enhanced access to Caltrain stations • Close the gaps in the Bay Trail and improve access Mr. Melara discussed the needs analysis for the updated plan. He stated that they looked at demand, connectivity, accessibility, and safety to help build the foundation for understanding where the opportunities are for enhancing the new master plan. Mr. Melara reviewed the six types of bikeway improvements: • Class II bike lane • Buffered bike lane • Separated bike lane • Shared -use path • Class III bike route • Bike boulevard Mr. Melara explained that there are two types of bike lanes that are not currently in the city. These are Class II and Class IV separated bike lanes. He explained that these lane types are great for cyclists and help to weave people around the city. Mr. Melara reviewed the plan's recommendations for pedestrian access and safety. He explained that the plan makes recommendations for crossing improvements, signal improvements, streetscape, and sidewalk improvements in 82 locations in the city. He emphasized that there is not a one size fits all for all the improvement types. He explained that they listened to what the community had to say in regards to certain locations. 12 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Mr. Melara reviewed a pie chart that summarized the proposed pedestrian projects: • Short term— 10 projects — 12% • Medium term — 15 projects — 18% • Long Term — 18 projects — 22% • Opportunity — 39 projects — 48% Mr. Melara discussed the process of implementing and prioritizing the various projects. He stated that the City should prioritize projects based on the following factors: • Community support • Enhanced safety • Improved connectivity • Increased accessibility • Cost • Complexity • Phased implementation Mr. Melara reviewed Alta's Drioritization of recommended bike Droiects: Street Start End Bikeway Class Total Points California Drive Oak Grove Avenue Howard Avenue Class IV 8.5 California Drive Carmelita Avenue Oak Grove Avenue Class IV 8.5 California Drive Broadway Carmelita Avenue Class IV 8.5 California Drive Howard Avenue Peninsula Avenue Class IV 8.5 Carmelita/Paloma n/a n/a Class IIIB 8 Neighborhood Bike Route Oak Grove/Dwight n/a n/a Class IIIB 8 Neighborhood Bike Route Cadillac n/a n/a Class IIIB 8 Neighborhood Bike Route Oak n/a n/a Class IIIB 8 Grove/Primrose Bike Route Howard Avenue El Camino Real Myrtle Road Class II 7 Next, Mr. Melara reviewed Alta's prioritization of recommended pedestrian projects: Location Recommended Improvements Total Points Burlingame Avenue/California I Station access im rovements 9 13 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Drive North Lane mid -block crosswalk Crossing improvements 9 East Lane/Burlingame Avenue Crossing improvements 9 Broadway/Rollins Road High visibility crosswalk 8.5 Trousdale Drive/Martinez High visibility crosswalk 8 Drive/Castenada Drive markings Curb extensions for Trousdale Drive crosswalks Advanced stop pavement markings Murchison Drive/El Camino Real/ High visibility crosswalk 7.5 South Irwin Place Median refuge islands Curb extensions Leading Pedestrian Interval Advanced stop markings Broadway/Airport Boulevard/Old High visibility crosswalk 7 Ba shore Boulevard Leading edestrian interval Broadway/El Camino Real High visibility crosswalk 7 Realign crosswalks Leading pedestrian interval Mr. Melara explained the Burlingame Avenue/California Drive project and the East Lane/Burlingame Avenue project have received grants to fund them. Mr. Melara stated that the bicycle projects cost approximately $32 million, and the pedestrian projects cost approximately $8 million. He reiterated that these are rough estimates for the projects, and that costs could change. Vice Mayor O'Brien Keighran stated that $40 million is a lot of money and asked what percentage would be covered by grants. DPW Murtuza answered that most of the projects are grant -qualified projects and that much of the funding can come from State and Federal grants as well as local Measure A and W grants. He stated that the City has received $1.4 million in grants for two projects. Vice Mayor O'Brien Keighran asked what the time frame would be if the City decided to complete all the projects in the master plan. DPW Murtuza responded that it would depend on a number of factors. He stated that the master plan is akin to a City's general plan and mentioned that there is no specific time frame in which to complete the projects. However, if time goes by without implementation, then the plan would need to be updated with more public input. Vice Mayor O'Brien Keighran stated that she hoped the City could get the majority of the projects funded by grants. 14 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Councilmember Brownrigg asked for clarification on the City's vision for California Drive from a bicyclist's point of view. Mr. Melara responded that the vision is to use the Caltrain right of way for a trail for the entire length of the roadway, with a protected bicycle lane. He stated that in the near term, between Broadway and Peninsula, the City could implement a Class IV bikeway. DPW Murtuza stated that the right of way is actually SFPUC and not Caltrain right of way. He commented that the City had received a grant for a Class III facility between Broadway and Peninsula and that it could be upgraded to Class IV. Councilmember Brownrigg stated that he is in favor of having a protected bike lane the length of California Drive as he believes this will promote safer bike use. Councilmember Brownrigg asked how the plan will get pedestrians across El Camino Real, especially around the McKinley area. Mr. Melara responded that there are plans to get people across El Camino Real, but that it is challenging since El Camino Real is State route. Councilmember Brownrigg stated that since the City is working with Caltrans on the El Camino Real Project, now would be a good time to address this. Councilmember Brownrigg asked if on street parking in residential areas is a hindrance or advantage to bicycle and pedestrian safety. Mr. Melara responded that it is both and that it depends on the street. He stated that a constraint in Burlingame is that the city has narrow streets. He explained that this makes it hard to install a proper bike lane. He noted that these are also the streets that people want to bike on because they are beautiful spaces and inviting for cyclists. He stated that Alta leveraged this when making the bike path plans, hoping that the paths already in use would encourage more people to bike. He mentioned that they do consider the width of the street and parking while making their traffic calming recommendations. Mayor Beach commented that she was encouraged by the vision set out in the master plan, but wanted to think about how the City can implement positive changes over the next five to ten years. Councilmember Colson suggested that Council include a cover letter summary of the plan so the public to more easily digest it. She asked what the process is for reevaluating the master plan in the future. DPW Murtuza responded that an opportunity may arise for a project that is not one of the top priorities (such as resurfacing a street and placing a bike lane on said street) to be undertaken. This would be one such time that the City could work with TPSC and the community for input. He stated that another opportunity would be when grants are available, as staff would come to Council for their blessing. He explained that if Council wanted to make wholesale changes to the plan, it would require a much bigger process. Councilmember Ortiz stated he agreed with Councilmember Brownrigg about pedestrian crossings along El Camino Real. He asked if there was currently anything the City could do to help facilitate a north/south path at the Broadway grade separation project. DPW Murtuza responded that a path going up over Broadway wasn't part of the scope of the Broadway grade separation project. Mayor Beached asked how the schools were engaged in the planning process. DPW Murtuza responded that staff worked closely with the schools in the beginning of the process. Staff contacted the schools to have 15 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 information sent out to both students and parents to provide feedback on routes used. He mentioned that staff contacted the schools themselves for feedback on improvements that they would like to see around schools. Mr. Melara mentioned that the virtual workshops were helpful with engaging with schools. Mayor Beach opened up the item for public comment. TSP Commissioner Howard Wettan commented that it would be helpful to add headlines to each section of the plan for the public's ease. He added that he believed the plan did a good job promoting bicycling among the youth and would assist in obtaining grants. A citizen discussed that this plan is a good step in reducing pollution. They stated that they are in favor of a Class IV protected bike lane from Millbrae through Burlingame. (comment submitted via publiccommentgburlin am�e.org). Mike Swire urged support of the master plan as he has seen bicycling increase in popularity among the youth and that more bike lanes will help facilitate kids getting from Hillsborough to Burlingame. (comment submitted via publiccomment&burlin am�e.org). BPAC Chair Lesley Beatty thanked staff and Council for prioritizing these issues. She stressed the importance of this plan and its role in reducing traffic and keeping people safe. Sandra Lang commented that she wanted to see bicycle and pedestrian safety measures taken around the new community center. (comment submitted via publiccommentkburlin ag me.org). Debbie Simon voiced support for the Bicycle Master Plan. (comment submitted via publiccomment(a�burlin ag me.org). Silicon Valley Bicycle Coalition representative Sandhya voiced her excitement about the plan. She noted that she would like to see more protected bike lanes installed. Manito Velasco thanked BPAC and the community for all the input they contributed to the plan. He stated that he wanted to see more plans on improving current bike infrastructure. (comment submitted via publiccommentgburlin am�e.org). Christy agreed with the plan's recommendation for bicycle improvements along El Camino Real. (comment submitted via publiccomment(kburlin ag_me.org). Madeline Frechette voiced her concern about the exclusion of fully protected bike lanes along California Drive. Mayor Beach closed public comment. 16 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 Councilmember Colson stated that it should be a goal to make the city more bikeable, and that this plan is a great way to do that. She noted that this is a great way to explore transit in a way that the City has not done before. Councilmember Ortiz thanked everyone involved for all their hard work. He commented that this is an important piece in the vision for the City of Burlingame. Councilmember Brownrigg stated he is in support of the plan. He noted that there is more to be done in terms of publicizing the plan. He added he had a few editorial notes. The first is that there is a comment on page 20 stating there is only one school east of 101. He mentioned Peninsula High School is east of 101 and should be included. The second is about the demographics in relation to school aged people. He commented that he wants to revisit the topic of City shuttles. He reiterated that he would like to see the big visions in the report be highlighted. Vice Mayor O'Brien Keighran stated that an executive summary would be helpful. She noted that the report was inclusive, and that any time there are grant opportunities, the City should take them. She commented that Council should talk about future funding options. She stated that there should be an incorporation of future timelines to help get a general gist of when projects would be implemented. She commented that she wants to know what percentage of kids bike to school at the different levels of schooling. She noted she agreed with Councilmember Brownrigg on revisiting the topic of shuttles. Mayor Beach stated that she was interested to see how long this master plan lasts. She explained that she is comforted by having a plan like this, as it makes opportunity projects easier to do. She stated that she is excited about this plan and reiterated that there are many projects that will require public input. She commented that many of the projects will have tradeoffs, and that the City will need input from the community to help decide how to navigate these tradeoffs. Councilmember Colson made a motion to adopt Resolution Number 157-2020; seconded by Councilmember Ortiz. The motion passed unanimously by roll call vote, 5-0. 11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS a. MAYOR BEACH'S COMMITTEE REPORT 12. FUTURE AGENDA ITEMS There were no future agenda items. 13. ACKNOWLEDGEMENTS The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Safety & Parking Commission, Beautification Commission, Parks and Recreation Commission, and Library Board of Trustees are available online at www.burlin ag me.org. 17 Burlingame City Council December 7, 2020 Unapproved Minutes Agenda Item 8a Meeting Date: 12/21/2020 14. ADJOURNMENT Mayor Beach adjourned the meeting at 10:41pm in memory of Virginia Rich "Ginger" Fortmiller. Respectfully submitted, Meaghan Hassel -Shearer City Clerk 18 Burlingame City Council December 7, 2020 Unapproved Minutes BURL- INGAME AGENDA NO: 8b STAFF REPORT MEETING DATE: December21, 2020 To: Honorable Mayor and City Council Date: December 21, 2020 From: Meaghan Hassel -Shearer, City Clerk — (650) 558-7203 Subject: Adoption of the 2021 City Council Calendar RECOMMENDATION Staff recommends that the City Council review, make changes if necessary, and approve the Burlingame City Council Calendar for 2021. he calendar reflects the cancellation of the July 19 and August 2, 2021 City Council meetings. BACKGROUND In 2015, the Council agreed to cancel the second meeting in July and the first meeting in August to give Councilmembers a longer break between meetings. Exhibit: • 2021 Council Calendar 1 2021 BURLINGAME CITY COUNCIL CALENDAR City Council meetings are held on the first and third Monday of each month. When Monday is a holiday, the meeting is usually held on Tuesday or Wednesday. Study meetings are held as scheduled. Meetings begin at 7:00 p.m. at City Hall, 501 Primrose Road, and are open to the public. Regular Council meetings are televised live via Burlingame's Cable Channel 26 for Astound subscribers and Channel 27 for Comcast subscribers. Also the meetings are live online on the City's website at www.burlingame.org. For more information, please view the City's website or call the City Clerk at 650-558-7203. REGULAR MEETINGS Monday, January 4 Tuesday, July 6 Tuesday, January 19 Monday, July 19 (canceled) Monday, February 1 Monday, August 2 (canceled) Tuesday, February 16 Monday, August 16 Monday, March 1 Tuesday, September 7 Monday, March 15 Monday, September 20 Monday, April 5 Monday, October 4 Monday, April 19 Monday, October 18 Monday, May 3 Monday, November 1 Monday, May 17 Monday, November 15 Monday, June 7 Monday, December 6 Monday, June 21 Monday, December 20 Saturday, January 23 Wednesday, March 10 Friday, March 12 Saturday, April 24 Wednesday, May 5 Wednesday, December 8 12/17/2020 1:39 PM STUDY MEETINGS AND OTHER DATES 2021/22 Goals Session, 9 a.m. 2020-21 Mid -Year Budget Session 6:30p.m. Commissioners Dinner (tentative) Joint Council and Planning Commission Meeting 9 a.m. 2021-22 Budget Study Session, 6:30 p.m. City Manager's Annual Performance Evaluation, 6 p.m. To: Date: From: STAFF REPORT Honorable Mayor and City Council December 21, 2020 AGENDA NO: 8c MEETING DATE: December 21, 2020 Syed Murtuza, Director of Public Works — (650) 558-7230 Subject: Adoption of a Resolution Reducing the Distance a Person May Stop, Park or Leave Standing a Vehicle in Relation to a Fire Hydrant Pursuant to California Vehicle Code Section 22514(b) RECOMMENDATION Staff recommends that the City Council adopt the attached resolution to modify the parking restriction distance at a fire hydrant pursuant to California Vehicle Code Section 22514(b). BACKGROUND California Vehicle Code (CVC) Section 22514 regulates parking adjacent to a fire hydrant. This section prohibits stopping, parking, or leaving any standing vehicle within 15 feet of a fire hydrant, with limited exceptions. However, CVC Section 22514(b) explicitly allows local agencies to reduce that distance through resolution or ordinance. The City of Burlingame Municipal Code, Title - 13 Vehicles and Traffic authorizes the City Engineer to maintain all no stopping zones, no parking areas, and restricted parking areas curb markings to indicate parking or standing regulations. The City Engineer is further authorized to place curb markings to indicate parking or standing regulations. nisri issinm The City receives requests to paint red curbing from time to time. When the request is in front of, or adjacent to, a fire hydrant, the on -street parking may be affected. This is because the 15 foot distance is not an aggregate amount of space, but rather a requirement that applies to the space on either side of a fire hydrant. This results in 30 feet of clearance in total. In evaluating such requests, the City must balance the need of maintaining emergency access to fire hydrants with the demand for use of curb space for on -street public parking. Central County Fire Department (CCFD) personnel have expressed that the parking restriction is needed for visibility of the fire hydrant and access by Fire Department crews, but not for parking of emergency vehicles. They have indicated that so long as there is adequate clearance to access the fire hydrant, the 15 feet on both sides of the hydrant is not always necessary. 1 Resolution to Apply California Vehicle Code Section 22514 (b) December 21, 2020 and Modify the Parking Restriction Distance at a Fire Hydrant On December 10, 2020, at a regularly scheduled meeting, the Traffic Safety and Parking Commission (TSPC) discussed and recommended that the City avail itself of the solution in CVC Section 22514(b) and allow for less than 15 feet of parking restriction on either side of a fire hydrant. If approved, the City Engineer will evaluate new red curb markings at fire hydrants on a case -by - case basis, with input from the Fire Department and in compliance with the CVC. Existing red curb markings at fire hydrants will be evaluated with input from the Fire Department when the paint becomes faded and requires refreshing. FISCAL IMPACT Installing red curb is a standard function of the Public Works Department. Costs are minimal. Exhibit: Resolution 2 RESOLUTION NO. A RESOLUTION REDUCTING THE DISTANCE A PERSON MAY STOP, PARK, OR LEAVE STANDING A VEHICLE IN RELATION TO A FIRE HYDRANT PURSUANT TO CALIFORNIA VEHICLE CODE SECTION 22514(b) The City Council of the City of Burlingame, California does resolve as follows: WHEREAS, California Vehicle Code Section 22514 states that no person shall stop, park, or leave standing any vehicle within 15 feet of a fire hydrant, with limited exceptions; and WHEREAS, California Vehicle Code Section 22514(b) authorizes the local authority to reduce that distance through the adoption of an ordinance or resolution; and WHEREAS, the above said 15 feet clearance on either side of a fire hydrant results in a total of 30 feet of clearance and significantly impacts curbside on -street parking; and WHEREAS, the City must balance the need for emergency access to a fire hydrant with curbside on -street parking demand; and WHEREAS, the Burlingame Municipal Code authorizes the City Engineer to maintain all no stopping zones, no parking areas, and restricted parking areas; and WHEREAS, the City Council appointed the Traffic, Safety and Parking Commission to review traffic requests, including parking related matters; and WHEREAS, at their regularly scheduled meeting on December 10, 2020, the Traffic, Safety and Parking Commission considered whether the City should reduce the distance a car may stop, park, or leave standing a vehicle in relation to a fire hydrant pursuant to California Vehicle Code Section 22514(b); and WHEREAS, the Commission made the recommendation that the City should have the option to reduce the distance requirement; and WHEREAS, the Central County Fire Department has reviewed and supports the recommended modification. NOW, THEREFORE BE IT RESOLVED, DETERMINED AND ORDERED BY THE COUNCIL, AS FOLLOWS: The City Council authorizes reducing the parking restriction distance at a fire hydrant per California Vehicle Code 22514(b), to be done on a case -by -case basis in consultation and input from the Central County Fire Department. Emily Beach, Mayor 1 I, MEAGHAN HASSEL-SHEARER, City Clerk of the City of Burlingame, certify that the foregoing Resolution was introduced at a regular meeting of the City Council held on the 21s' day of December 2020, and was adopted thereafter by the following vote: AYES: Councilmembers: NOES: Councilmembers: ABSENT: Councilmembers: Meaghan Hassel -Shearer, City Clerk To: Date: From: Subject STAFF REPORT Honorable Mayor and City Council December 21, 2020 AGENDA NO: 8d MEETING DATE: December21, 2020 Carol Augustine, Finance Director — (650) 558-7222 Acceptance of the Comprehensive Annual Financial Report for the Year Ended June 30, 2020 RECOMMENDATION Staff recommends that the City Council accept the Comprehensive Annual Financial Report (CAFR) for the fiscal year 2019-20. BACKGROUND Following the close of each fiscal year, the City's external auditors conduct an audit of the City's financial records and assist in the compilation of the Comprehensive Annual Financial Report (CAFR). The paramount objective of general purpose external financial reporting is accountability. The goal of a financial statement audit is to provide users with a reasonable assurance from an independent source that the information presented in the statements is reliable. The audit for the fiscal year ended June 30, 2020 was just recently completed. DISCUSSION The 2019-20 fiscal year audit is the fifth annual audit performed by Maze & Associates as the City's external auditors. The firm conducts its audits in accordance with generally accepted auditing standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The standards require that the auditors plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. On a sample basis, they examine evidence supporting the amounts and disclosures in the financial statements. The audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. The City implemented major Accounting modules of the Tyler Munis© Enterprise Resource Planning (ERP) software system on October 1, 2019. The auditors were aware of this conversion and adjusted their procedures to review fiscal transactions from both the legacy system (for the first quarter of the fiscal year) and the new financial system. Modified procedures and control functions also were accounted for. This year's audit process was additionally exacerbated by the need for a completely remote virtual audit, during a time when the department's availability of staff and information was limited. The auditor's unmodified ("clean") opinion is presented as the first item in 1 Comprehensive Annual Financial Report 2019-20 December 21, 2020 the financial section of the CAFR (page 1). In accordance with Government Auditing Standards, the auditors also issue a report of recommendations to City management identifying any areas for improvement in the City's internal control over financial reporting. The City's Audit Committee, currently comprised of Councilmembers Donna Colson and Ricardo Ortiz, met with staff and the auditors on December 9t" to discuss the audit reports, results, and recommendations. The City participates in the CAFR award program administered by the Government Finance Officers Association (GFOA), and has been successful in obtaining the award each fiscal year beginning in 1989-90. Staff intends to submit the City's FY 2019-20 CAFR to the GFOA program and is confident that the report will again merit the GFOA Certificate of Achievement for Excellence in Financial Reporting. Upon the full Council's acceptance, the FY 2019-20 CAFR will be posted to the City's web site (Finance Department web page). Management's Discussion and Analysis Governmental Accounting Standards require a Management's Discussion and Analysis (referred to as MD&A) to be included with the audited financial statements, with the intent of giving readers an objective and easily readable analysis of the City's financial performance for the year. The MD&A includes a discussion of the basic financial statements, some condensed financial information, an analysis of the City's financial position, and results of operations on both a City- wide and Fund basis. The Management's Discussion and Analysis begins on page 5 of the CAFR. As noted in the document, the financial standing of the City remains relatively strong despite the difficult economic circumstances resulting from the COVID-19 pandemic. The City's total revenues decreased $9.5 million over the prior year, and total expenses increased $4.1 million — $3.7 million in governmental activities (5.8 percent) and $0.4 million in the City's business -type activities (1.4 percent). The business -type activities consist of self-supporting functions (largely comprised of the City's Water and Wastewater utilities operations). The government -wide financial statements, which provide a broad overview of the City's finances, indicate that the City's net position increased over $31.2 million (nearly 11.4 percent) during the fiscal year ending June 30, 2020: $18.6 million due to governmental activities, and $12.7 million due to business -type activities. Governmental revenues were down significantly, with a $10.3 million decrease in general revenues, largely from General Fund transient occupancy tax (TOT) taxes, only slightly offset by a $237,000 increase in program revenues. Although most departmental charges for services remained strong, fees for recreational activities were significantly curtailed by shelter -in -place orders aimed at controlling the spread of the COVID-19 virus in the last four months of the fiscal year. Combined with a drop in both operating and capital grants (about $517,000), program revenues remained relatively flat when compared to the prior fiscal year. GASB standards that relate to the recording and reporting of other post -employment benefits (OPEB) liabilities were newly implemented in the 2017-18 fiscal year CAFR. Similar to the reporting of pension liabilities, the actuarially accrued liabilities of the City's retiree healthcare benefits are now reported on the face of the financial statements (as opposed to being simply disclosed in the Notes to the Financial Statements). The City's OPEB liabilities, which are comprised of retiree healthcare benefits, continue to be funded from an internal surcharge on each payroll. Funds 2 Comprehensive Annual Financial Report 2019-20 December 21, 2020 remaining from the surcharge after the year's pay-as-you-go obligations are met are placed in a trust fund that serves to offset the total liability. The balance in the OPEB trust fund was over $22.8 million at June 30, 2020. Coupled with the increase in plan assets, positive changes in the covered population, and a decrease in the assumed costs of Medicare from the prior actuarial valuation, the City's net OPEB liability decreased citywide by $10.8 million during the 2019-20 fiscal year. The City's net pension liability increased approximately $4.2 million, due largely to the fact that the interest cost on the total pension liability outpaced the net investment income of the City's plans with CalPERS. Note that although the City has begun to annually set aside additional funding in a pension trust account, these contributions cannot be used to offset the pension liability as shown in the financial statements. Rather, amounts in the pension trust fund (nearly $12.6 million as of June 30, 2020) are reflected as restricted assets on the City's Statement of Net Position. As the net pension liability diminishes, the unrestricted portion of the City's net position will improve. General Fund Status General Fund highlights for the 2019-20 fiscal year are summarized in the MD&A. A separate disclosure, the Budgetary Comparison Schedule for the General Fund, is included in the CAFR (page 126) after Required Supplementary Information. The General Fund experienced a deficit for the year, as expenditures and net transfers out of the fund exceeded revenues by nearly $4.3 million. Because the revenue budgets had been adjusted downward to reflect the anticipated impact of the pandemic, most revenue categories reported slightly positive variances for the year. The largest positive revenue budget variance was reported for Investment Income — a $1.2 million variance. General Fund investment income for the year (nearly $3.8 million) reflects a year-end "mark -to -market" of the City's investment portfolio of $2.0 million. Because this adjustment reflects unrealized gains and losses within the portfolio that will not materialize (the City typically holds investments to maturity), it is not included in investment income budget. Excluding investment earnings, revenues were 2.5 percent higher than budgeted. The City's TOT had been the highest General Fund revenue source for many years. But the City's 12 hotels suffered greatly from the COVID-19 outbreak and the restrictions on both international and domestic travel and tourism that followed. Although a $367,000 positive variance was experienced for the fiscal year, TOT revenues fell from the prior year results of $29.4 million to a sobering $20.4 million. Sales tax revenues also came in higher than the $14.2 million adjusted budget, by approximately $573,000. These revenues were $3.0 million less than reported for the prior fiscal year. Property tax revenues continued to reflect solid property values: at $23.3 million, these revenues were up $1.3 million from the prior year, an approximate 6.1 percent increase. In all, actual General Fund revenues came in approximately 4.3 percent higher than the adjusted budget, but $12.4 million (14.6 percent) lower than experienced in the prior fiscal year. Budgetary savings (positive expenditure variances) within the General Fund were experienced in all departments, resulting in expenditures of over $5.8 million (roughly 9.1 percent) less than budgeted for the fiscal year. Of this amount, slightly over $1.1 million was from salaries and wages (a 5.4 percent variance from budget), indicating an average vacancy rate. While the budget is established assuming full staffing throughout the year, savings were largely the result of the greatly decreased use of casual, part-time staff, with very little turnover in permanent staff. The area with 3 Comprehensive Annual Financial Report 2019-20 December 21, 2020 the highest budgetary savings (nearly $1.7 million) was Leisure & Cultural Services. These activities were greatly curtailed by the pandemic, and were most heavily impacted by the furlough of most of the City's casual work force in April. Community Development experienced an expenditure variance of nearly $1.2 million, due largely to programs to assist Burlingame's businesses during the pandemic; these programs were funded late in the fiscal year, but not spent until after the fiscal year end. These activities account for a large part of the fund's encumbered amounts that have been carried forward to the 2020-21 fiscal year budget. Public Safety, which comprised 46.2 percent of the fund's departmental budgets, experienced a positive variance of $1.0 million (3.4 percent). Since local government expenditure budgets (appropriations) serve as the legal level of budgetary control, some level of savings will be realized in any fiscal year. In addition, budgets are developed based on year-round occupancy of all authorized staff positions. In periods of high turnover or other reasons for an increased level of staff vacancies, higher budgetary savings may be experienced. Unaudited financial results for the General Fund were presented to the Council in September; the actual results for the year varied little. Note that unrealized gains on the City's investment portfolio are required by governmental accounting standards to be included as income in the audited financial statements; such gains were not included in the unaudited General Fund revenues and ending fund balance reported in September. Storm Drain Fund Status Although the Storm Drainage Fund was established in fiscal year 2009-10 to account for the storm drainage fees collected as a result of an assessment approved by the voters, it was not shown as a major governmental fund in the CAFR until fiscal year 2014-15. Fee revenues to the fund were nearly $3.0 million in fiscal year 2019-20, slightly more than revenues of the prior year, reflective of the increase in the actual storm drain fee for the year, which is capped at 2 percent. Transfers of $2.1 million for debt service on previously issued bonds resulted in a fund balance of nearly $7.1 million. Proprietary Funds Proprietary Funds are used to account for activities that are fueled by charges for the services provided by each fund. Enterprise Funds account for external activities (largely utilities), while Internal Service Funds (ISFs) account for internal (interdepartmental) activities. The Water and Sewer Funds account for the City's main enterprise activities. Charts depicting the historical financial performance of these two funds are included in the MD&A. The funds are self- supporting: the sale of water and provision of sewer and wastewater services to customers generates the revenue needed to support the operations and capital needs of these utilities. Both utilities experienced an increase in net position in fiscal year 2019-20: a $5.4 million increase for the Water Fund, and a $3.3 million increase for the Sewer Fund. Much of the increase represented growth in each fund's net investment in capital assets. However, while the Water Fund's unrestricted net position increased over $3.1 million (32.8 percent), the Sewer Fund's unrestricted net position decreased by $0.7 million (9.7 percent). The Sewer Fund's net operating income was !r Comprehensive Annual Financial Report 2019-20 December 21, 2020 insufficient to cover capital outlays and debt service, indicating that revenues are not adequate to sustain operations in the longer term. Rates for sewer services have not been increased since 2012. The Solid Waste Management Fund and Landfill Fund are both fueled by a surcharge on garbage rates. The Solid Waste Fund accounts for City costs of street cleaning, the household hazardous waste program, steam -cleaning of City receptacles, and other related activities, and provides a rate stabilization reserve for rate payers. As that rate stabilization reserve had been drawn on in recent fiscal years, the City Council approved a 6 percent solid waste rate increase for the utility for each of the calendar years 2019, 2020, and 2021. The rate increases should eliminate draws on the reserves and provide for the higher costs of collection and recycling services that are anticipated with a new franchise agreement in 2021. The Landfill Fund accounts for post -closure maintenance and monitoring of the City's old landfill site. The City reports its obligation to ensure that the City's landfill site is properly maintained going forward as a post -closure liability, which results in a deficit position for the fund. However, the landfill surcharge should serve not only to maintain the site, but also to reduce the unfunded portion of the post -closure liability in future years. The increase in rates for solid waste services will serve to boost these revenues, and the landfill post -closure liability should be fully funded within the next 4-5 years. Other enterprise funds consist of the Parking Fund and the Building Fund. The Parking Fund's net position increased slightly over $1.0 million, despite a drop of $843,000 (30.4 percent) in parking fee revenue for the year. Parking restrictions in the City's downtown areas were lifted to assist local businesses in response to the coronavirus for the last four months of the fiscal year. An annual increase in this fund's net position is appropriate, as it reflects the funding of future improvements and replacements in the City's parking infrastructure. The Building Fund experienced a $2.1 million increase in net position, as revenues from permit and plan check activities were 19.9 percent higher than the prior year, more on par with the level of activity in fiscal year 2017-18. The City's six Internal Service Funds (ISFs) are utilized to report activities that provide insurance, facilities, vehicles and equipment, and information technology services to support the City's various programs and functions. The combined net positions reported in most of the ISFs increased in fiscal year 2019-20. The total increase of nearly $1.3 million was due largely to the stable claims development within the City's general liability and workers' compensation programs during the year. The City's OPEB (Other Post -Employment Benefits) Fund was created in fiscal year 2013-14 to account for funding of the external trust account established to meet the City's retiree medical obligations. Surcharges on departmental payrolls provide revenue to the OPEB ISF; retiree medical premiums and monthly contributions to the trust account comprise the fund's expenditures. The City forwards any remaining departmental charges to the trust fund, where higher interest earnings are obtained than can be achieved in the City's investment portfolio. The City strives to maintain an appropriate level of reserves in all of its Internal Service Funds to protect against unusual losses beyond normal experience. Charges to the departments are calibrated so as to the cover costs of each activity; demands of these funds have not varied considerably in recent fiscal years. As of June 30, 2020, nearly all of the ISFs maintain positive 5 Comprehensive Annual Financial Report 2019-20 December 21, 2020 balances, although the Facilities Services Fund retained a deficit ($1.1 million). Internal (departmental) charges for services should require only small adjustments in future years. Other Funds The MD&A discusses changes in the City's Capital Projects Fund and Debt Service Fund, which are considered major funds for financial statement purposes. Capital project expenditures totaled over $15.1 million, with facilities capital improvements leading the list with $6.3 million in expenditures, followed by street and sidewalk pavement projects ($4.1 million), parks and tree projects ($3.3 million), and nearly $1.5 million in storm drain capital improvements. A discussion of some of the City's major governmental capital projects is included in the MD&A. The major change in governmental debt activities for the year was the result of the Lease Revenue Bonds Series 2019 issuance in December 2019. The $39.2 million bond proceeds will be used to help fund construction of the long -planned Community Center. Notwithstanding this major event, the City made regular debt service payments on the City's outstanding debt, which included $3.9 million in principal payments and close to $2.7 million in interest and administrative costs. This amount is approximately $2.4 million higher than in the prior fiscal year due largely to the new bond issuance and the first principal and interest payment on those bonds on July 1, 2020. As noted in the document's Letter of Transmittal, Standard & Poor's Global Ratings (S&P) raised the City's issuer credit rating (ICR) and its outstanding pension obligation bonds from AA+ to AAA In August 2019. At that time, it also raised the long-term rating on the City's outstanding lease revenue bonds to AA+. S&P increased the rating on the City's Storm Drainage Revenue bonds from A+ to AA in January 2019. The City also has eight non -major governmental funds, all of which are considered Special Revenue Funds. (Special revenue funds are used to account for the proceeds of governmental revenues that are restricted or committed for purposes other than debt service or capital projects.) Details of these funds are reported in the Combining Financial Statements beginning on page 132 of the CAFR. The City's largest special revenue fund is the Development Fees Fund, which experienced the largest fund balance increase of $2.7 million, to nearly $9.1 million, as of June 30, 2020. Non -major special revenue funds also include the Gas Tax and Measure A Funds. Transactions in these funds consist largely of transfers to the Capital Projects Fund for street and transportation projects. These funds retain a minimal fund balance ($1.5 million combined at the end of fiscal year 2019-20) as the revenues are put to work annually on related projects. The impact of the 2019-20 fiscal year results for the City's General Fund on the current year budget continues to be analyzed in conjunction with a monthly budget -to -actual review. Although quarterly updates of the General Fund will be provided to the Council, a more comprehensive review of all of the City's funds, an update on the status of major projects and priorities, and an update of economic conditions will be presented to the Council with the mid -year report and budget adjustments in March. At that time, the long-term financial forecast will also be revised. FISCAL IMPACT Acceptance of the City's CAFR has no direct impact on City resources. However, obtaining an unqualified opinion from the auditor is an important independent verification and validation of the ON Comprehensive Annual Financial Report 2019-20 December 21, 2020 City's financial management practices and a prerequisite to receive the GFOA award. An award - winning CAFR contributes to the City's excellent bond rating. Exhibit: • City of Burlingame Fiscal Year 2019-20 Comprehensive Annual Financial Report 7 City of Burlingame, California COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2020 Prepared by City of Burlingame Finance Department CITY OF BURLINGAME, CALIFORNIA Comprehensive Annual Financial Report June 30, 2020 COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2020 TABLE OF CONTENTS Page INTRODUCTORY SECTION Finance Director's Letter of Transmittal............................................................................................ i Certificate of Achievement— Government Finance Officers Association .......................................... vili Elected and Appointed Officials......................................................................................................... ix City of Burlingame Organizational Chart........................................................................................... x City of Organization by Critical Service Area............................................................................................. xi City of Burlingame Finance Department Organization Chart............................................................ xii Organizational Compass.................................................................................................................... xiii FINANCIAL SECTION Independent Auditor's Report.................................................................................................................. 1 Management's Discussion and Analysis................................................................................................... 5 Basic Financial Statements: Government -Wide Financial Statements: Statementof Net Position........................................................................................................... 29 Statementof Activities................................................................................................................ 30 Fund Financial Statements: BalanceSheet—Governmental Funds........................................................................................ 34 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position.............................................................................................. 35 Statement of Revenues, Expenditures, and Changes in Fund Balances —Governmental Funds.................................................................................. 36 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................ 37 Statement of Net Position — Proprietary Funds......................................................................... 40 Statement of Revenues, Expenses, and Changes in Fund Net Position — Proprietary Funds..................................................................................... 42 Statement of Cash Flows— Proprietary Funds............................................................................ 44 Statement of Net Position — Fiduciary Funds.............................................................................. 46 Notes to the Basic Financial Statements (The Notes to the Basic Financial Statements are an integral part of the basic financial statements)........................................................................... 47 Required Supplementary Information: Cost -Sharing Multiple -Employer Defined Benefit Pension Plan Schedule of the City's Proportionate Share of the Net Pension Liability ......................................... 116 Cost -Sharing Multiple -Employer Defined Benefit Pension Plan Schedule of Contributions ............. 117 Page FINANCIAL SECTION (continued) Required Supplementary Information (Continued): Agent Multiple Employer Defined Benefit Pension Plan Schedule of Changes in the Net Pension Liability and Related Ratios................................................................. 118 Agent Multiple Employer Defined Benefit Pension Plan Schedule of Contributions ......................... 119 Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................... 120 Schedule of Changes in the Net OPEB Liability and Related Ratios Schedule of Contributions . 121 Modified Approach for the City's Infrastructure........................................................................ 122 Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual — GeneralFund............................................................................................................................ 126 Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual — Storm Drainage Special Revenue Fund..................................................................................... 128 Combining Financial Statements and Supplemental Information: Combining Balance Sheet — Nonmajor Governmental Funds .................................................... 132 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Nonmajor Governmental Funds................................................................ 134 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual — Nonmajor Governmental Funds ............................................ 136 Combining Statement of Net Position — Internal Service Funds ................................................ 142 Combining Statement of Revenues, Expenses, and Changes in Net Position — Internal Service Funds................................................................................... 143 Combining Statement of Cash Flows — Internal Service Funds .................................................. 144 Combining Statements of Changes in Assets and Liabilities — All Agency Funds ........................ 146 STATISTICAL SECTION NetPosition by Component....................................................................................................... 152 Changein Net Position............................................................................................................... 154 Fund Balance of Governmental Funds....................................................................................... 156 Changes in Fund Balance of Governmental Funds..................................................................... 158 Assessed Values of Taxable Property......................................................................................... 160 Net Taxable Assessed Value History........................................................................................... 162 Property Tax Rates — Direct and Overlapping Governments...................................................... 163 Top Ten Property Taxpayers...................................................................................................... 164 Property Tax Levies and Collections........................................................................................... 165 Governmental Activities Tax Revenues by Source..................................................................... 166 Ratios of Outstanding Debt by Type........................................................................................... 167 Ratios of General Bonded Debt Outstanding............................................................................. 168 Computation of Direct and Overlapping Debt............................................................................ 169 Legal Debt Margin Information.................................................................................................. 170 Pledged Revenue Coverage........................................................................................................ 171 Page STATISTICAL SECTION, Continued Demographic and Economic Statistics....................................................................................... 172 PrincipalEmployers.................................................................................................................... 173 Full -Time Equivalent City Government Employees by Function ................................................. 174 Operating Indicators by Function............................................................................................... 176 Capital Asset Statistics by Function............................................................................................ 178 Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ................................................ 179 Comprehensive Annual Financial Report June 30, 2020 WOY Burlingame Finance Department 501 Primrose Road Burlingame, CA 94010-3997 650-558-7200 Fax:650-342-8386 www.burlingame.org November 23, 2020 To the Honorable Mayor, Members of the City Council, and residents of Burlingame: I am pleased to submit the City of Burlingame's Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2020. This financial report contains a complete set of audited financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) as promulgated by the Governmental Accounting Standards Board (GASB). Responsibility for the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City, and in particular, the Finance Department. Information contained in this report is based upon a comprehensive framework of internal controls that has been established for this purpose. The objective of internal controls is to provide reasonable assurance that the CAFR information is accurate in all material aspects. The Management's Discussion and Analysis section of the financial report provides information on the City's financial position and should be read in conjunction with the financial statements. As required by GAAP, the financial statements present the government and its component units that are considered to be fiscally interdependent. For financial reporting purposes, the City's basic financial statements include all funds, boards, commissions, and authorities that are controlled by or are dependent upon the Burlingame City Council. The California Government Code requires an annual audit of the basic financial statements of the City. The accounting firm Maze & Associates performed the audit for the fiscal year ended June 30, 2020. The independent auditor's report on the general purpose financial statements is included in the financial section of this report and states that the City's basic financial statements present fairly, in all material respects, the financial position of the City as of June 30, 2020, and the results of its operations and the cash flows of its proprietary fund types for the year then ended, in conformity with generally accepted accounting principles. For the year ended June 30, 2020, single audits were not required in accordance with the provisions of the Single Audit Act, as threshold expenditure requirements from federal funding were not reached during the fiscal year. This transmittal letter is intended to provide an introductory profile of the City of Burlingame, its economy, and other information useful in assessing its overall financial condition, especially in consideration of the economic impact of the pandemic late in the fiscal year. The transmittal letter is designed to complement the Management's Discussion & Analysis (MD&A), and should be read in conjunction with it. The MD&A, which can be found immediately following the independent auditor's report in the financial statement of the CAFR, provides a more comprehensive look at the City's financial results. Government Profile The City of Burlingame is a California general law City incorporated in 1908 that operates under the Council - Manager form of government. A five -member City Council is elected at large to four-year terms and serves as the board of directors. The City Council selects a Mayor and Vice Mayor from its members annually. A City Manager is appointed by the City Council and serves as the chief executive officer. The City Manager is responsible for all municipal functions. A City Attorney is appointed by the City Council to serve as chief legal advisor for the governing body and the administration. The City's municipal services include: police and fire protection, public works, community development, parks and recreation, library services, water, sewer, parking, solid waste, and storm drainage. General government activities include finance and information technology, human resources, legal services, and city administration. The City employs approximately 220 full-time employees. An executive team helps the City Manager lead the City organization. It includes eight department directors, the City Attorney, and the City Clerk. Burlingame is approximately six square miles in size and is located in San Mateo County, on the western shore of the San Francisco Bay approximately 10 miles south of San Francisco. According to the State Department of Finance, the population for Burlingame is 30,118. The population has remained fairly level, increasing by 1.3% over the past five years. Budget Process The City adopts an annual budget for all funds, except for the debt service fund and capital projects fund. Major funds include the General, Capital Projects, Debt Service, Water, Sewer, Parking, Waste Management, Landfill, and Building Funds. Budgets are prepared on the same basis of accounting as the associated financial statements. The City's formal budget is employed as a management control device during the year, and it is adopted annually for all City funds, except for the fiduciary funds and certain special revenue funds where appropriate. Consistent with most governmental entities, the City's budget is based on a modified accrual basis of accounting under which revenues are recognized in the period they become available and measurable, and expenditures are recognized in the period the related liability is incurred. The City budget includes information regarding estimated costs (or outlays) and revenue (or cash inflows) for identified programs, projects, and levels of service to meet the needs of the City. All annual appropriations lapse at the end of the fiscal year except in the Capital Projects Fund, because capital improvement projects typically span more than one fiscal year. Appropriations for capital projects lapse when projects are completed, placed into service, accounted for as capital assets, or abandoned at the discretion of the City staff and/or City Council. Budget amendments that increase a fund's appropriations require majority approval by the City Council. Certain budgetary re -allocations within departments require approval by the Finance Director and department heads. Budget amendments between departments are approved by the Finance Director and City Manager. A mid -year budget status report and a long-term financial forecast for the next five years are presented to the City Council as part of an ongoing assessment and evaluation of budgetary performance, with special attention to the General Fund and certain other major funds. The City Council encourages all Burlingame residents and business community members to participate in the development of the City budget. The Council holds three public meetings to provide guidance on the budget: a goal -setting session in January, and budget study sessions in March and May. The City Council solicits input at each of the meetings. Community members may also submit their ideas directly to the City Council and/or City staff. Under these policy directives and guidance, departments prepare their budget requests in support of their programs for submission in early April. Expenditure assumptions are based on known factors such as collective bargaining agreements, current pay and benefit policies, consumer price indices, and other information available from expert third -parties or governing authorities. The Finance Department reviews budget requests for technical compliance to City budget instructions. The Proposed Budget is prepared and delivered to the City Council in May. The City Council reviews the Proposed Budget before the final budget is formally adopted in June at a public hearing, which gives residents an additional opportunity to comment on the spending plan. Assessment of Economic Conditions Through the first eight months of the 2019-20 fiscal year, the City's revenues continued to grow moderately, as they had each year since the 2008-2010 recession. The City's top three revenue streams (from transient occupancy tax, property tax, and sales taxes), which had long surpassed pre -recessionary amounts, constituted nearly 82% of the City's General Fund revenues in the City's prior fiscal year. However, many of these revenues are highly sensitive to economic conditions and reliant on the travel and leisure industry. When nations around the world began to shut down their economies because of the coronavirus pandemic, governmental restrictions decimated passenger demand for air travel — up to 67 percent of flights in and out of nearby SFO were cancelled or postponed. The City's transient occupancy tax (TOT) revenues were hardest hit, and the impact to the City's sales tax revenues was also significant. In recognition of the vulnerability of the City's main revenue sources, and in preparation for the next inevitable economic downturn, Burlingame's General Fund Reserve Policy dictates that the City hold a high level of reserves. In addition, a sizeable Capital Investment Reserve has been accumulated from recent year operating surpluses. Coupled with the systematic pre -funding of its pension and retiree medical obligations, the City is in a strong financial position to weather this economic storm. Key indicators of the City's economic health are job growth, real estate values, travel activity and retail sales volume. Job growth, travel -related activity and retail sales volumes have been greatly diminished by the pandemic -induced recession, but assessed values of properties in Burlingame have remained solid. The following information is being provided to offer a flavor of the City's fiscal health as it stands at the time of this report. Employment Despite the pandemic, the unemployment rate in the San Francisco Bay Area remains one of the lowest in California, based upon recent Employment Development Department (EDD) data. The unemployment rate in the San Francisco/Redwood City/South San Francisco Metropolitan Division was 6.5% in October 2020, down from a revised 7.7% in September 2020, but well above the pre -recessionary estimate of 2.0%. Comparatively, California's unemployment rate stood at 9.0% in October, while it was 6.6 % nation-wide. The Bay Area was among the first regions in the nation to enact stay-at-home orders in March 2020, as reflected in a 15% decline in employment from March to April 2020. The Leisure and Hospitality sector led the decline, comprising roughly 44% of this job loss. The unemployment rate in the region peaked at 12.9% in May. Despite the ongoing pandemic, average salaries in the Bay Area are well above the California average and are expected to remain so in the near future. Real Estate & Property Taxes With the recent dampening of revenues from hotel taxes beginning in March 2020, property taxes, which are based on assessed value, are now the City's largest revenue source. Fiscal year 2019-20 property tax receipts were $23.3 million, up approximately 6.1% from the prior year, and accounted for 28.3% of the City's General Fund revenue. According to data obtained from the San Mateo County Assessor, the City has 8,707 parcels with a net total assessed value of nearly $11.8 billion —an increase of $816.8 million, or 7.4%, since last year. Residential assessed values grew by 7.4%; commercial assessed values grew by 7.7%. The median price of homes sold in Burlingame during the third quarter of 2020 was approximately $2.9 million, reflecting a 4.8% increase in home values compared to the prior year. The volume of homes on the market remained low (although 60 homes sold in the third quarter of 2020 as compared to 49 in 2019). County -wide, the median value of homes sold in the third quarter also increased — from over $1.2 million in 2019 to over $1.3 million in 2020. Although the rents have dropped throughout the region since the beginning of the pandemic, home sale values are projected to continue trending higher. The continued lack of inventory of homes on the market appears to be the primary driver of high housing costs. With lower - income residents getting priced out of the area, housing affordability is a priority issue for Burlingame and for the entire San Francisco Metropolitan area. Sales and Use Taxes Burlingame is a highly desirable residential community and upscale commercial location with attractive shopping districts. Burlingame borders Hillsborough, an affluent community that is 100% residential. Therefore, in many cases, Burlingame businesses have the opportunity to serve the commercial needs of Hillsborough residents and benefit from the additional disposable income from neighboring communities. Numerous national retailers are located in the Burlingame Avenue Business District, making the area competitive with regional shopping malls. In addition, the city is known for its upscale restaurants and businesses that attract patrons from throughout the entire San Francisco Bay Area. The City owns and manages most of the parking spaces located within the shopping districts and works with local merchants to maximize the shopping experience. However, the statewide shelter -in -place order issued to help curtail the spread of the COVID19 virus was firmly in place at the end of the fiscal year's third quarter, and many retail businesses, considered non -essential, were temporarily or permanently closed. With the travel industry significantly truncated, there were very few out-of-town shoppers to be drawn from Burlingame's hotels. Although restrictions were relaxed somewhat through May and June, sales transactions, particularly from consumer goods and restaurants, were severely reduced. Sales and use taxes accounted for 20.5% of General Fund revenue in fiscal year 2019-20. Sales and use tax revenues were $14.8 million, which is approximately 17% less than the prior year's receipts of $17.8 million. Note that these revenues include both the 1% local sales tax on taxable transactions and the City's Measure I receipts. Measure I, approved by the voters in November 2017 and effective in April 2018, enacted an additional % cent transaction tax to help fund street and sidewalk maintenance, enhance neighborhood police patrols and programs, and support the cost of maintaining recreation programs and facilities. iv The top 25 sales tax producers in Burlingame in the last quarter of the fiscal year accounted for approximately 61% of total sales tax revenue, and included several auto dealers, grocery and drug stores, and building contractors. This is a significant contrast to the first three quarters of the fiscal year, where retail shops, hotels, and restaurants joined auto dealers in contributing the larger share of sales tax revenues. Although sales from the New Motor Vehicle Dealers business type dropped 18.8% when compared to the prior fiscal year, it still accounted for nearly a third of the City's local sales tax revenue in the year ended June 30, 2020. While revenues from sales taxes dropped in all other major industry groups due to the severe decline in business activity in the fourth quarter, the City's share of the countywide use tax pool increased over 4.2% compared to the same four quarters in 2019. The County distributes these taxes, which do not involve a California "point of sale", to each jurisdiction in the county on a pro rata share of taxable sales. These use tax pool allocations represent tax revenue from out-of-state online retailers. These receipts comprised about 24% of the City's total sales tax revenues in fiscal year 2019-20 (and are categorized by major industry group along with point -of -sale receipts). The increase reflects further accelerated growth in on-line shopping and demand for merchandise shipped from out of state, due largely to shutdowns created in response to the pandemic. Tourism and Business Travel Burlingame's 12 major hotels provide convenient overnight accommodations for business travelers and tourists using San Francisco International Airport (SFO), with a total of approximately 3,709 rooms available for rental. Hotel occupancy rates are indicative of growth (or lack thereof) in the economy. The rapid and sharp decline in hotel occupancy in area hotels began early in 2020, as international air traffic began to slow. As the pandemic brought most business -related travel activities to a halt, Burlingame's overall hotel occupancy dropped from a seasonally appropriate 82.8% in January to 23.7% in April. Although each passing month shows improved occupancy, as of September occupancy levels remain quite low at 38.7%. The decline in occupancy rates in the latter months of the fiscal year was exacerbated by a drop in average room rates. Although transient occupancy tax (TOT) revenues had been the City's highest revenue source since 2010-11 — at nearly $29.4 million, approximately 34.8% of all General Fund revenues last year - TOT declined by nearly $9 million (30.5%) in the year ended June 30, 2020. As reported by the San Francisco Airport, total domestic and international airport passengers decreased by 89.9% in June 2020 as compared to the month of June 2019, while passenger traffic declined 29.4% from the previous fiscal year ended June 30. Financial Information Accounting System, Budgetary Control & Fund Accounting: All governmental and fiduciary fund types use the modified accrual basis of accounting. Revenues are recorded when measurable and available, rather than when received, and expenses are recorded when the liability is incurred, rather than when paid. Conversely, the accrual basis of accounting is used for proprietary funds. All governmental fund types are accounted for on a spending (or funds flow) measurement focus. Only current assets and current liabilities are generally included on the governmental fund balance sheets. Internal Controls: City management is responsible for establishing and maintaining adequate internal controls to ensure that City assets are protected from loss, theft, or misuse and to assure that adequate accounting data is compiled to allow for the preparation of financial statements that conform to generally accepted accounting principles. Internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits to be derived, and that cost -benefit analysis requires prudent estimates and judgments by management. v The Finance Department establishes internal accounting controls to provide management with reasonable assurance regarding the safeguarding of assets and the reliability of financial records for preparing financial statements and maintaining asset accountability. The City's finance staff and the independent auditor consider the internal controls over financial reporting in planning and performing the annual audit. The independent auditors test the City's internal controls and make inquiries into the staff's knowledge of fraud or the occurrence of fraud. Cash Management: The City pools cash from all operating sources to manage cash flow and invest idle funds. The Finance Director serves as the City's Treasurer and, utilizing the services of a third -party asset management advisor, oversees the investment of funds in accordance with the City Council -adopted Investment Policy and Government Code Sections 53601 and 56535. The Finance Director submits a quarterly investment report to the Council. The Council also reviews and approves the City's Investment Policy early in each fiscal year. Risk Management: The City is a member of the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA), a joint powers insurance authority that consists of 28 member cities in the San Francisco Bay Area. The PLAN JPA was established to provide liability insurance, claims, risk management, and legal defense services to participating members. The program provides the City with liability coverage up to a maximum of $10 million, with the City maintaining a self -insured retention of $250,000. The City also maintains workers' compensation coverage to a maximum of $5 million, with a self -insured retention of $500,000 per claim. The City maintains reserves for all claims below its self -insured retention in separate Internal Service Funds and charges the costs of the program to operating departments. Accruals for current and expected claims have been included in the year-end results for the General Liability and Workers' Compensation Funds based on an actuarial study of current obligations. The City has implemented and is in compliance with Governmental Accounting Standards Board Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues. Debt Administration: In August 2019, S&P Global Ratings reviewed the City's debt obligations and raised the City's issuer credit rating (ICR) and its outstanding pension obligation bonds from AA+ to AAA. At the same time, it raised the long-term rating from AA to AA+ on the City's outstanding lease revenue bonds. The City's water and wastewater revenue refunding bonds are also rated AA+. The rating on the City's three series of storm drainage revenue bonds is AA. In December 2019, the City issued the 2019 Lease Revenue Bonds to help fund a new Community Center, replacing the aged Recreation Center in Washington Park. The $31.4 million issuance yielded $39.2 million in bond proceeds at an all -in interest cost of 3.16%. The bonds were structured to maintain an annual debt service payment of $2 million per year for 30 years. As of June 30, 2020, the City had 12 outstanding bonds or loans, including a taxable bond issue for pension obligations, two loans from the State of California Water Resources Control Board for improvements to the Burlingame Wastewater Treatment Plant, and a storm drain revenue bond issued under the Internal Revenue Service's Build America Bond program. The City annually evaluates each outstanding debt obligation that is subject to arbitrage rebate requirements and determined that there was no arbitrage rebate liability as of June 30, 2020. As of June 30, 2020, the City's general obligation debt limit was $442 million, which represents 3.75% of total assessed valuation based on assessments at 100% of full market value, in accordance with California Government Code Section 43605. With only the 2006 Pension Obligation Bonds ($8.0 million outstanding) considered to be general obligation debt, the City's legal debt margin was $434 million. vi Additional information pertaining to the City's outstanding long-term debt can be found under Long -Term Debt (Note 6) in the Notes to the Basic Financial Statements and in the Statistical Section under Legal Debt Margin information. Certificate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal year ended June 30, 2019. The City has received the award for 18 consecutive years. To receive the award, a government must publish a readable and well organized annual financial report. The report must satisfy both generally accepted accounting principles and applicable legal requirements. The certificate is valid for one year. Staff believes that the City's current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements. Acknowledgments The preparation of this report on a timely basis could not be accomplished in these unprecedented times without the dedicated service of the entire staff of the Finance Department. The department achieved the successful implementation of a new financial system in October 2019 and has been working on the Payroll module implementation as this annual report was being prepared and audited. Each member of the team has our sincere appreciation for their contributions in furthering the fiscal year-end audit while maintaining excellent levels of financial service and accountability. Special thanks go to the City's Deputy Finance Director Karen Huang, who oversaw the compilation and review of the financial statements and continues to lead the new ERP system implementation under very difficult circumstances. The audit firm of Maze and Associates has also been very helpful in meeting the City's audit report requirements and financial reporting. The City Council's continued support in fiscal matters, especially in the maintenance of a long-term, sustainable financial vision, is essential and sincerely appreciated. The financial health of the City is a direct result of their vigilant fiduciary stewardship. Respectfully submitted, va, Lisa K. Goldman City Manager Carol Augustine Finance Director & Treasurer vii Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Burlingame California For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 Executive Director/CEO M CITY NNq CITY OF BURLINGAME, CALIFORNIA ELECTED AND APPOINTED OFFICIALS FISCAL YEAR ENDED JUNE 30, 2020 Emily Beach, Mayor....................................................................November 2024 Ann O'Brien Keighran, Vice Mayor ...........................................November 2022 Donna Colson...............................................................................November 2024 Michael Brownrigg......................................................................November 2022 Ricardo Ortiz.................................................................................November 2022 CITY MANAGER Lisa K. Goldman DEPARTMENT DIRECTORS Community Development............................................................ Kevin Gardiner Finance Director and Treasurer .................................................. Carol Augustine Central County Fire (JPA) Chief ........................................................ Bruce Barron Human Resources......................................................................... Sonya Morrison Library.......................................................................................... Bradley McCulley Parks and Recreation............................................................. Margaret Glomstad Police....................................................................................... Michael Matteucci Public Works.................................................................................... Syed Murtuza Meaghan Hassel -Shearer CITY ATTORNEY Kathleen Kane ix « z 0 F- � < « � L \ k § � � o 0 F- Q Al ■ � .� ■ ■ .E E 0 U L le 6. (D u u A V) Q .§ E .G jo o ±�-E ■%y3«7 Boa£% �mE0E§ a55z E§ S e 2 _j0 ■ -D R Q g.G S ° � � } \ / 0 � [�� � E .0 LLJ 6 ' f a. /U to\ \ ƒ ! \% r Ito 5:a- § � oy§0 Jes.Li C" 3E� 3 �)CL\ j j � 0 x CITY OF BURLINGAME I FISCAL YEAR 2019-20 General Government City Attorney In-house counsel, risk management, and code enforcement City Clerk Elections, City records, public noticing, and maintenance of municipal code City Manager Supervision of departments, implementation of City policy and strategy, management of City communications and sustainability programs Finance Revenue management, disbursements, budget and forecasting, payroll, financial reporting, treasury, purchasing, information technology, telecom and utility billing, business licenses, cashiering and front -desk customer service, and solid waste Human Resources Salary and benefits administration, employment, health and safety, employee training and wellness, and collective bargaining Public Works Engineering Administration of capital improvement program including major and minor repair and replacement of city infrastructure Water & Sewer Delivery of potable water, treatment and discharge of sanitary flows in accordance with environmental, health and safety guidelines Streets & Storm Drainage Street sweeping, transportation and regional shuttles, streetlights, and stormwater management and compliance Public Safety Police Community patrol, 911 communications and dispatch, crime prevention, special weapons and tactics (SWAT), K-9 Program, traffic safety, parking enforcement, and community outreach Central County Fire Department (JPA) Fire suppression and prevention, emergency medical services, and disaster preparedness for the City of Burlingame and the Town of Hillsborough; provision of service to the City of Millbrae via contract Leisure and Neighborhood Services Library City literacy advocacy, circulation of written and digital media, special programs, and community education for citizens, children, and teens Parks Operation and maintenance of urban forest, landscaping, City parks, and infrastructure Recreation Recreational, educational and after -school programs for pre-school children, youth, and seniors Community Development Building Plan checking, inspection, complaint response, development review and consultation, and building research and development Planning Public outreach, Climate Action Plan, land use, economic development, plan checks, and code and zoning enforcement xi O N Q1 r-I O N OC Q W LL a U aLL Z oc wO O LL J u Q w y.j U a. 5; Z O F- Z � Q m C7 LL OC 00 >- F- F- Z V CW G H Q a W 0 W U z a z xn CITY OF BURLINGAMI ORGANIZATIONAL COMPASS The City of Burlingame is an organization that exists to serIve and benefit the community. We deliver unsurpassed municipal services that enhance the quality of life for our citizens. As employees of the City of Burlingame, we recognize the leadership role we play in the community and we hold ourselves accountable to those we serve. We value the partnership that exists between the organization and community and strive to foster and maintain that relationship. As such, we are committed to the tenets of the Organizational Compass: COMMUNITY,5ERVICE THAT 1S RESPONSIVE TO AND MEETS THE NEEDS OF THE PUHLIOBY: ■ Being dedicated to the community we serve ■ Involving and understanding our community ■ Anticipating and adapting to the changing needs of our citizens AN ETHICAL ORGANIZATION THAT INTERACTS WITH THE PUBLIC AND EACH OTHER IN AN HONEST AND PROFESSIONAL MANNER BY: ■ Treating people with respect and dignity ■ Taking responsibility for our decisions, statements and actions to the organization and community ■ Dealing with differences and conflicts in a professional, respectful and authentic fashion ONE ORGANIZATION THAT FOSTERS POSITIVE RELATIONSHIPS AND TEAMWORK BY: ■ Being pan of the solution • Creating and maintaining constructive relationships while respecting individual contributions ■ Focusing on the issues and nccds of the organization and community ■ Enqui-ging behavior that builds confidence and self-esteem r ■ Em$hasizing self -initiative, constant improvement and employee invoivemet4t,� f. POSITIVE LEADERSHIP THAT IS NURTURING AND FORWARD -THINKING BY: ■ recognizing the leadership role all employees play in the community ■ Encouraging innovation and creativity ■ Leading by example r t ■ Being supportive, humanistic and compassionate As City employees we embrace the Organizational Compass and will be guided by its points. Comprehensive Annual Financial Report June 30, 2020 aVleVtoF-Asi eIM01 Comprehensive Annual Financial Report June 30, 2020 ILI 19.101 BON foRYAWN III RULI Comprehensive Annual Financial Report June 30, 2020 F\J, M ADZ E INDEPENDENT AUDITOR'S REPORT To the Honorable Members of the City Council City of Burlingame, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business - type activities, each major fund, and the aggregate remaining fund information of the City of Burlingame, California as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the Table of Contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Accountancy Corporation 34 7 B Buskirk Avenue, Suite 215 Pleasant Bill, CA 94523 r 925.930.0902 r 925.930.0135 s maze(Omazeassociates.com w maxeassociates.com 1 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Burlingame as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management's Discussion and Analysis and other required supplementary information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The Introductory Section, Supplemental Information and Statistical Section listed in the Table of Contents are presented for purposes of additional analysis and are not required parts of the basic financial statements. The Supplemental Information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplemental Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 23, 2020 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. -1GtrlQ- A 55 C) ct\ox� Pleasant Hill, California November 23, 2020 3 Comprehensive Annual Financial Report June 30, 2020 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 This is Management's Discussion and Analysis of financial activities for the fiscal year ended June 30, 2020. This information should be read together with the transmittal letter, financial statements, and notes to the basic financial statements to better understand the City of Burlingame's (the City) financial position. The City has prepared its annual financial report in accordance with accounting principles generally accepted in the United States of America (GAAP) and all Governmental Accounting Standards Board (GASB) pronouncements that affect the City. Financial Highlights for Fiscal Year 2019-20 (ending June 30) Key financial highlights for the year are as follows: • In total, City assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $305.7 million, which is a $31.1 million increase compared to the beginning net position. • Governmental fund balances increased $43.1 million, to $172.0 million. Of this amount, approximately $12.3 million, or 7.1%, was unassigned fund balance and available for spending at the City's discretion. • The Enterprise Funds net position increased by $12.7 million to over $134.2 million. Of this amount, $39.7 million was unrestricted net position and available for use at the City's discretion. • General Fund revenues decreased by $12.4 million in fiscal year 2019-20, a decrease of 14.6% over the prior year's total of $84.5 million. The decrease in revenue was largely the result of the international response to the COVID-19 pandemic early in 2020, which drove transient occupancy (hotel) taxes down nearly $9.0 million (30.5%), and caused a retraction of sales and use tax revenues of approximately $3.0 million (16.9%) when compared to the prior year. Property tax revenues remained strong, rising over $1.3 million (6.1%). • At mid -year, the City Council authorized amendments to decrease various revenue sources in the General Fund budget in the amount of $9.6 million, as the impaired revenues became evident during the third quarter of the fiscal year. • The General Fund ending fund balance decreased from $49.2 million to $44.8 million. Of this amount, $21.7 million has been assigned — intended to be used for specific purposes. Overview of the Financial Statements This section introduces the reader to the City's three basic financial statements: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. The report also contains supplemental information to help the reader develop a full understanding of the City's financial activities. k, CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Government -Wide Statements The government -wide financial statements include the Statement of Net Position and the Statement of Activities. These statements provide a broad overview of the City's finances. They are presented in a manner that is similar to private -sector business. The Statement of Net Position presents complete information on the City's assets and deferred outflows of resources, as well as liabilities and deferred inflows of resources, with the difference reported as net position. Changes in net position that occur over time may serve as an indicator of the City's financial position. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported using the "accrual basis of accounting." Changes are reported when the underlying event causing the changes occurs, regardless of the timing of the related cash flows. Therefore, revenue and expenses are reported in this statement for some items that will result in cash flows in future years, such as revenues related to uncollected taxes, or earned but unused employee leave. Both government -wide financial statements distinguish between governmental activities, such as City functions that are supported by taxes and intergovernmental revenue, and other activities that are self- supporting. The self-supporting functions are called "business -type activities," or enterprise funds. They are intended to recover all or a significant portion of their costs through user fees and charges for services. Governmental activities include general government administration, public safety (such as police, fire, and 911-dispatch), public works, community development, parks, recreation and library, shuttle bus operations, and financing and other activities. The self-supporting, business -type activities include water, sewer service, parking, waste management, landfill, and building inspection. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance -related legal and accounting requirements. The City's funds can be divided into three categories: governmental, proprietary, and fiduciary. Governmental Funds Governmental funds account for tax supported functions reported as governmental activities in the governmental -wide financial statements. Governmental funds use the "current financial resources" measurement focus, with an emphasis on having sufficient resources to meet expenditures in the short- term — a 12 month fiscal year. These statements focus on how cash and other financial assets can be readily converted to available resources for spending on City services. They also show fund balances that are left at the end of the fiscal year and distinguish between amounts that are restricted versus funds that are available for spending. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impacts of the City's near -term financing decisions. Both 11 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental activities and governmental funds. The City has four major governmental funds: General, Capital Projects, Storm Drainage, and Debt Service. Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances for these funds. Financial information for the remaining governmental funds is combined into a single, aggregated presentation called Non -Major Governmental Funds. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements located elsewhere in the report. Proprietary Funds Proprietary funds are used to account for services and activities for which a fee is charged to customers in exchange for City provided goods or services. Proprietary funds use the "economic resources" measurement focus, which concentrates on how transactions and events have affected the fund's total economic resources. The City maintains two different types of proprietary funds. Business -Type Activities or Enterprise Funds: These are funds that are used to report business -type activities in the governmental -wide financial statements. The City has six enterprise funds: Water, Sewer, Parking, Waste Management, Landfill, and the Building Fund. Internal Service Funds: These funds are used to allocate costs internally among the City's functions. The City uses internal service funds to account for the maintenance and replacement of its fleet and rolling stock; maintenance of City buildings and facilities; general liability; workers' compensation; and information technology and administrative support. These funds are included in the governmental activities of the government -wide financial statements because their activities support governmental programs. The internal service funds are then combined into a single, aggregated presentation in the proprietary fund financial statements. Individual data for the internal service funds is provided in the form of combining statements. Fiduciary Funds Fiduciary funds are used to account for financial resources held for the benefit of parties outside the City government. The City holds these funds in a custodial capacity or as an agent for individuals, private organizations, or other governmental units such as the State of California or the United States. Fiduciary funds are not reflected in the government -wide financial statements because the resources of these funds are not available to support the City's governmental activities. Government -Wide Financial Analvsis All financial statements are presented in conformance with GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis (MD&A) —for State and Local Governments. Prior year information is made available for a comparative analysis of government -wide data. Analysis of Net Position The City had a total net position of $305.7 million as of June 30, 2020. Net position increased by 11.3% from the beginning total net position of $274.6 million. Assets and deferred outflows of resources as of 7 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 the end of June 30, 2020 were $558.2 million, reflecting a 13.5% positive change from the prior year due to a $53.2 million increase in current assets and deferred outflows of resources as well as a $13.4 million increase in capital assets. Liabilities and deferred inflows of resources increased by 16.3% ($35.5 million). In addition to the $32.1 million increase in long-term debt due largely to the issuance of Lease Revenue Bonds in December 2019, the City experienced an increase in net pension liability and related deferred inflows ($4.5 million). Offsetting these increases somewhat was a $3.8 million decrease in the City's OPEB (retiree medical obligations) liability and related deferred inflows. The largest portion (approximately 59.4%) of the City's net position is its net investment in capital assets totaling $181.5 million. Capital assets are the aggregate value of land, buildings, and improvements that are used to provide services. Their value is reported net of related debt because the funds to repay the debt come from other sources - the capital assets themselves cannot be used to liquidate these liabilities. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. An additional portion of the City's net position, $97.2 million (31.8%), represents resources that are subject to restrictions that may only be used for debt service, to construct specified capital projects, or within the confines of special revenue programs. Unrestricted net position can be used to finance day-to-day operations without constraints established by debt covenants or other legal requirements or restrictions. The City's unrestricted net position on June 30, 2020 was approximately $27.0 million, or 8.8% of total net position. City of Burlingame Comparative Statement of Net Position June 30, 2020 and 2019 (Amounts In Millions) Governmental Business -Type Activities Activities Totals 2020 2019 2020 2019 2020 2019 Assets: Current and other assets $203.78 $156.61 $84.11 $75.80 $287.89 $232.41 Capital assets 141.17 130.03 111.06 108.84 252.23 238.87 Total assets: 344.95 286.64 195.17 184.64 540.12 471.28 Deferred Outflows: 14.62 16.22 3.47 4.15 18.09 20.37 Liabilities: Current liabilities 10.81 8.72 6.68 6.18 17.49 14.90 Other liabilities 2.70 2.85 1.54 1.51 4.24 4.36 Long term liabilities 166.35 135.92 54.58 59.28 220.93 195.20 Total liabilities: 179.86 147.49 62.80 66.97 242.66 214.46 Deferred Inflows: 8.19 2.26 1.64 0.28 9.83 2.54 Net Position: Net investment in capital assets 107.08 98.57 74.43 69.49 181.51 168.06 Restricted 77.14 28.85 20.02 15.48 97.16 44.33 Unrestricted (12.70) 25.68 39.75 36.56 27.05 62.24 Total net position: $171.52 $153.11 $134.20 $121.54 $305.72 $274.65 W CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Governmental Activities Governmental activities increased the City's net position by $18.4 million, with a total net position of $171.5 million at the end of the fiscal year. The increase was attributable to total governmental revenues that exceeded total expenses by $10.2 million, prior to net transfers in of $2.2 million and net investment income of $6.0 million. City of Burlingame Statement of Activities For the Fiscal Years Ended June 30, 2020 and 2019 (Amounts in millions) Governmental Business -Type Activities Activities Total 2020 2019 2020 2019 2020 2019 Revenues: Program revenues: Charges for services $11.81 $11.21 $42.63 $42.47 $54.44 $53.68 Operating grants and contributions 0.42 0.63 - - 0.42 0.63 Capital grants and contributions 0.20 0.51 0.20 0.51 General revenues: Property taxes 23.30 21.95 23.30 21.95 Sales taxes 14.80 17.82 14.80 17.82 Transient occupancy taxes 20.42 29.38 20.42 29.38 Other taxes 5.50 5.21 - - 5.50 5.21 Other general revenue 0.39 0.46 0.83 0.20 1.22 0.66 Total revenues: 76.84 87.17 43.46 42.67 120.30 129.84 Expenses: Governmental Activities General government 6.71 6.18 6.71 6.18 Public safety 31.55 28.63 31.55 28.63 Public works 7.64 7.57 7.64 7.57 Community development 2.38 1.75 2.38 1.75 Parks, recreation and library 16.06 16.87 16.06 16.87 Shuttle operations 0.16 0.17 0.16 0.17 Interest 2.14 1.81 - 2.14 1.81 Business -Type Activities - Water - - 15.11 14.85 15.11 14.85 Sewer service 12.22 11.87 12.22 11.87 Waste management 0.64 0.73 0.64 0.73 Landfill 0.21 0.22 0.21 0.22 Parking 1.00 0.93 1.00 0.93 Building inspection - 2.35 2.49 2.35 2.49 Total expenses: 66.64 62.98 31.53 31.09 98.17 94.07 Increase/(decrease) in net position before transfers 10.20 24.19 11.93 11.58 22.13 35.77 Loss on disposal of capital assets 0.00 0.00 0.00 0.00 0.00 0.00 Investment income (expenses) 6.00 5.76 2.94 2.13 8.94 7.89 Transfers 2.21 2.16 (2.21) (2.16) - Change in net position: 18.41 32.11 12.66 11.55 31.07 43.66 Net position - beginning 153.11 121.00 121.54 109.99 274.65 230.99 Net position - ending $171.52 $153.11 $134.20 $121.54 $305.72 $274.65 PEI CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 General revenues decreased by nearly $10.3 million (13.7%). The decrease was largely the result of a 30.5% ($9.0 million) decrease in transient occupancy tax receipts: hotel occupancy remained on par with the prior fiscal year until February of 2020, when the first signs of the coronavirus curtailed international travel. The most rapid and steep decline occurred in mid -March, as California was among the first states to issue stay-at-home orders to prevent further spread of the virus. Sales taxes also declined precipitously in the last four months of the fiscal year, with only "essential businesses" allowed to operate fully. In all, sales tax revenues decreased by approximately $3.0 million (16.9%) from the prior fiscal year. Property tax revenues remained strong, coming in $1.3 million (6.1%) higher than in the prior year. Expenses from governmental activities increased over $3.6 million, for a total of $66.6 million for the fiscal year. Expenses increased 10.2% ($2.9 million) in the area of public safety, which includes the City's Police Department as well as services provided by the Central County Fire Department. A 4.8% ($0.8 million) decrease was experienced in the recreation, library, and shuttle programs, as these activities were dampened by the public health emergency. But expenses in all other functional areas increased due to staffing increases at mid -year. The addition of over $1 million in new programs to assist the City's small businesses and most impacted citizens in responding to the pandemic also added to the cost of governmental activities. The majority of these governmental activities are financed from City taxes. However, the $11.8 million collected in charges for services (reported as program revenues) for these various activities served to offset the departmental spending associated with some services. Overall, program revenues covered approximately 18.6% of governmental expenses over the fiscal year. Although program revenues from governmental activities were slightly higher when compared to fiscal year 2018-19, the composition of these revenues was quite different, as shown in the chart below. While the Community Development Department was able to process a high volume of project applications, the pandemic created an abrupt limitation of recreational offerings, and their associated revenues, in the last four months of the fiscal year. Governmental Activities Two -Year Comparative Program Revenues Fiscal Years 2019 and 2020 ■2019 ■2020 (Amounts in millions) 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0�- General Public Safety Public Works Community Parks, Recreation, Shuttle Operations Government Development and Library 10 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 The charts of expenses and net cost of the City's various governmental activities shown below have been derived from the Statement of Activities. The first pie chart reflects expenses incurred in each area as a percentage of the total expense of governmental activities ($66.6 million in fiscal year 2019-20). This compares with the relative net cost after applying program revenues derived from each area's activity shown in the second chart. The total net cost of governmental activities ($54.2 million in fiscal year 2019- 20) must be funded out of the City's general revenues — primarily taxes and investment earnings. Areas with the highest program revenues (i.e., planning permits and recreation offerings) are able to offset relatively more costs than activities that have fewer opportunities to derive program revenues (such as public safety). Governmental Expenses - by Program Fiscal Year 2019-20 0.2°i 3.2% ■ General Government • Public Safety FAA 24.1% Public Works ■ Community Development 3.6%J 11� Parks, Recreation, and Library Shuttle Operations ■ Interest Business -Type Activities Governmental Activities - Net Expense by Program Fiscal Year 2019-20 0.2%I 4.0% ■ General Government ■ Public Safety 23.8% Public Works I■ Community Development -1.3%' 6.Parks, Recreation, and 10% Library Shuttle Operations ■ Interest The net position for business -type activities increased by nearly $12.7 million, or 10.4%, from a beginning net position of $121.5 million. The increase is largely a result of the collection of revenues needed to fuel future utility infrastructure and improvements. In fiscal year 2019-20, enterprise operations produced total operating revenue (consisting largely of revenues from charges for services) of $42.6 million, marking a mild (less than 0.4 %) increase from fiscal year 2018-19 operating revenues. The water utility showed the biggest boost in revenues (an increase of slightly under $1 million — 4.8%), as the last of a series of rate increases was implemented January 1, 2019. Building activities also showed a revenue increase ($0.6 million, or 19.9%) due largely to an increase in construction permitting activities. Other business -type revenues were down, most notably, parking fees totaled $1.9 million, down from nearly $2.8 million in fiscal year 2019-20. Charges for sewer services were down 3.7 percent, as the utility's larger hotel customers reduced operations in the latter portion of the fiscal year. Business -type expenses totaled $31.5 million. Operating expenses for these activities increased slightly (1.4%), from prior year expenses of $31.1 million. This increase was largely attributable to expenses incurred with Water and Sewer utilities, although the cost of Parking operations also increased somewhat. These activities maintained fairly constant staffing levels throughout the year, despite any decrease in service demand due to the pandemic. 11 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 The changes in net position reflected a relatively healthy increase for these enterprise activities. Unlike the governmental activities, program revenues cover total expenses in the business -type activities, with no contribution from City taxes. The City is able to adjust water, sewer, solid waste, parking rates, and building permit fees to cover expenditures and future liabilities. Financial Analysis of City Funds Governmental Funds The Governmental Funds financial statements provide information on the short-term inflows, outflows, and balances of resources that are available for spending over the 12-month fiscal period. The goals of the funds are to have sufficient resources available to finance City services within each fiscal year. In particular, the unassigned fund balance may serve as a measure of City funds that are available for spending in the short-term. The General Fund, Capital Projects Fund, Storm Drainage Fund, and the Debt Service Fund, or collectively, the 'major funds,' are reported separately in the basic Financial Statements. A separate accounting of the City's nine non -major governmental funds can be found in the Combining Statements located in the Other Supplementary Information section of the CAFR. Total Governmental Funds (Amounts In Millions) 6/30/2020 7/1/2019 Change- Net Net Position/Fund 6/30/2020 Net Position/Fund 7/1/2019 Position/Fund Fund Description Balance Nonspendable Balance Nonspendable Balance General Fund $44.83 $0.01 $49.17 $0.00 ($4.34) Capital Projects 61.09 - 56.56 - 4.53 Storm Drainage 7.09 - 5.57 - 1.52 Debt Service Fund 45.97 - 8.00 - 37.97 Non -Major Funds 12.98 - 9.55 - 3.43 $171.96 $0.01 $128.85 $0.00 $43.11 Total The General Fund is the City's main operating fund. Revenues and expenditures are monitored year-round to maintain a balanced budget. General Fund revenues totaled $72.2 million in fiscal year 2019-20, reflecting a $12.4 million (14.6%) decrease from the prior year's performance of $84.5 million. Expenditures totaled $58.2 million, which is $2.4 million higher than in the prior year. Revenues less operating expenditures before transfers were nearly $14.0 million. The General Fund transferred $4.7 million out to the Debt Service Fund to pay for governmental debt, and nearly $16.0 million to the Capital Projects Fund. The large contribution for capital spending was approved to pay for project -related expenditures ($9.5 million), and to bolster the Capital Investment Reserve ($6.5 million) established in past fiscal years in recognition of the City's large backlog of facility needs. Detailed notes on the transfers can be found in the Interfund Transfer section (Note 4) in the Notes to the Basic Financial Statements. The General Fund balance as of June 30, 2020, was $44.8 million, representing a decrease of $4.3 million from the prior year fund balance of $49.2 million. The City Council assigned $21.7 million as reserves for specific purposes as described in Note 12 of the Notes to the Basic Financial Statements, of which approximately $323,000 represents contractual obligations (encumbrances) and reappropriations of specific program funding that will carry forward to the next fiscal year. $10.8 million of the ending General Fund balance reflects the amount of cash and investments restricted as to use for specific purposes - this is the amount held in the City's § 115 Trust Fund to pay required future pension contributions attributable to governmental funds. The remaining $12.3 million represents unassigned amounts. 12 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Capital Projects Fund The Capital Projects Fund accounts for the resources used to acquire, develop, and construct capital improvements or to purchase major capital equipment for governmental activities. The City capitalizes equipment with a cost basis of at least $5,000 and that has an estimated useful life in excess of one year. Structures, improvements, and infrastructure with a value of at least $250,000 are also capitalized. All capital assets are valued at historical cost. Major outlays for capital assets and improvements are capitalized as projects are constructed. For more information on capital assets, please refer to the Notes to the Basic Financial Statements under Capital Assets (Note 5). The Capital Projects Fund had revenues of nearly $393,000, which is nearly $152,000 lower than the prior year. The lower amount was largely due to a decrease in grant reimbursements when compared to the prior year. In fiscal year 2019-20, projects were financed mainly by nearly $19.3 million in transfers from other funds to support ongoing construction costs and to support previously appropriated projects. In addition to the General Fund contribution of $16.0 million, $1.4 million of Storm Drain bond proceeds and $1.8 million from the Measure A and Gas Tax special revenue funds were transferred into the Capital Projects Fund. Capital project expenditures totaled $15.1 million, a decrease of $943,000 from prior year expenditures. The Capital Projects fund balance at the end of the fiscal year was $61.1 million, an increase of $4.5 million from the prior year ending balance. Other than the $24.7 million reserve for Capital Investment, the entire fund balance is assigned for the construction of specific capital projects. During fiscal year 2019-20, major governmental capital projects exceeding $100,000 in current year spending included the following: • New Community Center — $3.8 million The City Council approved a list of pre -qualified bidders for the construction of the long-awaited Community Center early in the fiscal year; in April, the Council approved a contract with the successful bidder. Demolition of the existing Recreation Center was completed in June. The completed project is expected to cost nearly $52.2 million. • Washington Park Playground/Sports Court/Picnic Areas - $2.1 million Of the $3.3 million spent on Parks & Recreation projects, much of the spending in fiscal year 2019- 20 was at Washington Park. After years of community outreach meetings and master planning and design, site preparation work for the future Community Center began in earnest early in the new fiscal year. This included replacing and reconfiguring the existing outdoor facilities at Washington Park through the installation of a new playground, a sports court, and a small picnic area. Although this work was necessary to allow for the construction of the new Community Center, this was established as a standalone project for budgeting purposes. • Citywide Playgrounds — Murry Field Natural Playground- $259,000 After 19 years of use, the Murray Field Playground was out of compliance with ADA, and the surfacing was worn and no longer met the ASTM standards for fall safety. The fiscal year 2019-20 Budget included funding for the demolition and redesign of the playground. The project included relocating the existing playground to create a 60 x 40 grass practice area for soccer teams utilizing the field, while still providing a play area for siblings and/or other children visiting Murray Field. Now that the base project is complete, Parks Division staff continue to add additional natural elements to the playground for a unique play experience. 13 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Bay Trail Fitness Equipment - $197,000 To enhance physical fitness opportunities along the bayside, the City installed fitness equipment at strategic locations along the Bay Trail. The project included the installation of concrete pads and outdoor fitness equipment, and provided for curbs, proper drainage, and landscaping. A consortium of hoteliers, the Burlingame Parks & Recreation Foundation, and other donors provided funding to allow for the upgrade of the equipment surfacing. Fire Station 35 Rehab & HVAC System Upgrade - $1.0 million This project consisted of making improvements to the Central County Fire Department Station 35, including renovations of station sleeping quarters, replacement of mechanical systems, hot water heaters, roofing, skylights, and electrical panel replacement. Police Station Fuel Tank Replacement - $583,000 Two underground storage tanks (USTs) were removed from the Police Station at 1111 Trousdale Drive. The 12,000 gallon gasoline tank was used for refueling police vehicles, and a 4,000 gallon diesel tank was used for standby power for the generator. Associated work included obtaining a UST removal permit from San Mateo County, demolition of the refueling station, removal of contaminated soil, backfill with engineered fill, and restoration of the asphalt parking lot. • Neighborhood Storm Drain Projects #11 and #12 - $940,000 These projects are part of a series of projects identified as part of the Storm Drainage Master Plan to improve drainage and minimize localized flooding. Project work includes construction of new storm drain inlets, storm drain mains, curbs and gutters, sidewalks, valley gutters, concrete channels, medians, drainage structures, curb ramps, driveway approaches, and replacement of existing storm drain facilities in public rights -of -way and storm drain easements. While Storm Drain Project #11 was largely completed by fiscal year end, the construction phase of Project #12 encountered material supply delays. Easton Drive Drainage Improvements - $348,000 This project improved the storm drainage system in the neighborhood around 2627 Easton Drive. Project work included construction of new storm drain piping, inlets, curb, and gutter in the public right-of-way and storm drain piping through an existing easement in private property 2019 Annual Street Resurfacing Program Project — $1.9 million This project consisted of resurfacing 17 collector and residential streets. This project is part of a continuous effort to resurface older street segments. The work consisted of street base failure repair and resurfacing on various City streets within the city limits and two shared streets with the City of Millbrae. The project included asphalt concrete "dig -out" repairs, asphalt concrete overlay, curb drains, reconstruction, curb and gutter repair, curb ramp improvements, surface milling, traffic markings and striping, curb drains, traffic control, concrete base repair, and other related work. 2019 Sidewalk Repair Program — $1.1 million The City's Sidewalk Repair Program is part of the City's ongoing effort to provide safe and ADA- compliant sidewalks for the community. Project work included removal and replacement of sidewalks, driveways, curb ramps, and curb and gutter removal of trees; grinding of stumps; and associated restoration work. 14 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 • New Financial System Project — $222,000 After selecting and procuring an agreement with Tyler Technologies for the Munis° Enterprise Resource Planning (ERP) System in the prior fiscal year, the Finance Department implemented the Accounting Modules of the new Financial System in fiscal year 2019-20, going live in October 2019. The Human Capital Management modules will constitute phase II of the implementation. Phase III will consist of the implementation of the Utility Billing System modules for the City's Water and Sewer utilities. In all, capital projects spending included $3.3 million in Parks and Tree projects, $6.3 million in Facilities projects, $4.1 in Pavement projects, and nearly $1.5 million in Storm Drain capital improvements. Debt Service Fund The Debt Service Fund is used to account for resources used to repay general long-term debt and to record the payment of principal and interest as well as other expenditures related to debt administration. In December 2019, the City issued lease revenue bonds to fund the construction of the long -planned Community Center, to replace the aging Recreation Center, in Washington Park. The $31.4 million issuance netted $39.2 million in bond proceeds; the $7.8 million premium will be amortized over the life of the bonds. The bonds were structured to maintain an annual debt service payment of $2 million per year for 30 years. Debt service on the issuance will be funded totally from the City's General Fund, bolstered by revenues from the Measure I % percent transactions tax approved by voters in November 2017. Initial debt service on the bonds was made in June 2020, leaving a $30.2 million principal balance on the issuance. Total principal payments on outstanding debt reduced general government debt by over $3.9 million. The General Fund contributed nearly $4.7 million to the Debt Service Fund for governmental debt service payments. The Storm Drainage Fund paid nearly $2.1 million as required to meet obligations relating to the Storm Drain Revenue Bonds. Taxable Build America Bonds comprised a significant portion of the 2010 Storm Drain Bonds; the Internal Revenue Service provided an annual interest subsidy of approximately $157,000 for this issuance. Debt service expenditures represent principal payments, interest charges, and administrative costs of debt such as fiscal agent fees on existing governmental debt. A more detailed description of the City's outstanding debt and the long-term obligations associated with each issue can be found in the Notes to the Basic Financial Statements under Long -Term Debt (Note 6). Storm Drainage Fund The Storm Drainage Fund was added as a special revenue fund in fiscal year 2009-10 to fund needed improvements to the City's infrastructure and to pay debt service on certain revenue bonds issued to fund storm drain capital projects. The voter -approved initiative requires that the funds be accounted for separately, given their intended purpose. The voters approved the new fee in May 2009, and revenues are collected through an assessment on property tax bills. The storm drain fee will sunset after 30 years. Neighborhood storm drainage improvements continued in fiscal year 2019-20. The storm drain fee generated about $3.0 million in revenue. The funds are dedicated to debt service on the use of storm drain revenue bonds and to fund improvements on a pay-as-you-go basis. Revenue bonds issued with a pledge of storm drain fee revenues are used as a funding source for these projects in the Capital Projects Fund. 15 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 The fund balance increased by over $1.5 million during the fiscal year, as revenues from storm drain fees and interest earnings were adequate to fund the $2.1 million debt service expense for the fiscal year. Non -Major Governmental Funds Fiscal year 2019-20 marked the second full year of S131 funding - the 2017 Road Repair and Accountability Act (S131) allocations from the State. Gas Tax revenues increased nearly $52,000 (to over $1.2 million) due to S131 inflows. Measure A revenues remained heathy, with an increase in this funding source of $30,000 from the prior year. Together, Measure A and Gas Tax Funds provided over $2.1 million of traffic and street improvements. Non -major governmental fund balances in total increased approximately $3.4 million, or 36.0%, during the fiscal year due to an increase in development fees of approximately $2.2 million. In addition, a new fund was established to account for receipts from San Mateo County's Measure W tax. The % percent sales tax was approved by the voters in November 2018; the City receives a small allocation of Measure W receipts to be used for roadway improvements. As most of these funds are intended to fund capital projects, it is fitting that they accumulate to significant amounts before being appropriated to specific capital projects. For example, although annual expenditures of Measure A and Gas Tax Funds account for the majority of the City's non -major governmental funds' financing uses, the Development Fees Fund holds the preponderance ($9.1 million) of the total $13.0 million non -major governmental funds' balance. Proprietary Funds The City's proprietary fund statements provide the same type of information found in the government - wide financial statements. Proprietary funds consist of the City's six enterprise funds (Water, Sewer, Waste Management, Landfill, Parking, and the Building Enterprise funds) and six Internal Service Funds (General Liability, Workers' Compensation, Facilities Services, Equipment Services, OPEB, and Information Technology Services funds). Operations of the City's Enterprise funds are accounted for as business activities. Total Enterprise Funds (Amounts In Millions) 6/30/2020 7/1/2019 Yr-over-Yr 6/30/2020 Net Investment 7/1/2019 Net Investment Change - Net Fund Description Net Position in Capital Assets Net Position in Capital Assets Position Water $36.60 $18.46 $31.19 $16.03 $5.42 Sewer 66.06 48.40 62.73 46.02 3.31 Waste Management 4.35 - 3.96 0.39 Landfill (1.11) - (1.46) 0.34 Parking 17.76 7.57 16.72 7.44 1.04 Building 10.55 - 8.40 - 2.15 $134.20 $74.43 $121.53 $69.49 $12.65 Total Water Fund The Water Fund continues to maintain a stable financial position despite considerable variability in water consumption in recent years. As a result of the end of six consecutive years of drought in the winter of 2017, water consumption increased and has stabilized over the past three years, though certainly not to the level of pre -drought years. Assisted by 7.5% rate increases for each of three consecutive years (the last 16 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 approved rate increase was effective starting January 1, 2019), the revenues of the water utility increased steadily over the years. Total operating revenues for the Water Fund increased $958,000 (4.9%) in the 2019-20 fiscal year, while operating expenditures increased a modest $284,000 (2.0%). The City continues to invest in updates to the aging water system. Total spending on capital projects (nearly $3.1 million in fiscal year 2019-20) included $1.3 million for completion of the East Burlingame Avenue and Anza Lagoon Bridge Improvements project. The project consisted of updating the domestic water main along Burlingame Avenue and installing a new water main at the Anza Lagoon Bridge. Also completed was Phase 2 of the Shoreland Subdivision Water Improvements, which replaced 4200 linear feet of pipelines originally installed in 1928. Residents in the surrounding area saw improved water quality, fire flow, and water pressure to their homes. Water Fund Historical Financial Performance Last 5 Fiscal Years Millions tTotal Revenue: tTotal Expenses: --1b—Net Position, excluding net investment in capital assets and capital projects: $24 $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 FY16 FY17 FY18 FY19 FY20 The net position of the Water Enterprise Fund increased by $5.4 million, to $36.6 million. The largest portion of net position ($18.5 million) relates to the net investment in capital assets, representing 50.4% of the utility's total net position. Approximately 23.4% of the fund's net annual revenue is irrevocably pledged to the prompt payment of debt service relating to future payments of principal and interest on revenue bonds previously issued. Sewer Fund The Sewer Fund continues to be financially stable, with an increase in the fund's overall net position (including capital assets) of $3.3 million, to $66.1 million, due largely to operating income. A concerted effort to increase the fund's net investment in capital assets through improvements to the City's waste water collection system and the treatment plant will advance the fund's position further in the near future. Note that the largest portion of the net position ($48.4 million) relates to this net investment in capital assets, representing 73.3% of the utility's total net position. Approximately 34.9% of the fund's net revenue is irrevocably pledged to the prompt payment of debt service relating to future payments of principal and interest on revenue bonds previously issued. 17 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 As a large portion of sewer charges are based on water consumption, sewer service revenues decreased markedly in the second half of the year, as large commercial water use declined. Though rising in the first half of fiscal year 2019-20, revenues from sewer service charges declined 3.7% for the year as a whole. There has been no annual rate increase for sewer service imposed in calendar years 2012 through 2020. Total operating expenses of the Sewer Fund increased 3.6%, largely in the area of personnel costs. Sewer Fund Historical Financial Performance Last 5 Fiscal Years tTotal Revenue: Millions tTotal Expenses: -gk--Net Position, excluding net investment in capital assets and capital projects: $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 FY16 FY17 FY18 FY19 FY20 As with the Water Fund, the Sewer Fund will also finance future capital improvements on a pay-as-you-go basis. The adopted budget for fiscal year 2019-20 included a set -aside of nearly $5.1 million to pay for capital improvements to the Burlingame Wastewater Treatment Plant and repair and maintenance of the sewer collection system. Total actual spending on capital projects was closer to $4.3 million, including nearly $3.9 million on sanitary mains, pipe and pump replacements, and upgrades throughout the city. This spending includes $1.3 million on the sanitary sewer work associated with the aforementioned East Burlingame Avenue and Anza Lagoon Bridge Improvements project. The remaining $434,000 was spent on improvements at the City's Wastewater Treatment Plant, including work on the Wastewater Collection System Master Plan, currently nearing completion. Parking Fund The objectives of the Parking Fund are to cover the costs of operating and improving the City's parking districts and to produce sufficient revenue to re -invest in the capital assets of the Burlingame and Broadway Avenue shopping districts, which are served by the City's parking lots. The fund's overall ending net position, including capital assets, increased over $1.0 million over the prior year ending net position of $16.7 million. The City funded a $2.5 million contribution toward a five -level parking garage on the City's former Parking Lot N (in conjunction with the development of the Village at Burlingame affordable workforce and senior apartment development on the adjacent lot) from the Parking Enterprise Fund. Hence, the fund's unrestricted net position is decreased, and the amount restricted for capital projects is increased from the prior year. Because much of the fund ($7.6 million) is invested in capital assets, the overall increase in net position is reflected in higher cash balances. liu: CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Revenue in the Parking Fund was fairly level with the prior year until the emergence of the coronavirus pandemic early in the spring of 2020. In an effort to assist the City's downtown businesses, parking restrictions were lifted for the remainder of the fiscal year, resulting in a loss of fee revenue. Operating revenues for the fund, at $1.9 million, were down approximately 30% from the prior year. Operating expenses increased by $79,000 (8.5%), largely due to increased personnel costs from full staffing in the current fiscal year. Investment income of $452,000 on the fund's cash reserves helped bolster the fund's ending net position. Waste Management and Landfill Funds The City is a member of the South Bayside Waste Management Authority (SBWMA), a joint powers authority that contracts with external vendors for solid waste collection and disposal as well as collection of inert recyclable materials, yard waste, and other organic materials. The Waste Management Fund accounts for certain other services that the City provides or pays for directly. The costs of these services, which include the cleaning of sidewalks, parking lots, and garbage cans/liners, hazardous waste disposal, and street sweeping, are built into garbage collection rates for both residential and commercial customers. Operating revenues of the Waste Management fund totaled $0.9 million in fiscal year 2019-20, 24.8% higher than reported in the prior fiscal year. Despite a 6% increase in solid waste rates as of January 1, 2020, fee revenues were flat due to a decrease in demand from commercial customers as business operations declined in response to the pandemic. However, revenues from the forfeiture of C&D deposits, largely from prior year development projects, increased significantly. These fees, shared equally with the Building Enterprise Fund, generated an additional $210,000 for the fund (included as miscellaneous revenue). The Waste Management fund's unrestricted net position largely reflects a rate stabilization reserve, built largely from prior year surpluses as a buffer to large rate swings. The City Council approved rate increases of 6% for the three calendar years beginning January 1, 2019 in order to mitigate continued draws on the rate stabilization reserve and to bolster the fund in anticipation of cost increases in waste management contracts in calendar year 2021. A surcharge on garbage collection rates funds the costs associated with the long-term monitoring requirements of the former city landfill. The surcharge yielded $480,000 in fiscal year 2019-20, level with the prior year revenues for the fund. The Landfill Fund continues to report a deficit position of nearly $1.1 million due to the status of the City's obligation to mediate closure and post -closure activities relating to the City's old landfill. On an annual basis, the City reports to CalRecycle (Department of Resources Recycling and Recovery) the estimated costs of post -closure and corrective action as adjusted for inflation and current year expenditures pertaining to mitigation. The landfill closure and post -closure liability increased slightly ($65,000) during the fiscal year due largely to the inflationary factors prescribed by CalRecycle, but the fund's ending net position increased by $351,000 (24.0%) when compared to the prior year as expenses were kept to a minimum. Internal Service Funds The Internal Service Funds (ISFs) are allocated among the City's various functions and are therefore considered to account for governmental activities for financial statement purposes. The Internal Service Funds as a whole experienced an increase in net position of nearly $1.3 million, but this amount reflects a wide variation in the change of net position of the various funds. The General Liability fund net position increased $1.0 million, with only slight increases in liabilities when compared to the prior year, and no large claims pay -outs. Claims and litigation liabilities were adjusted based on an actuarial study completed in 19 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 June 2019. The OPEB fund, which accounts for the cost of the City's retiree medical program, shows a balance of $147,000 due to amounts accrued for contribution to the OPEB trust fund (for retiree medical benefit obligations), but not yet paid out at the end of the fiscal year. Although the Facilities Services ISF showed a slightly improved net position from operations, the fund's negative net position reflects the inclusion of large net OPEB liabilities and pension liabilities in the fund's balance sheet that were not sufficiently covered in the charges to departments of prior years. The costs of the services provided by these funds are carefully monitored, and the charges to the departments are adjusted each fiscal year as appropriate. General Fund Budgetary Highlights Detailed information on budget variances can be found in the General Fund Statement of Revenues, Expenditures and Changes in Fund Balance, Budget and Actual. The adopted fiscal year 2019-20 General Fund budget assumed moderate gains in operating revenue, based on the continued, though slowing economic growth evidenced in recent years. Noting several positive anomalies in sales tax revenues experienced in the 2018-19 fiscal year, revenues were forecasted to remain fairly flat. However, due to the sudden onslaught of the pandemic in 2020, revenue budgets were amended to reflect a sizable decline from the revenues anticipated in the prior year adopted budget. Final collections totaled over $72.2 million, a decrease of $12.4 million (14.6%) over actual General Fund revenues experienced in fiscal year 2018-19. Key revenue budgets were adjusted downward (by $9.6 million total) at mid -year to reflect the impacts of the pandemic -induced recession on General Fund receipts in the spring of 2020. The highest adjustment was needed for the City's transient occupancy (hotel) tax -the budget for this revenue source was amended to be $8.6 million lower than projected in the 2019-20 budget adopted in June 2019. Although a positive 4.3% revenue variance was realized for General Fund revenues, much of the greater -than -anticipated amount was due to an increase in the market value of the City's portfolio, reported as investment income. City of Burlingame Historical General Fund Revenues (Amounts In Millions) FY16 FY17 FY18 FY19 FY20 Total Revenue $66.16 $68.04 $71.72 $84.54 $72.16 Dollar Change 4.25 1.89 3.68 12.82 (12.38) Percentage Change 6.86% 2.85% 5.40% 17.87% -14.64% The performance of the top three revenue sources compared to the adjusted budget is as follows: • Transient Occupancy Tax (TOT) revenues declined rapidly and sharply as international air traffic began to slow early in 2020, and progressed downward as the pandemic brought most travel - related activities to a halt. Burlingame hotels, which had experienced very high occupancy rates in past years, were forced to cut staff, shutting off floors and even suspending operations for whole hotels. Many area hotels experienced single -digit occupancy rates in April and May. In an attempt to slow transmission of the virus, the County leased some hotel rooms in order to offer health care workers and patients an alternative to returning home. Other hotels were used to alleviate the density in homeless shelters, where the virus could also spread rapidly. But this temporary re - purposing of rooms did very little to help the hospitality industry or the economy as a whole. As a 20 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 result, TOT receipts were greatly diminished in fiscal year 2019-20. Overall, these revenues were down nearly $9 million (30.5%) from the prior year, and exceeded the year's adjusted budget by 7.7% (approximately $367,000). Sales and use tax revenues ended the year at $14.8 million, approximately $3 million lower than in the prior year, and approximately $573,000 higher than forecast in the adjusted budget. As the 2018-19 fiscal year sales tax results contained a number of one-time anomalies, much of the decrease had been anticipated in the adopted budget. And as of mid -year, it appeared that an upward adjustment in the budget for sales tax revenues would be needed. However, swift reaction by consumers and businesses to the outbreak of the coronavirus caused a massive decrease in spending on certain goods and services. A review of Burlingame's second quarter data for 2020 indicates a decline in taxable transactions of approximately 33.6% from the second quarter of 2019. Not surprisingly, the industry group hardest hit as a percentage was Restaurants and Hotels, with a 68.3% decrease in taxable sales. The City's largest generator of sales tax, the Autos & Transportation Industry Group, suffered a 31.8% decline. Not surprisingly, taxes from online sales, allocated from the County's Pool account, actually grew by approximately 3.7%. These taxes comprised 29.6% of local sales tax collections in 2020's second quarter. Nearly $2.3 million of the total receipts for fiscal year 2019-20 were the result of the second full year of the City's Measure I transaction tax - a retail transactions and use tax of % percent effective April 1, 2018. This tax fared slightly better than point -of -sales results because it is assessed at the place of delivery for online sales, as opposed to being allocated to all cities from the County Pool. Property tax revenues, at $23.3 million, came in very slightly under budget (less than 0.6%), reflecting an increase of nearly 6.1% over prior year results. The secured property tax roll is well - established prior to the fiscal year budget being developed; this revenue is now only adjusted at mid -year for mild variances. Burlingame's fiscal health relies largely on growth in assessed property values, health in the travel and tourism industry, and increased consumer confidence. Although property taxes are expected to remain relatively strong over the next fiscal year, recovery of TOT and sales tax revenues is inextricably linked to the nation's recovery from the current pandemic -induced recession. In recent years, General Fund expenditures have increased fairly consistently as shown below. City of Burlingame Historical General Fund Expenditures (Amounts In Millions) FY16 FY17 FY18 FY19 FY20 Total Operating Expenditures $47.46 $49.71 $53.64 $55.76 $58.21 Dollar Change 3.05 2.25 3.93 2.12 2.44 Percentage Change 6.88% 4.74% 7.91% 3.96% 4.38% The fiscal year 2019-20 adopted General Fund budget assumed operating expenditures of nearly $61.6 million, a growth of 3.3% from the prior year budget. At mid -year, the City made budget adjustments of $1.5 million, largely for increases to personnel costs. Assembly Bill 5 (A135), effective January 1, 2020, necessitated the adoption of new standards for the use of contract labor, increasing the City's employee 21 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 head count, and decreasing the use of contract services. Later in the fiscal year an additional $1 million was approved for the costs of responding to the impacts of the pandemic on the City's small businesses and most vulnerable residents. Budgets were closely monitored City wide, as reflected in positive budget variances in all functional areas. The extent of the budgetary savings that would result due to the reduction in operating activities, particularly in leisure and cultural services, was difficult to ascertain in real time. For example, City facilities were closed in response to the public health emergency, and, though most essential services were maintained, a large portion of the City's casual employees were furloughed in April 2020. Reopening and rehiring plans were put on hold by the end of the fiscal year. Actual expenditures totaled $58.2 million; total budgetary (expenditure) savings for the fund were over $5.8 million, or 9.1%. General Fund Historical Revenues & Expenditures Last 5 Fiscal Years Millions —*—Total Revenue tTotal Operating Expenditures $90 $85 $80 $75 $70 $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 FY16 FY17 FY18 FY19 FY20 General Fund Reserve Po The chart below illustrates the amounts of General Fund balance assigned as various reserves for the past five years. In January 2015, the Council adopted a General Fund Reserve Policy that established reserve levels based on an analysis of risks specific to the City, including vulnerability to extreme events and public safety concerns, revenue source stability, expenditure volatility, liquidity, leverage, and adequacy of infrastructure funding. The policy established targeted levels for an Economic Stability Reserve and a Catastrophic Reserve (24% and 2%-9% of budgeted revenues, respectively), as well as a Contingency Reserve amount of $0.5 million. Based on an updated risk analysis, the policy was revised in October 2015 to replace the initial range for the Catastrophic Reserve to a fixed $2 million. The actual reserve levels are adopted by resolution with each annual budget but may be modified by resolution throughout the year based on recommendations by the Finance Director as economic forecasts or other changes dictate. Each reserve is reported as an assignment of the City's General Fund balance. 22 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 City of Burlingame City Council Assigned General Fund Reserves (Amounts In Millions) FY16 FY17 FY18 FY19 FY20 Economic Stability Reserve $15.70 $16.20 $16.91 $18.84 $18.91 Catastrophic Reserve 2.00 2.00 2.00 2.00 2.00 OPEB Reserve - - - - General Plan Reserve - - - - - Contingency Reserve 0.50 0.50 0.50 0.50 0.50 Total Reserves 18.20 18.70 19.41 21.34 21.41 Encumbrances and Reappropriations 0.44 0.69 0.52 0.24 0.32 Total Assigned Fund Balance $18.64 $19.39 $19.93 $21.58 $21.73 As a measure of the General Fund liquidity, it is useful to compare its unrestricted fund balance (including commitments and assignments of fund balance) to annual operating expenditures. As of June 30, 2020, the unrestricted fund balance of $34.0 million ($44.8 million less non -spendable and restricted fund balance of $10.8 million) represents 58.4% of General Fund operating expenditures of $58.2 million. Up until the current fiscal year, fund balance in the General Fund has consistently increased in recent years: City of Burlingame Historical General Fund Ending Fund Balance (Spendable) (Amounts In Millions) FY16 FY17 FY18 FY19 FY20 Ending Spendable Fund Balance $29.64 $33.06 $36.37 $53.96 $49.86 Dollar Change 0.40 3.42 3.31 17.60 (4.10) of Expenses: 62.46% 66.50% 67.80% 96.78% 85.66% Capital Assets and Debt Administration Capital Assets Improvements that lengthen an asset's useful life are not capitalized unless the improvements increase its service potential. Furthermore, maintenance costs are expensed in the period incurred. The City maintains an inventory of roads and parking lots and performs periodic assessments to establish the condition levels. The City uses the modified approach for roads and parking lots as an alternative to depreciation. Additional information can be found in the CAFR's Required Supplementary Information, Note 4 - Modified Approach for the City's Infrastructure. As reported in the Statement of Net Position, capital assets for the governmental and business -type activities totaled $252.2 million on June 30, 2020, net of depreciation, increasing 5.6% from the prior fiscal year. The investments in capital assets include: land, construction in progress, buildings, improvements, machinery, equipment, major software systems, facilities, roads, streets, utilities infrastructure, and storm drains. 23 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Land and other assets not being depreciated Facilities, infrastructure and equipment Total Capital Assets, Net of Accumulated Depreciation June 30, 2020 (Amounts In Millions) Governmental Activities Business -Type Activities 2020 2019 % Change 2020 2019 % Change $55.47 $46.16 20.19% $13.22 $13.93 7mn -5.1% $68.70 Total 2019 % Change $60.09 14.33% $85.69 $83.87 2.17% $97.84 $94.90 3.1% $183.53 $178.78 2.66% $141.17 $130.03 8.6% $111.06 $108.84 2.0% $252.23 $238.86 5.6% All depreciable capital assets were depreciated from their acquisition/completion date to the end of the current fiscal year for the government -wide financial statement presentation. Governmental fund financial statements record capital asset purchases as expenditures during the year. Ongoing projects are accounted for as "construction in progress." Additional information about Capital Assets can be found in the Notes to the Basic Financial Statements under Note 5 - Capital Assets. Long -Term Obligations As of June 30, 2020, the City had total long-term obligations of $229 million, an increase of $26.3 million from the prior year. The increase is largely due to the new $31.4 million bonded debt, issued in December 2019, to support the construction of the City's New Community Center project. This increase in outstanding debt was offset somewhat by a $10.8 million decrease in Net OPEB Liabilities. In addition to the new debt, $43.3 million of the City's total long-term outstanding debt relates to storm drain revenue bond financing and other governmental activities; the remainder ($37.6 million) is comprised of loans and revenue bonds previously issued to support various capital projects overseen by the Water and Sewer enterprises. Short of additional debt financings, bonded debt obligations will decrease over time as principal amounts are paid off. Outstanding Long -Term Obligations June 30, 2020 (Amounts In Millions) Governmental Activities Business -Type Activities Total 2020 2019 % Change 2020 2019 % Change 2020 2019 % Change Bonds Due in More than One Year $78.25 $43.28 80.8% $34.88 $38.24 -8.8% $113.13 $81.52 38.8% Bonds Due Within One Year 3.01 2.60 15.5% 2.71 2.61 3.9% 5.72 5.21 9.7% Claims and Litigation 6.78 6.51 4.2% - - 0.0% 6.78 6.51 4.2% Landfill Closure - - 0.0% 3.35 3.29 2.0% 3.35 3.29 2.0% Net OPEB Liability ' 21.87 30.59 -28.5% 5.18 7.24 -28.5% 27.04 37.83 -28.5% Net Pension Liability 58.63 55.04 6.5% 10.99 10.43 5.4% 69.62 65.46 6.4% Compensated Absences 2.90 2.48 17.1% 0.44 0.35 25.3% 3.34 2.83 18.1% Total: $171.44 $140.50 22.0% $57.55 $62.16 -7.4% $228.99 $202.65 13.0% During fiscal year 2017-18, the City implemented GASB Statement No. 75, which requires the recording of net OPEB liability and related deferred inflows and outflows of resources on the financial statements. In addition, the City has several other long-term obligations. Landfill closure and post -closure liabilities are determined in order to capture the estimated cost of municipal solid waste landfill closure and post -closure care as required by federal and state regulations. Funds are set aside to ensure adequate funding for the post -closure costs of the former Burlingame landfill, including the annual costs of monitoring and 24 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 maintenance as the costs are incurred. Funding for this liability is currently provided through a portion of solid waste rates charged to City ratepayers. Additional information about the City's long term debt and other obligations can be found in the Notes to the Basic Financial Statements under Note 6 — Long Term Debt and Note 7 — Other Long -Term Liabilities. The City's OPEB liabilities, which are comprised of retiree healthcare benefits, continue to be funded from a surcharge on each payroll. The cost of the City's former retiree medical benefits program is charged to all operations as a percentage of payroll, calculated to yield the actuarially determined contribution (both normal and accrued liability costs) of the plan. The proceeds of this surcharge are used first to pay actual retiree medical costs on a pay-as-you-go basis; remaining funds are deposited to a trust account established in 2013 for the purpose of funding the OPEB liabilities. As of the end of the fiscal year, there was a balance of nearly $22.8 million in the California Employers' Retiree Benefit Trust, serving to offset the total liability. As there will be no new members added to this benefit plan — the City now offers a defined contribution plan for retiree health costs to its employees — this liability will be fully funded in 15 years. As of June 30, 2020, the net OPEB liability for the City was computed to be $27.0 million. The City's Statement of Net Position also reflects unfunded pension liabilities. Governmental accounting standards require the City to compute its unfunded liabilities by ascertaining "net pension liability," or the difference between a plan's total pension liability and the assets available to pay for such liability at a specific time. As of June 30, 2020, the net pension liability for the City was computed to be $69.6 million, an increase over the prior year of $4.2 million. Concerned over growing pension liabilities and in response to the sharply increasing employer rates to support the pensions provided by CalPERS, the City implemented a plan, beginning in fiscal year 2017-18, to annually set aside additional funding in a § 115 Trust, at a rate that would smooth the projected increased employer contributions to CalPERS over the next 10-12 years. The balance in the pension trust fund as of June 30, 2020, was $12.6 million. Unlike contributions to the OPEB trust fund, these contributions are not shown as expenditures and cannot be used to offset the liability as shown in the financial statements. Rather, amounts in the pension trust fund are reflected in each operating fund as restricted cash and investments. A detailed explanation of the changes in the pension liabilities associated with the City's Safety and Miscellaneous Employee pension plans can be found in the Notes to the Basic Financial Statements under Notes 9 and 10, respectively. Economic Factors and Next Year's Budeet and Rates The following factors were taken into consideration in preparing the fiscal year 2020-21 budget: Revenue Projections: Each year, City staff prepares a five-year forecast of revenues and expenditures for the General Fund early in the budget process. In light of the continued presence of the virus and related economic impacts, the adopted budget for fiscal year 2020-21 assumed a second year of reductions (approximately $7.7 million, or 11.2%) in total General Fund revenues. Although property tax receipts are expected to remain strong in the 2020-21 fiscal year, further reductions in TOT (30.2%) and sales tax revenues (15.7%) were anticipated in the adopted budget. The budget's revenue projections were based on fiscal year 2019-20 estimates that came in slightly higher than forecast; however, they also anticipated a slightly quicker recovery than is evidenced in the first two quarters of the year. With vaccines being readied for national distribution later in the fiscal year, the timing and strength of the City's revenue recovery is uncertain at best. 25 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Expenditures: General Fund operating expenditures are expected to grow approximately 0.9% when compared to the fiscal year 2019-20 adjusted budget. Fiscal year 2020-21 departmental budgets of $63.3 million provide for a full year of increased full-time staffing assumed in the prior mid -year analysis. Increases in pension costs are also included in the adopted budget (reflected not only in the City's personnel budgets but also in the cost of Central County Fire Department services as well). Since personnel costs represent a large investment in the City's current and future resources, requests for increases in Full Time Equivalent (FTE) positions are carefully monitored to ensure they provide the best on -going value for the City. In light of the reduced revenues anticipated for the fiscal year, the FY 2020-21 budget for capital projects was reduced by over $6.0 million when compared to FY 2019-20. Work on the large number of previously funded capital projects will continue, including construction of the $52.3 million New Community Center project, expected to be complete at the end of April 2022. Also, to minimize the General Fund operating deficit for the year, no contribution to the Capital Investment Reserve was included in the FY 2020-21 Budget. (The General Fund contributed $6.5 million to the Capital Investment Reserve in fiscal year 2019-20.) In addition, the General Fund transfer for debt service was reduced by $2 million by utilizing previously transferred funds from the 2018-19 fiscal year, set aside in anticipation of the 2019 Lease Revenue Bond issuance. However, the 2020-21 fiscal year budget does provide for all the day-to-day operations and capital needs required to sustain high -quality services, and continues to set aside monies in the City's §115 trust fund for pension liabilities - $2.25 million from the General Fund alone. Funding of retiree medical obligations is also included in the departmental budgets in fiscal year 2020-21. In all, the budgeted deficit was limited to $5.2 million, well within the $12.3 million unassigned General Fund balance as of June 30, 2020. General Fund Capital Improvements: The City Council earmarked nearly $3.2 million in the 2020-21 fiscal year General Fund budget for capital improvements in the Five Year CIP Plan. Although this is well below the $8.0 million provided in the prior year adopted budget, this funding covers the immediate capital needs of the City, including $2.6 million for streets and sidewalk infrastructure improvements. Water and Sewer Rate Adjustments: The most recent rate study for the water utility was completed in the fall of 2016. At that time, the drought that had begun in 2011 had worsened, and state-wide water restrictions had reduced water consumption to record lows. Based on the increased cost of water purchased from the San Francisco Public Utilities Commission (SFPUC), and to upgrade and maintain the aging water system, the City approved water rates increases for each of the years beginning January 1, 2017, 2018, and 2019. Beyond these water utility rate increases, no further rate adjustments have been approved. However, rates for the sewer utility have not been adjusted since 2012. A rate study is currently underway for this utility. Solid Waste Rate Adjustments: The City provides solid waste services through a joint exercise of powers agreement (JPA) and a franchise with a private contractor. Rates are adjusted each calendar year based on updated costs of solid waste collection and material processing service, including landfill post -closure costs, street sweeping, recycling, and other diversion programs. Due to significant upheaval in global market conditions for recyclables, changes in both commercial and residential waste streams, a scarcity of landfill options, and increased diversion requirements and environmental regulation from the State, the cost of solid waste services has risen in recent years. Further cost increases were anticipated with a restated, 15- year franchise agreement for solid waste collection services effective January 1, 2021. Although a rate stabilization reserve within the City's Solid Waste Fund had allowed services to continue without a rate increase since 2012, solid waste rate increases of 6% were approved for each of the three calendar years 2019, 2020, and 2021. 26 CITY OF BURLINGAME, CALIFORNIA MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Requests for Information This financial report is designed to provide Burlingame's citizens, taxpayers, investors, and creditors with a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. Individuals are encouraged to make inquiries or requests for additional financial information at: Burlingame Department of Finance City Hall 501 Primrose Road, Burlingame, CA 94010 (650) 558-7200 27 Comprehensive Annual Financial Report June 30, 2020 CITY OF BURLINGAME, CALIFORNIA STATEMENT OF NET POSITION JUNE 30, 2020 ASSETS Cash and investments Receivables (net of uncollectible amounts) Due from consumers Due trom other governments Other receivables Inventory Prepaid items and deposits Cash and investments, restricted Internal balance Capital assets: Land and other assets not being depreciated Facilities, infrastructure, and equipment, net of depreciation Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred amount of bond refunding Deferred outflows related to OPEB Deferred outflows related to pension Total deferred outflows of resources LIABILITIES Accounts payable Retentions payable Accrued payroll Accrued interest Deposits Unearned revenue Claims and litigation Due in one year Due in more than one year Compensated absences Due in one year Due in more than one year Landfill closure and post closure costs Due in one year Due in more than one year Long-term debt Due in one year Due in more than one year Net OPEB liability, due in more than one year Net pension liability, due in more than one year Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to OPEB Deferred inflows related to pension Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted for: Pension and employee benefit program Debt service Capital projects Development fees Burlingame Avenue Special Assessment District Shuttle, Access TV and community programs Street and sidewalk repair and maintenance Governmental Business -Type Activities Activities Total $ 141,026,480 $ 76,003,859 $ 217,030,339 5,691,464 5,691,464 370,658 184,253 554,911 7,071,486 327,428 7,398,914 245,963 245,963 6,627 6,627 55,054,088 1,911,059 56,965,147 2,166 (2,166) 55,473, 935 13, 223,491 68, 697,426 85,694,662 97,837,131 183,531,793 344,946,065 195,176,519 540,122,584 961,434 961,434 4,344,133 1,028,280 5,372,413 10, 276, 550 1,484, 705 11, 761, 255 14,620,683 3,474,419 18,095,102 4,330,661 3,002,749 7,333,410 420,746 227,898 648,644 898,470 898,470 65,009 482,244 547,253 2,698,362 1,502,377 4,200,739 42,640 42,640 1,581,700 1,581,700 5,197, 300 5,197,300 502,847 33,953 536,800 2,399,855 406,926 2,806,781 223,492 223,492 3,128,894 3,128,894 3,005,540 2,713,546 5,719,086 78,254,437 34,876,932 113,131,369 21,868,184 5,176,319 27,044,503 58,633,933 10,989,146 69,623,079 179,857,044 62,807,116 242,664,160 5,767,562 1,365,213 7,132,775 2,422,775 278,385 2,701,160 8,190,337 1,643,598 9,833,935 107,082,922 11,099,746 4,006,024 49,048,768 9,093,373 419,430 1,651,221 1,818,264 74,431,578 1,897,053 18,123,238 Total restricted net position 77,136,826 20,020,291 Unrestricted (12,700,381) 39,748,355 Total net position $ 171,519,367 $ 134,200,224 See accompanying Notes to the Basic Financial Statements 181,514,500 12,996,799 4,006,024 67,172,006 9,093,373 419,430 1,651,221 1,818,264 97,157,117 27,047,974 $ 305,719,591 29 CITY OF BURLINGAME, CALIFORNIA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Total Governmental activities: General government $ 6,710,119 $ 115,485 $ 115,485 Public safety 31,550,875 1,495,025 $ 211,897 1,706,922 Public works 7,639,042 4,218,536 $ 150,773 4,369,309 Community development 2,376,022 3,052,616 12,000 3,064,616 Parks, recreation, and library 16,062,021 2,925,033 164,164 45,000 3,134,197 Shuttle operations 155,770 36,000 36,000 Interest 2,143,775 Total governmental activities 66,637,624 11,806,695 424,061 195,773 12,426,529 Business -type activities: Water 15,096,157 20,615,001 20,615,001 Sewer 12,223,785 15,127,320 15,127,320 Waste management 636,581 616,805 616,805 Landfill 212,952 480,021 480,021 Parking 1,004,676 1,929,956 1,929,956 Building 2,354,195 3,861,213 3,861,213 Total business -type activities 31,528,346 42,630,316 42,630,316 Total government -wide $ 98,165,970 $ 54,437,011 $ 424,061 $ 195,773 $ 55,056,845 General revenues: Taxes: Property taxes Sales taxes Transient occupancy tax Othertaxes Other general revenue Total general revenues Investment income (expense) Transfers Total general revenues and transfers Change in net position Net position - beginning Net position - ending See accompanying Notes to the Basic Financial Statements 30 Net (Expense) Revenue and Changes in Net Position Governmental Business -type Activities Activities Total $ (6,594,634) $ (6,594,634) (29,843,953) (29,843,953) (3,269,733) (3,269,733) 688,594 688,594 (12,927,824) (12,927,824) (119,770) (119,770) (2,143,775) (2,143,775) (54,211,095) (54,211,095) $ 5,518,844 5,518,844 2,903,535 2,903,535 (19,776) (19,776) 267,069 267,069 925,280 925,280 1,507,018 1,507,018 11,101, 970 11,101, 970 (54,211,095) 11,101,970 (43,109,125) 23,304,404 23,304,404 14,803,366 14,803,366 20,416,543 20,416,543 5,502,719 5,502,719 383,043 831,437 1,214,480 64,410,075 831,437 65,241,512 5,999,563 2,941,953 8,941,516 2,212,819 (2,212,819) 72,622,457 1,560,571 74,183,028 18,411,362 12,662,541 31,073,903 153,108,005 121,537,683 274,645,688 $ 171,519,367 $ 134,200,224 $ 305,719,591 31 Comprehensive Annual Financial Report June 30, 2020 GOVERNMENTAL FUND FINANCIAL STATEMENTS The General Fund accounts for all financial resources necessary to carry out basic governmental activities of the City that are not accounted for in another fund. The General Fund supports essential City services such as police and fire protection, street maintenance, libraries, parks, and recreation. The Storm Drainage Fund — This fund is to account for the storm drainage fees collected due to an assessment approved by the majority of the parcel owners in the City voting at a special election on May 5, 2009. The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs (other than those paid for by the Proprietary Funds). The Capital Projects Fund accounts for City capital projects funded by the General Fund or other governmental funds, or any projects funded by multiple sources. 33 CITY OF BURLINGAME, CALIFORNIA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2020 Storm Capital Nonmajor Total General Drainage Debt Service Projects Governmental Governmental Fund Fund Fund Fund Funds Funds Assets: Cash and investments $ 33,048,184 $ 6,840,035 $ 2,572,130 $ 63,524,892 $ 12,877,183 $ 118,862,424 Accounts receivable 5,470,877 246,592 16,471 941,088 199,462 6,874,490 Due from other governments 370,658 370,658 Due from other funds 146,768 2,166 576,944 725,878 Prepaids and deposits 6,627 6,627 Cash and investments, restricted 10,823,849 43,954,342 54,778,191 Total assets $ 49,866,963 $ 7,086,627 $ 46,545,109 $ 65,042,924 $ 13,076,645 $ 181,618,268 Liabilities: Accounts payable $ 1,339,392 $ 2,707,766 $ 42,399 $ 4,089,557 Due to other funds $ 576,944 576,944 Retentions payable 420,746 420,746 Accrued payroll 898,470 898,470 Deposits 2,698,362 2,698,362 Unearned revenue Total liabilities 4,936,224 576,944 3,128,512 42,399 8,684,079 Deferred Inflows: Unavailable revenue 104,039 819,488 51,958 975,485 Total deferred inflows 104,039 819,488 51,958 975,485 Fund Balances: Nonspendable 6,627 6,627 Restricted 10,823,849 $ 7,086,627 45,968,165 12,982,288 76,860,929 Committed 36,438,924 36,438,924 Assigned 21,728,489 24,656,000 46,384,489 Unassigned 12,267,735 12,267,735 Total fund balances 44,826,700 7,086,627 45,968,165 61,094,924 12,982,288 171,958,704 Total liabilities, deferred inflows and fund balances $ 49,866,963 $ 7,086,627 $ 46,545,109 $ 65,042,924 $ 13,076,645 $ 181,618,268 See accompanying Notes to the Basic Financial Statements 34 CITY OF BURLINGAME, CALIFORNIA Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position JUNE 30, 2020 Fund balance —total governmental funds $ 171,958,704 Amounts reported for governmental activities in the statement of net assets are different because: CAPITAL ASSETS Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 139,133,527 LONG TERM LIABILITIES Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Compensated absences (2,840,401) Long-term debt (81,259,977) Net OPEB Liability ($20,875,651) Net Pension Liability (56,747,381) Interest on long-term debt is not accrued in the funds, but rather is recognized as an expenditure when due. (65,009) DEFERRED INFLOWS AND OUTFLOWS Deferred outflows are not current assets or financial resources; and deferred inflows are not due and payable in the current period and are therefore not reported in the governmental funds Deferred Outflows 14,168,630 Deferred Inflows (7,880,772) Unavailable revenues 975,485 ALLOCATION OF INTERNAL SERVICES FUND NET ASSETS Internal service funds are used by management to charge the costs of fleet management, building maintenance, information technology and risk management to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the statements of net assets. $14,952,212 Net assets of governmental activities $ 171,519,367 See accompanying Notes to the Basic Financial Statements. 35 CITY OF BURLINGAME, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Storm Capital General Drainage Debt Service Projects Fund Fund Fund Fund REVENUES: Nonmajor Total Governmental Governmental Funds Funds Property taxes $ 23,304,404 $ 23,304,404 Sales and use taxes 14,803,366 14,803,366 Transient occupancy taxes 20,416,543 20,416,543 Other taxes 3,133,927 3,133,927 Charges for services - fees 5,471,236 $ 2,993,956 $ 2,791,077 11,256,269 Charges for services - licenses and permits 98,905 98,905 Fines, forfeitures, and penalties 793,281 793,281 Investment income 3,775,603 605,582 $ 352,541 440,770 5,174,496 Intergovernmental taxes 2,368,792 2,368,792 Grants and subventions 177,564 $ 150,773 114,610 442,947 Other revenue 183,030 242,288 127,226 552,544 Total revenues 72,157,859 3,599,538 352,541 393,061 5,842,475 82,345,474 EXPENDITURES: Current: General government 6,482,235 33,130 6,515,365 Public safety 28,573,977 55,978 28,629,955 Public works 5,970,041 623,209 6,593,250 Community development 2,197,977 176,469 2,374,446 Parks, recreation, and library 14,839,936 176,875 171,653 15,188,464 Shuttle operations 155,770 155,770 Capital Outlay 141,299 14,153,574 14,294,873 Debt service: Principal 3,928,954 3,928,954 Interest 2,697,166 2,697,166 Cost of Issuances 303,054 303,054 Total expenditures 58,205,465 6,962,304 15,130,127 383,401 80,681,297 REVENUES OVER (UNDER) EXPENDITURES 13,952,394 3,599,538 (6,609,763) (14,737,066) 5,459,074 1,664,177 OTHER FINANCING SOURCES (USES): Bond issuance proceeds 39,231,615 39,231,615 Transfers in 2,543,819 6,776,902 19,267,014 143,500 28,731,235 Transfer out (20,837,263) (2,083,139) (1,432,014) (2,166,000) (26,518,416) Total other financing (uses) sources (18,293,444) (2,083,139) 44,576,503 19,267,014 (2,022,500) 41,444,434 Net change in fund balances (4,341,050) 1,516,399 37,966,740 4,529,948 3,436,574 43,108,611 FUND BALANCES: Beginning of year 49,167,750 5,570,228 8,001,425 56,564,976 9,545,714 128,850,093 End of year $ 44,826,700 $ 7,086,627 $ 45,968,165 $ 61,094,924 $ 12,982,288 $ 171,958,704 See accompanying Notes to the Basic Financial Statements 36 CITY OF BURLINGAME, CALIFORNIA RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Net change in fund balances — total governmental funds $ 43,108,611 Amounts reported for governmental activities in the statement of activities are different because: CAPITAL ASSETS TRANSACTIONS Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The capital outlay expenditures are added back to fund balance 14,294,873 Expenses being added due to difference in capital outlay and capital asset additions 337,099 Depreciation expense on capital assets is reported in the Government -Wide Statement of Activities and Changes in Net Assets, but they do not require the use of current financial resources. Therefore, depreciation expense is deducted from the fund balance. (3,099,108) LONG TERM DEBT PROCEEDS AND PAYMENTS Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds. Accrued interest calculated on bonds payable 598,447 Amortization of bond premium 257,998 Proceeds from bond issuance are deducted from fund balances (39,231,615) PG&E loans were funded by capital contribution (337,099) The repayment of the principal of long-term debt consumes the current financial resources of governmental funds. This transaction, however, has no effect on net assets: Principal payments 3,928,954 ACCRUAL OF NON -CURRENT ITEMS Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. This change reflects a increase in compensated absences that occurred during the year (409,302) Pension Expense (4,969,059) Net other post -employment benefits obligation expense 2,624,150 Unavailable revenues recognized as revenue in prior year 45,115 ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY Internal Service funds are used by management to charge the costs of certain activities, such as fleet management, building maintenance, information technology and risk management to individual funds. The portion of the net revenue (expense) of these Internal Service Funds arising out of their transactions with governmental funds is reported with governmental activities, because they service those activities. Change in net position - All Internal Service Funds 1,262,298 Change in net position of governmental activities $ 18,411,362 See accompanying Notes to the Basic Financial Statements 37 Comprehensive Annual Financial Report June 30, 2020 PROPRIETARY FUND FINANCIAL STATEMENTS The Water Fund is used to account for the provision of water services to residents of Burlingame and some residents of areas adjacent to the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, financing, and billing/collections. The Sewer Fund is used to account for the provision of sewer services to the residents of Burlingame and some residents of areas adjacent to the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, financing, and billing/collections. The Waste Management Fund is used to account for the provision of solid waste services to the residents of Burlingame, excluding the revenues and expenditures associated with the collection, processing, and disposal of solid waste and recyclable materials which are provided by solid waste contractors servicing member cities of the South Bay Waste Management Authority. The Landfill Fund is used to account for the landfill closure costs and post -closure monitoring services. The Parking Fund is used to account for the activities of the City's parking districts. The Building Fund was established to account for the activities of the City's building permits and inspection division. 39 CITY OF BURLINGAME, CALIFORNIA STATEMENT OF NET POSITION PROPRIETARY FUNDS 1UNE 30, 2020 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments Receivables (net of uncollectible amounts): Due from other governments Due from consumers Other receivables Prepaids and deposits Inventory Total current assets Noncurrent assets: Cash and investments, restricted Capital assets: Land and other assets not being depreciated Facilities, infrastructure, and equipment, net of depreciation Total noncurrent assets Total assets Deferred outflows of resources: Deferred amount on bond refunding Deferred outflows related to pensions Deferred outflows related to OPEB Total deferred outflows of resources LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Current liabilities: Accounts payable Due to other funds Accrued interest Retentions payable Deposits Unearned revenue Claims and litigation due in one year Bonds payable due in one year Compensated absences due in one year Landfill closure and post -closure liability due in one year Total current liabilities Noncurrent liabilities: Bonds payable Landfill closure and post closure liability Claims and litigation Compensated absences Net pension liability Net OPEB liability Total noncurrent liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions Deferred inflows related to OPEB Total deferred inflows of resources Enterprise Funds Waste Water Sewer Management Fund Fund Fund $ 22,396,877 $ 20,378,476 $ 4,871,177 184,253 2,965,694 2,725,770 83,497 79,962 19,612 25,446,068 23,184,208 5,075,042 586,555 934,940 85,378 3,379,061 3,818,559 31,600,130 64,689,755 35,565,746 69,443,254 85,378 61,011,814 92,627,462 5,160,420 549,874 411,560 524,357 440,962 71,787 417,436 339,537 59,634 1,491,667 1,192,059 131,421 1,662,425 1,154,894 6,024 1,083 1,083 161,850 320,394 113,675 114,223 20,340 42,640 1,108,682 1,604,864 18,387 7,967 1,275 3,129,082 3,203,425 7,299 15,959, 577 18,917, 355 176,731 136,439 13,509 3,881,065 3,263,811 531,335 2,101,358 1,709,213 300,194 22,118,731 24,026,818 845,038 25,247,813 27,230,243 852,337 98,318 82,681 13,460 554,217 450,791 79,174 652,535 533,472 92,634 NET POSITION Net investment in capital assets 18,460,806 48,397,655 Restricted for capital projects 4,987,330 9,914,642 Restricted for pension and benefits program 586,555 934,940 85,378 Unrestricted 12,568,442 6,808,569 4,261,492 Total net position $ 36,603,133 $ 66,055,806 $ 4,346,870 See accompanying Notes to the Basic Financial Statements 40 Landfill Fund Enterprise Funds Parking Building Fund Fund Total Governmental Activities - Internal Service Funds $ 2,267,638 $ 11,943,460 $ 14,146,231 $ 76,003,859 $ 22,164,056 184,253 5,691,464 43,517 46,546 54,294 327,428 196,996 245,963 2,311,155 11,990,006 14,200,525 82,207,004 22,607,015 14,006 54,430 235,750 1,911,059 275,897 6,025,871 13,223,491 1,547,246 97,837,131 2,035,070 14,006 7,627,547 235,750 112,971,681 2,310,967 2,325,161 19,617,553 14,436,275 195,178,685 24,917,982 961,434 858 240,382 206,359 1,484,705 254,885 9,670 37,607 164,396 1,028,280 197,168 10,528 277,989 370,755 3,474,419 452,053 26,765 60,982 91,659 3,002,749 241,104 2,166 146,768 482,244 227,898 1,482,037 1,502,377 42,640 1,581,700 2,713,546 2,109 4,215 33,953 5,300 223,492 223,492 250,257 63,091 1,577,911 8,231,065 1,974,872 34,876,932 3,128,894 3,128,894 5,197,300 9,670 70,577 406,926 57,001 6,349 1,779,203 1,527,383 10,989,146 1,886,552 48,680 189,312 827,562 5,176,319 992,533 3,183,923 1,978,185 2,425,522 54,578,217 8,133,386 3,434,180 2,041,276 4,003,433 62,809,282 10,108,258 161 45,072 38,693 278,385 47,792 12,839 49,929 218,263 1,365,213 261,773 13,000 95,001 256,956 1,643,598 309,565 7,573,117 74,431,578 2,035,070 3,221,266 18,123,238 54,430 235,750 1,897,053 275,897 (1,111,491) 6,910,452 10,310,891 39,748,355 12,641,245 $ (1,111,491) $ 17,759,265 $ 10,546,641 $ 134,200,224 $ 14,952,212 41 CITY OF BURLINGAME, CALIFORNIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 OPERATING REVENUES: Water sales Sewer service charges: City of Burlingame users Other agencies Special surcharges Parking fees Charges for services Otherrevenue Total operating revenues OPERATING EXPENSES: Salaries and benefits Retiree medical benefit Supplies and services Water purchases Depreciation Insurance claims and expenses Total operating expenses Operating income NONOPERATING REVENUES (EXPENSES): Investment income Interest expense Net nonoperating revenues (expenses) Income before transfers Transfers out Enterprise Funds Waste Water Sewer Management Fund Fund Fund $ 20,379,319 $ 13,558,548 1,568,772 $ 616,805 235,682 26,913 313,098 281,334 20,641,914 15,440,418 898,139 3,098,052 2,747,380 436,270 1,328,700 5,636,820 199,171 7,766,238 2,069,723 3,037,033 150,338 92,279 1,140 14,413,051 11,513,512 636,581 6,228,863 3,926,906 261,558 841,871 843,887 (683,106) (710,273) 158.765 133.614 185,971 185.971 6,387,628 4,060,520 447,529 (970,815) (738,815) (58,000) Net change in net position 5,416,813 3,321,705 389,529 NET POSITION: Net position - beginning (deficit) 31,186,320 62,734,101 3,957,341 Net position - end of year (deficit) $ 36,603,133 $ 66,055,806 $ 4,346,870 See accompanying Notes to the Basic Financial Statements 42 Enterprise Funds Governmental Activities - Landfill Parking Building Internal Fund Fund Fund Total Service Funds $ 20,379,319 13,558,548 1,568,772 $ 480,021 1,096,826 $ 1,929,956 1,929,956 $ 3,861,213 4,096,895 $ 11,131,603 210,092 831,437 2,725 480,021 1,929,956 4,071,305 43,461,753 11,134,328 41,076 416,560 1,176,701 7,916,039 1,385,983 4,652,150 171,876 452,349 1,174,162 8,963,078 2,235,237 7,766,238 135,012 5,241,768 731,024 755 3,332 247,844 1,692,703 212,952 1,004,676 2,354,195 30,134,967 10,697,097 267,069 925,280 1,717,110 13,326,786 437,231 84,209 451,865 534,150 2,941,953 825,067 (1,393,379) 84,209 451,865 534,150 1,548,574 825,067 351,278 1,377,145 2,251,260 14,875,360 1,262,298 (337,189) (108,000) (2,212,819) 351,278 1,039,956 2,143,260 12,662,541 1,262,298 (1,462,769) 16,719,309 8,403,381 121,537,683 13,689,914 $ (1,111,491) $ 17,759,265 $ 10,546,641 $ 134,200,224 $ 14,952,212 43 CITY OF BURLINGAME, CALIFORNIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Receipts from other funds Payments to other funds Payments to suppliers Payments to retirees and trust Payments to claims Receipts from claims and litigation Payments to employees for services Net cash provided by (used in) operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers from other funds Transfers to other funds Net cash provided by (used in) noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Principal paid on long-term debt Interest paid on long-term debt Net cash provided by (used in) capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Interest received on investments Net cash provided by (used in) investing activities Net increase (decrease) in cash and equivalents CASH AND CASH EQUIVALENTS: Beginning of year End of year RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Operating income Adjustments for noncash activities: Depreciation and amortization Changes in assets and liabilities: Receivables Prepaid / Inventories Deferred outflows Due to other funds Accounts payable Retentions and Deposits payable Unearned revenue Compensated absences Claims and litigations liabilities Net pension liabilities Net OPEB Liabilities Deferred inflows Total adjustments Net cash provided by (used in) operating activities RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET POSITION Cash and investments -current Cash and investments, restricted Cash and cash equivalents on statement of cash flows Non -cash transactions Amortization of Bond Premiums Enterprise Funds Waste Water Sewer Management Fund Fund Fund $ 20,759,179 $ 16,011,175 $ 770,568 (1,194) (1,194) (8,453,833) (5,478,660) (320,226) (2,884,246) (2,567,149) (411,014) 9,419,906 7,964,172 39,328 (970,815) (738,815) (58,000) (970,815) (738,815) (58,000) (3,128,389) (4,074,072) (1,431,328) (1,829,254) (695,406) (738,920) (5,255,123) (6,642,246) 841,871 843,887 185,971 841,871 843,887 185,971 4,035,839 1,426,998 167,299 18,947,593 19,886,418 4,789,256 $ 22,983,432 $ 21,313,416 $ 4,956,555 $ 6,228,863 $ 3,926,906 $ 261,558 2,069,723 3,037,033 118,166 570,757 (127,571) 264,164 213,987 28,439 (1,194) (1,194) 674,078 175,287 (119,915) 117,365 75,152 (901) 37,752 32,130 10,652 199,007 167,357 27,245 (838,277) (681,841) (119,754) 551,160 448,598 78,674 3,191,043 4,037,266 (222,230) $ 9,419,906 $ 7,964,172 $ 39,328 $ 22,396,877 $ 20,378,476 $ 4,871,177 586,555 934,940 85,378 $ 22,983,432 $ 21,313,416 $ 4,956,555 $ 186,328 $ 138,213 See accompanying Notes to the Basic Financial Statements 44 Enterprise Funds Governmental Activities - Landfill Parking Building Internal Fund Fund Fund Total Service Funds $ 485,651 $ 1,944,182 $ 4,075,665 $ 44,046,420 $ 11,170,144 (2,388) (159,047) (434,727) (1,642,543) (16,489,036) (2,959,826) (4,843,401) (643,080) (46,570) (270,359) (1,116,426) (7,295,764) (1,277,883) 280,034 1,239,096 1,316,696 20,259,232 1,445,954 146,768 (337,189) (108,000) (2,212,819) (337,189) (108,000) (2,212,819) 146,768 (264,083) (7,466,544) (339,071) 64,952 (3,195,630) (1,434,326) 64,952 (264,083) (12,096,500) (339,071) 84,209 443,294 534,150 2,933,382 825,067 84,209 443,294 534,150 2,933,382 825,067 429,195 1,081,118 1,742,846 8,883,295 2,078,718 1,852,449 10,916,772 12,639,135 69,031,623 20,361,235 $ 2,281,644 $ 11,997,890 $ 14,381,981 $ 77,914,918 $ 22,439,953 $ 267,069 $ 925,280 $ 1,717,110 $ 13,326,786 $ 437,231 135,012 5,241,768 731,024 5,630 5,655 4,360 576,997 35,816 8,571 8,571 (192,891) 1,061 82,188 81,188 671,027 99,806 (2,388) 12,829 33,880 (501,052) 275,107 55,674 (15,503) 36,003 213,017 (901) (5,266) 13,843 89,111 13,708 271,000 325 91,231 78,319 563,484 96,736 (19,420) (75,520) (330,132) (2,064,944) (362,626) 12,540 53,568 217,057 1,361,597 260,476 12,965 313,816 (400,414) 6,932,446 1,008,723 $ 280,034 $ 1,239,096 $ 1,316,696 $ 20,259,232 $ 1,445,954 $ 2,267,638 $ 11,943,460 $ 14,146,231 $ 76,003,859 $ 22,164,056 14,006 54,430 235,750 1,911,059 275,897 $ 2,281,644 $ 11,997,890 $ 14,381,981 $ 77,914,918 $ 22,439,953 $ 324,541 45 Cash and investments Accounts receivable Total assets CITY OF BURLINGAME, CALIFORNIA STATEMENT OF NET POSITION FIDUCIARY FUNDS June 30, 2020 ASSETS LIABILITIES Agency Funds $ 273,862 1,313,810 1,587,672 Accounts payable $ 110,838 Due to other governmental units 1,476,834 Total liabilities $ 1,587,672 See accompanying Notes to the Basic Financial Statements 46 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Definition of the Reporting Entity The City of Burlingame (the City) was incorporated in 1908 as a California general law city. Burlingame is a full -service city providing all municipal services, including police, fire, library, parks, recreation, street and storm drain maintenance, and water and sewage treatment. It is governed by a five member City Council, whose members are normally each elected to a four year term. The Mayor of the City is a one-year rotating chair of the City Council. As a government agency, the City is exempt from both federal income taxes and state franchise taxes. The accompanying financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of the City's operations and so data from these units are combined with data of the City as the primary government. For financial reporting purposes, the City's financial statements include all funds, boards and commissions, and authorities that are controlled by or are dependent on the City's legislative branch, the City Council. Control by or dependence on the City was determined on the basis of budget adoption, taxing authority, outstanding debt, or the City's obligation to fund any deficits that may occur. Blended Component Units The following unit is a legally separate component unit for which the City is financially accountable, and therefore, the related financial activities have been blended with the City's financial reporting: Burlingame Financing Authority In November 1995, the City formed an authority known as the Burlingame Financing Authority (Authority). The Authority provides services entirely to the City. The purpose of this Authority is to issue bonds to finance the construction of public capital improvements through the lease of certain land and existing improvements or a pledge of revenue. Facilities are leased by the Authority to the City pursuant to lease agreements. The Authority is comprised of members of the City Council. The City and the Authority have a financial and operational relationship and the financial activities of the Authority have been included in the financial statements of the City as a blended component unit. The Authority's financial activities are presented in the Debt Service Fund as part of the governmental fund statements. The books and records of the Authority are maintained by the City. Additional financial data for the Authority may be obtained from the Finance Department, 501 Primrose Road, Burlingame, CA 94010. 47 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Definition of the Reporting Entity (Continued) Non -Disclosed Organizations There are other agencies that provide services within the City, which are independently governed, and also maintain financial books and records that are separate from the City. Agency Funds The fiduciary fund consists of various agency funds, which account for various programs, activities, or funds held by the City in a custodial capacity or as an agent for individuals, private organizations, and other government units. The City's basic financial statements, except for certain cash held by the City as a fiscal agent, do not reflect, for example, the operations of the Burlingame School District, the Burlingame Library Trustees, nor the Hotel and Business Improvement Districts. A complete listing of agency funds can be found in the Fiduciary Fund Financial Statements. Central County Fire Department Effective July 1, 2010, City fire employees became employees of Central County Fire Department (CCFD). CCFD is a Joint Powers Authority (JPA) which provides fire, emergency medical, and disaster preparedness services to the City and the Town of Hillsborough. CCFDS also provide fire and emergency medical services to the City of Millbrae through a contract. CCFD is governed by a four member board of directors and a Chief Administrative Officer. As members of the CCFD JPA, Burlingame and Hillsborough fund 70% of the direct costs in support of the ongoing operations and maintenance of CCFD based on a 60/40 cost allocation as outlined in the JPA. The remaining 30% is funded by the City of Millbrae. The Town of Hillsborough maintains the books and records of the CCFD which is subject to a separate annual audit. This cost allocation is reflected as a receivable (if total actual direct costs are less than budgeted or expected direct costs) or payable (if total actual direct costs exceed budgeted or expected direct costs) on the City's Statement of Net Position. CCFD is a stand-alone employer recognized by the California Public Employees' Retirement System (CaIPERS). B. Basis of Accounting, Measurement Focus, and Presentation The City's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities. 1�3 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Accounting, Measurement Focus, and Presentation (Continued) GASB requires that the accounts of the City be organized on the basis of funds, each of which is considered a separate accounting entity. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance -related legal and contractual provisions. The operations of each fund are accounted for in a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. City resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. Financial reporting standards established by GASB require that the financial statements described below be presented. Government -Wide Financial Statements The Government -Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities, except for interfund services provided and used, which are not eliminated in the process of consolidation. These statements present summaries of Governmental and Business -Type Activities, and represent a consolidation of all financial activities for the entire City. Fiduciary activities of the City are not included in these statements. The Government -Wide Financial Statements are presented on an economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds. Accordingly, all of the City's current and long-term assets and liabilities, including capital assets, infrastructure assets, and long- term liabilities, are included in the accompanying Statement of Net Position as of June 30. The Statement of Activities presents changes in net position since July 1, the beginning of the fiscal year. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred, regardless of the timing of the related cash flows. For example, property tax revenue is recognized in the year of levy, and all other revenue is recognized when services have been rendered. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions. Governmental Fund Financial Statements Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the Government -Wide Financial Statements. The City has presented all major funds that met the qualifications for major fund reporting. 49 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Accounting, Measurement Focus, and Presentation (Continued) Governmental Fund Financial Statements (Continued) Major funds are funds whose revenues, expenditures/expenses, assets, or liabilities (excluding extraordinary items) are at least 10% of corresponding totals for all governmental or enterprise funds and at least 5% of the aggregate amount for all governmental and enterprise funds. The identification and separate reporting of major funds serves to highlight financial activities which may be particularly important to financial statement users. Nonmajor funds are reported in aggregate in a separate column in the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances. The City reports the following major governmental funds: The General Fund is the general operating fund of the City. It is used to account for all financial resources and transactions except those required to be accounted for in another fund. The Storm Drainage Special Revenue Fund is used to account for the storm drainage fees collected as a result of an assessment approved by the majority of the parcel owners in the City voting at a special election on May 5, 2009. The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs (other than those paid by the proprietary funds). The Capital Proiects Fund is used to account for resources used to acquire or develop facilities or major capital improvements. All governmental funds are accounted for on a spending or current financial resources measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in current net position. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Accordingly, revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are taxpayer -assessed tax revenues (such as property taxes, sales taxes, transient occupancy taxes, and franchise taxes), certain grant revenues, and earnings on investments. 50 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Accounting, Measurement Focus, and Presentation (Continued) Governmental Fund Financial Statements (Continued) Expenditures are recorded in the accounting period in which the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. Non -exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis of accounting, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Other revenues which may be accrued include other taxes, intergovernmental revenues, interest, and charges for services. Again, grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost -reimbursement grants and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenses. It is the City's policy to first apply restricted resources to such programs, followed by unrestricted resources if necessary. Proprietary Fund Financial Statements Proprietary Fund Financial Statements include a Statement of Net Position; a Statement of Revenues, Expenses, and Changes in Fund Net Position; and a Statement of Cash Flows for each major proprietary fund. A column representing internal service funds is also presented in these statements. However, internal service fund balances and activities are combined with the Governmental Activities in the Government -Wide Financial Statements. The City reports the following major proprietary (enterprise) funds: The Water Fund is used to account for the activities of the City's water supply system. The Sewer Fund is used to account for the activities of the City's sewage collection system and the Wastewater Treatment Plant. The Waste Management Fund is used to account for the activities of the City's franchised garbage collections and recycling program. 51 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Accounting, Measurement Focus, and Presentation (Continued) Proprietary Fund Financial Statements (Continued) The Landfill Fund is used to account for the landfill closure costs and post -closure monitoring services. The Landfill Fund was created in 2014 by separating landfill activities from the Waste Management Fund. The Parking Fund is used to account for the activities of the City's Parking Districts. The Building Fund is used to account for activities of the City's building division. Proprietary funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Fund Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. The primary operating revenues of the City's enterprise and internal service funds include water and sewer service, connection fees, sewer discharge permits, garbage and recycling collection surcharges, building inspections, parking fees and permits, information technology support, vehicle and facilities maintenance, and risk management activities provided to the various departments in the City. All other revenues are reported as non -operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses. The Internal Service Funds are used to account for the servicing of self-insurance, allocation of funding for the retiree medical benefit trust fund, vehicle maintenance and acquisition, facilities maintenance, and information technology maintenance and acquisitions made for City departments or agencies on a cost -reimbursement basis. Fiduciary Fund Financial Statements The Fiduciary Funds are used to account for the resources held by the City in a custodial capacity or as an agent for individuals, private organizations, other government units such as the State of California, and/or other funds The City maintains agency funds for the Library Trustees; Hotel, Downtown and Broadway Business Improvement Districts (BIDs) fees; and the elementary and high school district developer fees. Fiduciary Fund Financial Statements include a Statement of Net Position and represent the related activity for the City's Agency Funds. 52 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Fair Value Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs — other than quoted prices included within level 1— that are observable for an asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for an asset or liability. If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. D. Deferred Outflows and Inflows of Resources In addition to assets, the statement of financial position or balance sheet reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of financial position or balance sheet reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. E. Capital Assets Capital assets, which include land, roads and parking lots, buildings and structures, improvements other than buildings, machinery and equipment, infrastructure assets, and construction in progress, are reported in the applicable governmental or business -type activities columns in the government - wide financial statements. The City capitalizes equipment and improvements having an estimated useful life in excess of one year and acquisition cost of at least $5,000. 53 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) F. Inventories and Prepaid Items Inventories are reported at a cost basis. The cost is recorded, using a weighted average, as an expenditure at the time an individual item is consumed rather than when purchased. Inventories are reflected as nonspendable in the General Fund balance and are, therefore, unavailable for appropriation. As of June 30, 2020, inventories on hand were immaterial. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government -wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed, rather than when purchased. The inventories and prepaid items recorded in the governmental funds do not reflect current appropriable resources and, thus, are reported as part of nonspendable fund balance. G. Property Taxes Property taxes are collected for a twelve-month period effective July 1 by the County Tax Collector. Property tax is levied each September 1 on the assessed values as of the prior January 1 for all real and personal property located in the City. Once the levy rates are approved, the actual claim to property taxes arises and is enforceable. Taxes are billed once a year in late October and are payable in two equal installments due by December 10 and April 10 (of the following year). Taxes are considered delinquent if paid after the due dates. As a result of the implementation of Article XIII (a) of the California State Constitution in fiscal year 1978-1979, the City does not have the power to levy property taxes or to set property tax rates based on the financial requirements of the various funds. Instead, the City receives remittances from the County. These remittances are based either on a flat 1% rate applied to the fiscal year 1975-1976 full value of the property, or on 1% of the sales price of the property on sales transactions and construction which occur after the fiscal year 1975-1976 valuation. Values on properties (exclusive of increases related to sales transactions and construction) can rise at a maximum of 2% per year or the amount of increases to the California Consumer Price Index, whichever is less. City property tax revenues are recognized when levied to the extent that they result in current receivables. Article XIII (a), Section 113, of the California State Constitution allows property taxes in excess of the 1% limit to fund general obligation bond debt service when such bonds are approved by two-thirds of the local voters. On October 12, 1993, the County Board of Supervisors adopted and implemented the Alternative Method of Tax Apportionment (Teeter Plan). The Teeter Plan applies to secured taxes only and provides a consistent predictable cash flow for taxes since they are apportioned to the City as if the tax levy had been collected in full. 54 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) H. Use of Estimates and Reclassifications The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. I. New Accounting Pronouncements The City has implemented the requirements of the following GASB Pronouncement: GASB Statement No. 95 — Postponement of the Effective Dates of Certain Authoritative Guidance. This Statement extended the implementation dates for 15 GASB Statements and Implementation Guides by 1 year or more. Of course, many of the Statements could be early -implemented, as applicable. 55 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 2 — BUDGETS AND BUDGETARY ACCOUNTING A. Basis of Budgeting A formal budget is employed as a management control device during the year for the City, and is adopted annually for all City funds, except for the fiduciary funds, Debt Service Fund and certain special revenue funds where appropriate. Consistent with most governmental entities, the City's budget is based on a modified accrual basis of accounting under which revenues are recognized in the period they become available and measurable, and expenditures are recognized in the period the related liability is incurred. Budgets for the General Fund and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States (GAAP). The City budget includes information regarding estimated costs (or outlays) and revenue (or cash inflows) for identified programs, projects, and levels of service to meet the needs of the City. All annual appropriations lapse at the end of the fiscal year except in the Capital Projects Fund because capital improvement projects typically span more than one fiscal year. Appropriations for capital projects lapse when projects are completed, placed into service, accounted for as capital assets, or abandoned at the discretion of the City and/or City Council. Budget amendments that increase a fund's appropriations require majority approval by the City Council. Certain budgetary re -allocations within departments require approval by the Finance Director and department heads. Budget amendments between departments are approved by the Finance Director and City Manager. A mid -year budget status report and long-term financial forecast for the next five years is presented to the City Council as part of an ongoing assessment and evaluation of budgetary performance, with special attention to the General Fund and certain other major funds. Budgetary financial data is included in the required supplementary information for the General Fund and Storm Drainage Fund. Final budgetary data excludes the amount reserved for encumbrances in order to properly compare these amounts to actual expenditures. Budget Development and Adoption The City Council encourages all Burlingame residents and business community members to participate in the development of the City budget. The Council holds public meetings to provide guidance on the budget. Under Council's policy directives and guidance, departments prepare their budget requests in support of their programs in January for submission in early April. Expenditure assumptions are based on known factors such as collective bargaining agreements, current pay and benefit policies, consumer price indices, and other information available from expert third -parties or governing authorities. 56 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 2 — BUDGETS AND BUDGETARY ACCOUNTING (Continued) A. Basis of Budgeting (Continued) Budget requests are reviewed by the Finance Department for technical compliance to City budget instructions. The Proposed Budget is prepared and delivered to the City Council in May. The City Council reviews the Proposed Budget before the final budget is formally adopted in June at a public hearing, which gives residents an additional opportunity to comment on the spending plan. A separate publication presenting this information is available from the City of Burlingame, Finance Department, 501 Primrose Road, Burlingame, CA 94010. General Fund and Storm Drainage Fund Budgetary Comparison Schedules are also included in the Required Supplementary Information, which has information regarding budget to actual performance for the General Fund and Storm Drainage Fund. NOTE 3 — CASH AND INVESTMENTS The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds. This pooled cash is invested to enhance interest earnings in accordance with City investment policy guidelines established by the City Treasurer. The pooled interest earned is allocated to the funds based on cash and investment balances in these funds at the end of each accounting period. The City has the following cash and investments at June 30, 2020: Cash and investments Cash and investments, restricted Cash and investments, restricted, held with fiscal agents Total cash and investments Government -Wide Statement of Net Position Governmental Business -Type Activities Activities Fiduciary Funds Total $ 141,026,480 $ 76,003,859 $ 273,862 $ 217,304,201 447,984 447,984 55,054,088 1,463,075 56, 517,163 $ 196,080,568 $ 77,914,918 $ 273,862 $ 274,269,348 57 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 3 — CASH AND INVESTMENTS (Continued) The City's cash and investments at June 30, 2020 in more detail: Fair Value Deposits Deposits - unrestricted $ 8,993,811 Deposits - restricted 56,667,566 Total deposits 65,661,377 Investments -unrestricted U.S. Treasury Bond/Note 38,846,977 Supranational Agency Bond/Note 4,532,124 Municipal Bond/Note 1,242,446 Federal Agency Obligations 35,390,050 Certificates of Deposit 10,811,114 Asset -Backed Security/Collateralized Mortgage 8,913,964 Corporate notes 24,541,469 California Asset Management Program (CAMP) 36,548,943 California Local Agency Investment Funds (LAIF) 47,780,884 Total investments 208,607,971 Total Cash and Investments $ 274,269,348 Cash and Investments Held with Treasur Unrestricted, held with Treasury 217,153,798 Restricted, held with Treasury 447,984 Total Cash and Investments Held With Treasury 217,601,782 Restricted Cash and Investment Held with Fiscal Agent Investment held with Pension Trust - PARS 12,562,820 Cash held by fiscal agent - US Bank 39,169,302 Cash held by fiscal agent - Bank of New York 4,785,040 Cash held by fiscal agent - J. P. Morgan Chase 127,858 Cash held by fiscal agent - Bank of America 22,546 Total restricted cash and investments held with fiscal agent 56,667,566 Total Cash and Investments $ 274,269,348 RN CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 3 — CASH AND INVESTMENTS (Continued) A. Deposits Custodial Credit Risk The carrying amounts of the City's cash deposits were $8,993,812 at June 30, 2020. Bank balances before reconciling items were $9,469,629. At that date, the total collateralized or insured with securities held by the pledging financial institutions in the City's name as discussed below. Custodial credit risk for deposits is the risk that the City will not be able to recover its deposits or will not be able to recover collateral securities in the possession of an outside party if a depository institution fails. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit exposure to custodial credit risk for deposits or investments, other than the following provision applicable to deposits. The California Government Code requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The fair value of pledged securities must equal at least 110% of the City's cash deposits. State law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City, however, has not waived the collateralization requirements. The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period -end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund. B. Investments Pooled Investments and Investment by City Treasury Cash of the respective funds is pooled and invested principally in U.S. Treasury and agency securities and short-term investments such as the State of California (State) Local Agency Investment Fund (LAIF) and the California Asset Management Program (CAMP). 59 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 3 — CASH AND INVESTMENTS (Continued) B. Investments (Continued) The LAIF is a pool of State cash and investments and those of California cities and local agencies. The State's investment policy is consistent with the City's policy, and, although State and City investments are pooled, the State does not have access to City funds. The State Treasurer administers LAIF, which charges for the service by retaining a percentage of investment earnings. State regulations permit the City to place up to $75,000,000 (effective January 1, 2020) in LAIF, plus any bond proceeds related to construction of a City facility. Valuation For the purposes of the Statement of Cash Flows, the City considers cash and cash equivalents to be cash on hand, demand deposits, and highly liquid investments with original maturities of three months or less at the time of acquisition. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available. Interest income from investment of pooled cash is allocated to the funds based on monthly cash balances. Investments are presented at fair value except as noted below. The fair value of participants' position in the investment pools is the same as the value of the investment pools' shares and investment income includes changes in fair value (i.e., realized and unrealized gains or losses). Money market funds (such as short-term, highly liquid debt instruments including bankers' acceptances and securities notes, bills, and bonds of the U.S. government and its agencies), and participating interest -earning investment contracts (such as negotiable certificates of deposit, certificates of deposit, and repurchase agreements) that have a remaining maturity at the time of purchase of one year or less, are carried at amortized cost which approximates fair value. Certain disclosures, if applicable, for deposits and investment risks such as interest rate risk and custodial credit risk are required to be disclosed in the financial statements: ■ Fair Value Hierarchy ■ Interest Rate Risk ■ Credit Risk o Overall o Custodial Credit Risk o Concentrations of Credit Risk In addition, other disclosures are specified, including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other information. For purposes of the Statement of Cash Flows of the proprietary fund types, cash and cash equivalents include all investments, as the City operates an internal cash management pool which maintains the general characteristics of a demand deposit account. .e CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 3 — CASH AND INVESTMENTS (Continued) B. Investments (Continued) Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The following is a summary of the fair value hierarchy of the fair value of cash and investments of the City as of June 30, 2020: Investments by Fair Value Level: U.S. Treasury Bond/Note Supranational Agency Bond/Note Municipal Bond/Note Federal Agency Obligations Asset -Backed Security/ Collateralized Mortgage Corporate notes Total Investments Investments measured at Amortized Cost: California Local Agency Investment Fund California Asset Management Program Certificates of Deposit Level Level Total $ 38,846,977 $ 38,846,977 $ 38,846,977 $ 4,532,124 4,532,124 1,242,446 1,242,446 35,390,050 35,390,050 8,913,964 8,913,964 24,541,469 24,541,469 $ 74,620,053 $ 113,467,030 $ 47,780,884 36,548,943 10,811,114 Total Investments $ 208,607,971 61 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 3 — CASH AND INVESTMENTS (Continued) B. Investments (Continued) Investments classified in Level 1 of the fair value hierarchy are valued using quoted prices in active markets. Federal agency securities, Certificates of Deposit, Commercial paper totaling and Corporate notes classified in Level 2 of the fair value hierarchy, are valued using matrix pricing techniques maintained by various pricing vendors. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. The California Local Agency Investment Fund (LAIF) is classified as exempt in the fair value hierarchy, as it is valued at amortized cost, which is exempt from being classified under GASB 72. Fair value is defined as the quoted market value on the last trading day of the period. These prices are obtained from various pricing sources by the custodian bank. Concentration of Credit Risk The investment policy of the City contains limitations on the amount that can be invested in any one issuer. The City has the following investments in one issuer (other than money market funds and an external investment pool) that represent 5% or more of total City investments: Issuer Fannie Mae Interest Rate Risk Investment Type Federal Agency Securities Amount $ 23,874,042 To minimize exposure to fair value losses caused by rising interest rates and to meet the liquidity needs of the City, the City's investment policy limits its investment portfolio to a maturity of less than 5 years. 12 Months 13 to 24 25 to 60 Percentage Investment Type or less Months Months Total of Portfolio U.S. Treasury Bond/Note $ 38,846,977 $ 38,846,977 18.62% Supranational Agency Bond/Note $ 3,290,268 $ 1,241,856 4,532,124 2.17% Municipal Bond/Note 1,242,446 1,242,446 0.60% Federal Agency Obligations 3,096,949 32,293,101 35,390,050 16.96% Corporate notes 7,331,982 4,462,227 12,747,260 24,541,469 11.76% Asset -Backed Security/ Collateralized Mortgage 530,573 8,383,391 8,913,964 4.27% Certificates of Deposit 7,159,406 1,187,328 2,464,380 10,811,114 5.18% California Asset Management Program 36,548,943 36,548,943 17.52% California Local Agency Investment Fund 47,780,884 47,780,884 22.90% Total Investments $ 102,111,483 $ 10,518,933 $ 95,977,555 $ 208,607,971 100.00% M CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 3 — CASH AND INVESTMENTS (Continued) B. Investments (Continued) Credit Risk State law limits investments in commercial paper and corporate bonds to be rated in a category "A" or its equivalent or better by nationally recognized statistical rating organizations (NRSROs). It is the City's policy to limit its investments in these investment types to the top rating issued by NRSROs, including raters Standard & Poor's, Fitch Ratings, and Moody's Investors Service (Moody's). Investment Type: Fair Value: Moody's Rating U.S. Treasury Bond/Note $ 38,846,977 Aaa Federal Agency Obligations 35,390,050 Aaa Supranational Agency Bond/Note 4,532,124 Aaa Municipal Bond/Note 1,242,446 Aa2 Asset -Backed Security/ Collateralized Mortgage 8,913,964 Aaa Corporate Notes: Wells Fargo Corp Notes 978,234 A2 Bank of New York Mellon Corp 2,030,044 Al Bank of America Corp Note 936,117 A2 Morgan Stanley Corp Notes 934,989 A3 Goldman Sachs GRP Inc. Corp NT 933,809 A3 Branch Banking & Trust 1,518,789 A3 Cisco System Inc. Corp Notes 1,450,241 Al Citigroup Inc. Corp Note 947,518 A3 IBM Corp Bonds 2,064,468 A2 Walt Disney Company Notes 1,122,132 A2 Amazon.com Inc. Bonds 1,838,643 A2 JPMorgan Chase & Co Bonds 1,002,437 A2 Home Depot Inc. Corp Note 1,135,305 A2 Apple Inc Corporate Notes 721,946 Aal Apple Inc Corporate Notes 1,474,182 Aal US Bank NA Cincinnati Corp Notes 1,954,818 Al Pfizer Inc Corp Notes 1,621,608 Al Toyota Motor Credit Corp Corp Notes 392,510 Al Toyota Motor Credit Corp Corp Notes 547,448 Al Intel Corp Corporate Notes 936,231 Al Certificates of Deposit 10,811,114 FDIC Insured California Asset Management Program 36,548,943 Not Rated California Local Agency Investment Fund 47,780,884 Not Rated $ 208,607,971 63 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 3 — CASH AND INVESTMENTS (Continued) Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are held by the counterparty. All of the City's investments in securities are held in the name of the City. The City's custody agreement policy prohibits counterparties holding securities not in the City's name. C. Investments in LAIF The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance available for withdrawal is based on the accounting records maintained by the State, which are recorded on an amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage -backed securities, other asset -backed securities, loans to certain state funds, floating rate Securities issued by federal agencies, government -sponsored enterprises, United States Treasury Notes and Bills and corporations. As of June 30, 2020, these investments have an average maturity of 191 days. D. California Asset Management Program The City is a voluntary participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by a Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the "Act") for the purpose of exercising the common power of its participants to invest certain proceeds of debt issues and surplus funds. The Pool's investments are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code. The City reports its investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share. At June 30, 2020, these investments have an average maturity of 53 days, and the fair value approximated was the City's cost. NOTE 4 — INTERFUND TRANSFERS AND TRANSACTIONS A. Transfers Between Funds With Council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to allocate resources from the fund that receives them to the fund where they will be spent without a requirement for repayment. Less often, a transfer may be made to open or close a fund. 64 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 4 — INTERFUND TRANSFERS AND TRANSACTIONS (Continued) Transfers between funds for the year ending June 30, 2020, are as follows: Transfers In Debt Service Capital Projects Transfers Out General Fund Fund Fund General Fund Storm Drain Fund Debt Service Fund Non Major Water Fund Sewer Fund Waste Management Fund Parking Fund Building Enterprise Fund Total In $ 4,708,763 $ 15,985,000 $ 15,000 2,068,139 1,432,014 316,000 1,850,000 970,815 738,815 58,000 337,189 108,000 $ 2,543,819 $ 6,776,902 $ 19,267,014 (a) To fund debt service and administrative support (b) To fund capital projects (c) To fund capital projects and various city services (d) To fund debt service B. Interfund Receivables and Payables Non Major Total Out $ 143,500 $ 20,837,263 (c)(d) 2,083,139 (d) 1,432,014 (b) 2,166,000 (b) 970,815 (a) 738,815 (a) 58,000 (a) 337,189 (a) 108,000 (a) $ 143,500 $ 28,731,235 During the course of operations, transactions may occur between funds to account for goods received or services rendered. Transactions between funds that are representative of lending or borrowing arrangements outstanding at the end of the fiscal year are referred to as advances to/from other funds, which represent the noncurrent portion of any interfund loans. All other outstanding balances between funds are reported as due to/from other funds. Any other residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as internal balances. C. Internal Balances Internal balances are presented only in the government -wide financial statements. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business -type activities. Due To Governmental Internal Services Fund Enterprises Fund Fund Debt Service Water Sewer Due From Fund Fund Fund OPEB Fund Total General Fund $ 146,768 $ 146,768 Debt Service Fund $ 1,083 $ 1,083 2,166 Capital Projects Fund $ 576,944 576,944 Total $ 576,944 $ 1,083 $ 1,083 $ 146,768 $ 725,878 65 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 5 — CAPITAL ASSETS All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated acquisition value on the date contributed. Furthermore, the book value of grant -funded assets is shown net of any grant reimbursement revenue. Capital outlay is recorded as expenditures in the General, Capital Projects, and other governmental funds and as an asset in the government -wide financial statements to the extent that the City's capitalization threshold is met. Major outlays for capital assets and improvements are capitalized as projects are constructed. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Interest incurred during the construction phase of the capital assets of business -type activities is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Except for roads and parking lots covered by the modified approach, depreciation has been provided on capital assets excluding land and construction in progress. Depreciation of all capital assets is charged as an expense against operations each year and the total amount of depreciation taken over the years, called accumulated depreciation, is reported on the Statement of Net Position as a reduction in the book value of capital assets. Depreciation is provided using the straight-line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives listed below to capital assets. Type of Asset Years Buildings and structures 10-100 Improvements 10-100 Machinery and equipment 5-15 Infrastructure 10-100 The modified approach is an alternative to depreciation that may be applied for eligible infrastructure capital assets. The City has elected to follow the modified approach for paved roads and parking lots. No depreciation is reported for these assets nor are amounts capitalized in connection with improvements that lengthen the lives of the roads and parking lots, unless the improvements also increase their service potential. Rather, costs for both maintenance and preservation of these assets are expensed in the period incurred. The City maintains an inventory of the roads and parking lots and performs periodic condition assessments to establish the condition levels of the systems. Additional information regarding the condition of paved roads can found in the required supplementary information. CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 5 — CAPITAL ASSETS (Continued) Intangible Assets In 2010, the City adopted GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. GASB Statement No. 51 established accounting and financial reporting requirements for intangible assets to reduce inconsistencies, enhancing the comparability of the accounting and financial reporting of such assets among state and local governments. The statement also provides authoritative guidance that specifically addresses the nature of the intangible assets that are internally created by the governmental entity. Examples of intangible assets include easements, land use rights, and computer software. The City capitalizes intangible assets with an acquisition cost of at least $5,000 and an estimated useful life in excess of one year. Artwork and historical artifacts of the City held for public exhibition or promotion of education and public service rather than financial gain are not capitalized and are expensed when incurred. As of June 30, 2020, the City does not have intangible assets. A. Capital Asset Activity from Governmental Activities Capital asset activity for the year ended June 30, 2020, relating to governmental activities was as follows: Balance Balance July 01, 2019 Increases Decreases Transfers June 30, 2020 Capital assets not being depreciated: Land $ 6,407,198 $ 6,407,198 Pavement accounted for using the modified approach 32,947,987 32,947,987 Construction in progress 6,800,759 $ 14,334,686 $ (5,016,695) 16,118,750 Total capital assets, not being depreciated 46,155,944 14,334,686 (5,016,695) 55,473,935 Capital assets being depreciated: Buildings and structures 42,100,412 337,100 213,399 42,650,911 Machinery and equipment 21,810,768 480,370 $ (36,503) 170,772 22,425,407 Improvements and Infrastructure 108,180,592 (181,112) 4,632,524 112,632,004 Total capital assets, being depreciated 172,091,772 817,470 (217,615) 5,016,695 177,708,322 Less accumulated depreciation for: Buildings and structures 19,104,052 825,957 19,930,009 Machinery and equipment 18,046,464 1,247,621 (36,503) 19,257,582 Infrastructure & Improvements 51,069,514 1,756,555 52,826,069 Total accumulated depreciation 88,220,030 3,830,133 (36,503) 92,013,660 Total capital assets, being depreciated, net 83,871,742 (3,012,663) 181,112 5,016,695 85,694,662 Governmental activities capital assets, net $ 130,027,686 $ 11,322,023 $ 181,112 $ 141,168,597 67 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 5 — CAPITAL ASSETS (Continued) B. Capital Asset Activity from Business -Type Activities Capital asset activity for the year ended June 30, 2020, relating to business -type activities was as shown below. Capital assets not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets being depreciated: Buildings and structures Improvements and Infrastructure Machinery and equipment Total capital assets, being depreciated Less accumulated depreciation for: Buildings and structures Improvements other than buildings Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Business -type activities capital assets, net C. Depreciation Expense Balance Balance July 01, 2019 Increases Transfers June 30, 2020 $ 6,357,188 $ 6,357,188 7,575,008 $ 7,265,751 $ (7,974,456) 6,866,303 13,932,196 7,265,751 (7,974,456) 13,223,491 3,924,051 3,924,051 173,405,281 167,551 7,910,412 181,483, 244 7,434,271 33,242 64,044 7,531,557 184,763,603 200,793 7,974,456 192,938,852 1,580,744 80,096 1,660,840 82,611,469 4,833,572 87,445,041 5,667,740 328,100 5,995,840 89,859,953 5,241,768 95,101,721 94,903,650 (5,040,975) 7,974,456 97,837,131 $ 108,835,846 $ 2,224,776 $ 111,060,622 Depreciation expense was charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program for the current year were as follows: Governmental activities: General government Public safety Public works Parks, recreation, and library Total depreciation expense - governmental activities Business -type activities: Water Sewer Parking Total depreciation expense - business -type activities Governmental Depreciation Less:ISF Funds $ 145,851 $ 145,851 513,234 513,234 2,194,861 $ (731,024) 1,463,837 976,187 976,187 $ 3,830,133 $ (731,024) $ 3,099,109 $ 2,069,723 3,037,033 135,012 $ 5,241,768 M CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT Government -Wide Financial Statements In the government -wide financial statements, long-term debt and other financial obligations are reported as liabilities in the appropriate activities or proprietary funds. Bond premiums, discounts, and deferred gains and losses at refunding are deferred and amortized over the life of the bonds using the straight-line method. Issuance costs are expensed in the year incurred. Governmental Fund Financial Statements The governmental fund financial statements do not present long-term debt, which is shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government -Wide Statement of Net Position. Governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 - LONG-TERM DEBT (Continued) The following is a summary of changes in long-term debt related to governmental and business -type activities during the fiscal year ended June 30, 2020: Description Beginning Balance June 30, 2019 Additions Reductions Ending Balance June 30, 2020 Amounts Due Within One Year Governmental Activities - Bonds: Pension Obligation Bonds, Series 2006 $ 8,510,000 $ (505,000) $ 8,005,000 $ 555,000 Storm Drainage Revenue Bonds, Series 2010 7,730,000 (275,000) 7,455,000 285,000 - Unamortized Premium 141,870 (7,790) 134,080 (7,790) Storm Drainage Revenue Bonds, Series 2012 8,765,000 (325,000) 8,440,000 340,000 - Unamortized Premium 207,819 (10,657) 197,162 (10,657) Lease Revenue Refunding Bonds, Series 2010 2,210,000 (1,085,000) 1,125,000 1,125,000 - Unamortized Premium 108,729 (54,365) 54,364 (54,364) Lease Revenue Bonds, Series 2012 8,610,000 (245,000) 8,365,000 250,000 - Unamortized Premium 189,541 (8,066) 181,475 (8,066) Storm Drainage Revenue Bonds, Series 2016 8,520,000 (295,000) 8,225,000 305,000 - Unamortized Premium 885,256 (46,593) 838,663 (46,593) Lease Revenue Bonds, Series 2019 $ 31,400,000 (1,160,000) 30,240,000 485,000 - Unamortized Premium 7,831,615 (130,527) 7,701,088 (261,054) Total Governmental Activities -Bonds 45,878,215 39,231,615 (4,147,998) 80,961,832 2,956,476 Governmental Activities - Direct Borrowings: PG&E Loan - 2020 - 337,099 (38,954) 298,145 49,064 Total Governmental Type Activities - Direct Borrowings - 337,099 (38,954) 298,145 49,064 Total Governmental Type Activities $ 45,878,215 $ 39,568,714 $ (4,186,952) $ 81,259,977 $ 3,005,540 Business -Type Activities - Bonds: Water and Wastewater Refunding Bonds, Series 2011 $ 3,600,000 $ (330,000) $ 3,270,000 $ 345,000 - Unamortized Premium 312,493 (34,722) 277,771 (34,722) Water and Wastewater Refunding Bonds, Series 2013 9,805,000 (815,000) 8,990,000 845,000 - Unamortized Premium 902,163 (90,216) 811,947 (90,216) Water and Wastewater Refunding Bonds, Series 2016 14,645,000 (950,000) 13,695,000 985,000 - Unamortized Premium 2,395,228 (199,603) 2,195,625 (199,603) Total Business -Type Activities - Bonds 31,659,884 (2,419,541) 29,240,343 1,850,459 Business -Type Activities - Direct Borrowings: State Water Resource Loan - 2003 5,120,022 (586,075) 4,533,947 600,727 State Water Resource Loan - 2010 4,071,154 (254,966) 3,816,188 262,360 Total Business -Type Activities - Direct Borrowings 9,191,176 (841,041) 8,350,135 863,087 Total Business -Type Activities $ 40,851,060 $ (3,260,582) $ 37,590,478 $ 2,713,546 70 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities Pension Obligation Bonds, 2006 Series A Bonds — Original Issue $32,975,000 In September 2006, the City issued $32,975,000 in taxable pension obligation bonds. The City is obligated to make payments to the California Public Employees' Retirement System (CaIPERS) as a result of retirement benefits accruing to members of CaIPERS. The City's statutory obligation includes, among others, the requirement to amortize the unfunded accrued actuarial liability (UAAL) and to make contributions with respect to such retirement benefits. The proceeds of the bonds were used to provide funds to allow the City to refund its current UAAL with respect to retirement benefits accruing to members of CaIPERS and to prepay a portion of its contribution to CaIPERS for the fiscal year ended June 30, 2007. Principal on the bonds is payable annually on June 1. Interest on the bonds is payable semi-annually June 1 and December 1. During fiscal year 2020, the City made principal and interest payments totaling $505,000 and $471,500, respectively. The bonds mature on June 1, 2036, and the underlying serial and term bonds carry an interest rate that varies from 5.2% to 5.5%. The bonds are payable from any source of available funds of the City. The bond covenants contain events of default that require the revenue of the City to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the City to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the City; or if any court or competent jurisdiction shall assume custody or control of the City. Remedies following an event of default include any remedy available at law or in equity. No such events of default occurred during the fiscal year ending June 30, 2020. For The Year Ending June 30 Principal 2021 2022 2023 2024 2025 2026-2030 2031-2035 2036 $ 555,000 605,000 660,000 725,000 790,000 1,685,000 2,395,000 590,000 $ 8,005,000 Interest $ 443,891 413,550 379,966 343,329 303,085 1,121,025 581,190 32,751 $ 3,618,787 Total $ 998,891 1,018,550 1,039,966 1,068,329 1,093,085 2,806,025 2,976,190 622,751 $ 11,623,787 71 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities (Continued) Lease Revenue Refunding Bonds, Series 2010 — Original Issue $8,205,000 In 2010, the Authority issued $8,205,000 of Lease Revenue Refunding Bonds, Series 2010 to refund and defease all of the Authority's outstanding Lease Revenue Bonds, Series 2001, which financed certain improvements to the City's Corporation Yard and paid the costs of issuance of the bonds. A premium of $579,892 was paid and will be amortized over the life of the bonds. The transaction resulted in an economic gain of $1,150,926 and a reduction of $2,575,952 in future debt service payments. Principal is due annually on June 1, commencing on June 1, 2007. Interest on the bonds is payable semiannually on June 1 and December 1, commencing on December 1, 2010. During fiscal year 2020, the City made principal and interest payments totaling $1,085,000 and $82,775, respectively. The bonds mature on June 1, 2021, and the underlying serial and term bonds carry an interest rate that varies from 2.5% to 4.0%. The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from the revenues, consisting primarily of base rental payments paid by the City to the Authority and from amounts on deposit in certain funds and accounts held under the trust agreement. The City has covenanted in the facilities sublease to include all base rental payments and additional payments needed in its annual budgets. Should the City default under the facilities sublease, the trustee may terminate the sublease and recover certain damages from the City, or may retain the facilities sublease and hold the City liable for base rental payments as they become due. Base Rental payments may not be accelerated upon a default under the facilities sublease. No such events of default occurred during the fiscal year ending June 30, 2020. For The Year Ending June 30 2021 Plus: Unamortized premium Principal Interest Total $ 1,125,000 $ 39,375 $ 1,164,375 1,125,000 39,375 1,164,375 54,364 S 1.179.364 54,364 $ 39,375 $ 1,218,739 72 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities (Continued) Storm Drainage Revenue Bonds, Series 2010— Original Issue $9,805,000 Series 2010A-1 Tax -Exempt $2,635,000 Series 2010A-2 Taxable — Build America Bonds $7,170, 000 The Authority issued Storm Drainage Revenue Bonds, Series 2010 to provide funds to the City to finance certain improvements to the City's Storm Drainage System and fund a reserve account for the bonds. The bonds include $2,635,000 in tax-exempt bonds and $7,170,000 in taxable Build America Bonds under the American Recovery and Reinvestment Act of 2009 (Recovery Act). Pursuant to the Recovery Act, the City expects to receive a cash subsidy payment from the United States Treasury up to 35% of the interest payable on the Series 2010A-2 bonds on or about each interest payment date. The Refundable Credits received by the City constitute system revenues and are pledged to the payment of installment payments under the Installment Sale Agreement. The tax-exempt series was issued at a premium of $210,326, which will be amortized over the life of the bonds. Principal is due annually on July 1, commencing July 1, 2011. Interest on the bonds is payable semiannually on January 1 and July 1, commencing on January 1, 2011. During fiscal year 2020, the City made principal and interest payments on the tax-exempt series totaling $275,000 and $20,975, respectively. Principal and interest payments on the taxable series totaled $0 and $318,688, respectively, net of the Build America Bonds Interest subsidy. The bonds mature on July 1, 2038, and the underlying serial and term bonds carry interest rates which vary from 3.0% to 6.8%. The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from the revenues generally consisting of installment payments paid by the City to the Authority and from amounts on deposit in certain funds and accounts held under the trust agreement. The installment payments are special obligations of the City under the 2010 Installment Sale Agreement and are separately secured by a pledge of the system revenues of the Storm Drainage System. System revenues are required to be at least equal to 110% of the maximum annual debt service for all outstanding installment payments and all outstanding parity obligations during each fiscal year. The system revenues consist primarily of the Storm Drainage Fees approved by a majority of the parcel owners in the City voting at a special election May 5, 2009. Failure by the City to pay installment payments constitutes an event of default under the installment sale agreement, and the trustee is permitted to pursue remedies at law or in equity to enforce the City's obligation to make such payments. The trustee has no right to accelerate the total unpaid principal amount of the installment payments. No such events of default occurred during the fiscal year ending June 30, 2020. 73 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities (Continued) Storm Drainage Revenue Bonds, Series 2010 (continued) Storm Drainage - Series 2010A-1 - Tax Exempt Governmental For The Year Ending June 30 Principal Interest Total 2021 $ 285,000 $ 9,975 $ 294,975 285,000 9,975 294,975 Plus: Unamortized premium 134,080 134,080 $ 419,080 $ 9,975 $ 429,055 Storm Drainage - Series 2010B Taxable - Build America Bonds Governmental For The Year Ending June 30 Principal Interest Subsidy* Total 2021 $ 475,245 $ (156,522) $ 318,723 2022 $ 295,000 475,245 (156,522) 613,723 2023 310,000 457,377 (153,580) 613,797 2024 320,000 438,600 (147,545) 611,055 2025 335,000 419,218 (141,261) 612,957 2026-2030 1,890,000 1,754,308 (494,018) 3,150,290 2031-2035 2,350,000 1,060,488 (423,370) 2,987,118 2036-2039 1,670,000 230,112 (154,486) 1,745,626 $ 7,170,000 $ 5,310,593 $ (1,827,304) $ 10,653,289 * Assumes sequestration rate of Federal subsidy of Build America Bonds remains at 2020 rate (5.9%) 74 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities (Continued) Lease Revenue Bonds, Series 2012 — Original Issue $10,030,000 In December 2012, the Authority issued the Lease Revenue Bonds, Series 2012 to finance certain improvements to Downtown Burlingame Avenue in accordance with the City's Downtown Burlingame Avenue Streetscape Project and to pay the costs of issuance of the bonds. The bonds were issued at a premium of $237,936, which will be amortized over the life of the bonds. Principal and interest are due annually on June 1, commencing on June 1, 2013. During fiscal year 2020, the City made principal and interest payments totaling $245,000 and $306,488, respectively. The bonds mature on June 1, 2042, and the underlying serial and term bonds carry an interest rate that varies from 2.0% to 5.0%. The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from revenues consisting primarily of base rental payments paid by the City to the Authority and from amounts on deposit in certain funds and accounts held under the trust agreement. The City has covenanted in the facilities sublease to include all base rental payments and additional payments needed in its annual budgets. Should the City default under the facilities sublease, the trustee may terminate the sublease and recover certain damages from the City, or may retain the facilities sublease and hold the City liable for base rental payments as they become due. Base rental payments may not be accelerated upon a default under the facilities sublease. No such events of default occurred during the fiscal year ending June 30, 2020. For The Year Ending June 30 Principal Interest Total 2021 $ 250,000 $ 296,688 $ 546,688 2022 265,000 286,688 551,688 2023 275,000 276,088 551,088 2024 285,000 262,338 547,338 2025 300,000 248,088 548,088 2026-2030 1,675,000 1,069,512 2,744,512 2031-2035 1,955,000 793,431 2,748,431 2036-2040 2,315,000 431,725 2,746,725 2041-2042 1,045,000 55,125 1,100,125 8,365,000 3,719,683 12,084,683 Plus: Unamortized premium 181,475 181,475 $ 8,546,475 $ 3,719,683 $ 12,266,158 75 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities (Continued) Storm Drainage Revenue Bonds, Series 2012 — Original Issue $10,615,000 In December 2012, the Authority issued Storm Drainage Revenue Bonds, Series 2012 to provide funds to the City to finance certain improvements to the City's Storm Drainage System and fund a reserve account for the bonds. Principal is due annually on July 1, commencing July 1, 2013. Interest on bonds is payable semiannually on January 1 and July 1, commencing on July 1, 2013. During fiscal year 2020, the City made principal and interest payments totaling $325,000 and $299,144, respectively. The bonds mature on July 1, 2038, and the underlying serial and term bonds carry interest rates which vary from 2.0% to 5.0%. The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from the revenues generally consisting of installment payments paid by the City to the Authority and from amounts on deposit in certain funds and accounts held under the trust agreement. The installment payments are special obligations of the City under the 2012 Installment Sale Agreement and are separately secured by a pledge of the system revenues of the Storm Drainage System. System revenues are required to be at least equal to 110% of the maximum annual debt service for all outstanding installment payments and all outstanding parity obligations during each fiscal year. The system revenues consist primarily of the Storm Drainage Fees approved by a majority of the parcel owners in the City voting at a special election May 5, 2009. Failure by the City to pay installment payments constitutes an event of default under the installment sale agreement, and the trustee is permitted to pursue remedies at law or in equity to enforce the City's obligation to make such payments. The trustee has no right to accelerate the total unpaid principal amount of the installment payments. No such events of default occurred during the fiscal year ending June 30, 2020. For The Year Ending June 30 Principal 2021 2022 2023 2024 2025 2026-2030 2031-2035 2036-2038 Plus: Unamortized premium $ 340,000 360,000 370,000 395,000 410,000 2,230,000 2,580,000 1,755,000 8,440,000 197,162 Interest $ 286,144 269,144 251,144 232,644 212,894 892,657 538,226 115,376 2,798,229 Total $ 626,144 629,144 621,144 627,644 622,894 3,122,657 3,118,226 1,870,376 11,238,229 197,162 $ 8,637,162 $ 2,798,229 $ 11,435,391 76 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities (Continued) Storm Drainage Revenue Bonds, Series 2016— Original Issue $9,855,000 In February 2016, the Authority issued Storm Drainage Revenue Bonds, Series 2016 to provide funds to the City to finance certain improvements to the City's Storm Drainage System and fund a reserve account for the bonds. Principal is due annually on July 1, commencing July 1, 2016. Interest on bonds is payable semiannually on January 1 and July 1, commencing on July 1, 2017. During fiscal year 2020, the City made principal and interest payments totaling $295,000 and $357,875, respectively. The bonds mature on July 1, 2038, and the underlying serial and term bonds carry interest rates which vary from 2.0% to 5.0%. The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from the revenues generally consisting of installment payments paid by the City to the Authority and from amounts on deposit in certain funds and accounts held under the trust agreement. The installment payments are special obligations of the City under the 2016 Installment Sale Agreement and are separately secured by a pledge of the system revenues of the Storm Drainage System. System revenues are required to be at least equal to 110% of the maximum annual debt service for all outstanding installment payments and all outstanding parity obligations during each fiscal year. The system revenues consist primarily of the Storm Drainage Fees approved by a majority of the parcel owners in the City voting at a special election May 5, 2009. Failure by the City to pay installment payments constitutes an event of default under the installment sale agreement, and the trustee is permitted to pursue remedies at law or in equity to enforce the City's obligation to make such payments. The trustee has no right to accelerate the total unpaid principal amount of the installment payments. No such events of default occurred during the fiscal year ending June 30, 2020. For The Year Ending June 30 Principal Interest Total 2021 $ 305,000 2022 310,000 2023 335,000 2024 345,000 2025 365,000 2026-2030 2,130,000 2031-2035 2,625,000 2036-2038 1,810,000 8,225,000 Plus: Unamortized premium 838,663 $ 346,075 333,875 318,375 301,625 284,375 1,132,375 653,125 172,625 3,542,450 $ 9,063,663 $ $ 651,075 643,875 653,375 646,625 649,375 3,262,375 3,278,125 1,982,625 11,767,450 838,663 3,542,450 $ 12,606,113 77 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities (Continued) Lease Revenue Bonds, Series 2019— Original Issue $31,400,000 In December 2019, the Authority issued the Lease Revenue Bonds, Series 2019 to finance the construction and equipping of a portion of the Burlingame Community Center to be located at 850 Burlingame Avenue and to pay the costs of issuance of the bonds. The bonds were issued at a premium of $7,831,615, which will be amortized over the life of the bonds. Principal and interest are due annually on July 1, commencing on June 1, 2020. During fiscal year 2020, the City made principal and interest payments totaling $1,160,000 and $837,333, respectively. The bonds mature on July 1, 2049, and the underlying serial and term bonds carry an interest rate of 5.0%. The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from revenues consisting primarily of base rental payments paid by the City to the Authority and from amounts on deposit in certain funds and accounts held under the trust agreement. The City has covenanted in the facilities sublease to include all base rental payments and additional payments needed in its annual budgets. Should the City default under the facilities sublease, the trustee may terminate the sublease and recover certain damages from the City, or may retain the facilities sublease and hold the City liable for base rental payments as they become due. Base rental payments may not be accelerated upon a default under the facilities sublease. No such events of default occurred during the fiscal year ending June 30, 2020. For The Year EndingJune 30 Principal Interest Total 2021 $ 485,000 $ 1,512,000 $ 1,997,000 2022 510,000 1,487,750 1,997,750 2023 535,000 1,462,250 1,997,250 2024 560,000 1,435,500 1,995,500 2025 590,000 1,407,500 1,997,500 2026-2030 3,425,000 6,564,250 9,989,250 2031-2035 4,365,000 5,618,500 9,983,500 2036-2040 5,575,000 4,412,000 9,987,000 2041-2045 7,115,000 2,871,750 9,986,750 2046-2050 7,080,000 906,250 7,986,250 30,240,000 27,677,750 57,917,750 Plus: Una morti zed premium 7,701,088 7,701,088 $ 37,941,088 $ 27,677,750 $ 65,618,838 I&M CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) A. Long -Term Debt from Governmental Activities (Continued) PG&E On -Bill Financing 2019 Loans (Direct Borrowing) The City entered into several loan agreements with Pacific Gas & Electric Company (PG&E) through the On -Bill Financing (OBF) Program to retrofit City lighting with qualified energy -saving lights throughout the City. The notes are to be repaid with future energy savings over various periods at interest rates of 0%. Under this program, the City's bill after the retrofits are completed will be kept constant, rather than reduced based on energy savings. PG&E will use the City's financial savings from lower energy bills to service the debt associated with the upgrades. The annual requirements to repay the PG&E note outstanding as of June 30, 2020 are as follows: For The Year Ending June 30 Principal Interest Total 2021 $ 49,064 $ - $ 49,064 2022 49,064 - 49,064 2023 49,064 - 49,064 2024 36,916 - 36,916 2025 33,934 - 33,934 Thereafter 80,103 - 80,103 $ 298,145 $ - $ 298,145 79 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) B. Long -Term Debt from Business -Type Activities Water and Wastewater Refunding Revenue Bonds, Series 2011 — Original Issue $5,935,000 In 2011, the Authority issued $5,935,000 of Water and Wastewater Refunding Revenue Bonds, Series 2011 to refund and defease all of the Authority's outstanding Water and Wastewater Revenue Bonds, Series 2003, which financed certain improvements to the City's water and wastewater system, and to pay the costs of issuance of the bonds. Principal is payable annually on April 1, commencing April 1, 2012. Interest on the bonds is payable semiannually on April 1 and October 1, commencing April 1, 2012. For the current year, principal and interest paid on the Water and Wastewater Bonds, Series 2011 were $330,000 and $172,251, respectively. Of this amount, principal and interest payments made by the Water Enterprise Fund were $210,000 and $109,813, respectively. Principal and interest payments made by the Sewer Enterprise Fund were $120,000 and $62,438, respectively. The bonds mature on April 1, 2028, with an interest rate that varies from 4.00 to 4.75%. A premium of $575,800 was paid and will be amortized over the life of the bond. The refunding transaction resulted in an economic gain of $450,734 and a reduction of $1,429,732 in future debt service payments. The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from the revenues generally consisting of separate installment payments paid by the City to the Authority. The bonds are secured by a pledge of the net revenue generated from the water system, wastewater system, and from amounts on deposit in certain funds held under the trust agreement. Net system revenues are required to be at least equal to 120% of the installment payments and debt service for any parity obligations during each fiscal year, and net system revenues (excluding connection fees and money transferred from any rate stabilization fund) will be equal to at least 100% of the installment payments and debt service on other parity obligation during each fiscal year. The City is not obligated to use system net revenues from one system to make up for a deficiency in the installment payments in connection with the other system. Failure by the City to pay installment payments constitutes an event of default under the installment sale agreement, and the trustee is permitted to pursue remedies at law or in equity to enforce the City's obligation to make such payments. Although the trustee has the right to accelerate the total unpaid principal amount of the installment payments, there is no assurance that the City would have sufficient funds to pay the accelerated amounts. No such events of default occurred during the fiscal year ending June 30, 2020. Ee CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) B. Long -Term Debt from Business -Type Activities (Continued) For The Year Ending June 30 Principal Interest 2021 2022 2023 2024 2025 2026-2028 Plus: Unamortized premium $ 345,000 360,000 380,000 400,000 415,000 1,370,000 3,270,000 277,771 $ 155,751 138,501 120,501 101,501 81,501 128,453 726,208 Total $ 500,751 498,501 500,501 501,501 496,501 1,498,453 3,996,208 277,771 $ 3,547,771 $ 726,208 $ 4,273,979 Water and Wastewater Revenue Refunding Bonds, Series 2013 — Original Issue $14,260,000 In 2013, the Authority issued $14,260,000 of Water and Wastewater Revenue Refunding Bonds, Series 2013 to advance refund the Authority's outstanding Water and Wastewater Revenue Bonds, Series 2004, which financed certain improvements to the City's water and wastewater system, and to pay the costs of issuance of the bonds. Principal is payable annually on April 1, commencing April 1, 2013. Interest on the bonds is payable semi-annually on April 1 and October 1, commencing October 1, 2013. During fiscal year 2020, the City made principal and interest payments of $815,000 and $388,301, respectively. Of this amount, principal and interest payments made by the Water Enterprise Fund were $540,000 and $257,838, respectively. Principal and interest payments made by the Sewer Enterprise Fund were $275,000 and $130,463, respectively. The bonds mature on April 1, 2029, with underlying serial and term bonds carrying an interest rate that varies from 2.00% to 5.00%. The bond was issued a premium of $1,533,676 which will be amortized over the life of the bond. The refunding transaction resulted in an economic gain of $584,903. E� CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) B. Long -Term Debt from Business -Type Activities (Continued) The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from the revenues generally consisting of separate installment payments paid by the City to the Authority. The bonds are secured by a pledge of the net revenue generated from the water system, wastewater system, and from amounts on deposit in certain funds held under the trust agreement. Net system revenues are required to be at least equal to 120% of the installment payments and debt service for any parity obligations during each fiscal year, and net system revenues (excluding connection fees and money transferred from any rate stabilization fund) will be equal to at least 100% of the installment payments and debt service on other parity obligation during each fiscal year. The City is not obligated to use system net revenues from one system to make up for a deficiency in the installment payments in connection with the other system. Failure by the City to pay installment payments constitutes an event of default under the installment sale agreement, and the trustee is permitted to pursue remedies at law or in equity to enforce the City's obligation to make such payments. Although the trustee has the right to accelerate the total unpaid principal amount of the installment payments, there is no assurance that the City would have sufficient funds to pay the accelerated amounts. No such events of default occurred during the fiscal year ending June 30, 2020. For The Year Ending June 30 Principal Interest Total 2021 $ 845,000 $ 359,776 $ 1,204,776 2022 875,000 325,976 1,200,976 2023 910,000 290,976 1,200,976 2024 950,000 254,576 1,204,576 2025 995,000 207,076 1,202,076 2026-2030 4,415,000 404,004 4,819,004 8,990,000 1,842,384 10,832,384 Plus unamortized premium 811,947 811,947 $ 9,801,947 $ 1,842,384 $ 11,644,331 Water and Wastewater Revenue Refunding Bonds, Series 2016 — Original Issue $17,585,000 In July 2016, the Authority issued $17,585,000 of Water and Wastewater Revenue Refunding Bonds, Series 2016 to advance refund the Authority's outstanding Water and Wastewater Revenue Bonds, Series 2007, which financed certain improvements to the City's water and wastewater system, and to pay the costs of issuance of the bonds. Principal is payable annually on April 1, commencing April 1, 2017. Interest on the bonds is payable semi-annually on April 1 and October 1, commencing October 1, 2016. During fiscal year 2020, the City made principal and interest payments of $950,000 and $630,100, respectively. Of this amount, principal and interest payments made by the Water Enterprise Fund were $495,000 and $328,950, respectively. Principal and interest payments made by the Sewer Enterprise Fund were $455,000 and $301,150, respectively. IM CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) B. Long -Term Debt from Business -Type Activities (Continued) The bonds mature on April 1, 2031, with underlying serial and term bonds carrying an interest rate that varies from 2.00% to 5.00%. The bond was issued a premium of $2,994,038 which will be amortized over the life of the bond. The bonds are limited obligations of the Burlingame Financing Authority and are payable by the Authority solely from the revenues generally consisting of separate installment payments paid by the City to the Authority. The bonds are secured by a pledge of the net revenue generated from the water system, wastewater system, and from amounts on deposit in certain funds held under the trust agreement. Net system revenues are required to be at least equal to 120% of the installment payments and debt service for any parity obligations during each fiscal year, and net system revenues (excluding connection fees and money transferred from any rate stabilization fund) will be equal to at least 100% of the installment payments and debt service on other parity obligation during each fiscal year. The City is not obligated to use system net revenues from one system to make up for a deficiency in the installment payments in connection with the other system. Failure by the City to pay installment payments constitutes an event of default under the installment sale agreement, and the trustee is permitted to pursue remedies at law or in equity to enforce the City's obligation to make such payments. Although the trustee has the right to accelerate the total unpaid principal amount of the installment payments, there is no assurance that the City would have sufficient funds to pay the accelerated amounts. No such events of default occurred during the fiscal year ending June 30, 2020. For The Year Ending June 30 Principal Interest Total 2021 $ 985,000 $ 592,100 $ 1,577,100 2022 1,035,000 552,700 1,587,700 2023 1,080,000 500,950 1,580,950 2024 1,130,000 446,950 1,576,950 2025 1,185,000 390,450 1,575,450 2026-2030 6,760,000 1,136,400 7,896,400 2031 1,520,000 60,800 1,580,800 13,695,000 3,680,350 17,375,350 Plus: Unamortized premium 2,195,625 2,195,625 $ 15,890,625 $ 3,680,350 $ 19,570,975 !&I CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) State Water Resources Control Board Loan, 2010 (Direct Borrowing) — Principal $5,605,800 In 2010, the City entered into an agreement with CWRCB to receive financial assistance for the Influent Storm Water Retention Basin project at the City's wastewater treatment facility, which involves the construction of an influent storm water retention basin and associated pumping system, commencing in July 2011. The loan is due in annual installments payments at an interest of 2.9%, and the net revenues of the Sewer Fund are pledged for the prompt payment of debt service on the loan. Installment payments commenced July 2012 and shall be fully amortized in July 2031. The City is required to maintain compliance with all provisions of the loan. During fiscal year 2020, the City made principal and interest payments of $254,966 and $118,063, respectively. For The Year Ending June 30 Principal Interest Total 2021 $ 262,360 $ 110,670 $ 373,030 2022 269,968 103,062 373,030 2023 277,797 95,232 373,029 2024 285,854 87,176 373,030 2025 294,143 78,886 373,029 2026-2030 1,603,726 261,422 1,865,148 2031-2032 822,340 37,566 859,906 $ 3,816,188 $ 774,014 $ 4,590,202 :2 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 - LONG-TERM DEBT (Continued) B. Long -Term Debt from Business -Type Activities (Continued) State Water Resources Control Board Loan, 2003 (Direct Borrowing) - Principal $10,743,788 In 2003, the City entered into an agreement with the State of California Water Resources Control Board (CWRCB) to receive financial assistance for the improvement of the wastewater treatment plant which consists of upgrading the performance of several unit processes and increasing their reliability to help the plant meet discharge requirements. The loan is due in annual installment payments at an interest of 1.5%. Installment payments will start August 2007 and shall be fully amortized August 2026. The City is required to maintain compliance with all provisions of the loan. During fiscal year 2020, the City made principal and interest payments of $586,075 and $128,001, respectively. For The Year Ending June 30 Principal Interest Total 2021 $ 600,727 $ 113,349 $ 714,076 2022 615,745 98,331 714,076 2023 631,139 82,937 714,076 2024 646,918 67,158 714,076 2025 663,091 50,985 714,076 2026-2027 1,376,327 51,825 1,428,152 $ 4,533,947 $ 464,585 $ 4,998,532 C. Future Debt Requirements The future outstanding debt of the City, net of amortized costs as of June 30, 2020, for governmental activities is as follows: TOTAL FUTURE DEBT REPAYMENTS - BONDS TOTAL FUTURE DEBT REPAYMENTS - DIRECT BORROWINGS For The Year For The Year EndingJune 30 Principal Interest Total Ending June 30 Principal Interest Total 2021 $ 3,345,000 $ 3,252,871 $ 6,597,871 2021 $ 49,064 $ $ 49,064 2022 2,345,000 3,109,730 5,454,730 2022 49,064 49,064 2023 2,485,000 2,991,620 5,476,620 2023 49,064 49,064 2024 2,630,000 2,866,491 5,496,491 2024 36,916 36,916 2025 2,790,000 2,733,899 5,523,899 2025 33,934 33,934 2026-2030 13,035,000 12,040,109 25,075,109 Thereafter 80,103 80,103 2031-2035 16,270,000 8,821,590 25,091,590 $ 298,145 $ $ 298,145 2036-2040 13,715,000 5,240,103 18,955,103 2041-2045 8,160,000 2,926,875 11,086,875 2046-2049 7,080,000 906,250 7,986,250 71,855,000 44,889,538 116,744,538 Plus: Una morti zed premium 9,106,832 9,106,832 $80,961,832 $44,889,538 $ 125,851,370 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) B. Long -Term Debt from Business -Type Activities (Continued) The future outstanding debt of the City, net of amortized costs as of June 30, 2020, for business - type activities is as follows: TOTAL FUTURE DEBT REPAYMENTS - BONDS TOTAL FUTURE DEBT REPAYMENTS - DIRECT BORROWINGS For The Year For The Year Ending June 30 Principal Interest Total Ending June 30 Principal Interest Total 2021 $ 2,175,000 $ 1,107,627 $ 3,282,627 2021 $ 863,087 $ 224,019 $ 1,087,106 2022 2,270,000 1,017,177 3,287,177 2022 885,713 201,393 1,087,106 2023 2,370,000 912,427 3,282,427 2023 908,936 178,169 1,087,105 2024 2,480,000 803,027 3,283,027 2024 932,772 154,334 1,087,106 2025 2,595,000 679,027 3,274,027 2025 957,234 129,871 1,087,105 2026-2030 12,545,000 1,668,857 14,213,857 2026-2030 2,980,053 313,247 3,293,300 2031-2032 1,520,000 60,800 1,580,800 2031-2032 822,340 37,566 859,906 25,955,000 6,248,942 32,203,942 $ 8,350,135 $ 1,238,599 $ 9,588,734 Plus unamortized premium 3,285,343 3,285,343 $ 29,240,343 $ 6,248,942 $ 35,489,285 D. Arbitrage Rebate Liability Under U.S. Treasury Department regulations, all government tax — exempt debt issued after August 31, 1986, is subject to arbitrage rebate requirements. The requirements stipulate, in general, that the excess of earnings from the investment of tax-exempt bond proceeds over related interest expenditure on the bonds must be remitted to the federal government on every fifth anniversary of each bond issue. The city has valuated each outstanding debt obligation that is subjected to arbitrage rebate requirement and has determined that there is no arbitrage rebate liability as of June 30, 2020. E. Credit Rating The City carried underlying ratings of AA+ for the Water and Sewer Funds, AA+ for the Storm Drainage Fund, and AAA as the City's institutional credit rating for general obligation debt. These ratings were most recently affirmed by Standard & Poor's in August 2019. M. CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) F. Revenue Pledge The City has pledged future revenues to debt service on previously issued revenue bonds to finance the capital programs related to the Water and Sewer Funds or defease previously issued revenue bonds: (1) Water and Wastewater Revenue Bonds, Series 2011; (2) Water and Wastewater Refunding Revenue Bonds, Series 2013; (3) Water and Wastewater Refunding Revenue Bonds, Series 2016. Debt service on certain bonds are payable solely through the net revenue of the activities of the Water and Sewer Funds. Under the provisions of GASB Statement No. 48, the City's net revenue for the year ended June 30, 2020, and net amounts available to pay debt service on the revenue bonds are as follows: Water Fund Sewer Fund Pledged revenue required for future principal and interest $ 18,812,746 $ 22,979,930 Principal and interest paid during the year 1,941,601 2,431,156 Net revenue, excluding depreciation and amortization 8,298,586 6,963,939 Percentage of revenue pledged 23.40% 34.91% Term of commitment 2031 2031 G. Debt Service Coverage Under the terms of the City's Indenture, the Water and Sewer Funds are required to collect sufficient net revenues each fiscal year, which may include any other unappropriated enterprise funds available for expenditure on debt service. The Indenture requires that net revenues are, at minimum, equal to 1.20 times annual debt service for the applicable fiscal year. For the year ended June 30, 2020, the Water and Sewer Funds had sufficient net revenues to satisfy the requirements of the Indenture. Under the terms of the City's Indenture, the Storm Drainage Fund is required to collect sufficient net revenues each fiscal year, which may include any other unappropriated funds available for expenditure on debt service. The Indenture requires that net revenues are, at minimum, equal to 1.10 times annual debt service for the applicable fiscal year. For the year ended June 30, 2020, the Storm Drainage Fund had sufficient net revenues to satisfy the requirements of the Indenture. Other obligations relating to governmental activities are paid solely from available revenue of the City, such as the Lease Revenue Bonds Series 2010 and the Pension Obligation Bonds Series 2006, which are subordinate to previously issued parity debt relating to the Water and Sewer Funds. M. CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) The following table summarizes debt service coverage levels for the Water Fund for the fiscal year ending June 30, 2020: Water Fund Gross operating revenue $ 20,641,914 Less: Operating expenses, except depreciation and amortization (12,343,328) Net revenue 8,298,586 Debt Service Water Refunding Bonds, Series 2016 823,950 Water Refunding Bonds, Series 2011 319,813 Water Refunding Bonds, Series 2013 797,838 Parity Debt Service 1,941,601 Lease Revenue Bonds, Series 2010 385,366 Pension Obligation Bond, Series 2006 122,063 Total Debt Service $ 2,449,030 Parity Debt Service Coverage 4.27 Total Debt Service Coverage 3.39 The following table summarizes debt service coverage levels for the Sewer Fund for the fiscal year ending June 30, 2020: Sewer Fund Gross operating revenue Less: Operating expenses, except depreciation and amortization Debt Service State Water Resource Board Loan, 2003 Wastewater Refunding Bonds, Series 2016 State Water Resource Board Loan, 2010 Wastewater Refunding Bonds, Series 2011 Wastewater Refunding Bonds, Series 2013 Lease Revenue Bonds, Series 2010 Pension Obligation Bond, Series 2006 $ 15,440,418 (8,476,479) Net revenue 6,963,939 $ 714,076 756,150 373,029 182,438 405,463 Parity Debt Service 2,431,156 385,366 122,063 Total Debt Service $ 2,938,585 Parity Debt Service Coverage 2.86 Total Debt Service Coverage 2.37 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 6 — LONG-TERM DEBT (Continued) The following table summarizes debt service coverage levels for the Storm Drainage Fund for the fiscal year ending June 30, 2020: Storm Drainage Fund Net Revenue, Excluding Depreciation and Amortization $ 3,599,538 Debt Service Storm Drain Revenue Bond, Series 2010 614,663 Storm Drain Revenue Bond, Series 2012 624,144 Storm Drain Revenue Bond, Series 2016 652,875 Parity Debt Service $ 1,891,682 Parity Debt Service Coverage 1.90 NOTE 7 — OTHER LONG-TERM LIABILITIES A. Compensated Absences The City's compensated absences consist of accumulated vacation, compensatory time, and administrative leave for management employees. The estimated unpaid compensated absences at June 30, 2020 are recorded in the government -wide and proprietary fund financial statements. The City permits its employees to accumulate vacation hours up to a maximum of two years of annual accrual. Depending on the bargaining unit, Sick leave is accumulated up to 2000 or 2080 hours. Upon retirement unused sick leave is reported to CalPERS and converted to service credit in accordance with CalPERS rules and procedures. Depending on the bargaining unit, an employee may elect to be compensated for up to 600 hours of unused sick leave and the remainder can be reported to CalPERS for conversion to service credit. At retirement or termination, employees receive compensation for any unused vacation leave balance, any accrued compensatory time, and administrative leave for management employees. Such cash payments are recognized as expenditures of the government -wide and proprietary funds. The General Fund has been primarily used to liquidate the liability for compensated absences. Balance on June 30, 2019 Additions Payments Balance on June 30, 2020 Due Within One Year Noncurrent Portion Governmental Business Total $ 2,479,692 $ 351,768 $ 2,831,460 1,955,841 425,625 2,381,466 (1,532,831) (336,514) (1,869,345) $ 2,902,702 $ 440,879 $ 3,343,581 $ 502,847 $ 33,953 $ 536,800 $ 2,399,855 $ 406,926 $ 2,806,781 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 7 — OTHER LONG-TERM LIABILITIES (Continued) B. Pollution Remediation Obligation Landfill Closure and Post -Closure Costs The City closed the Burlingame Landfill located on Airport Boulevard in accordance with the California Code of Regulations under the jurisdiction of the California Integrated Waste Management Board in 1987. The landfill had been filled to capacity and has been reconstructed as a multi -use recreational facility. State and federal laws and regulations require that the City perform certain maintenance and monitoring functions at the landfill site. These same regulations require the City to make annual contributions and/or provide an alternative funding mechanism to finance closure and post -closure costs. The City has collected a surcharge on solid waste collection fees in order to cover these costs. The City was also required by the Bay Area Air Quality Management Board to install a gas collection system. In 1997, the City developed a post -closure plan that met all regulatory requirements. The post - closure estimate was $3,660,000. In 2008, the City recognized an additional liability, as required by the State, for corrective action. The corrective action cost estimate was $733,100. Consequently, the City recorded 100% of its closure and post -closure costs based upon these estimates. At June 30, 2020, the City's outstanding future post -closure and corrective action costs were estimated at $3,352,386. This estimate is based upon the original estimates for post -closure and corrective action costs as reported to the California Department of Resources Recycling and Recovery (CalRecycle) as adjusted, based on changes in the implicit price deflator for the gross national product in accordance with Title 27 of the California Code of Regulations, reduced by any permitted 15 year amortization of post -closure costs, and adjusted for incurred costs and expected costs of remediation. The City will fund ongoing post -closure costs with a combination of revenues from the surcharge and interest earnings. However, if these revenues are inadequate or additional post -closure care requirements are determined, these costs may need to be covered by additional garbage surcharges or from future tax revenue. all CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 8 — RISK MANAGEMENT A. Self -Insurance and Contingent Liabilities Effective July 1, 1976, and December 2, 1976, respectively, the City implemented a self-insurance program for workers' compensation and general liability. The City is a member of the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA), a joint powers insurance authority which consists of 28 member cities in the San Francisco Bay Area. PLAN JPA provides liability insurance with coverage, claims management, risk management services, and legal defense to its participating members. PLAN JPA is governed by a board of directors, which comprises officials appointed by each participating member. Premiums paid to PLAN JPA are subject to possible refund based on the results of actuarial studies and approval by PLAN JPA's board of directors. Premiums are assessed to the participants based on their individual loss experience. The PLAN JPA claim administrators set the reserve levels for known liability claims. General liability insurance coverage has been purchased by PLAN JPA for losses exceeding $250,000 up to a maximum of $10,000,000. The workers' compensation program is administered by a third -party administrator (TPA). The TPA sets reserve levels for reported claims. Excess workers' compensation insurance has been purchased by the City for losses exceeding $500,000 up to the maximum statutory limit. The City's liabilities are reported when it is both probable that a loss has occurred and the amount of the loss can be reasonably estimated. The claims and litigation liabilities are reported in the governmental activities of the government -wide financial statements and in the internal service fund and include an amount for claims that have been incurred but not reported. The liabilities are re-evaluated annually using the results of actuarial studies. The estimated liability for claims and litigation is calculated considering recent claim settlement trends, amounts for claims incurred but not reported, current settlements, frequency of claims, past experience, and economic factors. Changes in the balances of the City's claims liabilities were as follows: 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 Balance July 1 $ 6,640,000 7,071,000 6,774,000 7,895,000 7,015,000 6,418,000 6,535,000 6,665,000 6,508,000 Current Year Claims and Changes in Estimates $ 1,516,265 1,595,000 2,813,959 911,838 910,959 1,675,414 1,591,781 1,311,960 1,315,668 Payments for Current and Prior Fiscal Years $ (1,085,265) (1,892,000) (1,692,959) (1,791,838) (1,507,959) (1,558,414) (1,461,781) (1,468,960) (1,044, 668) Balance June 30 $ 7,071,000 6,774,000 7,895,000 7,015,000 6,418,000 6,535,000 6,665,000 6,508,000 6,779,000 There have been no significant reductions in any insurance coverage, nor have there been any insurance related settlements that exceeded insurance coverage during the past nine fiscal years. 91 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 8 — RISK MANAGEMENT (Continued) In September 2016, an actuarial review was conducted and completed to identify the estimated liability for the City's Self -Insured General Liability Program as well as determine the various funding confidence levels to cover that liability. The study estimated the expected liability for outstanding claims to be $753,000 as of June 30, 2020. The study recommends that the City set aside an amount in addition to the discounted expected loss costs to be set aside as a margin for contingencies. As of June 30, 2020, the City has funded the general liability program at the 90% confidence level noted in the actuarial report, or $753,000. In September 2016, an actuarial review was conducted and completed to identify the estimated liability for the City's Self -Insured Workers' Compensation Program as well as determine the various funding confidence levels to cover that liability as of June 30, 2020. The study estimated that the outstanding claims at June 30, 2020, were $6,026,000. The study also recommends that an amount be set aside as a margin for contingencies. As of June 30, 2020, the City has funded the workers' compensation program at the 70% confidence level noted in the actuarial report, or $6,026,000. NOTE 9 — PENSION PLANS — COST -SHARING A. General information about the Safety Pension Plan The City's Safety Plan is part of the public agency cost -sharing multiple -employer defined benefit pension plan, which is administered by CAPERS. The Plan consists of a miscellaneous pool and a safety pool (also referred to as "risk pools"), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Individual employers may sponsor more than one miscellaneous and safety rate plan. The employer participates in one cost -sharing multiple - employer defined benefit pension plan regardless of the number of rate plans the employer sponsors. The City sponsors two rate plans (Police Classic tier and Police PEPRA tier) within the safety risk pool. Plan Descriptions — All qualified permanent and probationary employees are eligible to participate in the City's separate Safety Employee Pension plan, cost -sharing multiple -employer defined benefit pension plans administered by the California Public Employees' Retirement System (CaIPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and the City's resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CaIPERS website. ON CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 9 — PENSION PLANS — COST -SHARING (Continued) A. General information about the Safety Pension Plan (Continued) Benefits Provided — CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. The Pension Reform Act of 2013 (PEPRA), Assembly Bill 340, is applicable to employees new to CalPERS and hired after December 31, 2012. The Plan's provisions and benefits in effect at June 30, 2020, are summarized as follows: Hire date Benefit formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of annual salary Required employee contribution rates Required employer contribution rates Safety Classic PEPRA Prior to On or after January 1, 2013 January 1, 2013 3.0% @ 50 5 years service monthly for life 50-55 3% 9% 23.654% 2.7% @ 57 5 years service monthly for life 50 - 57 2.0 % - 2.7% 12.75% 13.786% Beginning in fiscal year 2017, CAPERS collects employer contributions for the cost -sharing plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability and side fund. The dollar amounts are billed on a monthly basis. The City's required contribution for the unfunded liability was $1,755,134 in fiscal year 2020. Contributions — Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. 93 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 9 — PENSION PLANS — COST -SHARING (Continued) A. General information about the Safety Pension Plan (Continued) For the year ended June 30, 2020, the contributions recognized as part of pension expense for each Plan were as follows: Contributions - employer Safety - Classic Safety - PEPRA $ 2,500,434 $ 267,098 B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2020, the City reported net pension liabilities for its proportionate shares of the net pension liability of the Plan as follows: Safety Proportionate Share of Net Pension Liability $ 29,524,728 The net pension liability of the Plan is measured as of June 30, 2019, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2018, rolled forward to June 30, 2019, using standard update procedures. The City's proportion of the net pension liability was based on a projection of City's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. For governmental funds, the General Fund has been primarily used to liquidate pension liabilities. The City's proportionate share of the net pension liability for the Plan as of June 30, 2019 and 2020, was as follows: Proportion - June 30, 2019 Proportion - June 30, 2020 Change - Increase (Decrease) Safety 0.46735 0.47296% 0.00561 94 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 9 — PENSION PLANS — COST -SHARING (Continued) B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2020, the City recognized a pension expense of $5,054,945 for the Safety Plan. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for the Safety Plan from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequent to measurement date $ 2,767,532 Differences between actual and expected experience 1,927,698 Changes in assumptions 1,210,167 $ (236,163) Net differences between projected and actual earnings on plan investments (406,163) Change in proportion 438,315 (122,831) Differences between actual contributions and proportionate share of contributions (920,203) Total $ 6,343,712 $ (1,685,360) $2,767,532 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ended Annual June 30 Amortization 2021 $ 1,783,711 2022 (234,689) 2023 262,772 2024 79,026 Total $ 1,890,820 C. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability for the Plan as of the measurement date, calculated using the discount rate for the Plan, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.15%) or one percentage point higher (8.15%) than the current rate: Safety 1% Decrease 6.15% Net Pension Liability $ 43,026,675 Current Discount Rate 7.15% Net Pension Liability $ 29,524,728 1% Increase 8.15% Net Pension Liability $ 18,455,247 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 9 — PENSION PLANS — COST -SHARING (Continued) Actuarial assumptions and information regarding the discount rate are discussed in Note 9D below. D. Information Common to the Miscellaneous (Footnote 10) and Safety Plans Actuarial Assumptions — For the measurement period ended June 30, 2019, the total pension liabilities were determined by rolling forward the June 30, 2018 total pension liability. The June 30, 2018 total pension liabilities were based on the following actuarial assumptions: Miscellaneous and Safety Plans Valuation Date June 30, 2018 Measurement Date June 30, 2019 Actuarial Cost Method Entry -Age Normal Cost Method Actuarial Assumptions: Discount Rate 7.15% Inflation 2.50% Payroll Growth 2.75% Projected Salary Increase Varies by Entry Age and Service Investment Rate of Return 7.15%(1) Mortality Derived using CalPERS Membership Data for all Funds (2) The lesser of contract COLA or 2.50% until Purchasing Power Protection Post Retirement Benefit Increase Allowance Floor on Purchasing Power applies (1) Net of pension investment and administrative expenses, including inflation (2) The mortality table used was developed based on CAPERS' specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on CalPERS website. Change of Assumptions — In 2018, demographic assumptions and inflation rate were changed in accordance to the CaIPERS Experience Study and Review of Actuarial Assumptions December 2017 for the period 1997 to 2015. The inflation assumption is reduced from 2.75 percent to 2.50 percent. The assumptions for individual salary increase and overall payroll growth are reduced from 3.00 percent to 2.75 percent. There were no changes in the discount rate. GASB 68, paragraph 68 states that the long long-term expected rate of return should be determined net of pension plan investment expense, but without reduction for pension plan administrative expense. The discount rate of 7.15 percent used for the June 30, 2019 measurement date is without reduction of the 15 basis -point pension plan administrative expense. W. CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 9 — PENSION PLANS — COST -SHARING (Continued) D. Information Common to the Miscellaneous (Footnote 10) and Safety Plans (Continued) Discount Rate — The discount rate used to measure the total pension liability was 7.15% for each Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CaIPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.15% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CaIPERS website. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds' asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The table below reflects the expected real rate of return by asset class. New Strategic Real Return Real Return Asset Class (a) Allocation Years 1 - 10 (b) Years 11+ (c) Global Equity 50.0% 4.80% 5.98% Fixed Income 28.0% 1.00% 2.62% Inflation Sensitive 0.0% 0.77% 1.81% Private Equity 8.0% 6.30% 7.23% Real Assets 13.0% 3.75% 4.93% Liquidity 1.0% 0.00% -0.92% Total 100% (a) In the CaIPERS CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (b) An expected inflation of 2.0% used for this period. (c) An expected inflation of 2.92% used for this period. Pension Plan Fiduciary Net Position — Detailed information about each pension plan's fiduciary net position is available in the separately issued CAPERS financial reports. 97 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 10—PENSION PLANS —MULTIPLE EMPLOYER A. General information about the Miscellaneous Pension Plan Plan Descriptions — All qualified permanent and probationary employees are eligible to participate in the City's separate Miscellaneous Plan, agent multiple employer defined benefit pension plan administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and the City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS website. Benefits Provided — CAPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the California Public Employees' Retirement Law. The Pension Reform Act of 2013 (PEPRA), Assembly Bill 340, is applicable to employees new to CalPERS and hired after December 31, 2012. The Plan's provisions and benefits in effect at June 30, 2020, are summarized as follows: Hire date Benefit formula Benefit vesting schedule Benefit payments Reti rement age Monthly benefits, as a % of eligible compensation Required employee contribution rates Required employer contribution rates Miscellaneous Prior to January 1, 2013 2.5% @ 55 5 years service monthly for life 50-55 2.0% to 2.5% 8.0% 11.377% On or after January 1, 2013 2.0% @ 62 5 years service monthly for I ife 52-67 1.0%to 2.5% 6.75% 13.300% a.*3 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 10 — PENSION PLANS — MULTIPLE EMPLOYER (Continued) A. General information about the Miscellaneous Pension Plan (Continued) Employees Covered — As of the June 30, 2018 actuarial valuation date, the following employees were covered by the benefit terms for the Plan: Miscellaneous Inactive employees or beneficiaries currently receiving benefits 277 Inactive employees entitled to but not yet receiving benefits 149 Active employees 187 Total 613 Contributions — Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. B. Net Pension Liability The City's net pension liability for the Miscellaneous Plan is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of the Plans is measured as of June 30, 2019, using an annual actuarial valuation as of June 30, 2018, rolled forward to June 30, 2019, using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown in Note 9D above. CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 10 — PENSION PLANS — MULTIPLE EMPLOYER (Continued) C. Changes in the Net Pension Liability The changes in the Net Pension Liability for the Miscellaneous Plan follow: Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability/(Asset) Balance at June 30, 2018 $ 148,239,707 $ 110,197,456 $ 38,042,251 Changes in the year: Service cost Interest on Total Pension Liability Changes of Benefit Terms Changes in Assumptions Differences between Expected and Actual experience Net Plan to Plan Resource Movement Contribution - Employer Contribution - Employee Net Investment Income Benefit payments, including Refunds of Employee Contributions Administrative Expenses Other Miscellaneous Income/(Expense)' Netchanges 3,112,725 3,112,725 10,492,653 10,492,653 962,894 962,894 4,093,017 (4,093,017) 1,290,194 (1,290,194) 7,207,344 (7,207,344) (8,017,140) (8,017,140) (78,639) 256 6,551,132 4,495,032 78,639 (256) 2,056,100 Balance at June 30, 2019 $ 154,790,839 $ 114,692,488 $ 40,098,351 ' During Fiscal Year 2017-18, as a result of Governmental Accounting Standard Board Statement (GASB) No.75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pension (GASB 7S), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75. Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017-18, CAPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB statement No.68, Accounting and Financial Reporting for Pensions (GASB 68). 100 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 10 — PENSION PLANS — MULTIPLE EMPLOYER (Continued) C. Changes in the Net Pension Liability (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate — The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City's net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate: Miscellaneous 1% Decrease 6.15% Net Pension Liability $ 60,128,454 Current Discount Rate 7.15% Net Pension Liability $ 40,098,351 1% 1 ncrease 8.15% Net Pension Liability $ 23,518,980 D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2020, the City recognized a pension expense of $8,597,120. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequentto measurement date $ 4,647,118 Changeof Assumptions $ (375,031) Differences between actual and expected experience 770,425 Net differences between projected and actual earnings on plan investments (640,769) Total $ 5,417,543 $ (1,015,800) The combined total for all plans are: Net pension liabilities Deferred outflows of resources Deferred inflows of resources Pension expenses Miscellaneous Plan Agent -Multiple $ 40,098,351 5,417,543 1,015,800 8,597,120 Safety Plan Cost -Sharing $ 29,524,728 6,343,712 1,685,360 5,054,945 R Total 69,623,079 11,761,255 2,701,160 13,652,065 101 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 10 — PENSION PLANS — MULTIPLE EMPLOYER (Continued) D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (continued) $4,647,118 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ended Annual June 30 Amortization 2020 $ 483,720 2021 (699,764) 2022 (141,196) 2023 111,865 Total $ (245,375) E. Payable to the Miscellaneous Pension Plan At June 30, 2020, the City reported no payable for the outstanding amount of employer and member contributions to the Miscellaneous pension plan required for the year ended June 30, 2020. NOTE 11— OTHER -POST-EMPLOYMENT HEALTHCARE PLAN (OP A. Plan Description The City of Burlingame has established a Retiree Healthcare Plan (Plan), and participates in an agent multiple -employer defined benefit retiree healthcare plan. The Plan provides post -employment healthcare benefits to eligible employees who retire directly from the City under CalPERS at the minimum age of 50 with at least 5 years of CAPERS service or disability. Retirees must make a retirement election with CalPERS within 120 days following the date of separation from the City. Benefit provisions are established and may be amended through agreements and memorandums of understanding (MOUs) between the City, its management employees, and unions representing City employees. The City participates in the CalPERS healthcare program (PEMHCA) and allow retirees to continue participation in the medical insurance program after retirement. Under the Plan, the City pays retiree healthcare benefits up to a cap for eligible retirees and dependents based on bargaining unit and hire date. Employees hired on or after January 1, 2012 (or an earlier date as defined in the MOUs) are only eligible to receive a City contribution equal to the PEMHCA minimum upon retirement from the City. As stated above, an individual must also qualify as a CalPERS annuitant in order to receive this benefit. No dental, vision or life insurance benefits are provided. 102 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 11— OTHER - POST -EMPLOYMENT HEALTHCARE PLAN (Continued) In addition, the City provides a defined contribution retiree healthcare plan for eligible employees. Employees hired after January 1, 2012 (or an earlier date as defined in the MOUs) are enrolled in a retiree health savings plan (RHS Plan) after meeting the service requirement defines in the MOUs. Upon enrollment, the City contributes 2.0% of the employee's annual base pay into the RHS Plan based on the benefit provisions in the MOUs. Contributions cease upon termination from employment. B. Employees Covered by Benefit Terms At June 30, 2019 (the Valuation date), the benefit terms covered the following employees: Active employees 216 Inactive employees, spouses, or beneficiaries currently receiving benefit payments 425 Inactive employees entitled to but not yet receiving benefit payments 0 Total 641 C. Net OPEB Liability The City's net OPEB liability was measured as of June 30, 2019, and the total OPEB liability for the Plan used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2019, using standard update procedures. For governmental funds, the General Fund has been primarily used to liquidate OPEB liabilities. Actuarial Assumptions: The total OPEB liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Actuarial valuation date June 30, 2019 Inflation 2.5% Salary increases 2.75%. Additional merit -based increases based on CaIPERS merit salary increasetables. Investment rate of return 7.00% Hea Ithca re cost trend rates 7.00% in the fi rst year. Trending down to 3.84% over 58 years Mortality rate Based on CaIPERS tables 103 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 11— OTHER - POST -EMPLOYMENT HEALTHCARE PLAN (Continued) Change of Assumptions: The assumptions of inflation, salary increase, and mortality and retirement rates are based on CalPERS tables. In 2018, CalPERS demographic assumptions and inflation rate were changed in accordance to the CAPERS Experience Study and Review of Actuarial Assumptions December 2017. As a result, the inflation assumption is reduced from 2.75 percent to 2.50 percent. The assumptions for individual salary increases and overall payroll growth are reduced from 3.00 percent to 2.75 percent. Discount rate changed to 7.00% from 7.28%. Discount Rate: The discount rate used to measure the total OPEB liability is 7.00%. This is the expected long-term rate of return on City assets using investment strategy 1 within the California Employers' Retiree Benefit Trust (CERBT). The projection of cash flows used to determine the discount rate assumed that the City contribution will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position is projected to cover all future OPEB payments. Therefore, the discount rate was set equal to the long-term expected rate of return. D. Changes in the Net OPEB Liability Balance at 6/30/2019: Changes Recognized for the Measurement Period: Service Cost Interest on the total OPEB liability Expected investment income Contributions Employer - City's Contribution Employer - Implicit Subsidy Employee Net investment income Administrative expenses Difference between expected and actual experience Changes of assumptions Implicit rate subsidy fulfilled Benefit payments Net Changes Balance at 6/30/2020: (Measurement Date 6/30/19) Increase (Decrease) Total OPEB Plan Fiduciary Net Net OPEB Liability Position Liability/(Asset) (a) (b) (c) = (a) - (b) $ 54,666,359 $ 16,833,224 $ 37,833,135 1,165,244 1,165, 244 3,939,278 3,939,278 5,064,694 (5,064,694) 675,769 (675,769) 1,146,645 (1,146,645) (3,777) 3,777 (6,552,966) (6,552,966) (2,456,857) (2,456,857) (675,769) (675,769) (2,765,515) (2,765,515) (7,346,585) 3,442,047 (10,788,632) $ 47,319,774 $ 20,275,271 $ 27,044,503 Sensitivity of the net OPEB liability to changes in the discount rate: The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (6.00%) or one percentage point higher (8.00%) follows: Net OPEB Liability/(Asse Discount Rate -1% Discount Rate (6.00 %) (7.00%) $ 31, 970, 348 $ 27, 044, 503 $ Discount Rate +1% (8.00%) 22,853,481 104 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 11— OTHER - POST -EMPLOYMENT HEALTHCARE PLAN (Continued) Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates: The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (6.00) or one percentage point higher (8.00%) than current healthcare cost trend rates follows: Net OPEB Liability/(Asset) 1% Decrease Healthcare Cost 1% Increase Trend Rates (6.00% decreasing to (7.00% decreasing to 2.84%) 3.84%) $ 22,466,683 $ 27,044,503 (8.0% decreasing to 4.84 % ) $ 32,469,764 E. OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB For the year ended June 30, 2020, the City recognized an OPEB expense of $3,399,602. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between Actual and Expected Experience $ (5,187,764) Employer contributions made subsequent to the measurement date $ 5,234,710 Net differences between Projected and Actual Earnings 91,254 Changes of assumptions 46,449 (1,945,011) Total $ 5,372,413 $ (7,132,775) Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Annual Ended June 30 Amortization 2021 $ (1,863,514) 2022 (1,863,512) 2023 (1,819,018) 2024 (1,449,028) Total $ (6,995,072) 105 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 11— OTHER - POST -EMPLOYMENT HEALTHCARE PLAN (Continued) F. Funding Policy The contribution requirements of the Plan participants and the City are established and may be amended by the City. In September 2013, the City established an irrevocable trust to prefund its unfunded actuarially accrued liability for retiree health care benefits. The California Benefit Trust Fund (CERBT), a multi - employer trust, is administered by CalPERS which also invests trust fund deposits made by the City on behalf of retirees. The City pre -funds the Plan by contributing the City's ADC every year to the CERBT. During fiscal year 2020, the City made deposits of $1,828,009 to the trust. As of June 30, 2020, the cash balance in the City's account within the trust was $22,832,869. NOTE 12 — NET POSITION AND FUND BALANCES A. Net Position Net position is the excess of all the City's assets and deferred outflows over all its liabilities and deferred inflow, regardless of fund. Net position is divided into three captions on the Statement of Net Position. These captions apply only to net position, which is determined at the Government - wide level and proprietary funds and are described as follows: Net investment in capital assets, describes the portion of net position which is represented by the current net book value of the City's capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements and funds restricted to low and moderate income purposes. Unrestricted describes the portion of net position which is not restricted as to use. B. Fund Balances Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund's cash and receivables, less its liabilities. The City's fund balances are classified in accordance with GASB Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on the long-term amounts of loans and on spending constraints imposed on the use of resources. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint as follows: 106 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 12 — NET POSITION AND FUND BALANCES (Continued) B. Fund Balances (Continued) Nonspendable represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as inventories and prepaids, the long-term amounts of loans and notes receivable and land held for resale are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then nonspendable amounts are required to be presented as a component of the applicable category. Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Nonspendable amounts subject to restrictions are included along with spendable resources. Committed fund balances have constraints imposed by resolution of the City Council, which may only be altered by resolution of the City Council. Nonspendable amounts subject to council commitments are included along with spendable resources. Assigned fund balances are amounts constrained by the City's intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its designees and may be changed at the discretion of the City Council or its designees. The City Council has not delegated the authority to make assignments of fund balance. This category includes nonspendables, when it is the City's intent to use proceeds or collections for a specific purpose and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed. Unassigned fund balance represents residual amounts that have not been restricted, committed or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds. Committed and Assigned Fund Balance In 2015, the City Council adopted a General Fund Reserve Policy by resolution. The policy, based on an analysis of risks specific to the City, establishes targeted levels for an Economic Stability Reserve and a Catastrophic Reserve (24% of budgeted revenues), Catastrophic Reserve amount of $2,000,000, as well as a Contingency Reserve amount of $500,000. The actual reserve levels are adopted by resolution with each annual budget, or as recommended by the Finance Director based upon an update of the City's fiscal needs or forecasts during the year. As the City Council and management can only use reserves for purposes consistent with the purposes described in the policy, these reserve amounts are reported as assignments of the General Fund's balance. 107 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 12 — NET POSITION AND FUND BALANCES (Continued) B. Fund Balances (Continued) The aggregate balance of the General Fund's assigned fund balance was $21,728,489 as of June 30, 2020. The breakdown is shown below: ■ The Economic Stability Reserve is available to protect and preserve City services from dramatic drops in General Fund revenues that are highly sensitive to economic conditions, mainly sales taxes and transient occupancy taxes. The balance at June 30, 2020, was $18,905,000. ■ The Catastrophic Reserve is available to make repairs and reconstruct City buildings and facilities that may be damaged by natural disasters or acts of war and terrorism. The balance at June 30, 2020, was $2,000,000. ■ The Contingency Reserve is available to cover unexpected expenses that may arise during the course of the fiscal year that were not considered during budget planning. The balance at June 30, 2020, was $500,000. ■ Encumbrances and Reappropriations represent commitments related to contracts not yet performed and purchase orders not yet filled or appropriations for specific activities approved late in the fiscal year that were not encumbered by contractual arrangements by the end of the fiscal year. The total of encumbrances and reappropriations at June 30, 2020 were $323,489. W. CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 12 — NET POSITION AND FUND BALANCES (Continued) B. Fund Balances (Continued) Detailed classifications of the City's fund balances, as of June 30, 2020, are below: Storm Capital Other General Drainage Debt Service Projects Governmental Fund Balance Classifications Fund Fund Fund Fund Funds Nonspendable: Items not in spendable form: Prepaids Total Nonspendable Fund Balances Restricted for: Employee benefits Special revenue programs: Development fees Localgrants Measure A and gas tax Measure W Special assessment district Other Capital projects Debt service Total Restricted Fund Balances Committed to: Capital projects Total Committed Fund Balances Assigned to: Debt services Encumbrances and reap propriations Contingency reserve Economic stability reserve Catastrophic event reserve Capital projects Total Assigned Fund Balances Unassigned: Total Fund Balances Total $ 6,627 $ 6,627 6,627 6,627 10,823,849 10,823,849 $ 9,093,373 9,093,373 556,172 556,172 1,504,840 1,504,840 313,424 313,424 419,430 419,430 1,095,049 1,095,049 $ 7,086,627 $ 41,962,141 49,048,768 4,006,024 4,006,024 10,823,849 7,086,627 45,968,165 12,982,288 76,860,929 $ 36,438,924 36,438,924 36,438,924 36,438,924 323,489 323,489 500,000 500,000 18,905,000 18,905,000 2,000,000 2,000,000 24,656,000 24,656,000 21,728,489 24,656,000 46,384,489 12,267,735 12,267,735 $ 44,826,700 $ 7,086,627 $ 45,968,165 $ 61,094,924 $ 12,982,288 $ 171,958,704 109 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 12 — NET POSITION AND FUND BALANCES (Continued) C. PARS Trust During fiscal year 2018, the City established an irrevocable trust with Public Agency Retirements Services (PARS) to set aside funds for pension liability. At June 30, 2020, the balance in the trust was $12,562,820. The City Council reserves the authority to review and amend this funding policy from time to time, in order to ensure the funding policy continues to best suit the circumstances of the City. D. Deficit Fund Balance/Net Position The following funds had a deficit fund balance/net position at June 30, 2020: Deficit Funds Net Position Enterprise Fund: Landfill $ 1,111,491 Internal Service Fund: Facilities Services 1,050,771 The City expects future revenues to mitigate the deficit fund balance/net position in future years. NOTE 13 — COMMITMENTS AND CONTINGENT LIABILITIES A. Grant Programs The City may, from time to time, participate in Federal and State grant programs. No cost allowances were proposed as a result of the City's financial audit. As of June 30, 2020, the City has not made an allowance for expenditures which may be disallowed by the granting agencies. Any disallowance for expenditures is expected to be immaterial. B. Litigation The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney, there is one case pending in which there is at least a possibility that the plaintiff could be entitled to monetary damages. However, the City believes that its financial position would not be adversely affected due to the availability of reserves in the remote event that the plaintiff prevails. 110 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 13 — COMMITMENTS AND CONTINGENT LIABILITIES (Continued) C. Bay Area Water Supply and Conservation Agency Revenue Bonds Surcharge The City contracts with the City and County of San Francisco for the purchase of water from the Hetch Hetchy System operated by the San Francisco Public Utilities Commission (SFPUC). The City is also a member of the Bay Area Water Supply and Conservation Agency (BAWSCA) which represents the interests of all the 24 cities and water districts, as well as two private utilities, that purchase wholesale water from the SFPUC. In 2009 the City entered into a new 25 year agreement with the SFPUC. Under the new agreement, the SFPUC issues revenue bonds and the debt service (which also includes an interest component) is paid for through rates over the life of the bonds. During the transition from the old to the new contracts, one of the issues addressed was how to deal with the $370 million in assets that were still being paid for by the wholesale customers under the old agreement. The assets were transferred to the new agreement, assigned a life with an agreed upon rate of return of 5.13%. Also negotiated was a provision to allow the wholesale customers to prepay any remaining existing assets' unpaid principal balance without penalty or premium. This prepayment was executed through the issuance of bonds by BAWSCA which provide a better interest rate given the favorable rate environment. BAWSCA issued Revenue Bonds in the principal amount of $335,780,000 in January 2013 to prepay the capital cost recovery payment obligation and fund a stabilization fund. The Bonds mature in October 2034 and are secured by surcharges to the monthly water purchase charges imposed upon the participating members. The Bonds are not a debt obligation of any member, and BAWSCA's failure to pay its Bonds would not constitute a default by any participating member. Should any participating member fail to pay its share, BAWSCA will rely on the stabilization fund and will pursue all legal remedies to collect the shortfall from the delinquent member. In the interim, other participating members may have their portion adjusted to insure the continued payment of the debt service surcharge. The risk of bearing the debt service expense of a defaulting member is not significantly different than the risk each member assumes currently for fluctuations in water purchase charges. Under the Bond indenture, BAWSCA maintains a stabilization fund. If surcharge revenues collected are less than needed (due to a member's failure to pay timely), BAWSCA uses the stabilization fund to fund the debt service deficiency, and increases the surcharge in the subsequent year to make up for the prior year shortfall and reimburse the stabilization fund account. Also, given that each participating agency's governing body adopted a Resolution to participate in the Bond issue, Management believes that default is generally very unlikely. 111 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 13 — COMMITMENTS AND CONTINGENT LIABILITIES (Continued) C. Bay Area Water Supply and Conservation Agency Revenue Bonds Surcharge (Continued) The annual debt service surcharges are a fixed amount for each participant and are calculated by taking the subsequent fiscal year's debt service, multiplied by each participant's actual water purchase as a percent of total wholesale customer water purchases from the prior fiscal year. One -twelfth of the annual surcharge is included in the monthly bill from SFPUC. Because each participant's share of the debt service surcharge is proportional to the amount of water purchased during the prior fiscal year, the City's share of the debt service will fluctuate from year to year. The City paid its surcharge of $637,929 during fiscal year 2020, which is included as a component of purchased water expenses in the Water Enterprise Fund. The surcharge for fiscal year 2021 is estimated to be $683,964. D. Contingent Liabilities On September 29, 2018, the Governor of California approved Assembly Bill No. 1912, which requires member agencies of an agency established pursuant to a joint powers agreement that participates in, or contracts with, a public retirement system, prior to filing a notice of termination or upon notice of potential termination by the Board of Administration of the Public Employees' Retirement System (PERS), to mutually agree as to the apportionment of the agency's retirement obligations among themselves, provided that the agreement equals 100% of the retirement liability of the agency. If the member agencies are unable to mutually agree to the apportionment, the bill requires the PERS board to apportion the retirement liability of the agency to each member agency, as specified, and would establish procedures allowing a member agency to challenge the board's determination through the arbitration process. This bill also requires the PERS board to enter into the above described agreement upon request of a member agency of a terminating agency formed under the Joint Exercise of Powers Act and providing that the member agencies of the terminating agency are liable to the system for inadequate funding of the benefits pursuant to the agreement. This bill extends that liability and lien to all of the parties of a terminating agency that was formed under the Joint Exercise of Powers Act. In addition, the bill requires the PERS board, prior to exercising its authority to reduce benefits and to the extent consistent with its fiduciary duties, to consider and exhaust all options and necessary actions, including evaluating whether to bring a civil action against any member agencies to compel payment of the terminated public agency's pension obligations. 112 CITY OF BURLINGAME, CALIFORNIA NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) JUNE 30, 2020 NOTE 13 — COMMITMENTS AND CONTINGENT LIABILITIES (Continued) D. Contingent Liabilities (Continued) As of June 30, 2020, the City participated in the following joint powers agreements that participate in, or contracts with, a public retirement system: • Central County Fire District — CCFD (fire, emergency medical, disaster preparedness) • San Mateo County Pre -Hospital Emergency Services Group —SMCPHESG (pre -hospital emergency services, ambulance transport, first response) The City is not aware that any of these agencies are in the process of termination or facing potential termination by the PERS board. 113 Comprehensive Annual Financial Report June 30, 2020 REQUIRED SUPPLEMENTARY INFORMATION CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 1- COST -SHARING MULTIPLE -EMPLOYER DEFINED BENEFIT PENSION PLAN Safety Plan, Cost -Sharing Multiple -Employer Defined Pension Plan Last 10 Years* SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Safety Plan Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 Plan's Proportion of the Net Pension Liability/Asset 0.24850% 0.44660% 0.45659% 0.45193% 0.46735% 0.47296% Plan's Proportionate Share of the Net Pension Liability/(Asset) $ 15,465,681 $ 18,401,988 $ 23,647,731 $ 27,003,552 $ 27,421,719 $ 29,524,728 Plan's Covered Payroll $ 4,498,186 $ 4,478,926 $ 4,671,613 $ 4,834,326 $ 4,880,736 $ 4,684,900 Plan's Proportionate Share of the Net Pension Liability/(Asset) as a Percentage of it's Covered Payroll 343.82% 410,86% 506.20% 558.58% 561.84% 630.21% Plan's Proportionate Share of the Net Pension Liability/(Asset) as a Percentage ofthe Plan's Total Pension Liability 18.58% 22.03% 27.54% 29.02% 28.73% 29.97% * Fiscal year 2015 was the 1st year of GASB 68 implementation, therefore only five years are shown. 116 CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 1— COST -SHARING MULTIPLE -EMPLOYER DEFINED BENEFIT PENSION PLAN (Continued Fiscal Year Ended June 30 Actuarially determined contribution Contributions in relation to the actuarially determined contributions Contribution deficiency (excess) Covered payroll Safety Plan, Cost -Sharing Multiple -Employer Defined Pension Plan Last 10 Years* SCHEDULE OF CONTRIBUTIONS Safety Plan 2016 2017 2018 2019 2020 $ 1,686,060 $ 1,923,807 $ 2,106,261 $ 2,369,301 $ 2,767,532 (1,686,060) (1,923,807) (2,106,261) (2,369,301) (2,767,532) $ 4,671,613 $ 4,834,326 $ 4,880,736 $ 4,684,900 $ 5,083,094 Contributions as a percentage of covered payroll 36.09% 39.79% 43.15% 50.57% 54.45% Notes to Schedule Valuation date: 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age Amortization method Level percentage of payroll, closed Remaining amortization period 30 years Asset valuation method 5-year smoothed market Inflation 2.50% Salary increases 2.75 % Varies by Age, Service and Type of Employment Retirement age The probabilities of retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007 Mortality The probabilities of mortality are derived from CalPERS' Membership Data for all Funds based on CalPERS' specific data from a 2014 CalPERS Experience Study. The table includes 20 years of mortality improvements using the Society of Actuaries Scale BB. * Fiscal year 2015 was the 1st year of GASB 68 implementation, therefore only five years are shown. 117 CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 2—AGENT MULTIPLE -EMPLOYER DEFINED BENEFIT PENSION PLAN Miscellaneous Plan, an Agent Multiple -Employer Defined Pension Plan Last 10 Years* SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 Total Pension Liability Service Cost $ 2,451,356 $ 2,374,018 $ 2,440,538 $ 2,891,884 $ 2,954,416 $ 3,112,725 Interest 8,964,159 9,244,742 9,456,322 9,717,799 10,042,619 10,492,653 Changes of Benefit Terms Differences Between Expected and Actual Experience (1,273,339) (1,959,467) (570,100) 332,948 962,894 Changes of Assumptions (2,208,472) 7,865,663 (1,056,903) - Benefit Payments, including Refunds of Employee Contributions (6,246,453) (6,895,260) (6,958,358) (7,275,386) (7,472,690) (8,017,140) Net Change in Total Pension Liability 5,169,062 1,241,689 2,979,035 12,629,860 4,800,390 6,551,132 Total Pension Liability - Beginning 121,419,671 126,588,733 127,830,422 130,809,457 143,439,317 148,239,707 Total Pension Liability - Ending (a) $ 126,588,733 $ 127,830,422 $ 130,809,457 $ 143,439,317 $ 148,239,707 $ 154,790,839 Plan Fiduciary Net Position Contributions - Employer $ 2,214,366 $ 2,605,414 $ 2,936,966 $ 3,362,448 $ 3,612,106 $ 4,093,017 Contributions - Employee 1,203,540 1,064,874 1,112,768 1,357,763 1,234,017 1,290,194 Net Investment Income 15,116,451 2,248,984 487,558 10,862,212 8,765,961 7,207,344 Benefit Payments, including Refunds of Employee Contributions (6,246,453) (6,895,260) (6,958,358) (7,275,386) (7,472,690) (8,017,140) Net Plan to Plan Resource Movement 40,946 (98) (397,322) (256) Administration Expense (111,650) (60,485) (142,865) (162,887) (78,639) Other Miscellaneous Income/(Expense) (309,326) 256 Net Change in Plan Fiduciary Net Position 12,287,904 (1,046,692) (2,481,649) 7,766,850 5,666,925 4,495,032 Plan Fiduciary Net Position - Beginning 88,004,118 100,292,022 99,245,330 96,763,681 104,530,531 110,197,456 Plan Fiduciary Net Position - Ending (b) $ 100,292,022 $ 99,245,330 $ 96,763,681 $ 104,530,531 $ 110,197,456 $ 114,692,488 Net Pension Liability - Ending (a)-(b) $ 26,296,711 $ 28,585,092 $ 34,045,776 $ 38,908,786 $ 38,042,2S1 $ 40,098,351 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 79.23% 77.64% 73.97% 72.87% 74.34% 74.10% Covered Payroll $ 13,078,081 $ 13,191,923 $ 13,560,054 $ 14,918,921 $ 15,717,707 $ 16,412,886 Net Pension Liability as Percentage of Covered - Employee Payroll 201.07% 216.69% 251.07% 260.80% 242.03% 244.31% Notes to Schedule: Benefit changes. Figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes in assumptions. In 2018, demographic assumptions and inflation rate were changed in accordance to the CaIPERS Experience Study and Review of Actuarial Assumptions December 2017. The inflation assumption is reduced from 2.75 percent to 2.50 percent. The assumptions for individual salary increases and overall payroll growth are reduced from 3.00 percent to 2.75 percent. There were no changes in the discount rate. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, the discount rate was changed from 7.5% (net of administrative expenses) to 7.65%. In 2014, amounts reported were based on the 7.5 discount rate. * - Fiscal year 2015 was the 1st year of GASB 68 implementation. 118 CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 2 —AGENT MULTIPLE -EMPLOYER DEFINED BENEFIT PENSION PLAN (Conti Miscellaneous Plan, an Agent Multiple -Employer Defined Pension Plan Last 10 Years SCHEDULE OF CONTRIBUTIONS Fiscal Year Ended June 30 2016 2017 2018 2019 2020 Actuarially determined contribution $ 2,929,226 $ 3,370,189 $ 3,611,599 $ 4,093,018 $ 4,647,118 Contributions in relation to the actuarially determined contributions (2,929,226) (3,370,189) (3,611,599) (4,093,018) (4,647,118) Contribution deficiency (excess) $ $ $ $ $ - Covered payroll $ 13,560,054 $ 14,918,921 $ 15,717,707 $ 16,412,886 $ 16,638,248 Contributions as a percentage of covered payroll 21.60% 22.59% 22.98% 24.94% 27.93% Notes to Schedule Valuation date: 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age Amortization method Level percentage of payroll Remaining amortization period 29 years Asset valuation method Market Value of Assets Inflation 2.50% Salary increases Varies by category, entry age, and duration of service. Retirement age The probabilities of Retirement are based on the CalPERS Experience Study. Mortality The probabilities of mortality are derived from CaIPERS' Membership Data for all Funds based on the CalPERS Experience Study. The table includes 20 years of mortality improvements using the Society of Actuaries Scale BB. * Fiscal year 2015 was the 1st year of GASB 68 implementation. 119 CITY OF BURLINGAME, CALIFORNIA- REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 3 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) Schedule of Changes in the Net OPEB Liability and Related Ratios An Agent Multi -Employer Defined Benefits Retiree Healthcare Plan Last 10 fiscal years* Measurement Date Total OPEB Liability (1) Service Cost Interest Changes of benefit terms Differences between expected and actual experience Changes of assumptions Implicit rate subsidy fulfilled Benefit payments Net change in total OPEB liability Total OPEB liability - beginning Total OPEB liability - ending (a) OPEB fiduciary net position Net investment income Contributions - employer Contributions - Implicit Subsidy Contributions - employee Administrative expense Implicit rate subsidy fulfilled Benefit payments, including refunds of employee contributions Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) Net OPEB liability - ending (a)-(b) Plan fiduciary net position as a percentage of the total OPEB liability Covered -employee payroll Net OPEB liability as a percentage of covered -employee payroll Notes to schedule: * - Fiscal year 2018 was the first year of GASB 75 implementation. 6/30/17 6/30/18 6/30/19 $ 1,076,983 $ 1,109,292 $ 1,165,244 3,715,640 3,831,234 3,939,278 (6,552,966) 82,179 (2,456,857) (627,012) (672,658) (675,769) (2,779,180) (2,735,249) (2,765,515) 1,386,431 1,614,798 (7,346,585) 51,665,130 53,051,561 54,666,359 $ 53,051,561 $ 54,666,359 $ 47,319,774 $ 1,236,932 $ 1,113,358 $ 1,146,645 4,402,957 4,323,894 5,064,694 627,012 672,658 675,769 (5,990) (7,856) (3,777) (627,012) (672,658) (675,769) (2,779,180) (2,735,249) (2,765,515) 2,854,719 2,694,147 3,442,047 11,284,358 14,139,077 16,833,224 $ 14,139,077 $ 16,833,224 $ 20,275,271 $ 38,912,484 $ 37,833,135 $ 27,044,503 26.65% 30.79% 42.85% $ 21,235,525 $ 20,450,015 $ 19,742,257 183.24% 185.00% 136.99% 120 CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 3 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) (Continued) Schedule of Changes in the Net OPEB Liability and Related Ratios An Agent Multi -Employer Defined Benefits Retiree Healthcare Plan Last 10 fiscal years* SCHEDULE OF CONTRIBUTIONS Fiscal Year Ended June 30, Actuarially Determined Contribution (ADC) Less: Contributions in Relation to the ADC Contribution Deficiency (Excess) Covered -employee payroll Contributions as a percentage of Covered -employee payroll Notes to Schedule: Assumptions and Methods Actuarial Cost Method Amortization Method Amortization Period Inflation Assumed Payroll Growth Healthcare Trend Rates Rate of Return on Assets Mortality & Retirement Rates 2018 2019 2020 $ 4,669,234 $ 4,471,859 $ 3,557,131 4,996,552 5,740,463 5,234,710 $ (327,318) $ (1,268,604) $ (1,677,579) $ 20,450,015 $ 19,742,257 $ 21,198,400 24.43% 29.08% 24.69% Entry age normal, level percent of pay Closed period, level percent of pay 15 years 2.50% 2.75% 7.00%, trending down to 3.84% 7.00% CaIPERS Rates * Fiscal year 2018 was the first year of implementation of GASB 75. 121 CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 4 —.MODIFIED APPROACH FOR THE CITY'S INFRASTRUCTURE In accordance with GASB Statement No. 34, the City accounts for and reports infrastructure capital assets. The City defines infrastructure as the basic physical assets including the street system; park and recreation lands and improvement system; storm water collection system; and site amenities associated with buildings, such as parking and landscaped areas, used by the City in the conduct of its business. Each major infrastructure system is divided into subsystems. For example, the street system is divided into concrete and asphalt pavements, concrete curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals, and pavement markings), landscaping, and land. Subsystem detail is not presented in these basic financial statements; however, the City maintains detailed information on these subsystems. The City has elected to use the modified approach, as defined by GASB Statement No. 34, for the Roads and Streets networks. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated. In March 2019, the City's consultant completed a study to update the physical condition assessment of the streets. The streets, primarily asphalt pavements, were defined as all physical features associated with the operation of motorized vehicles that exist within the limits of right of way. City -owned streets are classified based on land use, access and traffic utilization into the following four classifications: (1) arterial/major, (2) collector, (3) residential, and (4) other (such as alleys and parking lots). This condition assessment will be performed approximately every two years. For this inspection update, all the paved streets in the City's system were re -inspected. A visual survey of approximately 82.28 centerline miles was evaluated in accordance with Metropolitan Transportation Commission (MTC) standards. Upon completion of this survey, a Pavement Condition Index (PCI) was calculated for each segment to reflect the overall pavement condition. Ranging between 0 — 100, a PCI of 0 would correspond to a badly deteriorated pavement with virtually no remaining life. A PCI of 100 would correspond to a new pavement with proper engineering design and construction at the beginning of its life cycle. 122 CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 4 —.MODIFIED APPROACH FOR THE CITY'S INFRASTRUCTURE (Continued) The following conditions were defined: Condition Rating Description Excellent 90-100 Little or no distress. Little or no distress, with the exception of utility patches in good Very Good 70-89 condition, or minor to moderate hairline cracks; typically lightly weathered. Good 50-69 Light to moderate weathering, light load -related base failure, moderate linear cracking. Poor 25-49 Moderate to severe weathering, moderate levels of base failure, moderate to heavy linear cracking. Very Poor 0-24 Extensive weathering, moderate to heavy base failure, failed patches, extensive network of moderate to heavy linear cracking. The City's policy is to achieve an average rating of 65 for all streets. This rating allows minor cracking and raveling of the pavement along with minor roughness that could be noticeable to drivers traveling at the posted speeds. As of June 30, 2020, the City's street system was rated at a PCI index of 78 on a 100-point scale. The overall condition of the street pavement is in the lower range of MTC's designation 'Very Good'. The following table details the network statistics and pavement condition by functional class. Table 1— Street Network Statistics and Average PCI by Functional Class Table 1 Street Network Statistics and Average PCI by Functional Class Functional Class Centerline Miles Lane Miles # of Sections % of Network (by Pavement Area) Average PCI Arterial 23.66 53.86 85 29.7% 80 Residential 37.5 67.28 249 41.3% 81 Collector 20.35 39.69 116 25.7% 82 Other 0.8 1.61 24 3.3% 74 Totals 82.31 162.44 474 100% 81 123 CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 4 —.MODIFIED APPROACH FOR THE CITY'S INFRASTRUCTURE (Continued) Table 2 details the percentage of the street network area by each PCI range or condition category. Table 2 — Percent Network Area by Functional Class and Condition Class Table 2 Percent Network Area by Functional Class and Condition Class Condition Class PCI Range Arterial Collector Residential Other Total Excellent/Very Good (1) 100-90 23.7% 21.6% 31.5% 2.2% 79.0% Good/Fair (II/III) 89-50 6.0% 3.6% 7.7% 0.6% 17.9% Poor (IV) 49-25 0.0% 0.3% 2.1% 0.5% 2.9% Very Poor (V) 0-24 0.0% 1 0.1% 1 0.1% 1 0.0% 0.2% Total 29.7% 25.6% 41.4% 3.3% 100.0% The City's street network replacement value is estimated at $155 million. Replacement value is calculated as the current cost to reconstruct each street in the network. The optimal network PCI is somewhere between low and mid 80's, which is in the middle of the 'excellent/very good' condition category. This is recommended because streets with a PCI in the 80's as opposed to 70's will likely remain in the 'excellent/very good' condition category for a longer period of time if relatively inexpensive preventive maintenance treatments are used. Once PCI falls below 70, more expensive rehabilitation treatments will be needed. The cost to repair and maintain a pavement depends on its current PCI. In the 'excellent/very good' category, it costs very little to apply preventative maintenance treatments. More than half (76.9%) of the City's street network would benefit from these lower cost preventative maintenance treatments. Approximately 97% of the City's street network is considered in 'good' condition. Pavements in this range require more than a life -extending treatment. At this point, a well designed pavement will have served at least 75 percent of its life with the quality of the pavement dropping approximately 40%. The remaining 3% of the City's street network falls into the 'poor' or 'very poor' PCI ranges. These pavements are near the end of their service lives and often exhibit major forms of distress. At this stage a street usually requires either a thick overlay or reconstruction. One of the key elements of a pavement repair strategy is to keep streets that are in the 'good' or 'fair' category from deteriorating. This is particularly true for streets in the 'fair' range, because they are at the point where pavement deterioration accelerates if left untreated. The projected pavement budget for fiscal year 2020 through fiscal year 2024 is approximately $2,000,000 per year or $10,000,000 million. This investment level is estimated to maintain the current PCI level with a decrease of one point to 80 in 2023. Furthermore, under this investment level, the deferred maintenance backlog is projected to decrease from $1.2 million in 2019 to $0.9 million in 2023. 124 CITY OF BURLINGAME, CALIFORNIA REQUIRED SUPPLEMENTARY INFORMATION (Continued) FOR THE FISCAL YEAR ENDED JUNE 30, 2020 NOTE 4 —.MODIFIED APPROACH FOR THE CITY'S INFRASTRUCTURE (Continued) 2020 2021 2022 2023 Budget $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 Rehabilitation 1,749,705 1,713,333 1,623,564 1,761,962 Preventative Maintenance 249,213 285,607 128,246 16,936 Deferred Maintenance 294,547 72,376 - 896,357 PCI 78 81 81 80 A schedule of estimated annual amounts calculated to maintain and preserve the City's streets at the current level compared to actual expenditures for street maintenance for the last three years is presented below. Fiscal Year Maintenance Estimate Actual Expenditures PCI Rating 2015-2016 $ 1,200,000 $ 1,151,003 77 2016-2017 $ 1,200,000 $ 1,300,698 78 2017-2018 $ 1,200,000 $ 1,273,929 79 2018-2019 $ 1,200,000 $ 537,440 81 The City's ongoing street rehabilitation program is funded in the Capital Improvement Program. 125 CITY OF BURLINGAME, CALIFORNIA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Budgeted Amounts Original Final Actual Variance Positive (Negative) Revenues Property taxes $ 23,270,000 $ 23,435,600 $ 23,304,404 $ (131,196) Sales and use taxes 14,760,000 14,230,000 14,803,366 573,366 Transient occupancy taxes 28,700,000 20,050,000 20,416,543 366,543 Other taxes 3,224,000 2,927,000 3,133,927 206,927 Licenses and permits 79,500 79,500 98,905 19,405 Fines, forfeitures and penalties 978,000 608,000 793,281 185,281 Charges for services 5,490,000 5,135,000 5,471,236 336,236 Other revenue 160,000 160,000 183,030 23,030 Grants and subventions 140,000 140,000 177,564 37,564 Investment income 1,970,000 2,400,000 3,775,603 1,375,603 Total revenues 78,771,500 69,165,100 72,157,859 2,992,759 Expenditures Current: General Government City Attorney 1,157,463 1,157,463 829,633 327,830 City Clerk 570,929 620,729 553,256 67,473 City Council 433,961 940,961 933,671 7,290 City Manager 914,184 895,965 789,447 106,518 Human Resources 939,016 983,266 909,451 73,815 Finance 2,648,026 2,706,226 2,466,777 239,449 Total General Government 6,663,579 7,304,610 6,482,235 822,375 Public safety: Fire 11,682,359 11,682,359 11,611,715 70,644 Fire - Disaster Preparedness 100,000 110,000 54,121 55,879 Police Communications Dispatch 1,686,355 1,746,355 1,696,510 49,845 Police - Parking Enforcement 714,802 718,702 629,969 88,733 Police 15,045,350 15,334,649 14,581,662 752,987 Total Public Safety 29,228,866 29,592,065 28,573,977 1,018,088 Public Works 6,741,478 6,921,949 5,970,041 951,908 Community Development 2,795,888 3,471,238 2,197,977 1,273,261 Parks, recreation, and library Library 5,740,951 5,823,351 5,626,875 196,476 Parks 5.162.082 5.376.682 4.848.966 527,716 Recreation and Aquatics 5,026,936 5,302,481 4,364,095 938,386 Total Leisure & Cultural Services 15,929,969 16,502,514 14,839,936 1,662,578 Capital outlay 218,500 258,500 141,299 117,201 Total Expenditures 61,578,280 64,050,876 58,205,465 5,845,411 Excess (deficiency) of revenues over expenditures 17,193,220 5,114,224 13,952,394 8,838,170 Other financing sources (uses) Transfers in 2,543,819 2,543,819 2,543,819 Transfers out (20,517,263) (20,837,263) (20,837,263) Total other financing sources (uses) (17,973,444) (18,293,444) (18,293,444) Net change in fund balance $ (780,224) $ (13,179,220) (4,341,050) $ 8,838,170 FUND BALANCE Beginning of year End of year See accompanying Notes to the Basic Financial Statements 49,167,750 $ 44,826,700 126 CITY OF BURLINGAME, CALIFORNIA STORM DRAINAGE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Revenues Charges for services Investment income Total revenues Other financing sources (uses) Transfers out Total other financing sources (uses) Net change in fund balance FUND BALANCE Beginning of year End of year Budgeted Amounts Original Final Actual Variance Positive (Negative) $ 3,017,000 $ 3,017,000 $ 2,993,956 $ (23,044) 311,000 190,000 605,582 415,582 3,328,000 3,207,000 3,599,538 392,538 (2,083,139) (2,083,139) (2,083,139) (2,083,139) (2,083,139) (2,083,139) $ 1,244,861 $ 1,123,861 1,516,399 $ 392,538 5,570,228 $ 7,086,627 See accompanying Notes to the Basic Financial Statements 127 Comprehensive Annual Financial Report June 30, 2020 SUPPLEMENTAL INFORMATION COMBINING FINANCIAL STATEMENTS Comprehensive Annual Financial Report June 30, 2020 NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Measure A Fund — This fund accounts for the City's share of the special half -cent sales tax for transportation approved on the November 1988 ballot, effective January 1, 1989. Expenditures from this fund can only be incurred on transportation -related programs. Gas Tax Fund — This fund is to account for revenue received from the State of California derived from gasoline taxes. These funds may only be used for street purposes as specified in the State Streets and Highway Code. Special Assessment District Fund — This fund accounts for revenue from special assessments received from a special benefit district formed during fiscal year 2011-12 on Burlingame Avenue. The special benefit district revenues fund the lighting, landscape, and utility -related upgrades completed in 2014, and a portion of the related maintenance costs. Train Shuttle Fund — This fund is to account for revenues received from the Peninsula Joint Powers Board, San Mateo County Transportation Authority, Bay Area Air Quality Management District, City/County Association of Governments of San Mateo County, Downtown Burlingame Business Association, and the Broadway Improvement District for a free shuttle bus program. State/Federal Grants Funds — These funds are to account for grants from the State of California and the federal government, used or expended for a specific purpose, activity, or facility. Local Grants Fund — This fund is to account for grants or donations from local sources other than the State or Federal government used or expended for a specific purpose, activity, or facility. Development Fees Fund — This fund is to account for developers' fees that may be used for public improvements or facilities needed to support approved development projects in the City. This fund includes receipts from impact fees for specific improvement in the Bayfront and North Burlingame areas, as well as parking in lieu fees. Public TV Access Fund — This fund is to account for the PEG Access funding through Cable TV Franchise agreement beginning January 1, 1999. The City uses these funds to finance capital improvements associated with the broadcast of municipal events. Measure W Fund — This fund accounts for the City's share of the special half -cent sales tax for transportation approved on the November 2018 ballot, effective July 1, 2019. Expenditures from this fund can only be incurred for local safety, pothole & congestion relief improvements. 131 CITY OF BURLINGAME, CALIFORNIA Combining Balance Sheet Nonmajor Governmental Funds JUNE 30, 2020 ASSETS Cash and investments Receivables (net of uncollectible amount of $0): Accounts and other receivables Total assets LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable Total liabilities Deferred Inflows: Unavailable revenue Total deferred inflows Fund Balances: Restricted Total fund balances Total liabilities, deferred inflows and fund balances Special Revenue Funds Special Train Measure A Gas Tax Assessment Shuttle Fund Fund District Fund $ 476,022 $ 928,353 $ 414,248 $ 311,931 59,208 41,257 21,140 $ 535,230 $ 969,610 $ 435,388 $ 311,931 $ 36,174 36,174 $ 15,958 36,000 15,958 36,000 $ 535,230 $ 969,610 419,430 239,757 535,230 969,610 419,430 239,757 $ 535,230 $ 969,610 $ 435,388 $ 311,931 132 Special Revenue Funds Total State /Federal Local Development Public TV Nonmajor Grants Grants Fees Access Measure W Governmental Fund Fund Fund Fund Fund Funds $ 39,491 $ 560,430 $ 9,059,624 $ 789,820 $ 297,264 $ 12,877,183 1,967 33,749 25,981 16,160 199,462 $ 39,491 $ 562,397 $ 9,093,373 $ 815,801 $ 313,424 $ 13,076,645 $ 6,225 6,225 $ 42,399 42,399 51,958 51,958 $ 39,491 556,172 $ 9,093,373 $ 815,801 $ 313,424 12,982,288 39,491 556,172 9,093,373 815,801 313,424 12,982,288 $ 39,491 $ 562,397 $ 9,093,373 $ 815,801 $ 313,424 $ 13,076,645 133 CITY OF BURLINGAME, CALIFORNIA Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds FOR THE FISCAL YEAR ENDED JUNE 30, 2020 REVENUES: Investment income Intergovernmental taxes Charges for services Donation Grants and subventions Total revenues EXPENDITURES: Current: General government Public safety Community development Parks, recreation, and library Shuttle operations Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfer out Total other financing sources (uses) Net change in fund balance FUND BALANCE: Beginning of year End of year Special Revenue Funds Special Train Measure A Gas Tax Assessment Shuttle Fund Fund District Fund $ 17,628 $ 35,121 $ 15,575 823,670 1,239,271 294,136 $ 36,000 841,298 1,274,392 309,711 36,000 155,770 155,770 841,298 1,274,392 309,711 (119,770) 143,500 (750,000) (1,106,000) (310,000) (750,000) (1,106,000) (310,000) 143,500 91,298 168,392 (289) 23,730 443,932 801,218 419,719 216,027 $ 535,230 $ 969,610 $ 419,430 $ 239,757 134 Special Revenue Funds Total State /Federal Local Development Public TV Nonmajor Grants Grants Fees Access Measure W Governmental Fund Fund Fund Fund Fund Funds $ 16,606 $ 319,357 $ 28,910 $ 7,573 $ 440,770 305,851 2,368,792 2,402,530 94,411 2,791,077 127,226 127,226 $ 32,443 46,167 114,610 32,443 189,999 2,721,887 123,321 313,424 5,842,475 31,482 24,496 55,978 2,819 168,834 171,653 155,770 34,301 193,330 383,401 (1,858) (3,331) 2,721,887 123,321 313,424 5,459,074 143,500 (2,166,000) (2,022,500) (1,858) (3,331) 2,721,887 123,321 313,424 3,436,574 41,349 559,503 6,371,486 692,480 9,545,714 $ 39,491 $ 556,172 $ 9,093,373 $ 815,801 $ 313,424 $ 12,982,288 135 CITY OF BURLINGAME, CALIFORNIA Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Nonmajor Governmental Funds FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Special Revenue Funds Measure A Fund Gas Tax Fund Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES: Investment income $ 2,000 $ 17,628 $ 15,628 $ 7,000 $ 35,121 $ 28,121 Intergovernmental 760,000 823,670 63,670 1,176,000 1,239,271 63,271 Charges for services Grants revenue Total revenues 762,000 841,298 79,298 1,183,000 1,274,392 91,392 EXPENDITURES: Current: General government Public safety Parks, recreation, and library Community development Shuttle operations Total expenditures REVENUES OVER (UNDER) EXPENDITURES 762,000 841,298 79,298 1,183,000 1,274,392 91,392 OTHER FINANCING SOURCES (USES): Transfers in Transfers out (750,000) (750,000) (1,106,000) (1,106,000) Total other financing sources (uses) (750,000) (750,000) (1,106,000) (1,106,000) Net change in fund balance $ 12,000 91,298 $ 79,298 $ 77,000 168,392 $ 91,392 FUND BALANCE: Beginning of year 443,932 801,218 End of year $ 535,230 $ 969,610 136 Special Revenue Funds Special Assessment District Train Shuttle Fund State/Federal Grants Fund Variance Variance Variance Positive Positive Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $ 5,000 $ 15,575 $ 10,575 310,000 294,136 (15,864) $ 72,000 $ 36,000 $ (36,000) $ - $ 32,443 $ 32,443 315,000 309,711 (5,289) 72,000 36,000 (36,000) 32,443 32,443 215,500 155,770 59,730 215,500 155,770 59,730 315,000 309,711 (5,289) (143,500) (119,770) 23,730 143,500 143,500 (310,000) (310,000) (310,000) (310,000) 143,500 143,500 $ 5,000 (289) $ (5,289) 23,730 $ 23,730 $ 419,719 $ 419,430 216,027 $ 239,757 31,482 (31,482) 2,819 (2,819) 34,301 (34,301) (1,858) (1,858) (1,858) $ (1,858) 41,349 $ 39,491 (Continued) 137 CITY OF BURLINGAME, CALIFORNIA Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Nonmajor Governmental Funds FOR THE FISCAL YEAR ENDED JUNE 30, 2020 REVENUES: Investment income Intergovernmental Charges for services Grants revenue Total revenues EXPENDITURES: Current: General government Public safety Parks, recreation, and library Community development Shuttle operations Total expenditures REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources (uses) Net change in fund balance FUND BALANCE: Beginning of year End of year Special Revenue Funds Local Grant Funds Development Fees Fund Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) $ - $ 16,606 $ 16,606 $ 82,000 $ 319,357 $ 237,357 127,226 127,226 2,402,530 2,402,530 46,167 46,167 189,999 189,999 82,000 2,721,887 2,639,887 24,496 (24,496) 168,834 (168,834) 193,330 (193,330) (3,331) (3,331) 82,000 2,721,887 2,639,887 (3,331) $ (3,331) $ 82,000 2,721,887 $ 2,639,887 559,503 $ 556,172 6,371,486 $ 9,093,373 138 Special Revenue Funds Public TV Access Fund Measure W Fund Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) $ 9,000 $ 28,910 $ 19,910 $ - $ 7,573 $ 7,573 350,000 305,851 (44,149) 105,000 94,411 (10,589) 114,000 123,321 9,321 350,000 313,424 (36,576) 114,000 123,321 (9,321) 350,000 313,424 36,576 $ 114,000 123,321 $ (9,321) $ 350,000 313,424 $ 36,576 692,480 $ 815,801 $ 313,424 139 Comprehensive Annual Financial Report June 30, 2020 INTERNAL SERVICE FUNDS General Liability Fund — This fund accounts for the servicing of the general liability self-insurance program of the City. Included are costs associated with self-insurance and the purchase of excess insurance to adequately protect the City. User departments are charged for this program at rates based on loss experience (frequency and severity of claims). Workers' Compensation Fund - This fund accounts for the funding of the City's Workers' Compensation costs. User departments are charged for workers' compensation at rates based on loss experience and on departmental personnel budgets. OPEB (Other Post -Employment Benefits) Fund — This fund accounts for the costs of the City's retiree medical program and related liabilities. A percentage "surcharge" on actual payroll provides the fund's revenues; benefits are paid out of the fund and the remaining funds are swept to the irrevocable trust fund established to reduce the OPEB liability incurred in prior years. Facilities Services Fund — This fund accounts for the costs of operation of the City's maintenance and repair of City building and custodial services on a cost reimbursement basis. Equipment Services Fund — This fund accounts for the costs of operation, maintenance, and replacement of automotive equipment used by the various departments. Such costs are billed to the consuming departments at a rate that includes operation and maintenance, and an amount necessary to provide replacement of the equipment at a future date. Information Technology Services Fund — This fund accounts for the costs of operating and maintaining the City's computer system, computer hardware acquisitions, telecommunication system, and connectivity to the Internet and Intranet. Such costs are billed to the consuming departments at a rate that includes operation and maintenance, and an amount necessary to provide for replacement of computers. Activities of the fund also cover cybersecurity, technology disaster recovery and administrative support, such as reception, printing and mailing. 141 CITY OF BURLINGAME, CALIFORNIA Combining Statement of Net Position Internal Service Funds JUNE 30, 2020 Information General Workers' Facilities Equipment Technology Liability Compensation OPEB Services Services Services Fund Fund Fund Fund Fund Fund Total ASSETS Current assets: Cash and investments $ 7,095,031 $ 7,332,540 $ - $ 414,544 $ 5,955,194 $ 1,366,747 $ 22,164,056 Receivable (net of uncollectible amounts of $0): Other receivables 26,598 29,207 105,866 6,549 23,557 5,219 196,996 Prepaid and Inventory 205,483 401480 245,963 Total current assets 7,121,629 7,361,747 311,349 421,093 6,019,231 1,371,966 22,607,015 Non -Current assets: Cash and investments, restricted 161,045 98,662 16,190 275,897 Capital assets: Facilities, infrastructure, and equipment, net of depreciation 75,221 1,869,876 89,973 2,035,070 Total noncurrent assets 236,266 1,968,538 106,163 2,310,967 Total assets 7,121,629 7,361,747 311,349 657,359 7,987,769 1,478,129 24,917,982 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 150,415 97,570 6,900 254,885 Deferred outflows related to OPEB 112,821 73,065 11,282 197,168 Total deferred outflows of resources 263,236 170,635 18,182 452,053 LIABILITIES Current liabilities: Accounts payable 10,957 8,121 55,578 43,066 123,382 241,104 Due to other fund 146,768 146,768 Compensated absences due in one year 1,927 3,373 5,300 Claims and litigation due in one year 376,500 1,205,200 1,581,700 Total current liabilities 387,457 1,213,321 146,768 57,505 46,439 123,382 1,974,872 Noncurrent liabilities: Compensated absences 54,627 2,374 57,001 Claims and litigation 376,500 4,820,800 5,197,300 Net pension liability 1,113,308 722,175 51,069 1,886,552 Net OPEB liability 567,935 367,805 56,793 992,533 Total noncurrent liabilities 376,500 4,820,800 1,735,870 1,092,354 107,862 8,133,386 Total liabilities 763,957 6,034,121 146,768 1,793,375 1,138,793 231,244 10,108,258 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 28,203 18,295 1,294 47,792 Deferred inflows related to OPEB 149,788 97,006 14,979 261,773 Total deferred outflows of resources 177,991 115,301 16,273 309,565 NET POSITION Net investment in capital assets 75,221 1,869,876 89,973 2,035,070 Restricted 161,045 98,662 16,190 275,897 Unrestricted (deficit) 6,357,672 1,327,626 164,581 (1,287,037) 4,935,772 1,142,631 12,641,245 Total net position $ 6,357,672 $ 1,327,626 $ 164,581 $ (1,050,771) $ 6,904,310 $ 1,248,794 $ 14,952,212 142 CITY OF BURLINGAME, CALIFORNIA Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Information General Workers' Facilities Equipment Technology Liability Compensation OPEB Services Services Services Fund Fund Fund Fund Fund Fund Total OPERATING REVENUES: Charges for services $ 1,510,000 $ 848,622 $ 4,630,616 $ 1,809,111 $ 1,175,255 $ 1,157,999 $ 11,131,603 Other revenue 2,725 2,725 Total operating revenue 1,510,000 848,622 4,630,616 1,809,111 1,177,980 1,157,999 11,134,328 OPERATING EXPENSES: Salaries and benefits 894,261 420,391 71,331 1,385,983 Retiree medical benefit 4,652,150 4,652,150 Supplies and services 28,495 119,591 11,830 895,605 164,130 1,015,586 2,235,237 Depreciation 17,091 677,026 36,907 731,024 Insurance claims and expenses 724,259 925,076 2,266 41,102 1,692,703 Total operating expenses 752,754 1,044,667 4,663,980 1,809,223 1,302,649 1,123,824 10,697,097 Operating income (loss) 757,246 (196,045) (33,364) (112) (124,669) 34,175 437,231 NONOPERATING REVENUES (EXPENSES): Investment income (expense) 261,145 273,704 21,233 216,754 52,231 825,067 Net nonoperating revenues (expenses) 261,145 273,704 21,233 216,754 52,231 825,067 Net change in net position 1,018,391 77,659 (33,364) 21,121 92,085 86,406 1,262,298 NET POSITION: Total net position, beginning, 5,339,281 1,249,967 197,945 (1,071,892) 6,812,225 1,162,388 13,689,914 Total net position, ending $ 6,357,672 $ 1,327,626 $164,581 $ (1,050,771) $ 6,904,310 $ 1,248,794 $ 14,952,212 143 CITY OF BURLINGAME, CALIFORNIA Combining Statement of Cash Flows Internal Service Funds FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Information General Workers' Facilities Equipment Technology Liability Compensation OPEB Services Services Services Fund Fund Fund Fund Fund Fund Total CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers for service charges $ 1,530,649 $ 853,997 $ 4,612,686 $ 1,817,661 $ 1,190,497 $ 1,164,654 $ 11,170,144 Payments to claims (62,033) (581,047) (643,080) Payments to suppliers (591,870) (273,704) (11,830) (909,646) (177,142) (995,634) (2,959,826) Payments to retirees and trust (4,843,401) (4,843,401) Payments to employees (844,332) (393,428) (40,123) (1,277,883) Net cash provided by (used in) operating activities 876,746 (754) (242,545) 63,683 619,927 128,897 1,445,954 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Interfund loans received (paid) 146,768 146,768 146,768 146,768 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets (318,734) (20,337) (339,071) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received on investments 261,145 273,704 21,233 216,754 52,231 825,067 261,145 273,704 21,233 216,754 52,231 825,067 Net increase (decrease) in cash and cash equivalents 1,137,891 272,950 (95,777) 84,916 517,947 160,791 2,078,718 CASH AND CASH EQUIVALENTS: Beginning of year 5,957,140 7,059,590 95,777 490,673 5,535,909 1,222,146 20,361,235 End of year $ 7,095,031 $ 7,332,540 $ - $ 575,589 $ 6,053,856 $ 1,382,937 $ 22,439,953 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Operating (loss) income $ 757,246 $ (196,045) $ (33,364) $ (112) $ (124,669) $ 34,175 $ 437,231 Adjustments for noncash activities: Depreciation and amortization 17,091 677,026 36,907 731,024 Changes in assets and liabilities: Receivables 20,649 5,375 (17,930) 8,550 12,517 6,655 35,816 Inventories and prepaid (191,251) (1,640) (192,891) Deferred outflows 58,614 38,012 3,180 99,806 Accounts payable 9,851 7,916 (11,775) 29,730 19,952 55,674 Compensated absences 11,651 2,057 13,708 Claims and litigations liabilities 89,000 182,000 271,000 Deferred inflows 149,138 96,589 14,749 260,476 Net pension liabilities 57,087 37,031 2,618 96,736 Net OPEB liabilities (226,561) (146,726) 10,661 (362,626) Total adjustments 119,500 195,291 (209,181) 63,795 744,596 94,722 1,008,723 Net cash provided by (used in) operating activities $ 876,746 $ (754) $ (242,545) $ 63,683 $ 619,927 $ 128,897 $ 1,445,954 RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET POSITION Cash and investments -current $ 7,095,031 $ 7,332,540 $ - $ 414,544 $ 5,955,194 $ 1,366,747 $ 22,164,056 Cash and investments, restricted 161,045 98,662 16,190 275,897 Total cash and investments per Statement of Net Position $ 7,095,031 $ 7,332,540 $ $ 575,589 $ 6,053,856 $ 1,382,937 $ 22,439,953 144 FIDUCIARY FUNDS Agency Funds Hotel Business Improvement District (BID) Fees Fund — This fund accounts for fee collections received as an Agent for the San Mateo County Visitors and Convention Bureau. Elementary School Development Fees Fund— This fund accounts for fee collections received as an Agent for the Burlingame Elementary School District. High School Development Fees Fund — This fund accounts for fee collections received as an Agent for the San Mateo Union High School District. Business Improvement District (BID) Fund — Broadway — This fund accounts for collections received as an Agent for the Broadway Business Improvement Project. Library Foundation Account Fund — This fund accounts for collections and disbursements by the Library Foundation. Downtown Business Improvement District Fund — This fund accounts for collections received for the Downtown Business Improvement District. Deferred Compensation — Retirees Fund — This fund is for the collection of the City's closed out deferred compensation plans. Funds will be disbursed to the account beneficiaries. Deferred Compensation — Administrative Services Fund — This fund is used to collect funding deposits from the City's deferred compensation plan vendor to pay the third party expenses associated with the City's fiduciary responsibilities in administering the plan. 145 CITY OF BURLINGAME AGENCYFUNDS COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2020 Balance Balance June 30, 2019 Additions Deductions June 30, 2020 Hotel BID Fees Assets: Cash and investments $ 191,715 $ 2,180,108 $ (2,249,612) $ 122,211 Accounts receivable 943,066 1,978,435 (1,635,822) 1,285,679 Total assets $ 1,134,781 $ 4,158,543 $ (3,885,434) $ 1,407,890 Liabilities: Accounts payable $ 200,047 $ 1,101,679 $ (1,281,500) $ 20,226 Due to other governmental units 934,734 452,930 1,387,664 Total liabilities $ 1,134,781 $ 1,554,609 $ (1,281,500) $ 1,407,890 Elementary School Development Fees Assets: Cash and investments $ 43,039 $ 300,576 $ (296,362) $ 47,253 Total assets $ 242,245 $300,576 $ (296,362) $ 47,253 Liabilities: Accounts payable $ 43,039 $336,807 $ (332,593) $ 47,253 Total liabilities $ 242,245 $336,807 $ (332,593) $ 47,253 High School Development Fees Assets: Cash and investments $ 35,150 $ 206,191 $ (208,982) $ 32,359 Total assets $ 35,150 $ 206,191 $ (208,982) $ 32,359 Liabilities: Accounts payable $ 35,150 $ 234,485 $ (237,276) $ 32,359 Total liabilities $ 35,150 $ 234,485 $ (237,276) $ 32,359 (continued) 146 CITY OF BURLINGAME AGENCYFUNDS COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2020 Balance Balance June 30, 2019 Additions Deductions June 30, 2020 BID - Broadway Assets: Cash and investments Total assets Liabilities: Accounts payable Total liabilities Library Foundation Account Fund Assets: Cash and investments Total assets Liabilities: Accounts payable Total liabilities Downtown Business Improvement District Assets: Accounts receivable Total assets Liabilities: Accounts payable Due to other governmental units Total liabilities Deferred Comp - Retirees Assets: Cash and investments Total assets Liabilities: Due to other governmental units Total liabilities $ 1,200 $ 23,246 $ (24,446) $ $ 1,200 $ 23,246 $ (24,446) $ $ 1,200 $ 24,446 $ (25,646) $ $ 1,200 $ 24,446 $ (25,646) $ $ 1,540 $ 11,514 $ (13,054) $ $ 1,540 $ 11,514 $ (13,054) $ $ 1,540 $ 11,514 $ (13,054) $ $ 1,540 $ 11,514 $ (13,054) $ $ 9,953 $ 88,603 $ (81,523) $ 17,033 $ 9,953 $ 88,603 $ (81,523) $ 17,033 $ 2,145 $ 71,673 $ (73,818) $ - 7,808 285,971 (276,746) 17,033 $ 9,953 $ 357,644 $ (350,564) $ 17,033 $ 6,428 $ - $ $ 6,428 $ 6,428 $ $ $ 6,428 $ 6,428 $ $ $ 6,428 $ 6,428 $ $ $ 6,428 (continued) 147 CITY OF BURLINGAME AGENCYFUNDS COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2020 Balance Balance June 30, 2019 Additions Deductions June 30, 2020 Deferred Comp - Admin. Services Assets: Cash and investments $ 48,532 $ 33,293 $ (16,214) $ 65,611 Accounts receivable 11,098 11,098 Total assets 48,532 $ 44,391 $ (16,214) $ 76,709 Liabilities: Accounts payable $ - $ 25,750 $ (14,750) $ 11,000 Due to other governmental units 48,532 33,293 (16,116) 65,709 Total liabilities $ 48,532 $ 59,043 $ (30,866) $ 76,709 Totals - All Agency Funds Assets: Cash and investments $ 327,604 $ 2,754,928 $ (2,808,670) $ 273,862 Accounts receivable 953,019 2,078,136 (1,717,345) 1,313,810 Total assets $ 1,280,623 $ 4,833,064 $ (4,526,015) $ 1,587,672 Liabilities: Accounts payable $ 283,121 $ 1,806,354 $ (1,978,637) $ 110,838 Due to other governmental units 997,502 772,194 (292,862) 1,476,834 Total liabilities $ 1,280,623 $ 2,578,548 $ (2,271,499) $ 1,587,672 148 STATISTICAL SECTION Comprehensive Annual Financial Report June 30, 2020 STATISTICAL SECTION Contents Financial Trends Pages These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed overtime. 152-159 Revenue Capacity These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and other taxes. 160-166 Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 167-171 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. Operating Information 172-174 These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 176-178 151 CITY OF BURLINGAME, CALIFORNIA NET POSITION BY COMPONENT Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Governmental activities: Net investment in capital assets Restricted Unrestricted - restated per GASB 75 Total governmental activities net position Business -type activities: Net investment in capital assets Restricted Unrestricted - restated per GASB 75 Total business -type activities net position Primary government: Fiscal Year (1) (1) (1) (2) 2011 2012 2013 2014 $ 51,521 $ 78,903 $ 64,020 $ 72,956 8,674 12,102 26,400 45,863 49,259 27,234 34,841 14,732 $ 109,454 $ 118,239 $ 125,261 $ 133,551 $ 38,406 $ 40,381 $ 43,469 $ 46,341 - 5,014 5,050 451 17,736 14,788 16,093 27,092 $ 56,142 $ 60,183 $ 64,612 $ 73,884 Net investment in capital assets $ 89,927 $ 119,284 $ 107,489 $ 119,297 Restricted 8,674 17,116 31,450 46,314 Unrestricted 66,995 42,022 50,934 41,824 Total primary government net position $ 165,596 $ 178,422 $ 189,873 $ 207,436 (1) Reclassifications in the categories were made to stay consistent and comparable with the presentation in the current year. (2) 2012 reflects net position as originally stated and does not include the effect of implementation of GASB Statement No. 65 in 2013 which restated beginning net position. 152 Fiscal Year 2015 2016 2017 2018 2019 2020 $ 74,346 $ 79,019 $ 82,624 $ 87,689 $ 98,575 $ 107,083 36,446 38,414 43,383 26,901 28,852 77,137 (26,763) (25,511) (9,583) 6,415 25,681 (12,700) $ 84,029 $ 91,922 $ 116,424 $ 121,005 $ 153,108 $ 171,520 $ 50,485 $ 54,587 $ 61,071 $ 66,077 $ 69,494 $ 74,432 451 12,367 11,963 12,155 15,485 20,020 22,038 26,002 30,125 31,760 36,559 39,748 $ 72,974 $ 92,956 $ 103,159 $ 109,992 $ 121,538 $ 134,200 $ 124,831 $ 133,606 $ 143,695 $ 153,766 $ 153,766 $ 181,515 36,897 50,781 55,346 39,056 39,056 97,157 (4,725) 491 20,542 38,176 38,176 27,048 $ 157,003 $ 184,878 $ 219,583 $ 230,998 $ 230,998 $ 305,720 153 CITY OF BURLINGAME, CALIFORNIA CHANGE IN NET POSITION Last Ten Fiscal Years (accrual basis accounting) (amounts expressed in thousands) 2011 2012 2013 2014 Expenses Governmental activities: General government $ 6,803 $ 6,358 $ 6,188 $ 7,295 Public safety 21,141 20,265 21,163 19,141 Public works 8,514 8,248 9,268 12,961 Community development 1,752 1,245 941 1,007 Parks, recreation and library 10,475 9,828 11,065 11,162 Shuttle operations 324 249 179 188 Financing and other activities 2,656 2,215 3,552 2,812 Total governmental activities expenses 51,665 48,408 52,356 54,567 Business -type activities: Water 9,569 11,082 12,127 10,745 Sewer 9,509 9,686 9,553 9,332 Waste management 936 681 634 467 Landfill - - - 177 Parking 1,454 1,435 1,350 1,183 Building 1,141 1,222 1,317 1,254 Total business -type activities expenses 22,608 24,107 24,980 23,158 Total primary government expenses $ 74,273 $ 72,516 $ 77,336 $ 77,725 Program Revenue Governmental activities: Charges for services: General government $ 616 $ 2 $ 117 $ 302 Public safety 2,202 1,053 212 1,097 Public works 1,713 560 3,230 4,075 Community development 744 319 384 738 Parks, recreation and library 2,744 2,760 2,880 2,919 Shuttle operations 72 - - - Operating grants and contributions 2,210 1,165 987 738 Capital grants and contributions 3,189 3,520 357 1,249 Total government activities program revenues 13,490 9,379 8,167 11,118 Business -types activities: Charges for services: Water 12,734 13,708 14,875 16,023 Sewer 14,566 16,157 16,791 16,931 Waste management 653 465 564 1,694 Landfill - - - 350 Parking 1,802 1,950 2,428 2,477 Building 1,404 1,580 1,707 2,057 Capital grants and contributions - - - - Total business -type activities program revenues 31,159 33,860 36,365 39,532 Total primary governmental program revenues $ 44,649 $ 43,239 $ 44,532 $ 50,651 Net(expenses)/revenue Government activities $ (38,175) $ (39,029) $ (44,189) $ (43,449) Business -type activities 8,551 9,753 11,385 16,374 Total primary government net expenses $ (29,624) $ (29,277) $ (32,804) $ (27,075) General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes $ 13,310 $ 13,672 $ 14,394 $ 15,497 Sales tax 8,041 8,495 9,199 10,196 Transient occupancy tax 13,404 16,183 18,244 21,357 Other taxes 5,037 4,478 5,311 4,595 Other general revenue - - - 344 Special Item - OPEB pre -funding - - - (6,600) Investment earnings (expense) 805 472 148 576 Transfers 1,282 4,513 3,916 5,774 Total governmental activities 41,879 47,813 51,212 51,739 Business -type activities: Othertaxes - 228 314 - Other general revenue - - Investment earnings (expense) (1,145) (1,427) (3,353) (1,329) Transfers (1,282) (4,513) (3,916) (5,774) Total primary government (2,427) (5,712) (6,955) (7,103) Change in Net Position Government activities 3,704 8,784 7,023 8,290 Business -type activities 6,124 4,041 4,430 9,271 Total primary government $ 9,828 $ 12,825 $ 11,453 $ 17,562 154 2015 2016 2017 2018 2019 2020 $ 4,231 $ 4,275 $ 4,757 $ 5,785 $ 6,181 $ 6,710 23,005 26,296 25,710 27,244 28,634 31,551 8,267 8,312 7,353 7,929 7,574 7,639 1,145 1,162 1,386 1,817 1,755 2,376 15,832 13,786 14,581 16,925 16,875 16,062 135 137 150 191 168 156 2,422 2,639 3,075 2,210 1,814 2,144 55,037 56,607 57,012 62,101 63,001 66,638 11,471 12,822 13,806 14,671 14,855 15,096 10,144 10,960 10,345 11,205 11,874 12,224 481 487 676 789 728 637 67 56 77 406 224 213 1,296 445 635 1,053 926 1,005 1,368 1,420 2,054 1,580 2,495 2,354 24,827 26,190 27,593 29,704 31,102 31,529 $ 79,864 $ 82,797 $ 84,605 $ 91,805 $ 94,103 $ 98,167 $ 116 $ 123 $ 122 $ 119 $ 109 $ 115 1,066 1,009 1,075 1,140 1,386 1,496 3,870 3,477 4,316 4,186 4,122 4,219 657 890 5,900 702 1,332 3,053 3,372 3,405 3,860 4,208 4,261 2,924 - 150 - - - - 1,127 591 978 830 629 424 740 439 150 1,218 508 196 10,948 10,084 16,401 12,403 12,347 12,427 15,425 15,158 16,375 18,623 19,664 20,615 15,679 15,634 15,798 15,837 15,715 15,127 943 778 780 700 617 617 445 437 447 465 483 480 2,573 2,649 2,766 2,820 2,773 1,930 1,980 2,257 4,087 4,413 3,221 3,861 - 42,858 42,630 - - - 37,045 79,771 82,883 42,858 42,473 42,630 $ 47,993 $ 89,855 $ 99,284 $ 55,261 $ 54,820 $ 55,057 $ (44,089) $ (46,523) $ (40,611) $ (49,698) $ (50,654) $ (54,211) 12,218 53,581 55,290 13,154 11,371 11,101 $ (31,871) $ 7,058 $ 14,679 $ (36,544) $ (39,283) $ (43,110) $ 16,677 $ 17,645 $ 18,933 $ 20,335 $ 21,956 $ 23,304 11,101 12,828 12,089 12,820 17,820 14,803 23,698 26,092 26,263 27,936 29,384 20,417 4,697 4,589 4,407 4,869 5,214 5,503 1,254 233 427 381 466 383 481 1,292 266 624 5,758 6,000 3,127 (8,114) 2,730 2,863 2,157 2,213 61,037 54,565 65,115 69,828 82,755 72,623 382 144 185 203 831 (1,451) 762 128 235 2,127 2,942 (3,127) 8,114 (2,730) (2,864) (2,157) (2,213) (4,578) 9,258 (2,458) (2,444) 173 1,560 16,947 7,893 24,503 20,132 32,103 18,411 7,640 19,982 10,202 10,709 11,545 12,663 S 24,587 $ 27,875 $ 34,705 $ 30,841 $ 43,648 $ 31,074 155 CITY OF BURLINGAME, CALIFORNIA FUND BALANCE OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (modified accrual basis of accounting) (amounts express in thousands) 2011 (1) 2012 2013 2014 2015 General Fund: Nonspendable $ 3 $ 1 $ 217 $ 221 $ 224 Restricted - - - - - Committed - - - - - Assigned 10,200 11,927 12,300 9,413 18,773 Unassigned 1,665 3,591 7,430 13,251 10,465 Reserved Unreserved $ 29,462 Total general fund $ 11,868 $ 15,519 $ 19,947 $ 22,885 $ 375 All other governmental funds: 10,851 Nonspendable $ 475 $ 204 $ 396 $ 383 25,220 Restricted 5,756 11,898 26,004 17,417 8,762 Committed - - 19,412 28,063 - Assigned 16,140 13,246 1,166 651 Unassigned - - - - $ 45,208 Subtotal all other governmental funds $ 22,370 $ 25,348 $ 46,978 $ 46,514 $ 74,670 Reserved Unreserved, reported in: Debt service funds Special revenue funds Capital projects funds Total all other governmental funds $ 34,238 $ 40,867 $ 66,925 $ 69,399 $ 74,670 2016 2017 2018 2019 2020 General Fund: Nonspendable $ 337 $ 215 $ 6 $ 4 $ 7 Restricted - 12 4,391 7,480 10,824 Committed - - - - - Assigned 18,638 19,386 19,930 21,582 21,728 Unassigned 11,003 13,659 12,046 20,102 12,268 Subtotal General Fund $ 29,978 $ 33,272 $ 36,373 $ 49,168 $ 44,827 All other governmental funds: Nonspendable $ 575 $ - $ - $ - $ - Restricted 21,034 25,196 22,325 21,117 66,037 Committed 20,874 22,359 27,005 27,765 36,439 Assigned 13,500 20,500 25,800 30,800 24,656 Unassigned 97 (5) - - - Subtotal all other governmental funds $ 56,080 $ 68,050 $ 75,130 $ 79,682 $ 127,132 Total governmental fund balance $ 86,058 $ 101,322 $ 111,503 $ 128,850 $ 171,959 (1) Beginning in fiscal year 2011, the City implemented GASB Statement No. 54 which provided updated guidance on fund balance designation and reporting. 156 Comprehensive Annual Financial Report June 30, 2020 CITY OF BURLINGAME, CALIFORNIA CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (modified accrual basis of accounting) (amounts expressed in thousands) REVENUES: Property taxes Sales and use taxes Transient occupancy taxes Othertaxes Licenses and permits Fines, forfeitures, and penalties Investment income Motor vehicle in lieu tax Intergovernmental Charges for services Grant and governmental revenues Other revenue Total revenues EXPENDITURES: Current General government Public safety Public works Community development Parks, recreation and library Shuttle operations Other Capital Outlay Debt service: Principal Interest Cost of issuance Total expenditures EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transferin Transfer out Pension obligation bonds issued Payment to PERS retirement Refund bond issued Premium on bonds issued Proceeds from issuance of debt Payments to refunded bond escrow agent Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures Fiscal Year 2011 2012 2013 2014 2015 $ 13,310 $ 13,672 $ 15,539 $ 15,497 $ 16,677 8,041 8,495 9,199 10,196 11,101 13,404 16,183 18,244 21,357 23,698 2,416 2,582 2,970 2,970 3,048 97 100 102 112 84 1,025 889 933 874 921 803 472 148 391 374 148 - - - - 1,500 1,896 2,115 1,625 1,648 6,121 6,270 6,721 7,704 8,076 662 1,216 267 1,987 1,867 845 904 370 345 1,255 48,371 52,680 56,608 63,058 68,749 5,458 6,669 5,699 5,989 4,434 17,378 18,392 18,895 20,082 23,231 5,713 9,790 7,834 11,280 8,311 731 1,172 854 1,041 1,244 8,620 9,463 9,328 10,485 15,145 139 145 179 188 135 17 - - - - 4,023 - 6,447 3,205 6,594 7,526 3,034 3,527 4,631 4,964 2,425 2,304 2,337 2,752 2,548 (3,660) 1,711 1,507 3,404 2,142 26,312 29,276 33,209 33,520 33,694 (25,029) (24,763) (29,293) (34,448) (30,567) 20,300 405 20,637 (305) - - - - 21,278 4,918 24,553 (929) 3,127 $ 17,618 $ 6,630 $ 26,058 $ 2,473 $ 5,270 21% 10% 12% 13% 13% 158 Fiscal Year 2016 2017 2018 2019 2020 $ 17,645 $ 18,933 $ 20,335 $ 21,956 $ 23,304 12,828 12,089 12,819 17,820 14,803 26,092 26,263 27,936 29,384 20,416 3,154 3,024 3,216 3,233 3,134 86 88 83 85 99 864 898 976 1,209 793 1,036 309 547 5,059 5,174 1,435 1,383 1,653 1,980 2,369 7,919 14,284 9,298 9,918 11,257 1,075 779 2,048 1,010 443 391 427 378 416 553 72,525 78,477 79,289 92,070 82,345 4,917 5,148 5,604 5,922 6,515 25,057 25,646 26,448 27,647 28,631 7,330 6,238 6,617 6,313 6,593 1,406 1,531 1,812 1,710 2,374 12,725 13,590 15,642 16,128 15,188 137 150 160 168 156 3,885 4,863 8,080 14,429 14,295 5,832 5,596 5,246 2,600 3,929 2,633 3,182 2,364 1,963 2,697 303 63,922 65,944 71,973 76,880 80,681 8,603 12,533 7,316 15,190 1,664 30,150 26,378 29,605 28,964 28,731 (38,264) (23,648) (26,741) (26,806) (26,518) 1,045 - 9,855 39,232 2,786 2,730 2,864 2,158 41,445 $ 11,389 $ 15,263 $ 10,180 $ 17,348 $ 43,109 13% 14% 14% 7% 10% 159 CITY OF BURLINGAME, CALIFORNIA ASSESSED VALUES OF TAXABLE PROPERTY Last Ten Fiscal Years Category 2010-11 2011-12 2012-13 2013-14 2014-15 Residential $4,964,900,673 $5,067,435,558 $5,292,630,080 $5,657,587,039 $ 6,106,922,682 Commercial 1,197,204,546 1,203,204,597 1,264,338,491 1,304,028,690 1,406,432,281 Industrial 445,945,589 449,409,192 469,569,724 487,612,064 491,904,917 Government 477,622 481,217 490,841 1,131,741 1,136,878 Institutional 5,108,197 5,179,683 5,313,527 5,686,994 6,739,774 Miscellaneous 47,603,695 46,149,474 47,731,445 52,216,889 52,541,265 Recreational 21,392,656 21,565,053 21,330,221 21,756,820 27,696,881 Vacant Land 50,379,786 44,684,470 53,260,644 61,242,201 42,238,634 SBE Nonunitary 3,680,597 2,560,452 2,560,452 2,560,452 2,560,452 Unsecured 274,429,627 270,906,684 275,840,943 302,712,785 307,284,506 Unknown - - - 45,233,193 - TOTALS $7,011,122,988 $7,111,576,380 $7,433,066,368 $7,941,768,868 $ 8,445,458,270 Total Direct Rate 0.14520 0.14519 0.14209 0.14205 0.14235 Note Exempt values are not included in the total. In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1%, based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or Source: San Mateo County Assessor 2010/11- 2019/20 Combined Tax Rolls 160 2015-16 $ 6,543,165,637 1,487,657,043 500,290,183 16,859,592 5,545,746 63,818,615 30,269,253 43,082,544 2,763,435 324,903,282 2016-17 $ 6,996,722,454 1,665,932,944 523,550,270 17,116, 700 5,634,571 76,577,551 30,095,025 62,448,455 2,763,435 329,134,973 2017-18 $ 7,392,749,191 1,857,291,724 545,609,274 17,459,033 5,743,999 102,398,944 30,696,916 63,823,350 2,763,435 338,411,794 2018-19 $ 7,873,773,642 1,978,102, 748 650,767,854 40,103,131 5,819,973 2,461,921 52,691,864 18,242,238 2,763,435 344,682,252 2019-20 $ 8,453,667,110 2,064, 268,140 770,865,330 39,254,268 5,958,515 2,511,155 53,744,894 31,975,517 3,841,026 360,169,404 $ 9,018,355,330 $ 9,709,976,378 $10,356,947,660 $10,969,409,058 $11,786,255,359 0.14250 0.14246 0.14245 0.14245 0.14242 161 CITY OF BURLINGAME, CALIFORNIA NET TAXABLE ASSESSED VALUE HISTORY Last Ten Fiscal Years TAXABLE PROPERTY VALUES LIEN YEAR SECURED UNSECURED SBE NONUNITARY NET TOTAL ASSESSED VALUE % CHANGE 2010/11 $ 6,733,012,764 $ 274,429,627 $ 3,680,597 $ 7,011,122,988 0.64% 2011/12 6,838,109,244 270,906,684 2,560,452 7,111,576,380 1.43% 2012/13 7,154,664,973 275,840,943 2,560,452 7,433,066,368 4.52% 2013/14 7,636,495,631 302,712,785 2,560,452 7,941,768,868 6.84% 2014/15 8,135,613,312 307,284,506 2,560,452 8,445,458,270 6.34% 2015/16 8,690,688,613 324,903,282 2,763,435 9,018,355,330 6.78% 2016/17 9,378,077,970 329,134,973 2,763,435 9,709,976,378 7.67% 2017/18 10,015,772,431 338,411,794 2,763,435 10,356,947,660 6.66% 2018/19 10,621,963,371 344,682,252 2,763,435 10,969,409,058 5.91% 2019/20 11,422,244,929 360,169,404 3,841,026 11,786,255,359 7.45% Source: San Mateo County Assessor 162 CITY OF BURLINGAME, CALIFORNIA PROPERTY TAX RATES --DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Years (per $100 of assessed value) General DEBT AND/OR SPECIAL ASSESSMENTS County, Community Elementary High Fiscal City and Peninsula College School School Total Year Schools i1uzi City County Hospital District District District Tax Rate 2011 1.000000 0.000000 0.000000 0.000000 0.019300 0.132300 0.032200 1.183800 2012 1.000000 0.000000 0.000000 0.000000 0.019900 0.138800 0.038300 1.197000 2013 1.000000 0.000000 0.000000 0.000000 0.019400 0.144800 0.038100 1.202300 2014 1.000000 0.000000 0.000000 0.000000 0.019400 0.177200 0.035500 1.232100 2015 1.000000 0.000000 0.000000 0.000000 0.019000 0.101500 0.047500 1.168000 2016 1.000000 0.000000 0.000000 0.000000 0.025000 0.090000 0.046600 1.161600 2017 1.000000 0.000000 0.000000 0.000000 0.024700 0.082400 0.041500 1.148600 2018 1.000000 0.000000 0.000000 0.000000 0.023500 0.103800 0.043300 1.170600 2019 1.000000 0.000000 0.000000 0.000000 0.017500 0.097700 0.040700 1.155900 2020 1.000000 0.000000 0.000000 0.000000 0.026600 0.092500 0.038500 1.157600 City's Share of 1% Levy Per Prop 13 "' Redevelopment Rate "' Total Direct Rate 1.14472 0.14242 Note: (1) In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies in which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds. (2) Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners. (3) City's share of 1% levy is based on the City's share of the General Fund tax rate area with the largest net taxable value within the city. Educational Revenue Augmentation Fund (ERAF) General Fund tax shifts may not be included in tax ratio figures. (4) Redevelopment Agency (RD) rate is based on the largest RDA tax rate area (TRA) and includes only rate(s) from indebtedness adopted prior to 1989 per California State Statute. RDA direct and overlapping rates are applied only to the incremental property values. The approval of ABX1 26 eliminated RDA from the State of California for the fiscal year 2012/13 and years thereafter. (5) Total Direct Rate is the weighted average of all individual direct rates applied to by the government preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013-14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during 2012-13. For the purposes of this report, residual revenue is assumed to be distributed to the City in the same proportions as general fund revenue. 163 CITY OF BURLINGAME, CALIFORNIA TOP TEN PROPERTY TAXPAYERS June 30, 2020 (amounts expressed in thousands) 2020 2011 Percentage of Percentage Total of Taxable Taxable Taxable Total Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value (1) Value Rank Value (1) HMC Burlingame Hotels LLC $ 226,565 1 1.92% Bay Park Plaza Associates $ 90,000 1 1.28% Burlingame Point LLC 181,115 2 1.54% HMC Burlingame Hotel LLC 84,581 2 1.21% EQR-NorthPark LP 127,919 3 1.09% Host Marriott Corporation 70,754 3 1.01% Inland American Lodging Burlingame LLC 117,215 4 0.99% EQR-Skyline Terrace LP 46,485 4 0.66% EW PG Airport Owner LLC 102,250 5 0.87% Mills -Peninsula Health Services 40,521 5 0.58% Shac Carolan Apartments LLC 64,915 6 0.55% Felcor CSS Holdings LP 39,850 6 0.57% Felcor CSS Holdings LP 60,383 7 0.51% EQR-NorthPark LP 34,551 7 0.49% IP Woodstock One Bay LLC 58,154 8 0.49% Pauls Rollins Road LLC 34,000 8 0.48% Pur Skyline MMC II LLC 48,999 9 0.42% Harbor View Hotels Inc. 28,907 9 0.41% Romel Chicago LLC 43,059 10 0.37% 350 Beach Road LLC 26,467 10 0.38% $ 1,030,573 8.75% $ 496,116 7.07% (1) 2019-20 Local Combined Assessed Valuation $ 11,426,086 Source: San Mateo County Assessor Combined Tax Rolls and the SBE Non Unitary Tax Roll 164 6 CITY OF BURLINGAME, CALIFORNIA PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years Fiscal Year Total Tax Levy 2011 $ 11,729,356 2012 11,900,220 2013 12,446,101 2014 13,312,310 2015 14,167,158 2016 15,144,338 2017 16,321,692 2018 17,425,188 2019 18,469,901 2020 19,862,525 Notes: Collected Within Year of Levy Total Collections Current Delinquent Total Tax Tax Tax Collections % of Levy Collections Collections % of Levy $ 10,050,908 85.69% - $ 10,050,908 85.69% 10,976,456 92.24% - 10,976,456 92.24% 11,762,421 94.51% - 11,762,421 94.51% 12,745,227 95.74% - 12,745,227 95.74% 13,744,014 97.01% - 13,744,014 97.01% 14,512,541 95.83% - 14,512,541 95.83% 15,570,855 95.40% - 15,570,855 95.40% 16,758,071 96.17% - 16,758,071 96.17% 18,490,239 100.11% - 18,490,239 100.11% 19,780,067 99.58% - 19,780,067 99.58% (1) Current tax collections are less than the levy due to roll corrections, county administrative charges, and other adjustments which may occur after the date of levy. (2) The City participates in the Teeter Plan under California State law. Under the Teeter Plan, the County remints the entire tax levy and manages delinquent tax collections with the associated interest and penalties. Source: San Mateo County Controller's Office; Audited City financial records 165 CITY OF BURLINGAME, CALIFORNIA GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE (accrual basis of accounting) (amounts expressed in thousands) Transient Inter - Fiscal Property Sales & Use Occupancy governmental year Tax Tax Tax Other Taxes Revenues Total 2011 $ 13,310 $ 8,041 $ 13,404 $ 2,070 $ 1,500 $ 38,325 2012 13,672 8,495 16,183 2,582 1,896 42,828 2013 14,394 9,199 18,244 4,217 2,115 48,169 2014 15,497 10,196 21,357 2,970 1,625 51,645 2015 16,677 11,101 23,698 3,048 1,648 56,172 2016 17,645 12,828 26,092 3,154 1,435 61,154 2017 18,933 12,089 26,263 3,024 1,383 61,692 2018 20,335 12,820 27,936 3,216 1,653 65,960 2019 21,956 17,820 29,384 3,233 1,980 74,373 2020 23,304 14,803 20,417 3,134 2,369 64,027 Source: Audited City Financial records - Governmental Funds 166 CITY OF BURLINGAME, CALIFORNIA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years Fiscal Year Lease Revenue Bond Storm Drainage Governmental Activities Pension Obligation Direct Bonds Borrowing 1�1 State Loans Lease Purchase Business -Type Activities Sewer Water Bonds Bonds Total Primary Government Percentage of Personal Income Ill Per Capita Ill 2011 $ 11,555,000 $ 9,805,000 $ 26,010,000 $ - $ 11,776,097 $ 1,500,000 $ 20,470,000 $ 27,625,000 $ 108,741,097 7.78% 3,736 2012 10,935,000 9,560,000 24,235,000 - 13,466,890 1,305,907 18,225,000 25,925,000 103,652,797 6.91% 3,522 2013 19,985,000 19,630,000 22,275,000 - 364,204 1,104,952 17,525,000 24,895,000 105,779,156 7.14% 3,563 2014 18,889,859 19,596,924 20,095,000 - 320,209 897,598 30,260,807 24,550,763 114,611,160 7.74% 3,861 2015 16,999,489 19,083,477 17,695,000 - 274,884 683,639 28,729,137 23,372,756 106,838,382 6.41% 3,597 2016 15,040,564 28,920,064 15,050,000 - 228,210 462,866 27,143,163 22,154,450 108,999,317 6.03% 3,667 2017 13,773,133 28,060,024 12,145,000 - - - 25,861,091 21,262,243 101,101,491 5.44% 3,353 2018 12,465,703 27,169,985 8,970,000 - - - 24,129,246 19,895,915 92,630,849 4.77% 3,058 2019 11,118,270 26,249,945 8,510,000 - - - 22,351,473 18,499,587 86,729,275 4.11% 2,861 2020 47,666,927 25,289,905 8,005,000 298,145 - - 20,522,219 17,068,259 118,850,455 5.53% 3,946 Note: (1) Details regarding the City's outstanding debt can be found in the Notes to the Basic Financial Statements. Furthermore, please reference the schedule of Demographic and Economic Statistics for personal income and per capita data. Data for calendar year 2018 is not available. Therefore, in order to present a useful estimate, personal income data for calendar year 2016 has been used. (2) PG&E on -bill financing loans - issued in fiscal year 2020. 167 CITY OF BURLINGAME, CALIFORNIA RATIOS OF GENERAL BONDED DEBT OUTSTANDING Last Ten Fiscal Years General Fiscal Obligation Year Bonds 2011 $ 26,010,000 2012 24,235,000 2013 22,275,000 2014 20,095,000 2015 17,695,000 2016 15,050,000 2017 12,145,000 2018 8,970,000 2019 8,510,000 2020 8,005,000 Note: Percentage of Estimated Actual Taxable Net Total Value of Burlingame Per Assesssed Value Property Population Capita $ 7,011,122,988 0.37% 29,342 $ 886 7,111,576,380 0.34% 29,106 833 7,433,066,368 0.30% 29,426 757 7,941,768,868 0.25% 29,685 677 8,445,458,270 0.21% 29,700 596 9,018,355,330 0.17% 29,724 506 9,709,976,378 0.13% 30,148 403 10,356,947,660 0.09% 30,294 296 10,969,409,058 0.08% 30,317 281 11,786,255,359 0.07% 30,118 266 The City has had no general obligations bonds outstanding over the last ten years. However, because the 2006 Pension Obligation Bonds are to be repaid with general government resources, they are shown as general obligation bonds included in this table. CITY OF BURLINGAME, CALIFORNIA COMPUTATION OF DIRECT AND OVERLAPPING DEBT* June 30, 2020 2018-19 Assessed Valuation** : $11,786,255,359 City's share of Total Debt Percent Debt June 30, 2020 Applicable (1) June 30, 2020 OVERLAPPING TAX AND ASSESSMENT DEBT: San Mateo Community College District $ 766,683,503 4.925% $ 37,759,163 San Mateo Union High School District 623,906,623 14.111% 88,039,464 Burlingame School District 138,392,486 94.765% 131,147,639 Hillsborough School District 76,317,457 0.147% 112,187 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 1,605,300,069 $ 257,058,453 DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT: San Mateo County General Fund Obligations $ 515,920,256 4.925% $ 25,409,073 San Mateo County Board of Education Certificates of Participation 7,505,000 4.925% 369,621 City of Burlingame, direct debt 81,259,977 100.000% 81,259,977 (3) TOTAL GROSS DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $ 604,685,233 $ 107,038,671 Less: City of Burlingame General Fund Obligations supported from enterprise revenues 4,563,707 (3) Less: City of Burlingame Pension Obligations supported by enterprise revenues 2,001,250 (3) TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 100,473,714 TOTAL GROSS DIRECT DEBT $ 81,259,977 TOTAL NET DIRECT DEBT $ 74,695,020 TOTAL OVERLAPPING DEBT $ 282,837,147 GROSS COMBINED TOTAL DEBT $ 364,097,124 (2) NET COMBINED TOTAL DEBT $ 357,532,167 Ratios to 2019-20 Assessed Valuation: Total Overlapping Tax and Assessment Debt 2.18% * Source: California Municipal Statistics, Inc. Total Gross Direct Debt 0.69% ** Total assessed valuation less other exemptions Total Net Direct Debt 0.63% Source: San Mateo County Assessor Gross Combined Total Debt 3.09% Net Combined Total Debt 3.03% Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Burlingame. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and, therefore responsible for repaying the debt of each overlapping government. (1) The percentage of overlapping debt applicable to the city is estimated using taxbalbe assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the ditrict's total assessed value. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non -bonded capital lease obligations. (3) Outstanding debt includes unamortized bond premium. Changed from source to reflect the amount shown in the Note 6 to the Financial Statement. Source: California Municipal Statistics 169 CITY OF BURLINGAME, CALIFORNIA LEGAL DEBT MARGIN INFORMATION Last Ten Fiscal Years (amount expressed in thousands) Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Debt limit $ 266,684 $ 295,550 $ 295,550 $ 297,816 $ 299,010 $ 323,138 $ 351,979 $ 379,416 $ 402,843 $ 433,980 Pension Obligation Bond $ 26,010 $ 24,235 $ 22,275 $ 20,095 $ 17,695 $ 15,050 $ 12,145 $ 8,970 $ 8,510 $ 8,005 Total net debt applicable to the limit as a percentage of debt limit 9.8% 8.2% 7.5% 6.7% 5.9% 4.7% 3.5% 2.4% 2.1% 1.8% Legal Debt Margin Calculation for Fiscal Year 2020 Gross Assessed Valuation $ 11,786,255,359 Multiplied by: (1) 0.0375 441,984,576 Less: Amount of Debt Applicable 8,005,000 Legal Debt Margin $ 433,979,576 (1) California Government, Code Section 43605 sets the debt limit at 15%. The Code section was enacted when assessed valuations were based on 25%of full market value. This has sincechanged to 100% of full market value. Thus, the limit shown is 3.75% (one-fourth the limit of 15%). 170 CITY OF BURLINGAME, CALIFORNIA PLEDGED REVENUE COVERAGE Last Ten Fiscal Years Water Revenue Bonds Less: Net Fiscal Water Operating Available Debt Service Year Charges Expenses Revenue Principal Interest Coverage 2011 12,734,554 7,747,436 4,987,118 975,000 1,218,998 2.27 2012 13,708,448 9,112,553 4,595,895 1,225,000 1,232,332 1.87 2013 14,874,705 9,577,242 5,297,463 1,220,000 1,295,085 2.11 2014 16,023,092 8,955,437 7,067,655 1,125,000 942,966 3.42 2015 15,425,234 9,507,833 5,917,401 1,095,000 964,149 2.87 2016 15,178,439 9,945,476 5,232,963 1,135,000 928,601 2.54 2017 16,385,236 10,933,600 5,451,636 1,240,000 705,220 2.80 2018 18,635,292 11,843,823 6,791,469 1,180,000 772,751 3.48 2019 19,683,908 12,043,332 7,640,576 1,210,000 737,151 3.92 2020 20,641,914 12,343,328 8,298,586 1,245,000 696,600 4.27 Wastewater Revenue Bonds Less: Net Fiscal Wastewater Operating Available Debt Service Year Charges Expenses Revenue Principal Interest Coverage 2011 14,566,587 6,927,346 7,639,241 375,000 824,648 6.37 2012 16,157,287 6,932,146 9,225,141 405,000 786,381 7.74 2013 16,791,449 6,297,799 10,493,650 700,000 780,966 7.09 2014 16,931,432 6,448,667 10,482,765 750,000 693,981 7.26 2015 15,679,343 7,071,969 8,607,374 750,000 695,633 5.95 2016 15,634,340 6,973,545 8,660,795 785,000 668,183 5.96 2017 15,821,906 7,081,664 8,740,242 870,000 470,705 6.52 2018 15,866,790 7,421,431 8,445,359 795,000 541,101 6.32 2019 15,732,905 8,122,946 7,609,959 820,000 519,101 5.68 2020 15,440,418 8,476,479 6,963,939 850,000 494,050 5.18 Notes: Details regarding the City's outstanding debt can be found in the Notes to the Basic Financial Statements. Operating expenses, for purposes of calculating debt service coverage, do not include depreciation and amortization. The above reference debt service only includes parity debt. 171 CITY OF BURLINGAME, CALIFORNIA DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Fiscal Years Personal Income % of Population % of Population (amounts Per Capita 25+ with High 25+ with Calendar expressed Personal School Degree Bachelor's Unemployment Year Population (1) in thousands)(2) Income (2) (3) Degree (3) Rate (4) 2010 29,342 $ 1,274,382 $ 43,432 94.4% 51.8% 6.5% 2011 29,106 1,396,972 47,996 94.1% 53.4% 5.8% 2012 29,426 1,500,785 51,002 95.2% 54.1% 3.7% 2013 29,685 1,480,747 49,882 95.2% 54.6% 3.0% 2014 29,700 1,667,596 56,148 95.5% 58.3% 3.3% 2015 29,724 1,808,528 60,844 95.8% 58.0% 2.6% 2016 30,148 1,856,902 61,592 96.6% 58.5% 2.3% 2017 30,294 1,943,371 64,150 96.3% 60.5% 2.2% 2018 30,317 2,109,904 69,594 96.4% 63.6% 2.2% 2019 30,118 2,147,950 71,317 95.2% 65.3% 1.9% Sources: (1) California State Department of Finance (2) Income Data: ESRI provided by HDL, Coren & Cone (3) For 2008, education level attained for population 25 years of age and over was not available. (4) State of California Employment Development Department for San Mateo County 172 CITY OF BURLINGAME, CALIFORNIA PRINCIPAL EMPLOYERS Last Fiscal Year and Nine Years Ago Business Name Mills-Penninsula Medical Center - Sutter Health Lufthansa Service Holding Group Sky Chefs Inc Flying Food Group** Hyatt Regency SF Airport* Burlingame School District Lahlouh Inc. Burlingame Long Term Care Guittard Chocolate CO* American Medical Response (AMR)* Putnam Auto Virgin America, Inc Wright Medical technology Inc United Natural Foods Critchfield Mechanical, Inc California Teachers Association Getinge USA Wine Warehouse Berkeley Farms ECC Remediation Services Corp Total Top 10 Employers Total City Labor Force (2) 2019-20 2010-11 Number of Percent of Total Number of Employees Employment (%) Employees (1) 1,980 11.72% 561 3.32% 433 2.56% 364 2.15% 467 351 2.08% 330 1.95% 295 1.75% 272 1.61% 265 1.57% 158 0.93% 5,009 16,900 Source: Avenu Insights & Analytics Results based on direct correspondence with city's local businesses. * Includes full and part time ** Inlcudes 2 locations in Burlingame (1) 2010-11 Prior year data provided by previous published CAFR. (2) Total City Labor Force provided by EDD Labor Force Data. 2,056 1,200 555 517 500 500 483 463 460 29.64% 7,201 173 CITY OF BURLINGAME, CALIFORNIA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Last Ten Fiscal Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Function General government 18.00 18.00 18.00 18.00 19.00 19.63 19.88 19.88 19.88 23.53 Public safety Police: Officers 37.00 37.00 37.00 37.00 37.00 37.00 39.00 39.00 40.00 40.00 Civilians 18.25 18.25 17.25 19.25 19.25 20.00 20.00 20.00 20.00 20.00 Fire: Firefighters and officers - - - - - - - - - - Civilians - - - - - - - - - - Public works 61.15 61.15 61.14 61.75 62.74 62.99 62.99 64.99 64.99 64.99 Community development 10.00 10.00 10.00 11.00 11.00 11.75 12.75 12.75 12.75 17.00 Leisure and culture 49.77 49.77 49.52 51.67 52.18 53.93 54.38 54.38 54.63 55.50 Note: The Central County Fire Department (CCFD) is a Joint Powers Authority shared by the Town of Hillsborough and City of Burlingame. Please refer to the Notes to the Financial Statements which define the reporting entity. CCFD is a non -disclosed organization, independently governed, and therefore, no longer a reporting unit of the City. Source: City of Burlingame 174 Comprehensive Annual Financial Report June 30, 2020 CITY OF BURLINGAME, CALIFORNIA OPERATING INDICATORS BY FUNCTION Last Ten Fiscal Years Function Police Calls for Service Physical arrests Crimes Reported Traffic Stops Fire Number of calls answered Inspections Public works Street repair (sq. ft.) Sidewalk & curb repair (sq. ft.) City planning Plans checked Planning applications reviewed Building Permit issued Inspections conducted Leisure and culture Recreation Class Participants Library circulation Tree plantings Tree trimmings Water New connections Main and valve repairs Millions of gallons purchased (millions of gallons) Wastewater Average daily sewage treatment (millions of gallons) Preventive Maintenance, main cleaning (Feet) 2011 2012 2013 2014 2015 30,865 39,724 41,651 40,773 40,854 348 508 560 634 586 1,516 1,879 1,799 1,787 1,878 3,683 5,692 8,057 9,455 6,506 4,152 N/A N/A N/A N/A 4,195 5,700 5,662 N/A N/A 14,154 10,678 15,560 12,600 13,650 5,468 2,539 1,985 2,100 43,789 355 366 499 554 500 144 134 125 94 120 N/A 1,075 1,229 1,185 1,230 N/A 5,161 5,662 5,280 5,600 13,821 13,657 11,982 13,428 13,424 696,096 721,132 761,795 753,694 647,128 229 164 271 230 198 1,785 1,712 1,621 1,943 2,866 37 20 10 21 16 19 19 15 17 26 1,474 1,190 1,519 1,497 1,340 2.60 2.60 2.60 2.60 3.00 404,488 299,212 330,586 270,000 366,774 Source: Various city department records. Aquatic Center registrations are not included in fiscal year 2013, due to the transition of programming responsibility from the City of Burlingame to the Burlingame Aquatics Club. Police statistical data has been presented on a calendar year basis. Central County Fire Department data is now reported with the Central County Fire Department CAFR. Recreation Class Participants in fiscal year 2020 - COVID restrictions affected enrollments. 176 2016 2017 2018 2019 2020 41,553 41,673 46,540 48,917 43,313 770 768 800 621 563 2,222 1,885 1,915 1,985 2,255 4,812 5,003 5,178 5,227 5,300 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 12,545 13,704 9,891 3,258 13,101 2,557 52,557 4,262 3,580 5,022 494 418 436 516 659 86 112 129 162 106 1,280 1,226 1,278 1,201 1,106 6,135 5,722 7,433 7,099 8,037 13,331 13,787 14,537 14,507 11,999* 720,000 688,058 658,754 730,751 676,723 271 240 257 248 232 1,520 1,830 2,081 2,076 1,424 20 4 2 3 5 16 22 21 22 17 1,164 1,058 1,232 1,235 1,269 2.81 3.55 2.82 3.11 2.40 220,192 202,812 342,422 380,405 457,941 177 CITY OF BURLINGAME, CALIFORNIA CAPITAL ASSET STATISTICS BY FUNCTION FOR FISCAL YEAR 2019-20 (COMPARED TO 5 YEARS AGO) 201S 2020 Function Public works Streets (miles) 152 152 Streetlights 1,800 1,745 Traffic signals 14 18 Water Water mains (miles) 107 100 Fire hydrants 826 831 Maximum daily capacity 2,850 2,850 (thousands of gallons) Sewer Sanitary sewers (miles) 88 119 Storm sewers (miles) 42.0 46.6 Maximum daily treatment capacity 4,100 4,100 (thousands of gallons) Storm drain pump station 5 5 Note: Historical data is not available. Includes Hillside Fire Station which is currently closed. Source: City of Burlingame 178 F\j, M ADZ E INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of City Council of the City of Burlingame, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the City of Burlingame, California, as of and for the year ended June 30, 2020, and have issued our report thereon dated November 23, 2020. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Accountancy Corporation 347B Buskirk Avenue, Suite 215 Pleasant Bill, CA 94523 r 925.930.0902 r 925.930.0135 s maze4mazeassociates.com w maxeassociates.com 179 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We have also issued a separate Memorandum on Internal Control dated November 23, 2020 which is an integral part of our audit and should be read in conjunction with this report. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. -/ Gt/ZQ- Z< 5 d (St \ate Pleasant Hill, California November 23, 2020 180