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HomeMy WebLinkAbout111020-03.1TOWN OF DANVILLE, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020 TOWN COUNCIL Karen Stepper, Mayor Lisa Blackwell, Vice Mayor Newell Arnerich, Councilmember Renee Morgan, Councilmember Robert Storer, Councilmember TOWN STAFF Joseph A. Calabrigo, Town Manager Lani Ha, Finance Manager/Treasurer DR A F T 11 . 0 2 . 2 0 2 0 DR A F T 11 . 0 2 . 2 0 2 0 TOWN OF DANVILLE, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2020 TOWN COUNCIL Karen Stepper, Mayor Lisa Blackwell, Vice Mayor Newell Arnerich, Councilmember Renee Morgan, Councilmember Robert Storer, Councilmember TOWN MANAGER Joseph A. Calabrigo Prepared by the Finance Division Lani Ha, Finance Manager/Treasurer Danville, CA (Cover Photo - by Engineering Division) DR A F T 11 . 0 2 . 2 0 2 0 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Comprehensive Annual Financial Report For the Year Ended June 30, 2020 Table of Contents Page INTRODUCTORY SECTION Letter of Transmittal .......................................................................................................................................................... i Organizational Chart ...................................................................................................................................................... xii Directory of Public Officials ........................................................................................................................................ xiii Certificate of Achievement for Excellence in Financial Reporting – Government Finance Officers Association ................................................................................................................ xiv Statement of Purpose ...................................................................................................................................................... xv FINANCIAL SECTION Independent Auditors’ Report: Report on Financial Statements .............................................................................................................................. 1 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 ............................................................................................. 3 Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ............................. 5 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position ........................................................................................................................... 18 Statement of Activities ................................................................................................................................ 19 Fund Financial Statements: Governmental Fund Financial Statements: Balance Sheet ............................................................................................................................................. 26 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ............................................................................. 29 Statement of Revenues, Expenditures and Changes in Fund Balances ....................................................... 30 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ......................................................................................................................... 32 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position ............................................................................................................ 36 Statement of Changes in Fiduciary Net Position ......................................................................................... 37 Index to Notes to Basic Financial Statements .......................................................................................................... 40 Notes to Basic Financial Statements ........................................................................................................................ 41 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Comprehensive Annual Financial Report For the Year Ended June 30, 2020 Table of Contents (Continued) Page FINANCIAL SECTION (Continued) Required Supplementary Information (Unaudited): Budgetary Information ............................................................................................................................................. 70 Budgetary Comparison Schedules: General Fund ............................................................................................................................................... 71 Lighting and Landscaping Special Revenue Fund ...................................................................................... 72 Regional Traffic Impact Fees Special Revenue Fund ................................................................................. 73 Modified Approach for Town Street Infrastructure Capital Assets .......................................................................... 74 Supplemental Information: Non-Major Governmental Funds: Combining Balance Sheet .................................................................................................................................. 83 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances ............................................ 89 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual: PEG Special Revenue Fund......................................................................................................................... 94 Gas Tax Special Revenue Fund .................................................................................................................. 95 Building and Planning Special Revenue Fund ............................................................................................ 96 Development Engineering Special Revenue Fund ...................................................................................... 97 Child Care Special Revenue Fund ............................................................................................................... 98 Stormwater Pollution Control Program (SPCP)Special Revenue Fund ...................................................... 99 Measure C/J Special Revenue Fund .......................................................................................................... 100 Donations and Contributions Special Revenue Fund ................................................................................ 101 General Development Impact Fees Special Revenue Fund ....................................................................... 102 Public Safety Special Revenue Fund ......................................................................................................... 103 Old Town Parking In-Lieu Special Revenue Fund ................................................................................... 104 Solid Waste Vehicle Impact Fee Special Revenue Fund .......................................................................... 105 Low and Moderate Income Housing Special Revenue Fund .................................................................... 106 Agency Funds: Combining Statement of Changes in Assets and Liabilities ...................................................................... 107 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Comprehensive Annual Financial Report For the Year Ended June 30, 2020 Table of Contents (Continued) Page STATISTICAL SECTION Financial Trends: Net Position by Component ............................................................................................................................... 110 Changes in Net Position ..................................................................................................................................... 112 Governmental Activities Tax Revenues by Source ............................................................................................ 117 Fund Balances of Governmental Funds ............................................................................................................. 118 Changes in Fund Balances of Governmental Funds .......................................................................................... 120 Revenue Capacity Assessed Value ................................................................................................................................................... 123 Direct and Overlapping Property Tax Rates ....................................................................................................... 124 Property Tax Levies and Collections ................................................................................................................. 125 Debt Capacity: Ratios of Outstanding Debt by Type .................................................................................................................. 126 Ratios of General Bonded Debt Outstanding ...................................................................................................... 127 Direct and Overlapping Governmental Activities Debt ...................................................................................... 128 Principal Property Taxpayers .............................................................................................................................. 129 Legal Debt Margin Information ......................................................................................................................... 130 Pledged-Revenue Coverage ................................................................................................................................ 132 Demographic and Economic Information: Demographic and Economic Statistics .............................................................................................................. 133 Principal Employers in the Town of Danville .................................................................................................... 134 Operating Information: Full-Time Equivalent Town Government Employees by Function ................................................................... 135 Operating Indicators by Function ...................................................................................................................... 136 Capital Asset Statistics by Function.................................................................................................................... 137 DR A F T 11 . 0 2 . 2 0 2 0 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 INTRODUCTORY SECTION DR A F T 11 . 0 2 . 2 0 2 0 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 “Small Town Atmosphere Outstanding Quality of Life” 5 1 0 L A G O N D A W A Y , D A N V I L L E , C A L I F O R N I A 9 4 5 2 6 Administration Building Engineering & Planning Transportation Maintenance Police Parks and Recreation (925) 314-3388 (925) 314-3330 (925) 314-3310 (925) 314-3320 (925) 314-3450 (925) 314-3700 (925) 314-3400 November 17, 2020 Mayor and Town Council Town of Danville Subject: Fiscal Year 2019/20 Comprehensive Annual Financial Report The Comprehensive Annual Financial Report (CAFR) of the Town of Danville for the fiscal year (FY) ended June 30, 2020, is submitted in compliance with laws of the State of California and as prescribed by the Government Accounting Standards Board (GASB) Statement 34. This report was prepared by the Town of Danville Finance Department, and the responsibility for the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the Town. To the best of our knowledge, the data included in the report is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the Town. All disclosures necessary to enable the reader to gain an understanding of the Town's financial activities have been included. The CAFR represents the culmination of all budgeting and accounting activities of the Town during FY 2019/20. GENERAL INFORMATION ABOUT THE TOWN OF DANVILLE Incorporated in 1982, Danville is located in Contra Costa County, approximately 30 miles east of San Francisco and lies in the center of the San Ramon Valley. The Town comprises 18.5 square miles and has 44,626 residents. Danville began as a small rural village during the 1850s. The first post office was established in 1860. Although the Town is suburban, it still retains its small-town character. Older well- maintained neighborhoods coexist with new subdivisions and their modern amenities. The community enjoys natural creeks, hiking and biking trails, and dedicated open space. Mt. Diablo, at an elevation of 3,849 feet, rises to the east and Las Trampas Regional Wilderness, elevation 2,049 feet, creates the Town's western boundary. Danville's primary commercial district lies in the center of the community and offers resident-serving commercial businesses, boutique shopping, and fine dining. The Old Town area is the historical center of the Town. It is a source of pride to our residents and is ii the site of many holiday and special events which attract visitors throughout the year from around the Bay Area. While Danville has remained residential, neighboring cities have developed job centers including major commercial and light industrial business parks located within minutes from the Town. The Town operates under the Council-Manager form of government and is governed by a five-member Town Council elected at large and serving staggered four-year terms. Council elections are held in November of even-numbered years. The Town Manager and the City Attorney are appointed by the Town Council. The Town Manager appoints all Department Directors and through them all other employees of the Town. Areas of service delivery for the Town include General Government, Police Services, Administrative Services, Development Services, Maintenance Services and Recreation, Arts and Community Services. The Town contracts with the Contra Costa County Sheriff’s Office to provide police services. Additional services are provided by other agencies: fire service by the San Ramon Valley Fire Protection District, water service by the East Bay Municipal Utility District, wastewater service by the Central Contra Costa Sanitary District, and primary and secondary education by the San Ramon Valley Unified School District. The Town also contracts with private companies and individuals to provide portions of its building inspection and recreation and maintenance services. REPORTING ENTITY A preliminary step in preparing the CAFR for the Town was the identification of the reporting entity. In accordance with Government Accounting Standards Board Statement No. 14, related governmental entities were evaluated to determine if the Town was financially accountable for its operations. This report includes all fund types and account groups of the Town of Danville. The former Community Development Agency (CDA) of the Town of Danville was dissolved by AB x1 26 on January 31, 2012. As a result, all assets and debt liabilities of the former CDA were transferred to a Fiduciary Trust Fund, the Successor Agency (SA) to the former Community Development Agency of the Town of Danville, in FY 2011/12. On June 27, 2012, cleanup legislation AB 1484 was passed and directed that the Low and Moderate Income Housing assets be transferred from the SA to the Town. The SA does not meet the definition of a "component unit," and its financial activities and assets are therefore not included in the Town’s financial statements. Although the SA is legally a separate entity, the governing board of the SA has the same membership as the Town Council. The Town is responsible for day-to-day activities, including the ability to appoint, hire, reassign or dismiss management. An Oversight Board consisting of seven members was appointed to the SA for the purpose of overseeing the dissolution and winding down of the CDA. The Town of Danville Financing Authority (a joint powers authority of the Town of Danville and the former CDA) is not included as a component unit since it is financially independent. iii ECONOMIC CONDITION AND OUTLOOK Current Economic Condition As of June 30, 20120, the Town of Danville's financial condition continues to be sound. An indicator of the Town’s financial condition is the level of fund balance, reserved and unreserved, in its Governmental Funds, which include General, Special Revenue, Debt Service and Capital Projects. The Town has a policy of retaining a minimum of 20% of the coming year’s operating expenditures as an operating reserve against the General Fund fund balance. As of June 30, 20120, $12,309,768 or 35.87% is designated for this purpose. Additional reserves against the General Fund include various future operating costs, including General Fund purchase order encumbrance carryovers; reserves for Certificate of Participation debt issued by the Town in 2001 and 2005; a contingency for unforeseen expenditures; compensated absences/personnel; reward funds to help recover Town property; a reserve for the receivable for the funds loaned to the former CDA and funds to be used for maintenance of Town’s rental property. An additional $3,585,005 has been designated as a transfer to the Capital Improvement Program Project Fund. The Town’s conservative Investment Policy and practices continue to protect the principal of the Town’s investment portfolio. The Town’s portfolio is invested in U.S. Treasury bonds; U.S. Agency bonds; the State of California’s pooled fund; LAIF; and U.S. Corporate Notes with ratings of AA- or higher. The total General Fund fund balance of $26,574,948 represents 112.80% of total FY 2019/20 General Fund operating expenditures and 77.24% of operating expenditures from all funds. Additionally, the Town has $28,763,532 of Special Revenue funds, and $34,072,908 in Capital Projects funds. The Town’s five largest revenue sources account for 78.46% of all Town revenues. These include Property Tax providing 38.63% of revenues; Sales Tax providing 13.84%; Other Taxes providing 11.38%; Special Assessments providing 8.66% and Development Impact Fees providing 5.96% of revenues. Property Tax increased by $670,628 (4.37%) compared to FY 18-19, as assessed values were increased and the median sales price for a single family residential home increased. Revenue trends from the past four years illustrate strong growth in assessed valuation. December 31, 2015 marked the sunset of the sales tax for property tax swap known as “the triple flip” that was enacted by the passage of Proposition 57 in 2004. Charges for Services decreased by $845,770 (29.50%), reflecting a decrease in Recreations classes due to the pandemic, Building and Planning fees, and a slight decrease in Development Engineering fees. Sales Tax decreased $384,274 (6.27%) due to the pandemic. Other Taxes and Intergovernmental Fund Revenues increased a net of $411,893 (9.56%), reflecting higher iv revenues from Gas Tax and SPCP, offset with decrease from Regional Traffic Impact Fees and Measure J funds. LLAD Special Assessments remained essentially flat. The decrease in Development Fees of $1,815,328 (42.35%), reflects a decrease in the permitting activity. Danville’s jobless rate as of June 2020 was 10.0% as compared to 11.1% nationwide, 15.1% in California, and 13.4% in Contra Costa County. Outlook for the Future The Town uses a multi-year financial planning process that includes estimates of future revenue and operating expenditure growth as well as capital needs to be financed from all funds over the next 10 years. The annual update of this model, the 2020/21 Operating Budget and Capital Improvement Program, was completed in May 2020 and adopted on June 16, 2020. General Fund revenues are projected to decrease 11.55% from FY 2019/20 to FY 2020/21, largely attributable to a 22.20% decrease in sales tax, and a 47.55% decrease in Recreations. Special Purpose revenues are projected to decrease 14.52%, mostly due to a decrease in 19.20% in Building and Planning revenue, decrease in Gas Tax and Measure J, and slight increase or no increase in other Special Revenues funds. Looking forward 10 years, General Purpose revenues are projected to decrease 11.55% in FY 2020/21 and an average increase of 2.37% thereafter. Special Purpose revenues are projected to decrease 14.52% in FY 2020/21, and an average increase of 2.94% through FY 2029/30. The 10-year projection includes cost increases that average 2.8% annually, reflecting anticipated adjustments to service demands as well as changes in the Consumer Price Index. The Town continues to evaluate the impact of current decisions on the long term fiscal stability of the Town. By FY 2021/22, all four zones in the Lighting and Landscape Assessment District will require General Fund subsidies, or an increase in assessments, in order to maintain current service levels. Despite the passage of Senate Bill 1 – The Road Repair and Accountability Act of 2017, which significantly increased the local streets and roads funds allocated back to Danville, Gas Tax revenues alone will not support all of the costs associated with maintaining the Town's street system over the next 10 years. Additional General Purpose and Special Purpose revenue resources, will continue to be needed to maintain the current Pavement Condition Index (PCI) and street maintenance service levels. Furthermore, the Town’s Capital Improvement Program will continue to require an annual infusion from the General Fund and other available resources in order to maintain the Town’s practice of paying cash for capital projects. v The Town’s current funding of service delivery, capital projects, local streets and roads and long-term fiscal health depends on continued growth of the economy and avoidance of further negative fiscal actions by the State. The dissolution of the former Community Development Agency continues to have a major negative impact on the Town by eliminating a major annual funding source for downtown improvements. While the Town will be repaid $6.2 million in funds owed by the former Community Development Agency through annual payments, further action from the State could adversely affect the Town’s fiscal condition. Additional financial information on the Town of Danville is provided in The Management Discussion and Analysis (MD&A). The Transmittal letter and MD&A are intended to provide complementary information to each other. MAJOR ACCOMPLISHMENTS AND INITIATIVES For Fiscal Year 2019/20 Major events took place in the Town during FY 2019/20 that had or will have significant financial effects on the Town in the years to come. The Town: 1. Received the distinction of “Safest City in California” with a population of 50,000 or less, in 2020, for the third year in a row by Safewise, an independent review website. 2. Installed upgraded Automated License Plate Reader (ALPR) cameras to replace aging equipment with an increase from 13 locations to 23 and a 30% reduction in annual costs resulting in an estimated savings of $150,000 over the next five years. 3. Completed the sale of 115-125 Hartz Avenue property 4. Completed purchase of the $12.6 million 500 La Gonda Way property for relocation of the Danville Town Offices and Police Department. 5. Declared a local state of emergency in response to the COVID-19 pandemic which involved closing public facilities and implementing cost savings measures to reduce operating expenses by $2.2 million to offset estimated revenue losses. 6. Adapted and adhered to various COVID-19 related Health Orders issued by the Contra Costa County Department of Public Health and the State of California. 7. Adopted a balanced post pandemic 2020/21 operating budget through reducing expenditures and fund transfers without the need to utilize Town reserve funds. 8. Moved ALL public meetings to the remote (ZOOM) format while adhering to the revised Brown act requirements. 9. Worked with Tri-Valley Cities Coalition, Contra Costa Mayors Conference and state legislators to advocate for changes to housing legislation in a manner that lessens their impacts to Danville. vi 10. Continued implementation of the Community Marketing and Branding Plan, including publication of the Live Locally Guide, marketing material and rebranding of the Town’s quarterly newsletter. 11. Completed the construction of the $3 million project to overlay Danville streets as part of the 2018/19 Pavement Rehabilitation program. 12. Continued the design of the $2.03 million Sycamore Valley Park and Ride Expansion Project, which will add 122 new public parking spaces and bicycle parking to serve commuters and users of the Iron Horse Trail. 13. Completed construction of the $1.6 million One Bay Area Grant (OBAG) Project to improve El Cerro Boulevard from El Pintado to La Gonda Way and Sycamore Valley Road from Camino Ramon to San Ramon Valley Boulevard including the bus loop at the Park N Ride. 14. Completed construction of the $150,000 Osage Station Park pathway improvements project. 15. Completed construction of the $752,400 Front Street Creek Bank Stabilization project, which repaired a creek bank failure caused by heavy rains in 2014. 16. Completed the Town Green and Arts District Concept Master Plan based on feedback from the Parks, Recreation & Arts Commission, and community input for adoption by Town Council. 17. Initiated development of a Town-wide Bicycle Master Plan. 18. Continued with various Transportation programs including: Street Smarts traffic safety education program, Neighborhood Traffic Management Program and participation in Danville’s TRAFFIX Student Transportation Program. 19. Completed replacement of all Railroad Avenue Parking Lot lights with LEDs. 20. Continued the design work for the $6 million project to replace the La Gonda Way bridge at Danville Boulevard. 21. Continued the design of the storm drain trash racks at Starview Drive, Loch Lomond Way and Westridge, pending response from FEMA on the Town’s grant applications. Construction phase to proceed after FEMA determination. 22. Completed installation of bicycle video detection cameras at seven intersections (total of 12 cameras); Rectangular Rapid Flashing Beacons (RRFBs) at ten (10) locations. 23. Completed replacement of traffic signal battery back-up systems at eight (8) intersections and radar speed display signs at two (2) locations. 24. Completed installation of four (4) wayfinding guide signs on Interstate 680 within Town limits. 25. Committed $1.45 million to fund 240 additional student parking spaces on campus and increasing the total supply of student on-campus parking spaces from 275 to 515 spaces, in order to alleviate parking congestion in adjacent neighborhoods and the north end of the downtown. vii 26. Expanded the Downtown Street Banner Program to include Railroad Avenue. 27. Increased efficiencies within the MUNIS Financial System by implementing internal paperless/contactless/electronic routing and approval of both credit card and paper check vendor payments. Greatly expanded and improved online permit application submission to the Energov Permitting & Land Management System for contractors and Danville homeowners. 28. Launched 10-8 program, a weekly live video podcast that allows for engagement and interaction with residents via Facebook and YouTube to replace in person engagement due to the COVID-19 Pandemic. 29. Renovated the turf in the large dog park at Hap Magee Ranch Park for a total of $18,615. The dog park at Hap Magee Ranch Park is rated one of the best dog parks in the area by Diablo Magazine. 30. Completed the annual creek cleaning through in-house and contract efforts ($14,950) which helps protect the community and prevent damage to public and private property. 31. Converted four additional landscape areas to the automated underground sensor irrigation management system (UgMO), doubling the amount of sites the Town previously had. 32. Integration of arts into programs such as the Danville Dogs Art Program, which included calling for artists to design and paint ceramic dogs for display throughout the Town. Other opportunities are being explored with the funds raised by this successful event. 33. Created a new Senior Advisory Commission. 34. Dissolved the Arts Commission and created an Arts Advisory Board as an adjunct the Parks, Recreation and Arts Commission. 35. Completed the upgrades to the keycard access system at all town-maintained buildings and replace A.D.A. doors at the Library and Veteran’s Memorial buildings. For Fiscal Year 2020/21 During the upcoming FY 2020/21 the Town will: 1. Continue to operate under a declared a local state of emergency in response to the COVID-19 pandemic implementing cost savings measures to offset estimated revenue losses. 2. Continue to adapt to and monitor various COVID-19 related Health Orders issued by the Contra Costa County Department of Public Health and the State of California. 3. Continue to work with Tri-Valley Cities Coalition, Contra Costa Mayors Conference and state legislators to advocate for changes to housing legislation in a manner that lessens their impacts to Danville. viii 4. Complete the design of the $6 million project to replace the La Gonda Way bridge at Danville Boulevard. 5. Begin construction of the $2.03 million Sycamore Valley Park and Ride Expansion Project, which will increase capacity by 122 public parking spaces and enhance bicycle parking. 6. Complete the design of storm drain trash racks at Starview Drive, Loch Lomond Way and Westridge, pending response from FEMA on the Town’s grant applications. Construction phase to proceed after FEMA determination 7. Complete installation of Rectangular Rapid Flashing Beacons (RRFBs) at 11 locations Town-wide. 8. Complete research and selection of new manufacturer for new signal traffic controllers Townwide, ensuring that they are compliant with the Advance Transportation Controller (ATC) standards. 9. Complete installation of 40 electronic bicycle locker parking spaces. 10. Complete initiate the development of a Town-wide Bicycle Master Plan. 11. Continue with various Transportation programs including: Street Smarts traffic safety education program, Neighborhood Traffic Management Program and participation in Danville’s TRAFFIX Student Transportation Program. 12. Renovate the turf in the large dog park at Hap Magee Ranch Park for a total of $18,870. The dog park at Hap Magee Ranch Park is rated one of the best dog parks in the area by Diablo Magazine. 13. Award a new landscape maintenance contract for parks - Lighting and Landscape Assessment District Zone D. 14. Renew the street sweeping services contract for $200,295 to continue providing clean and safe streets and prevent pollution of creeks. 15. Complete the annual creek cleaning through in-house and contract efforts (approximately $12,000), which helps prevent damage to public and private property. 16. Replace the gazebo at Hap Magee Ranch Park (approximately $80,000, with half the cost being paid by Contra Costa County). 17. Continue the Disaster Preparedness Program to step up readiness efforts aimed at preparing for and responding to any natural or man-made disasters or emergencies that could befall the Town. 18. Finalize a five-year rolling strategic plan for Police Services that is updated annually. 19. Research technology solutions to optimize law enforcement strategies. 20. Implementation of the Master Plan for the Town Green as recommended in the Parks, Recreation and Arts Strategic Plan. ix 21. Continue to work with the Arts Advisory Board and Parks, Recreation and Arts Commission to prioritize and begin implementation of recommendations in the Parks, Recreation and Arts Strategic Plan. 22. Continue to explore potential locations for the multi-use skate park as identified in the latest feasibility study. 23. Complete the renovation of the children’s play area at Hap Magee Ranch Park with a projected cost of $625,000. 24. Design and planning of the Riverwalk bridge connecting Diablo Road to the Town Green 25. Expand and improve eSignature (DocuSign) system for contracts and other legal documents. 26. Continued efforts by the IT Department to implement additional security measures as warranted and monitor cybersecurity issues to protect the Town from these ongoing types of attacks. 27. Plan and mitigate the transfer of Town’s technologies in preparation of the move to the newly acquired Town Offices building at 500 La Gonda Way. 28. Work with the Federal State Agencies to get COVID-10 related expenses reimbursed through FEMA and CARES Act. FINANCIAL CONTROLS AND INFORMATION The Town's financial records for general governmental operations are maintained on a modified accrual basis with revenues recorded when available and measurable and expenditures recorded when the services or goods are received and the liability incurred. Town Management is responsible for establishing and maintaining an internal control structure designed to ensure that assets are protected from loss and theft or misuse; and for compiling accounting data which is adequate for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management. Budgeting Controls The Town maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Town Council. Activities of all governmental type funds are included in the annual appropriated budget. For FY 2019/20, the budgetary level of control (that is the level at which expenditures cannot legally exceed the appropriated amount) for the operating budget was at the fund level. x For the capital improvement budget, the level of control was the individual capital improvement project. The Town also utilizes the encumbrance system as a management control technique to assist in controlling expenditures. All appropriations lapse at year-end. However, encumbrances and appropriations for unfinished capital and other projects are reviewed and, when warranted, are reappropriated ("carried over") as part of the following year's budget. Risk Management The Town is a member of the Municipal Pooling Authority (MPA), a consortium of 20 California cities, including 17 in Contra Costa County, one in San Mateo County, one in Santa Clara County and one in San Joaquin County. The Risk Management Authority is a risk-sharing, self-insured pool providing insurance benefits to its members. Insurance activities are financed by charges to member cities, and no long-term debt has been incurred by the Authority. The Town participates in the Authority's self-insured general and auto liability programs and purchases commercial property and earthquake insurance through MPA. Annual premiums are determined based on an actuarial study using a retrospective method. During FY 2019/20, the Town was responsible for the first $5,000 of general liability costs and $2,000 and $3,000 for Town and police auto liability respectively, for each of its own claims. The Town’s limits of coverage per claim are $29 million for general liability and $250,000 for auto liability. The Town has established in the General Fund $53,990 in liability to finance anticipated settlement of claims. The Town is also a member of the Authority's workers' compensation pool. The Authority is responsible for the first $500,000, per claim. This program carries excess insurance above $500,000 per claim. The Town has implemented various risk control techniques and loss prevention and reduction programs, including employee training and education. OTHER INFORMATION Independent Audit It is the policy of the Town of Danville to have an audit performed annually by an independent certified public accountant. The independent audit of the June 30, 2020 financial statements was performed by The Pun Group, LLP. Their opinion is included with the general purpose financial statements. xi Acknowledgments The development of this report would not have been possible without the dedication and efforts of the entire Finance Division team. We would like to express our appreciation to all staff members of the Town and our independent auditing firm who made this report possible. The Town’s prudent fiscal management policies and practices are guided by the leadership and support of the Danville Town Council. We appreciate the Town Council’s support and continued leadership. Respectfully submitted, Joseph A. Calabrigo Lani Ha Town Manager Finance Manager/Treasurer Town of Danville Organizational Chart xii DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Directory of Public Officials xiii TOWN COUNCIL Karen Stepper Mayor Lisa Blackwell Vice Mayor Newell Arnerich Councilmember Renee Morgan Councilmember Robert Storer Councilmember TOWN STAFF Joseph A. Calabrigo Town Manager Robert Ewing City Attorney Marie Sunseri City Clerk Tai Williams Assistant Town Manager Allan Shields Chief of Police Dave Casteel Maintenance Services Director Henry Perezalonso Recreation, Arts & Community Services Director Lani Ha Finance Manager/Treasurer DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Certificate of Achievement for Excellence in Financial Reporting – Government Finance Officers Association xiv DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Statement of Purpose xv DANVILLE IS A COMMUNITY DEDICATED TO PROVIDING AN EXCEPTIONAL QUALITY OF LIFE FOR ITS CITIZENS To achieve this level of excellence, Danville will:  Value and enhance its heritage and natural environment;  Build innovative processes for citizen involvement and stimulate active participation in local government decision making;  Foster personal responsibility, ethical standards and commitment among citizens;  Achieve high quality development in scale with the natural surroundings;  Deliver superior municipal and educational services;  Encourage the arts, cultural and recreation activities, and community celebrations; and  Exercise strong leadership in regional issues. These goals enhance a sense of positive “small town” values related to the family, neighborhood, and community. DR A F T 11 . 0 2 . 2 0 2 0 FINANCIAL SECTION DR A F T 11 . 0 2 . 2 0 2 0 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 INDEPENDENT AUDITORS’ REPORT To the Mayor and Members of the Town Council of the Town of Danville Danville, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Danville, California (the “Town”), as of and for the year ended June 30, 2020, and the related notes to the basic financial statements, which collectively comprise the Town’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 financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ 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 entity’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 entity’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. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Town, as of June 30, 2020, and the respective changes in financial position, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. DR A F T 11 . 0 2 . 2 0 2 0 To the Mayor and Members of the Town Council of the Town of Danville Danville, California Page 2 2 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Information, Budgetary Comparison Schedules for General Fund, Lighting and Landscaping Special Revenue Fund, and Regional Traffic Impact Fee Special Revenue Fund, and Modified Approach for Town Street Infrastructure Capital Assets 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 Town’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate 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 combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated __________, 2020, on our consideration of the Town’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 Town’s internal control over financial reporting and compliance. Walnut Creek, California __________, 2020 DR A F T 11 . 0 2 . 2 0 2 0 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 Independent Auditors’ Report To the Mayor and Members of the Town Council of the Town of Danville Danville, 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 financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Danville, California (the “Town”), as of and for the year ended June 30, 2020, and the related notes to the basic financial statements, which collectively comprise the Town’s basic financial statements, and have issued our report thereon dated __________, 2020. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Town’s internal control over financial reporting (internal control) as a basis for designing 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 Town’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town’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 entity’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. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town’s financial statements are free from 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 financial statements. 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. DR A F T 11 . 0 2 . 2 0 2 0 To the Mayor and Members of the Town Council of the Town of Danville Danville, California Page 2 4 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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Walnut Creek, California __________, 2020 DR A F T 11 . 0 2 . 2 0 2 0 5 MANAGEMENT’S DISCUSSION AND ANALYSIS The Town of Danville’s Financial Statements are issued in the format prescribed by the provisions of Government Accounting Standards Board Statement 34 (GASB No. 34). This discussion and analysis of the Town’s financial performance provides an overview of the Town’s financial activities for the fiscal year ended June 30, 2020. Please read it in conjunction with the accompanying transmittal letter, the Basic Financial Statements and the accompanying notes to those financial statements. FINANCIAL HIGHLIGHTS  The Town’s net position as of June 30, 2020 increased $7,702,840 or 3.0% from $255,886,275 to $263,589,115.  Total liabilities were $13,217,981. Total assets were $276,807,096. Of this amount $61,659,221 is classified as unrestricted and, with the future receipt of $6,159,401 of loan receivable from the former Community Development Agency (CDA), may be used to provide ongoing services and capital projects to residents and creditors.  Governmental funds for the Town have combined fund balances of $89,411,388. Of this amount $26,961,172 is restricted by external parties, $53,374,376 is committed for ongoing and future activities and $6,267,108 is classified as nonspendable reflecting the future of receiving the loan proceeds from the cooperative agreement to the former Community Development Agency and fund received for services that has not been rendered by the Town, and $2,808,732 has been assigned for ongoing operations.  The Town's General Fund fund balance decreased (2.5)% from $27,268,611 to $26,574,948. The fund balance includes funds reserved or designated for debt service, future capital projects, ongoing operations, and an operating reserve of $12,309,768 (35.78% of FY 2019/20 operating expenditures). Subsequent to the end of the fiscal year 2013-14, the Sacramento County Superior Court issued a ruling on September 5, 2014, concluding that the reentered Cooperative Agreement between the Successor Agency and the Town of Danville was an enforceable obligation. The State appealed the Superior Court decision afterward, and in May 2015, the State dismissed its appeal, and at the same time, the Department of Finance accepted the Agreement as an enforceable obligation. The Town has decided to retain the amount that was approved by the Department of Finance, $6,159,401 as a loan receivable on its books, and reserve an offsetting amount in fund balance. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements, which consists of three components: 1) Government-wide Financial Statements, 2) Governmental Fund Financial Statements and 3) Notes to the Basic Financial Statements. This report also contains supplementary information in addition to the basic financial statements. DR A F T 11 . 0 2 . 2 0 2 0 6 Reporting the Town as a Whole - Government-Wide Financial Statements The Government-Wide Financial Statements provide a longer-term view of the financial position of the Town as a whole, including all capital assets and long–term liabilities on the full accrual basis. This presentation is similar to that of a private-sector business. Over time, increases or decreases in the Town’s net position may serve as one useful indicator of the Town’s overall financial health. Other factors to consider are changes in the Town’s property tax base and the condition of the Town’s roads. The Statement of Activities and Changes in Net Position provides information on how the Town's net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Therefore, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (for example, long term debt payments due and capital asset depreciation). There is an emphasis on measuring net revenues and expenses of each of the Town’s programs. The Fiduciary Fund Financial Statements provide financial information about activities for which the Town acts solely as a trustee or agent for the benefit of those outside of the government. Fiduciary funds reported in the CAFR for Danville include the Deposits fund, Assessment District funds and the Successor Agency Trust Fund. In the Statement of Net Position and the Statement of Activities and Changes in Net Position, the Town's activities are separated as follows: Governmental Activities: All of the Town’s basic services are considered to be governmental activities, including general government, police, maintenance, development, transportation and recreation services. Governmental activities are generally supported by taxes and intergovernmental revenues. Reporting the Town’s Most Significant Funds - Governmental Fund Financial Statements The Fund Financial Statements provide detailed information about the most significant funds and group the remaining funds together under the column heading, "Non-Major Governmental Funds.” Some funds are required to be established by State law and by bond covenants. In addition, the Town Council may establish other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money.  Governmental Funds—Most of the Town’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The Governmental Fund Statements provide a detailed short-term view of the Town’s general government operations and the basic services it provides. Governmental funds information help determine whether there are more or fewer financial resources that can be spent in the near future to finance the Town’s programs. Capital assets and other long-lived assets, along with long-term liabilities, are not presented in the Governmental Fund Financial Statements. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities and Changes in Net Position) and Governmental Funds Financial Statements are explained in a reconciliation schedule following each Governmental Fund Financial Statement. DR A F T 11 . 0 2 . 2 0 2 0 7 Reporting the Town’s Fiduciary Responsibilities The Town is the trustee, or fiduciary, for certain amounts held on behalf of developers, property owners, assessment district bond holders, the Successor Agency and others. The Town’s fiduciary activities are reported in separate Statements of Fiduciary Net Position and Changes in Fiduciary Net Position. The Town provides a Defined- Contribution Pension Plan for all qualified employees. We exclude these activities from the Town’s other financial statements because the Town cannot use these assets to finance its operations. The Town is responsible for ensuring that the assets reported in these funds are used for their intended purposes. Notes to the Financial Statements The Notes provide additional information that is essential to a full understanding of the data provided in the Government-Wide and Governmental Fund Financial Statements. Other Information In addition to the Basic Financial Statements and accompanying notes, this report also presents certain Required Supplementary Information concerning the Town’s funding of its obligation to provide pension benefits to its employees, budgetary comparison schedules for the General Fund, each major Special Revenue Fund and schedules and disclosure of the modified approach for reporting the Town’s infrastructure. THE TOWN AS A WHOLE - GOVERNMENT-WIDE FINANCIAL ANALYSIS The Town’s combined Net Position for the fiscal years ended June 30, 2020 and 2019 was: Increase 2020 2019 (Decrease) Current and other assets 95,583,374$ 100,224,321$ (4,640,947)$ Capital assets, net 181,223,722 172,950,901 8,272,821 Total assets 276,807,096 273,175,222 3,631,874 Current liabilities 6,523,952 10,161,641 (3,637,689) Long-term liabilities 6,694,029 7,127,306 (433,277) Total liabilities 13,217,981 17,288,947 (4,070,966) Net position: Net investment in capital assets 174,968,722 166,215,901 8,752,821 Restricted for: Debt service 1,629,404 1,634,467 (5,063) Special projects 25,331,768 22,764,025 2,567,743 Unrestricted 61,659,221 65,271,882 (3,612,661) Total net position 263,589,115$ 255,886,275$ 7,702,840$ Table 1 Net Position Governmental Activities DR A F T 11 . 0 2 . 2 0 2 0 8 The Town’s Net Positions from Governmental Activities increased 3.0% from $255,886,275 to $263,589,115. This increase of $7,702,840 comes from the change in net position as recorded in the Statement of Activities and flows through the Statement of Net Position. Program expenses by function, general revenues by major source, excess and/or deficiency of revenues over expenses before contributions to permanent fund principal, special, and extraordinary items, and total assets are presented in the Statement of Activities and Changes in Net Position. The following is an explanation of the changes between fiscal years as shown in Table 1: Total assets increased $3,631,874:  Current and other assets decreased $(4,640,947) reflecting a decrease in cash and investments. Capital assets, net of depreciation, increased $8,272,821 reflecting expenditures for capital projects during the year. Total liabilities decreased $4,070,966:  Current liabilities decreased by a net of $(3,637,689), due largely to a decrease in accounts payable, wages payable, retention (for capital projects), unearned revenue, and deposit payable.  Non-current liabilities decreased a net of $(433,277) reflecting payment of long-term debt principal of $500,000 that was paid according to schedule, an increase of $66,723 in compensated absences. Net Position:  Restricted net position increased a net of $2,562,680. Special Revenue funds were spent for capital projects as budgeted. Debt Service funds decreased by $(5,063) reflecting the net change in annual RPTTF funds received for scheduled debt service payments of the Town's COPs. Special Projects funds increased by $2,567,743 as funds were needed for operations or appropriated for capital expenditures.  Unrestricted net position, which are designated by Council for specific future capital improvements or economic stability, increased by $(3,612,661), reflecting solid revenues and controlled costs, which enabled the transfer of $4.69 million of General Fund funds to be transferred to Capital Improvement funds for future capital projects and Asset Replacement funds and LLAD funds for its operating expenses and Contingency fund. Capital improvements include park improvements, road maintenance, traffic control measures and general Town improvements. DR A F T 11 . 0 2 . 2 0 2 0 9 Government Activities Table 2 presents the gross revenues and expenditures for the Town as whole. Increase 2020 2019 (Decrease) Revenues - Governmental Activities Program revenues: Charges for services 8,188,723$ 9,908,259$ (1,719,536)$ Operating grants and contributions 1,873,835 2,132,610 (258,775) Capital grants and contributions 1,358,781 3,880,922 (2,522,141) Total program revenues 11,421,339 15,921,791 (4,500,452) General revenues: Taxes: Property 16,025,356 15,354,728 670,628 Sales 5,753,805 6,126,449 (372,644) Motor vehicle 35,829 21,310 14,519 Franchise 2,836,124 2,609,820 226,304 Other 367,376 390,562 (23,186) Investment earnings 3,183,434 3,028,554 154,880 Miscellaneous 1,838,208 834,318 1,003,890 Gain on sale of capital assets 345,523 - 345,523 Reimbursement from Successor Agency 812,456 792,456 20,000 Total general revenues 31,198,111 29,158,197 2,039,914 Total revenues 42,619,450 45,079,988 (2,460,538) Expenses - Governmental Activities General government 1,988,737 1,648,107 340,630 Police services 9,824,261 9,908,945 (84,684) Maintenance services and Lighting and landscape 9,400,476 8,512,749 887,727 Development services 5,769,915 12,589,561 (6,819,646) Administrative services 3,816,145 3,625,899 190,246 Recreation, arts, & community services 3,794,125 4,273,896 (479,771) Interest on long-term debt 322,951 325,210 (2,259) Total expenses 34,916,610 40,884,367 (5,967,757) Changes in Net Position 7,702,840$ 4,195,621$ 3,507,219$ Net Position: Beginning of year 255,886,275 251,690,654 4,195,621 End of year 263,589,115$ 255,886,275$ 7,702,840$ Table 2 Revenues and Expenses Governmental Activities DR A F T 11 . 0 2 . 2 0 2 0 10 Variances shown above are reflected in the net numbers of Table 3 and are discussed following Table 3. Table 3 presents each program’s net cost (total cost less revenues generated by the activities). The net cost shows the financial burden that was placed on the Town’s taxpayers by each of these functions. The net cost of programs increased by $3,502,219 reflecting higher change in revenues compare to change in expenses. Increase 2020 2019 (Decrease) Revenues: General revenues 31,198,111$ 29,158,197$ 2,039,914$ Total general revenues 31,198,111 29,158,197 2,039,914 Net Expenses: General government (1,988,737) (1,646,981) (341,756) Police services (9,341,933) (9,414,305) 72,372 Maintenance services and Lighting and landscape (6,341,146) (5,466,274) (874,872) Development services 650,961 (2,289,319) 2,940,280 Administrative services (3,784,452) (3,587,773) (196,679) Recreation, arts, & community services (2,367,013) (2,232,714) (134,299) Interest on long-term debt (322,951) (325,210) 2,259 Total net expenses (23,495,271) (24,962,576) 1,467,305 Net Cost of Services 7,702,840$ 4,195,621$ 3,507,219$ Table 3 Cost of Services Governmental Activities Variances shown above are reflected in the net numbers of Tables 2 and 3 and are discussed following Table 3.  Program revenues increased by $4,500,452. A decrease of $(1,719,536) in Charges for Services was largely due to Recreations classes were canceled due to the pandemic, slight decreased activity in Police Services, and the decrease in the Development Services activity. Operating Grants decreased a net of $(258,775) as grants for Police and Development Services decreased. Capital Grants and Contributions decreased a net of $(2,507,141) as grant funded for capital projects decreased.  General revenues increased $2,044,330 reflecting the net reported increase $670,628 in property tax revenues, decrease in net reported $(372,644) in sales tax revenues, increase $154,880 in investment earning, and increase $1,003,890 in miscellaneous revenues and increase $349,939 in gain on sale of capital assets . The Net Direct Cost of Program Services indicates that the overall cost of government is well below the available general revenues and transfers. This shows that the Town's ongoing revenues cover its operational and capital expenditures. The services provided by the Town are provided in an cost effective manner and the Town is efficient in recovering the cost of these services with program revenues from user fees and other contributions. See the Statement of Activities for further detail on program revenues and general revenues. DR A F T 11 . 0 2 . 2 0 2 0 11 FINANCIAL ANALYSIS OF THE TOWN’S FUNDS At year-end, the fund balance for the Town’s General Fund was $26,574,948 a net decrease of $(693,663) over last year. Revenues exceeded expenditures by $7,193,320, and transfers out of $(11,459,475) were made for future capital projects and additional funding for parks and building maintenance in the Lighting and Landscape Assessment District ($1,000,000). Major revenue sources that exceeded budget include property and transfer taxes of $871,491, offset with sales taxes of $(175), uses of money and property of $1,556,101, which reported rental revenues, and Investment earning, which also reflects actual earning and unrealized market adjustments and the effect of discounts and premiums recognized in the year. These were offset by Other Taxes of $(99,765) and Charges for Services of $(688,759). Across the board, cost containment resulted in operating expenditures below budget in all programs. Budget to actual cost savings totaled $2,874,788. Capital outlay for operations was budgeted within each program and is broken out for year-end reporting on a separate line. Additional detail comparing the budgeted and actual amounts for the General Fund can be found in the Required Supplementary Information, Budgetary Comparison Schedule, General Fund. The Lighting and Landscape Special Revenue Fund decreased by $213,204, which compares favorably to the planned and previously projected reduction in this fund balance. Cost containment efforts and a budgeted transfer in from the General Fund of $1,000,000 for park and building maintenance account for this decrease in fund balance. The Regional Traffic Impact Fees fund balance is reported higher by $432,437 reflecting the increase in revenues, and decrease in expenditures. The fund balance in the Capital Improvement Projects Fund decreased by a net of $(2,601,823), reflecting capital expenditures and a transfer in of $10,334,475, helping to offset appropriated capital expenditures in excess of revenues. Non-major Special Revenue Funds increased by a net of $2,070,623, reflecting normal revenues and use of these funds for the operational or capital projects to which they are restricted. Non-major Special Revenue funds with major changes include: the increased of Gas Tax Fund increase by $938,789 due to more revenues and less expenditures,; increase of Measure J Fund by $333,651 due to more revenues and less expenditures, the General Development Impact Fee Fund increased by $124,479 due to more revenues and less expenditures; the Public Safety Fund increased by $67,371 due to more revenues and less expenditures; the Old Town Parking In-Lieu increased by $187,778 due to more revenues and less expenditures; and the Solid Waste Vehicle Impact Fee increased by $539,772 due to more revenues and less expenditures; offset by the Building and Planning Fund decreased by $(76,616) as transfer to Assets Replacement plus expenditures were higher than revenues collected, the Development Engineering Fund decreased by $(37,464) as revenues were lower than expenditure; and the SPCP fund decreased by $(33,036) as revenues were lower than expenditures. The Non-Major Capital Improvement Funds, decreased by a net of $(385,992) due a decrease of $(153,541) in the Civic Facilities Fund expenditures higher than revenues; and a decrease of $(517,187) in the Park Facilities Fund due to more expenditures and no transfer in from General Fund contributions; and a decrease of $(30,170) due to no contribution from general fund and higher expenditures; offset by an increase in the Asset Replacement General Fund by $296,225 due to higher transfer in from General Fund, PEG Fund and Building and Planning Fund than expenditures All activity in the above funds reflects anticipated revenues and appropriated transfers and expenditures for these funds. General Fund Budgetary Highlights Actual revenues over expenses exceeded the final budget by $4,513,260. This is primarily due to very conservative revenue projections, the absence of State raids on local revenues, steady sales tax, and actual 5% increase in average local property values. Final expenses for the General Fund at year end were less than budgeted by $2,874,788. The budget to actual variance in appropriations reflects conservation efforts, leaving staffing positions vacant and postponement of some operational activities by management. These proactive fiscal measures enabled the Town to transfer $11,459,475 to fund future capital projects throughout the Town. DR A F T 11 . 0 2 . 2 0 2 0 12 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At the end of FY 2020, the Town had a book value of $181,223,722 invested in a broad range of capital assets, including land, buildings, furniture and equipment, park improvements and infrastructure. (See tables 4 and 5 below.) This amount represents an increase of $8,272,821, net of additions, retirements and depreciation, resulting in a 4.78% increase over last year. Changes reflect construction of capital assets, offset by depreciation expenses. Depreciation on capital assets is recognized in the Government-Wide Financial Statements. The Town has elected to use the modified approach for their streets and roads, wherein the value is not depreciated but rather pavement condition and maintenance expenses are tracked. The pavement condition as of June 30, 2020 was 81, same as last year. This rating compares favorably with the target rating of 70. The average expense to maintain the streets is estimated by management to be a minimum of $3,000,000 per year for the next three years. Further detail may be found in Note 1F to the Financial Statements and in Note 3 of the Required Supplementary Information. Accumulated Original Cost Depreciation Book Value Land 31,221,867$ -$ 31,221,867$ Buildings and parking lots 39,873,605 (12,718,789) 27,154,816 Park improvements 24,041,510 (21,685,367) 2,356,143 Furniture and equipment 4,978,441 (4,547,459) 430,982 Construction in progress 21,660,504 - 21,660,504 Infrastructure 167,832,677 (69,433,267) 98,399,410 Total 289,608,604$ (108,384,882)$ 181,223,722$ Increase 2020 2019 (Decrease) Land 31,221,867$ 31,239,825$ (17,958)$ Buildings and parking lots 27,154,816 24,796,329 2,358,487 Park improvements 2,356,143 2,653,137 (296,994) Furniture and equipment 430,982 619,957 (188,975) Construction in progress 21,660,504 14,902,726 6,757,778 Infrastructure 98,399,410 98,738,927 (339,517) Total 181,223,722$ 172,950,901$ 8,272,821$ June 30, 2020 vs. June 30 2019 Table 4 Capital Assets (Net of Accumulated Depreciation) June 30, 2020 Table 5 Capital Assets (Net of Accumulated Depreciation) DR A F T 11 . 0 2 . 2 0 2 0 13 The Town’s five-year Capital Improvement Plan projects will cost $38,741,445 through FY 2023/24. No debt financing is required for these projects. Funding will come from current fund balances and projected revenues over the next five years. The most significant projects include town-wide park renovations and enhancements with an emphasis on Park and Ride Expansion Project and Town Office Improvements and infrastructure maintenance including $17,598,401 for pavement management. Additional details can be found in the Town's 2019/20 Operating Budget and Capital Improvement Program document available at www.danville.ca.gov/Council_and_Government/Departments/Finance/. Debt At year end, the Town had $7,304,029 in Certificates of Participation (COPs) and Compensated Absences outstanding versus $7,717,306 last year, a net decrease of $(413,277), as shown in Table 6 below. Increase 2020 2019 (Decrease) 2001 & 2005 Certificates of Participation 6,255,000$ 6,735,000$ (480,000)$ Compensated absences 1,049,029 982,306 66,723 Total 7,304,029$ 7,717,306$ (413,277)$ June 30, 2020 vs. June 30, 2019 Table 6 Outstanding Debt The $480,000 decrease in the COP amount is due to scheduled debt service payments, the $67,323 increase in Compensated Absences is due to personnel earning more leaves hours than used. Additional information on outstanding debt is presented in Note 8 to the Basic Financial Statements. CONTACTING THE TOWN’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the Town’s finances and to show the Town’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Town’s Finance Department at the Town of Danville, 510 La Gonda Way, Danville, California 94526-1740 DR A F T 11 . 0 2 . 2 0 2 0 14 This page intentionally left blank DR A F T 11 . 0 2 . 2 0 2 0 15 BASIC FINANCIAL STATEMENTS DR A F T 11 . 0 2 . 2 0 2 0 16 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 17 GOVERNMENT-WIDE FINANCIAL STATEMENTS DR A F T 11 . 0 2 . 2 0 2 0 Governmental Activities ASSETS Current assets: Cash and investments 60,001,633$ Receivables (net of allowances): Accounts 2,048,951 Due from Successor Agency of the former Community Development Agency (Note 6) 6,159,401 Interest 304,515 Total receivables 8,512,867 Prepaid items 107,707 Total current assets 68,622,207 Noncurrent assets: Restricted cash and investments: Held with fiscal agent 1,629,404 Held by the Town 25,331,763 Total restricted cash and investments 26,961,167 Capital assets: Nondepreciable 145,958,256 Depreciable, net 35,265,466 Total capital assets 181,223,722 Total noncurrent assets 208,184,889 Total assets 276,807,096 LIABILITIES Current liabilities: Accounts payable 4,682,795 Accrued wages payable 505,697 Retention payable 13,709 Deposit payable 145,310 Interest payable 90,622 Claims liabilities 53,990 Unearned revenue 421,829 Long-term debt - due within one year (Note 8)610,000 Total current liabilities 6,523,952 Noncurrent liabilities: Long-term debt - due in more than one year: (Note 8) Certificates of participation 5,755,000 Compensated absences 939,029 Total noncurrent liabilities 6,694,029 Total liabilities 13,217,981 NET POSITION Net investment in capital assets 174,968,722 Restricted for: Debt service 1,629,404 Special projects and programs 25,331,768 Total restricted 26,961,172 Unrestricted 61,659,221 Total net position 263,589,115$ Town of Danville Statement of Net Position June 30, 2020 See accompanying Notes to the Basic Financial Statements. 18 DR A F T 11 . 0 2 . 2 0 2 0 Net (Expense) Revenue and Changes in Net Position Operating Capital Charges for Grants and Grants and Governmental Functions/Programs Expenses Services Contributions Contributions Activities Governmental activities: General government 1,988,737$ -$ -$ -$ (1,988,737)$ Police services 9,824,261 296,126 181,202 5,000 (9,341,933) Maintenance services and lighting and landscape 9,400,476 3,059,330 - - (6,341,146) Development services 5,769,915 3,374,462 1,692,633 1,353,781 650,961 Administrative services 3,816,145 31,693 - - (3,784,452) Recreation, arts, & community services 3,794,125 1,427,112 - - (2,367,013) Interest expense 322,951 - - - (322,951) Total governmental activities 34,916,610$ 8,188,723$ 1,873,835$ 1,358,781$ (23,495,271) General revenues: Taxes: Property 16,025,356 Sales 5,753,805 Motor vehicle license fee 35,829 Franchise 2,836,124 Other 367,376 Total taxes 25,018,490 Investment earnings 3,183,434 Miscellaneous 1,838,208 Gain on sale of capital assets 345,523 Reimbursement from Successor Agency 812,456 Total general revenues 31,198,111 Change in net position 7,702,840 Net position - beginning of year 255,886,275 Net position - end of year 263,589,115$ Program Revenues Town of Danville Statement of Activities For the Year Ended June 30, 2020 See accompanying Notes to the Basic Financial Statements. 19 DR A F T 11 . 0 2 . 2 0 2 0 20 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 21 FUND FINANCIAL STATEMENTS DR A F T 11 . 0 2 . 2 0 2 0 22 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 23 GOVERNMENTAL FUND FINANCIAL STATEMENTS DR A F T 11 . 0 2 . 2 0 2 0 24 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Governmental Fund Financial Statements 25 General Fund The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. The major revenue sources for this fund are property taxes, sales taxes, unrestricted revenues from the State, fines and forfeitures and interest income. Expenditures are made for administration, legislation, public safety, parks and recreation and other services. Lighting and Landscaping Special Revenue Fund Assessments paid by property owners who receive street lighting services and assessments paid by all property owners for landscape and park maintenance are received into this Fund. The income is used to pay energy costs for the street lighting system, community roadside, median and park landscape costs. Regional Traffic Impact Fees Fund Development impact fees are collected for local, sub-regional and regional traffic improvements. Sub-regional and regional fees are collected on behalf of other agencies and distributed to the lead agency for project construction. Capital Improvement Capital Projects Fund This Fund receives contributions from the General Fund for future capital improvements, in accordance with the Town's Capital Improvement Program. DR A F T 11 . 0 2 . 2 0 2 0 General Fund Lighting and Landscape Special Revenue Fund Regional Traffic Impact Fees Special Revenue Fund Capital Improvement Capital Projects Fund ASSETS Cash and investments $ 22,455,274 $ 4,733,539 $ 4,663,956 $ 24,981,287 Cash and investments with fiscal agent 815,484 - - - Receivables (net of allowances): Accounts 1,754,047 36,287 15,491 - Due from Successor Agency of former CDA 6,159,401 - - - Interest 156,112 11,043 10,053 59,579 Prepaid items 107,707 - - - Total assets $ 31,448,025 $ 4,780,869 $ 4,689,500 $ 25,040,866 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 3,707,387 $ 379,393 $ 684 $ 103,060 Accrued wages payable 325,614 61,135 - 3,533 Retention payable - - - 1,378 Deposits payable 80,140 - - - Claims liabilities 53,990 - - - Unearned revenue 357,290 36,170 - - Total liabilities 4,524,421 476,698 684 107,971 Deferred Inflows of Resources: Unavailable revenue 348,656 - - - Total deferred inflows of resources 348,656 - - - Fund Balances: Nonspendable 5,167,108 - - - Restricted 815,484 1,686,327 4,688,816 - Committed 20,401,468 - - 24,932,895 Assigned 190,888 2,617,844 - - Total fund balances 26,574,948 4,304,171 4,688,816 24,932,895 Total liabilities, deferred inflows of resources and fund balances $ 31,448,025 $ 4,780,869 $ 4,689,500 $ 25,040,866 (Continued) Major Funds Town of Danville Governmental Funds Balance Sheet June 30, 2020 See accompanying Notes to the Basic Financial Statements. 26 DR A F T 11 . 0 2 . 2 0 2 0 Other Governmental Funds Total Governmental Funds ASSETS Cash and investments $ 28,499,340 $ 85,333,396 Cash and investments with fiscal agent 813,920 1,629,404 Receivables (net of allowances): Accounts 243,126 2,048,951 Due from Successor Agency of former CDA - 6,159,401 Interest 67,728 304,515 Prepaid items - 107,707 Total assets $ 29,624,114 $ 95,583,374 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 492,271 $ 4,682,795 Accrued wages payable 115,415 505,697 Retention payable 12,331 13,709 Deposits payable 65,170 145,310 Claims liabilities - 53,990 Unearned revenue 28,369 421,829 Total liabilities 713,556 5,823,330 Deferred Inflows of Resources: Unavailable revenue - 348,656 Total deferred inflows of resources - 348,656 Fund Balances: Nonspendable - 5,167,108 Restricted 19,770,545 26,961,172 Committed 9,140,013 54,474,376 Assigned - 2,808,732 Total fund balances 28,910,558 89,411,388 Total liabilities, deferred inflows of resources and fund balances $ 29,624,114 $ 95,583,374 (Concluded) June 30, 2020 Balance Sheet (Continued) Governmental Funds Town of Danville See accompanying Notes to the Basic Financial Statements. 27 DR A F T 11 . 0 2 . 2 0 2 0 28 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 Total Fund Balances - Total Governmental Funds $ 89,411,388 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the Governmental Funds Balance Sheet. Non-depreciable capital assets 145,958,256 Depreciable capital assets, net 35,265,466 Total capital assets 181,223,722 Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the Governmental Funds Balance Sheet. (90,622) Unavailable revenues recorded in Governmental Fund Financial Statements resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 348,656 Long-term liabilities are not due and payable in the current period and therefore they are not reported in the Governmental Funds Balance Sheet. Long-term debt due within one year (610,000) Long-term liabilities - due in more than one year: - Certificates of participation (5,755,000) - Compensated absences payable (939,029) Total long-term debt (7,304,029) Net Position of Governmental Activities 263,589,115$ Town of Danville Reconciliation of Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position June 30, 2020 See accompanying Notes to the Basic Financial Statements. 29 DR A F T 11 . 0 2 . 2 0 2 0 General Fund Lighting and Landscape Special Revenue Fund Regional Traffic Impact Fees Special Revenue Fund Capital Improvement Capital Projects Fund REVENUES: Property taxes $ 16,025,356 $ - $ - $ - Sales taxes 5,740,046 - - - Special assessments - 3,038,347 - - Other taxes 2,249,988 - - - Charges for services 1,413,021 - - - Licenses and permits 356,849 - - - Development fees - - 229,368 - Intergovernmental 34,107 - - 48,755 Fines and forfeitures 128,312 - - - Use of money and property 2,563,838 62,164 205,853 871,982 Miscellaneous 218,639 111,318 - 40,500 Total revenues 28,730,156 3,211,829 435,221 961,237 EXPENDITURES: Current: General government 1,905,768 - - - Police services 9,527,174 - - - Maintenance services 2,144,361 - - 114,421 Lighting and landscape - 3,703,613 - - Development services 1,065,708 - - 1,029,691 Administrative services 3,698,300 2,973 2,784 20,920 Recreation, arts, & community services 3,195,525 - - 24,575 Capital outlay - - - 12,707,928 Total expenditures 21,536,836 3,706,586 2,784 13,897,535 REVENUES OVER (UNDER) EXPENDITURES 7,193,320 (494,757) 432,437 (12,936,298) OTHER FINANCING SOURCES (USES): Proceeds from sale of property 3,274,939 - - - Transfers in 297,553 1,000,000 - 10,334,475 Transfers out (11,459,475) (292,039) - - Total financing sources (uses) (7,886,983) 707,961 - 10,334,475 NET CHANGE IN FUND BALANCES (693,663) 213,204 432,437 (2,601,823) FUND BALANCES: Beginning of year 27,268,611 4,090,967 4,256,379 27,534,718 End of year $ 26,574,948 $ 4,304,171 $ 4,688,816 $ 24,932,895 (Continued) Major Funds Town of Danville Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2020 See accompanying Notes to the Basic Financial Statements. 30 DR A F T 11 . 0 2 . 2 0 2 0 Other Governmental Funds Total Governmental Funds REVENUES: Property taxes $- $ 16,025,356 Sales taxes - 5,740,046 Special assessments 556,326 3,594,673 Other taxes 2,472,101 4,722,089 Charges for services 608,541 2,021,562 Licenses and permits 10,527 367,376 Development fees 2,241,695 2,471,063 Intergovernmental 1,125,308 1,208,170 Fines and forfeitures -128,312 Use of money and property 561,891 4,265,728 Miscellaneous 574,185 944,642 Total revenues 8,150,574 41,489,017 EXPENDITURES: Current: General government 16,246 1,922,014 Police services 131,336 9,658,510 Maintenance services 2,153,034 4,411,816 Lighting and landscape - 3,703,613 Development services 3,454,003 5,549,402 Administrative services 52,458 3,777,435 Recreation, arts, & community services 288,042 3,508,142 Capital outlay 490,313 13,198,241 Total expenditures 6,585,432 45,729,173 REVENUES OVER (UNDER) EXPENDITURES 1,565,142 (4,240,156) OTHER FINANCING SOURCES (USES): Proceeds from sale of property - 3,274,939 Transfers in 300,000 11,932,028 Transfers out (180,514) (11,932,028) Total financing sources (uses)119,486 3,274,939 NET CHANGE IN FUND BALANCES 1,684,628 (965,217) FUND BALANCES: Beginning of year 27,225,930 90,376,605 End of year $ 28,910,558 $ 89,411,388 (Concluded) Town of Danville Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2020 See accompanying Notes to the Basic Financial Statements. 31 DR A F T 11 . 0 2 . 2 0 2 0 Net Change in Fund Balances - Total Governmental Funds (965,217)$ Amounts reported for governmental activities in the Statement of Activities are different because: Governmental Funds report capital outlay as expenditures. However, in the Government-Wide Statement of Activities the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount of capital assets recorded in the current period.13,198,230 Depreciation expense on capital assets is reported in the Government-Wide Statement of Activities, but they do not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in Governmental Funds. (1,995,993) The net effect of various miscellaneous adjustments (i.e. sales and deletions) involving capital assets.(2,929,416) Revenues that have not met the revenue recognition criteria in the Fund Financial Statements are recognized as revenue in the Government-Wide Financial Statements.(27,546) Long-term compensated absences are reported in the Government-Wide Statement of Activities, but they do not require the use of current financial resources. Therefore, long-term compensated absences are not reported as expenditures in Governmental Funds. The following amount represents the change in long-term compensated absences from the prior year. (66,723) Repayment of bond principal is an expenditure in Governmental Funds, but the repayment reduces long-term liabilities in the Government-Wide Statement of Net Position. Long-term debt repayments: - Certificates of participation 480,000 Interest expense on long-term debt is reported in the Government-Wide Statement of Activities but they do not require the use of current financial resources. Therefore, interest expense is not reported as expenditures in Governmental Funds. The following amount represents the change in accrued interest from the prior year.9,505 Change in Net Position of Governmental Activities 7,702,840$ Town of Danville Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to Government-Wide Statement of Activities For the Year Ended June 30, 2020 See accompanying Notes to the Basic Financial Statements. 32 DR A F T 11 . 0 2 . 2 0 2 0 33 FIDUCIARY FUND FINANCIAL STATEMENTS DR A F T 11 . 0 2 . 2 0 2 0 34 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Fiduciary Fund Financial Statements 35 TRUST FUND Successor Agency Trust Fund The Successor Agency to the former Community Development Agency (CDA) of the Town of Danville was established as a result of the passage of Assembly Bill x1 26, which dissolved all Redevelopment Agencies in the State of California effective February 1, 2012. On January 10, 2012, pursuant to Health and Safety Code Section 34173, the Town Council declared that the Town of Danville would act in a special limited capacity as Successor Agency for the dissolved Community Development Agency of the Town of Danville, effective February 1, 2012. The Successor Agency is responsible for day to day administration of the former CDA, including identification and payment of enforceable and recognized obligations of the former CDA, and disbursement of available assets. An Oversight board, consisting of 7 members, was appointed to supervise the Successor Agency's wind down of the former CDA. AGENCY FUNDS Deposits Fund This fund is comprised of money temporarily deposited with the Town. Examples of deposits include cash improvement bonds posted by developers, performance bonds posted by contractors, third party pass-through fees and employee benefit allocations. DR A F T 11 . 0 2 . 2 0 2 0 Successor Agency Trust Fund Agency Funds ASSETS Cash and investments 798,647$ 1,147,553$ Cash and investments with fiscal agents 376,122 248,073 Total assets 1,174,769 1,395,626$ LIABILITIES Accounts payable 5,080 64,924$ Loan payable to Town 6,159,401 - Loan payable, due within one year 180,000 - Loan payable, due in more than one year 2,105,000 - Interest payable 475,312 - Deposits - 1,330,702 Total liabilities 8,924,793 1,395,626$ NET POSITION (DEFICIT) Unrestricted (deficit)(7,750,024) Total net position (7,750,024)$ Town of Danville Fiduciary Fund Statement of Fiduciary Net Position June 30, 2020 See accompanying Notes to the Basic Financial Statements. 36 DR A F T 11 . 0 2 . 2 0 2 0 Successor Agency Trust Fund ADDITIONS: Property tax receipt 2,292,878$ Miscellaneous 4,180 Total additions 2,297,058 DEDUCTIONS: Amount allocated to General Fund for principal payment 645,000 Interest 310,283 Other - Staff expenses and miscellaneous 24,369 Total deduction 979,652 Changes in net position 1,317,406 NET POSITION (deficit): Beginning of year (9,067,430) End of year (7,750,024)$ Town of Danville Fiduciary Fund Statement of Changes in Fiduciary Net Position For the Year Ended June 30, 2020 See accompanying Notes to the Basic Financial Statements. 37 DR A F T 11 . 0 2 . 2 0 2 0 38 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 39 NOTES TO THE BASIC FINANCIAL STATEMENTS DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Index to Notes to the Basic Financial Statements For the Year Ended June 30, 2020 40 Table of Contents Page Note 1 – Reporting Entity……………………………… .................................................................................... 41 Note 2 – Summary of Significant Accounting Policies ...................................................................................... 41 A. Basis of Presentation, Basis of Accounting, and Measurement Focus ..................................................... 41 B. Cash and Investments ................................................................................................................................ 44 C. Cash and Investments with Fiscal Agent .................................................................................................. 45 D. Land Held for Redevelopment .................................................................................................................. 45 E. Capital Assets ............................................................................................................................................ 46 F. Unearned Revenues ................................................................................................................................... 47 G. Compensated Absences ............................................................................................................................. 48 H. Long-Term Debt ....................................................................................................................................... 48 I. Fund Balance ............................................................................................................................................ 48 J. Net Position ............................................................................................................................................... 49 K. Spending Policies ...................................................................................................................................... 49 L. Property Taxes .......................................................................................................................................... 49 M. Use of Accounting Estimates .................................................................................................................... 49 N. Implementation of New GASB Pronouncements ..................................................................................... 50 Note 3 – Cash and Investments ........................................................................................................................... 50 A. Demand Deposits ...................................................................................................................................... 51 B. Investments ............................................................................................................................................... 52 C. External Investment Pool .......................................................................................................................... 53 D. Restricted Cash and Investments Held with Fiscal Agent ........................................................................ 54 E. Risk Disclosures ........................................................................................................................................ 54 Note 4 – Capital Assets ........................................................................................................................................ 56 A. Governmental Activities ........................................................................................................................... 56 Note 5 – Interfund Transactions ......................................................................................................................... 58 A. Transfers In/Out ........................................................................................................................................ 58 Note 6 – Loans Receivable from Successor Agency to the Former Community Development Agency ...................................................................................... 58 A. Successor Agency (SA) Cooperative Agreement Loan Receivable ......................................................... 59 Note 7 – Unearned Revenue ................................................................................................................................ 59 Note 8 – Long-Term Obligations ........................................................................................................................ 60 A. Governmental Activities ........................................................................................................................... 60 B. Fiduciary Fund Financial Statements ........................................................................................................ 62 Note 9 – Defined Contribution Pension Plan ..................................................................................................... 63 Note 10 – Fund Balance Classification ............................................................................................................... 64 Note 11 – Risk Management ................................................................................................................................ 65 Note 12 – Commitments and Contingencies ...................................................................................................... 66 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements For the Year Ended June 30, 2020 41 Note 1 – Reporting Entity The Town of Danville is a largely residential community located in the San Ramon Valley area of Contra Costa County, California. The Town was incorporated as a municipal corporation in 1982, and encompasses eighteen square miles with a population of 44,626. The Town operates under the Council-Manager form of government, with five elected Council members served by a full-time Town Manager and staff. The Town’s staff of 131.25 employees, as well as 30 County Sheriff’s Department employees under contract with the Town, are responsible for the following Town services:  Public Safety – The Town provides round-the-clock police services from a central station, using trained personnel provided under contract with the County Sheriff’s Department.  Streets and Roads – The Town builds and maintains its streets, curbs, gutters and related public property using Town employees. Major projects may be contracted to reduce costs.  Parks and recreation, public improvements, planning, zoning and other services are provided by Town employees.  Maintenance – In addition to Town staff, the Town employs varying numbers of seasonal personnel for maintenance and recreation services. The accompanying financial statements include the financial activities of the Town (the primary government) and its component units. The component units discussed below are included in the Town’s reporting entity because of the significance of their operational or financial relationships with the Town, including the Town Council, which acts as the governing board. In addition, Town staff performs all administrative and accounting functions for these entities, and these entities provide their services entirely to the Town. These blended component units, although legally separate entities, are, in substance, part of the Town’s operations. Note 2 – Summary of Significant Accounting Policies A. Basis of Presentation, Basis of Accounting, and Measurement Focus The basic financial statements of the Town have been prepared in conformity with accounting principles general accepted of the United States of America ("U.S. GAAP") as applied to governmental agencies. The Governmental Accounting Standards Board ("GASB") is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The accounts of the Town are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 42 Note 2 – Summary of Significant Accounting Policies (Continued) A. Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) The Statement of Net Position/Balance Sheet reports separate sections for deferred outflows of resources and deferred inflows of resources, when applicable. Deferred Outflows of Resources represent outflows of resources (consumption of net position) that apply to future periods and that, therefore, will not be recognized as an expense until that time. Deferred Inflows of Resources represent inflows of resources (acquisition of net position) that apply to future periods and that, therefore, are not recognized as revenue until that time. Government – Wide Financial Statements The Town’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of governmental activities for the Town. Fiduciary activities of the Town are not included in these statements. These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the Town’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Certain types of transactions are reported as program revenues for the Town in three categories:  Charges for services  Operating grants and contributions  Capital grants and contributions Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated. The following interfund activities have been eliminated:  Due To/From Other Funds  Transfers In/Out Governmental Funds Financial Statements 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 net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 43 Note 2 – Summary of Significant Accounting Policies (Continued) A. Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Revenues are recognized as soon as they are both “measurable” and “available.” Revenues are considered to be available when they are collectible within the current period as soon as enough thereafter to pay liabilities of the current period. For this purpose, the Town considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The primary revenue sources, which have been treated as susceptible to accrual by the Town, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences. The Town reports the following major Governmental Funds: General Fund The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. The major revenue sources for this fund are property taxes, sales taxes, unrestricted revenues from the State, licenses and permits, fines and forfeitures and interest income. Expenditures are made for administration, legislation, public safety, parks and recreation and other services. Lighting and Landscaping Special Revenue Fund Assessments paid by property owners who receive street lighting services and assessments paid by all property owners for landscape and park maintenance are received into this Fund. The income is used to pay energy costs for the street lighting system and community roadside, median and park landscape costs. Regional Traffic Impact Fees Special Revenue Fund Development impact fees are collected for local, sub-regional and regional traffic improvements. Sub- regional and regional fees are collected on behalf of other agencies and distributed to the lead agency for project construction. Capital Improvement Capital Projects Fund This Fund receives contributions from the General Fund for future capital improvements, in accordance with the Town’s Capital Improvement Program. Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The Town’s Fiduciary Funds represent Agency Funds and a Private Purpose Trust Fund. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The Fiduciary Funds are accounted for using the accrual basis of accounting. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 44 Note 2 – Summary of Significant Accounting Policies (Continued) A. Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) The Town reports the following Private Purpose Trust Fund: Successor Agency Trust Fund The Successor Agency to the former Community Development Agency (“CDA”) of the Town of Danville was established as a result of the passage of Assembly Bill x1 26, which dissolved all Redevelopment Agencies in the State of California effective February 1, 2012. On January 10, 2012 pursuant to Health and Safety Code Section 34173, the Town Council declared that the Town would act in a special limited capacity as Successor Agency for the dissolved CDA, effective February 1, 2012. The Successor Agency is responsible for day to day administration of the former CDA, including identification and payment of enforceable and recognized obligations of the former CDA, and disbursement of available assets. An Oversight board, consisting of seven members, was appointed to supervise the Successor Agency’s wind down of the former CDA. The Town reports the following Agency Fund: Deposits Fund This Fund is comprised of money temporarily deposited with the Town. Examples of deposits include cash improvement bonds posted by developers, performance bonds posted by contractors, third party pass-through fees and employee benefit allocations. B. Cash and Investments The Town pools its available cash for investment purposes. The Town’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as cash and investments. Certain disclosure requirements for deposits and investment risks were made in the following areas:  Interest rate risk  Credit risk  Overall  Custodial credit risk  Concentrations of credit risk DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 45 Note 2 – Summary of Significant Accounting Policies (Continued) B. Cash and Investments (Continued) 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 disclosures. 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. U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the Statements of Net Position, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows: Level 1 – Inputs are unadjusted, quoted prices for identical the asset or liability in active markets at the measurement date. Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Town maintains a cash and investment pool, which includes cash balances and authorized investments of all funds, which the Town Treasurer invests to enhance interest earnings. The pooled interest earned is allocated to each fund based on its average monthly cash and investment balances. The Town participates in an investment pool managed by the State of California titled Local Agency Investment Fund (“LAIF”), which has invested a portion of the pool funds in structured notes and asset-backed securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these structured notes and asset-backed securities are subject to market risk with changes in interest rates. C. Cash and Investments with Fiscal Agents Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. D. Land Held for Redevelopment The Successor Agency of the Town holds one parcel of land acquired by the former CDA as part of that entity's primary purpose before dissolution to develop or redevelop Town properties. The property was deeded to the Town on March 28, 2016 for capital projects. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 46 Note 2 – Summary of Significant Accounting Policies (Continued) E. Capital Assets Capital assets, which include lands, buildings, improvements, furniture, equipment and infrastructure assets (e.g., roads, bridges, signal systems and similar items) are reported in the applicable governmental activities in the Government-Wide Financial Statements. The Town defines infrastructure as the primary physical assets that allow the Town to conduct its business. The Town's infrastructure assets include:  Street system  Street signal system  Park and recreation lands and improvement systems  Storm water conveyance system  Bridges  Buildings combined with site amenities such as parking and landscaped areas Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into the following:  Pavement  Medians  Curb and gutters  Landscaping and land The detail of these subsystems is not presented in the basic financial statements. However, the operating departments maintain information regarding the subsystems. Capital assets are recorded at historical cost or estimated historical cost if actual cost was not available. Donated assets are valued at their estimated acquisition value on the date donated. Town policy has set the capitalization thresholds for reporting capital assets at the following:  All buildings (no threshold)  $20,000 for roads and bridges/box culverts  $10,000 for traffic signals and storm drain pipes  $5,000 for furniture, fixtures, equipment, catch basins and manholes Depreciation is recorded on a straight-line basis over the useful lives of all other assets, except for infrastructure, as follows: Building and parking lots 40 years Park improvements 5 years Furnitures and equipment 3 - 10 years Infrastructure 30 - 50 years DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 47 Note 2 – Summary of Significant Accounting Policies (Continued) E. Capital Assets (Continued) The Town elected to use the Modified Approach as defined by GASB Statement No. 34 for infrastructure reporting of its streets, concrete and asphalt pavements. This condition assessment will be performed every three years. Each homogeneous segment of Town-owned street was assigned a physical condition based on potential defects. A Pavement Condition Index (PCI) was assigned to each street segment. The PCI is expressed in a continuous scale from 0 to 100, where 0 is assigned to the least acceptable physical condition and 100 is assigned to segments of street that have the physical characteristics of a new street. The following conditions were defined: Very good condition 70 - 100 Good condition 50-69 Poor condition 26-49 Very poor condition 0 - 25 The Town's policy relative to maintaining the street assets is to achieve an average rating of 65-70 for all street segments. This acceptable rating allows minor cracking and raveling of the pavement along with minor roughness that could be noticeable to drivers traveling at the posted speeds. For all other infrastructure systems, the Town elected to use the Basic Approach as defined by GASB Statement No. 34. The Town appraised its own infrastructure as of July 1, 2001 and has completed an internal update for June 30, 2019. The 2001 appraisal determined the original cost, which is defined as the actual cost to acquire new property in accordance with market prices at the time of first construction/acquisition. Original costs were developed in one of three ways: 1. Historical records; 2. Standard unit costs appropriate for the construction/acquisition date; 3. Present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date. The accumulated depreciation from the date of construction/acquisition to the current date was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the original cost. F. Unearned Revenues For the Government-wide Financial Statements, unearned revenue is recognized in connection with a transaction before the earnings process is completed. For the Governmental Fund Financial Statements, unearned revenues arise when potential revenues do not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met or when the government has a legal claim to the resources, unearned revenues are removed from the combined balance sheet and revenue is recognized. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 48 Note 2 – Summary of Significant Accounting Policies (Continued) G. Compensated Absences Compensated absences include general leave, which covers vacations up to the cap amount based on years of services and hire date, and is accounted for in accordance with U.S. GAAP. It is the policy of the Town to pay when an employee retires or terminates. This amount is funded at a level that recognizes each employee’s ability to request leave during employment and is included as a liability in the Government-wide Financial Statements. Compensated absences liabilities of governmental activities are generally liquidated by the General Fund (75%), Building and Planning Special Revenue Fund (10%), and Other Special Revenue Funds (15%). H. Long-Term Debt In the Government-wide Financial Statements, long-term debt is reported as liabilities. Bonds payable are reported net of the applicable bond premium or discount. For Governmental Fund Financial Statements, bond premiums and discounts, as well as bond issuance costs, are recognized during the current period. Bond proceeds are reported as other financing sources net of the applicable premium or discount. Issuance costs, whether or not withheld from the actual net proceeds received, are reported as debt service expenditures. I. Fund Balance In the Governmental Fund Financial Statements, fund balances are classified in the following categories: Nonspendable – Items cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds. Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making (normally the governing body) and that remain binding unless removed in the same manner. The Town Council is considered the highest authority for the Town. A Town resolution is required to have fund balance committed. Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The Town Council has authorized the Town Manager and the Finance Manager/Treasurer for that purpose. Unassigned – This category is for any balances that have no restrictions placed upon them. The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 49 Note 2 – Summary of Significant Accounting Policies (Continued) J. Net Position For the Government-Wide Financial Statements, net position is classified in the following categories: Net Investment in Capital Assets component of net position consists of capital assets net of accumulated depreciation, reduced by the outstanding balances of bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Unrestricted component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position. K. Spending Policies For Government-Wide Financial Statements, when an expense is incurred for purposes for which both restricted and unrestricted net position are available, the Town’s policy is to apply restricted net position first. For Governmental Fund Financial Statements, the Town’s policy is to spend restricted fund balances first, before spending unrestricted fund balances, for expenditures incurred for purposes for which both restricted and unrestricted fund balances are available, except for instances wherein a Town ordinance or resolution specifies the funding source or a fund balance to use. The Town’s policy is that committed and assigned fund balances are considered to have been spent first before unassigned fund balances have been spent, when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used, except for instances wherein a Town ordinance specifies the fund balance to use. L. Property Taxes Revenue is recognized in the fiscal year for which the tax and assessment is levied. The County of Contra Costa levies, bills and collects property taxes and special assessments for the Town and remits the full assessment regardless of the amounts received under a Teeter plan arrangement. Property Tax Secured Unsecured Lien Date January 1 January 1 (Preceding fiscal year) (Preceding fiscal year) Due Date November 1 & February 1 August 31 Delinquent Date December 10 & April 10 September 1   M. Use of Accounting Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 50 Note 2 – Summary of Significant Accounting Policies (Continued) N. Implementation of New GASB Pronouncements During fiscal year ended June 30, 2020, the Town has implemented the following new GASB Pronouncements: GASB Statement No. 95 In May 2020, GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. The primary objective of this Statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. That objective is accomplished by postponing the effective dates of certain provisions in Statements and Implementation Guides that first became effective or are scheduled to become effective for periods beginning after June 15, 2018, and later. Application of this statement did not have a material effect on the Town’s financial statements for the fiscal year ending June 30, 2020. Note 3 – Cash and Investments The following is a summary of pooled cash and investments, including restricted cash and investments held by the Town, and cash and investments held by fiscal agents, at June 30, 2020: Primary Government Fiduciary Governmental Fund Financial Activities Statements Total Cash and investments 60,001,633$ 1,946,200$ 61,947,833$ Restricted cash and investments: Held by Town 25,331,763 - 25,331,763 Held by fiscal agent 1,629,404 624,195 2,253,599 Total cash and investments 86,962,800$ 2,570,395$ 89,533,195$ At June 30, 2020, cash and investments, excluding restricted cash and investments held by fiscal agent, are reported at fair value based on quoted market prices. The following table presents the fair value measurements of investments recognized in the accompanying Statement of Net Position measured at fair value on a recurring basis and the level within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2020: DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 51 Note 3 – Cash and Investments (Continued) Percentage of Measurement Investment Type Fair Value Investments Input Demand deposits 2,201,998$ N/A N/A Investments: U.S. Securities: U.S. Treasury 20,792,222 24.44% Level 2 Federal Securities 31,881,249 37.47% Level 2 Asset Backed Securities 2,495,900 2.93% Level 2 Int'l Bank Recon & Development 1,503,519 1.77% Level 2 International Finance Corp 1,010,850 1.19% Level 2 Inter-American Dev Bank 1,128,516 1.33% Level 2 U.S. Corporate Notes/FDIC: State Street Bank Note 802,273 0.94% Level 2 PNC Bank Callable 921,925 1.08% Level 2 Blackrock Inc. 1,033,450 1.21% Level 2 Apple Inc. Callable 761,012 0.89% Level 2 Berkshire Hathaway Note 1,048,932 1.23% Level 2 Oracle Corp. Callable Note 1,033,979 1.22% Level 2 Paccar Financial Corp. Note 515,771 0.61% Level 2 Chevron Corp Callable Note 265,462 0.31% Level 2 Toyota Motor Credit Corp 1,050,499 1.23% Level 2 US Bank NA Callable Note 791,945 0.93% Level 2 Bank of NY Mellon Corp Callable Note 797,436 0.94% Level 2 Apple Inc. Note 792,803 0.93% Level 2 Wal-Mart Stores Callable Note 871,494 1.02% Level 2 American Honda Finance Note 1,034,824 1.22% Level 2 Local Agency Investment Fund (LAIF) 13,872,063 16.31% N/A Money Market Funds 671,474 0.79% N/A Total investments 85,077,598 100.00% Total cash and investments 87,279,596$ Investments securities classified in Level 2 of the fair value hierarchy are valued using prices determined by the use of matrix pricing techniques maintained by the pricining vendors for these securities. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. A. Demand Deposits The carrying amounts of the Town's cash deposits were $2,201,998 at June 30, 2020. Bank balances as of June 30, 2020, were $3,006,454 which were fully insured and collateralized with securities held by the pledging financial institutions in the Town’s name as discussed in the following. The California Government Code (Code) requires California banks and savings and loan associations to secure the Town'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 Town's name. The market value of pledged securities must equal at least 110% of the Town's cash deposits. California law also allows institutions to secure Town deposits by pledging first trust deed mortgage notes having a value of 150% of the Town's total cash deposits. The Town has waived collateral requirements for cash deposits that are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 52 Note 3 – Cash and Investments (Continued) B. Investments The Town reviews and refines its Investment Policy (Policy) annually, with the most recent revision approved by the Town Council on November 19, 2019. The Policy states that the primary investment objective is safety with investments being legally permitted and sufficiently liquid to meet forecasted needs. Maximization of interest earnings is a secondary objective. Further, the Policy states that the Town Treasurer has the ultimate responsibility to protect, preserve and maintain cash and investments. The Policy also established internal controls and reporting requirements and stipulates "Permitted Investments and Limitation on Investments". The Town is authorized by State statutes (California Government Code 53601) and in accordance with the Town's Policy to invest in the following:  U.S. Treasury Securities  U.S. Government Federal Agencies  Certificates of Deposit  Bankers Acceptances  Commercial Paper (Corporations)  Medium-Term Corporate Notes  Repurchase Agreements collateralized by U.S. Securities or U.S. Government Federal Agencies  California Local Agency Investment Fund (LAIF)  U.S. Government Mortgage Pass-Through Securities  Collateralized Mortgage Obligations (CMOs)  Asset-Backed Securities (ABS)  Money Market Mutual Funds  Passbook Savings and Demand Deposits Accounts Additionally, the Town's Policy specifies the maximum percentage of the total investment portfolio that may be held in each of the aforementioned securities. In addition to State statutes, the Town establishes that funds on deposit in banks must be federally insured or collateralized and investments shall: (1) have maximum maturity not to exceed five years; (2) be laddered and based on cash flow forecasts; and (3) be subject to limitations to a certain percent of the portfolio for each of the authorized investments. Investments were stated at fair value using the aggregate method in all funds and component units, resulting in the following investment earnings in all funds and component units: Interest earnings 1,549,749$ Unrealized gain on changes in fair value of investments 1,633,685 Total investment earnings 3,183,434$ DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 53 Note 3 – Cash and Investments (Continued) B. Investments (Continued) The Town’s investment practices are in compliance with California Government Code 53601 et seq., and the Town’s Policy. Securities that are purchased and maintain their rating are held to maturity with no exception. Therefore, while GASB Statement No. 31 requires that investments be stated as “fair value” for annual financial reporting purposes, the Town cannot realize either gains or losses in this valuation of the investments. C. External Investment Pool The Town invests in the Local Agency Investment Fund (LAIF), a State of California external investment pool. The LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The Town’s investments with the LAIF at June 30, 2020, include a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments may include the following: Structured Notes which are debt securities (other than asset-backed securities) with cash flow characteristics (coupon rate, redemption amount, or stated maturity) that depend upon one or more indices and/or that have embedded forwards or options. Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle its purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as CMO’s) or credit card receivables. As of June 30, 2020, the Town had $13,872,063 invested in the LAIF, which had invested 3.37% of the pool investment funds in structured notes and asset-backed securities. The fair value of the Town’s position in the LAIF pool is the same as the value of the pool shares. The Pooled Money Investment Board provides oversight to the State Treasurer’s pooled investment program. The purpose of the board is to design and administer an effective cash management and investment program, using all monies flowing through the State Treasurer’s Office bank accounts and keeping all available funds invested in a manner consistent with the goals of safety, liquidity, and yield. The Pooled Money Investment Board is comprised of the State Treasurer as chair, the State Controller, and the Director of Finance. The investment program is not registered with the Securities and Exchange Commission as an investment company. The State Treasurer’s Office reports its investments at fair value. The fair value of securities in the State Treasurer’s pooled investment program generally is based off of quoted market prices. The value of deposits in the State Treasurer’s pooled investment program, including the Local Agency Investment Fund, is equal to the dollars deposited in the program. Certain funds have elected to participate in the pooled investment program even though they have the authority to make their own investments. Others may be required by legislation to participate in the program; as a result, the deposits of these funds or accounts may be considered voluntary. However, these funds or accounts are part of the State’s reporting entity. The remaining participation in the pool, the Local Agency Investment Fund, is voluntary. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 54 Note 3 – Cash and Investments (Continued) D. Restricted Cash and Investments Held with Fiscal Agent Restricted cash and investments with fiscal agents, which can be only used for specific capital outlays, payment of certain long-term debt and maintaining required reserves, consists of $1,629,404 in the Governmental-wide Statement of Net Position and $624,195 in the Statement of Fiduciary Net Position. These funds have been invested only as permitted by specific State statutes governing these investments or by applicable Town ordinance, resolution or bond indenture. E. Risk Disclosures Interest Rate Risk As a means of limiting its exposure to fair value losses arising from rising interest rates, the Town’s Policy provides that final maturities of securities limits as follows: Maturity Maximum Investment Up to six months 25% Six months to five years 75% Specific maturities of investments depend on liquidity needs. At June 30, 2020, the Town's pooled cash and investments had the following maturities: Investment Type Fair Value 1 year or less 1-2 years 2-3 years 3-4 years 4-5 years Demand deposits 2,201,998$ 2,201,998$ -$ -$ -$ -$ Investments: U.S. Securities: U.S. Treasury 20,792,222 8,746,240 5,425,130 5,049,309 1,571,543 - Federal Securities 31,881,249 3,365,949 8,127,268 16,973,013 3,415,019 - Asset Backed Securities 2,495,900 - 208,955 501,971 825,986 958,988 Int'l Bank Recon & Development 1,503,519 1,503,519 - - - - International Finance Corp 1,010,850 1,010,850 - - - - Inter-American Dev Bank 1,128,516 - 1,128,516 - - - U.S. Corporate Notes/FDIC: State Street Bank Note 802,273 802,273 - - - - PNC Bank Callable 921,925 921,925 - - - - Blackrock Inc.1,033,450 1,033,450 - - - - Apple Inc. Callable 761,012 - 761,012 - - - Berkshire Hathaway Note 1,048,932 - 1,048,932 - - - Oracle Corp. Callable Note 1,033,979 - 1,033,979 - - - Paccar Financial Corp. Note 515,771 - - 515,771 - - Chevron Corp Callable Note 265,462 - - 265,462 - - Toyota Motor Credit Corp 1,050,499 - - 1,050,499 - - US Bank NA Callable Note 791,945 - - 791,945 - - Bank of NY Mellon Corp Callable Note 797,436 - - 797,436 - - Apple Inc. Note 792,803 - - 792,803 - - Wal-Mart Stores Callable Note 871,494 - - 871,494 - - American Honda Finance Note 1,034,824 - - - 1,034,824 - Local Agency Investment Fund (LAIF) 13,872,063 13,872,063 - - - - Money Market Funds 671,474 671,474 - - - - Total investments 85,077,598 31,927,743 17,733,792 27,609,703 6,847,372 958,988 Total cash and investments 87,279,596$ 34,129,741$ 17,733,792$ 27,609,703$ 6,847,372$ 958,988$ Maturities (in years) DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 55 Note 3 – Cash and Investments (Continued) E. Risk Disclosures (Continued) Credit Risk Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. According to the Town’s Policy, no more than 5% of the total portfolio may be invested in securities of any single issuer, other than the U.S. Government, its agencies and instrumentalities and the LAIF. If a security (other than the LAIF) is downgraded by either Moody’s or S&P to a level below the minimum quality required by the Town, the Town will determine whether to retain or liquidate the security based upon criteria set forth in the Town’s Policy. At June 30, 2020, the Town's investments are rated as follows: Moody's S&P Investments: U.S. Securities: U.S. Treasury Aaa AA+ Federal Securities Aaa AA+ Asset Backed Securities Aaa AAA Int'l Bank Recon & Development Aaa AAA International Finance Corp Aaa AAA Inter-American Dev Bank Aaa AAA U.S. Corporate Notes/FDIC: State Street Bank Note A1 A PNC Bank Callable A2 A Blackrock Inc. Aa3 AA- Apple Inc. Callable Aa1 AA+ Berkshire Hathaway Note Aa2 AA Oracle Corp. Callable Note A3 A Paccar Financial Corp. Note A1 A+ Chevron Corp Callable Note Aa2 AA Toyota Motor Credit Corp A1 A+ US Bank NA Callable Note A1 AA- Bank of NY Mellon Corp Callable Note A1 A Apple Inc. Note Aa1 AA+ Wal-Mart Stores Callable Note Aa2 AA American Honda Finance Note A3 A- Local Agency Investment Fund (LAIF) Not Rated Not Rated Money Market Funds Aaa AAA Credit Quality Rating Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Town will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Town does not have any custodial credit risk. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 56 Note 4 – Capital Assets A. Governmental Activities Summary of changes in capital assets for the year ended June 30, 2020 was as follows: Balance Transfers/ Balance July 1, 2019 Additions Retirements Reclassifications June 30, 2020 Governmental Activities: Capital assets, not being depreciated Land 31,239,825$ 2,907,042$ (2,925,000)$ -$ 31,221,867$ Construction in progress 14,902,726 10,169,019 - (3,411,241) 21,660,504 Infrastructure - streets, concrete & asphalt pavements 93,075,885 - - - 93,075,885 Total capital assets not being depreciated 139,218,436 13,076,061 (2,925,000) (3,411,241) 145,958,256 Capital assets being depreciated Buildings and parking lots/street 36,628,607 - - 3,244,998 39,873,605 Park improvements 23,875,267 - - 166,243 24,041,510 Furniture and equipment 5,069,577 122,169 (213,305) - 4,978,441 Infrastructure: Drainage system 56,689,603 - - - 56,689,603 Bridges 11,069,233 - - - 11,069,233 Signal system 6,997,956 - - - 6,997,956 Total capital assets being depreciated 140,330,243 122,169 (213,305) 3,411,241 143,650,348 Accumulated depreciation Buildings and parking lots (11,832,278) (886,511) - - (12,718,789) Park improvements (21,222,130) (463,237) - - (21,685,367) Furniture and equipment (4,449,620) (306,728) 208,889 - (4,547,459) Infrastructure: Drainage system (56,185,483) (23,728) - - (56,209,211) Bridges (7,442,665) (175,562) - - (7,618,227) Signal system (5,465,602) (140,227) - - (5,605,829) Total accumulated depreciation (106,597,778) (1,995,993) 208,889 - (108,384,882) Total capital assets, being depreciated, net 33,732,465 (1,873,824) (4,416) 3,411,241 35,265,466 Governmental activities capital assets, net 172,950,901$ 11,202,237$ (2,929,416)$ -$ 181,223,722$ DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 57 Note 4 – Capital Assets (Continued) A. Governmental Activities (Continued) Depreciation expenses by program for capital assets for the year ended June 30, 2020, were as follows: Police Services Building $ 19,250 Furniture & equipment (vehicle) 146,501 Subtotal 165,751 Maintenance Services Building 489,867 Parking lots 249,260 Park improvements 462,265 Furniture & equipment (vehicle) 83,655 Subtotal 1,285,047 Development Services Furniture & equipment (vehicle) 21,212 Infrastructure - drainage 23,728 Infrastructure - bridge 175,562 Subtotal 220,502 Transportation Services Furniture & equipment (vehicle) 1,362 Infrastructure - signal 140,227 Subtotal 141,589 Administrative Services Building 1,212 Furniture & equipment (vehicle) 37,498 Subtotal 38,710 Parks and Recreation Services Building 126,922 Park improvements 972 Furniture & equipment (vehicle) 16,500 Subtotal 144,394 Total depreciation expense $ 1,995,993 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 58 Note 5 – Interfund Transactions A. Transfers In/Out Transfers in/out for the year ended June 30, 2020, were as follows: Lighting Capital Landscape Improvement Special Capital Non-Major General Revenue Projects Governmental Fund Fund Fund Fund Transfers Out (1)(4)(2)(2)(3)(5)Total General Fund -$ 1,000,000$ 10,334,475$ 125,000$ 11,459,475$ Lighting & Landscape Special Revenue Fund 292,039 - - - 292,039 Non-Major Governmental Fund 5,514 - - 175,000 180,514 Total 297,553$ 1,000,000$ 10,334,475$ 300,000$ 11,932,028$ Transfers In The following are explanations for the transfers in and out: (1) Transfers in to the General Fund were for overhead expenses chargeable to Special Revenue Funds. (2) Transfers in to the Capital Improvement Capital Projects Fund and Lighting and Landscape Special Revenue Fund were to fund various capital projects. (3) Transfers in to the Non-Major Governmental Funds from other Non-Major Governmental Funds were to fund various capital projects. (4) Transfers in to the General Fund from the Non-Major Governmental Funds were for reimbursements for administration. (5) Transfers in to Non-Major Governmental Funds from the General Fund were for various projects. Note 6 – Loans Receivable from Successor Agency to the Former Community Development Agency In the fiscal year 2012, the Successor Agency Trust Fund was established to replace the Town's Community Development Agency. Below are the accounts and transactions as of and for the year ended June 30, 2020: Government-Wide Financial Statements Loans Receivable Cooperative Loan Agreement $ 6,159,401 Total $ 6,159,401 Transfers from Successor Agency $ 812,456 Funds Financial Statements General Fund Due from Successor Agency from Former Community Development Agency 6,159,401$ Total 6,159,401$ DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 59 Note 6 – Loans Receivable from Successor Agency to the Former Community Development Agency (Continued) A. Successor Agency (SA) Cooperative Agreement Loan Receivable Prior to the State of California's (State) dissolution of all redevelopment agencies, the Town of Danville and the former Community Development Agency (CDA) had entered into a Cooperation Agreement (Agreement), under which the Town advanced funds to the former CDA that were subject to later repayment by the former CDA. The Successor Agency to the former CDA and the Successor Agency's Oversight Board approved re-entry into the Agreement, as provided for in AB 1X 26 (the Dissolution Act). The State Department of Finance determined that the Agreement was not an enforceable obligation, leading the Town to file a lawsuit in the Sacramento County Superior Court (Superior Court) against the State challenging that determination. The Town won its suit in Superior Court, leading to an appeal by the State. In May 2015, the State dismissed its appeal, and at the same time, the Department of Finance accepted the Agreement as an enforceable obligation. As a result, the Town received its first payment in June 2015 under the Agreement. The Agreement incorporated the following payment schedule, which the Successor Agency and the Town will follow when preparing future Recognized Obligation Payment Schedule (ROPS) statements. However, due to the fact that the State refused to allow payment for the first several years post-dissolution, those amounts will be paid in years subsequent to those shown in the Agreement. Therefore, an additional $3,195,604 was approved in addition to the original amount and was recognized as special item in the basic financial statements. Fiscal Year Amount 2020-2021 1,100,000$ 2021-2022 1,100,000 2022-2023 1,100,000 2023-2024 1,100,000 2024-2025 1,100,000 2025-2026 659,401 Total 6,159,401$ Note 7 – Unearned Revenue Unearned revenue in Government-Wide Financial Statements and governmental funds statements represents amounts for which revenues have not been earned. At June 30, 2020, unearned revenues in the Government-Wide Financial Statements and governmental funds statements were as follows: Governmental Activities Business Licenses $ 112,044 Other Town-reimbursed fees 63,325 Recreation Program Registration 246,460 Total $ 421,829 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 60 Note 8 – Long-Term Obligations A. Governmental Activities A summary of changes in long-term debt for the year ended June 30, 2020 is as follows: Due Due in Balance Balance Within More than Description July 1, 2019 Additions Retirements June 30, 2020 One Year One Year COPs: 2001 issue 2,955,000$ -$ (310,000)$ 2,645,000$ 325,000$ 2,320,000$ 2005 issue 3,780,000 - (170,000) 3,610,000 175,000 3,435,000 Compensated absences 982,306 817,290 (750,567) 1,049,029 110,000 939,029 Total 7,717,306$ 817,290$ (1,230,567)$ 7,304,029$ 610,000$ 6,694,029$ Classification Certificates of Participation – 2001 Issue The Town issued $6,700,000 principal amount of 2001 Certificates of Participation (2001 COPs) on October 1, 2001. The purpose of the 2001 COPs was to provide funds to refund the outstanding 1992 Certificates of Participation and to defease the 1994 Tax Allocation Bonds. The 2001 COPs in the amount of $3,745,000 matured on September 1, 2018, and bore interest rates ranging from 3.50% to 4.625%. The 2001 COPs in the amount of $635,000 mature through September 1, 2020, and bear interest at the rate of 4.75% per annum. The 2001 COPs in the amount of $2,320,000 mature through September 1, 2026, and bear interest at the rate of 5.00% per annum. The 2001 COPs are payable semiannually on each March 1 and September 1, commencing March 1, 2002 and are subject to optional and mandatory early redemption provisions. The 2001 COPs represent lease payments (Lease Payments) to be paid by the Town under a Lease Agreement, dated as of October 1, 2001, by and between the Town of Danville Financing Authority (Authority) and the Town, for a lease of certain real property and improvements (Property). The Lease Payments will be in amounts calculated to be sufficient to pay principal and interest with respect to the Certificates when due. The Lease Payments are payable by the Town from its General Fund for the right to the use and possession by the Town of the Property. The annual debt service requirements for the 2001 COPs outstanding at June 30, 2020 are as follows: For the Years Ending June 30,Principal Interest Total 2021 $ 325,000 $ 123,719 $ 448,719 2022 340,000 107,500 447,500 2023 355,000 90,125 445,125 2024 380,000 71,750 451,750 2025 395,000 52,375 447,375 2026-2027 850,000 43,000 893,000 Total $ 2,645,000 $ 488,469 $ 3,133,469 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 61 Note 8 – Long-Term Obligations (Continued) A. Governmental Activities (Continued) Certificates of Participation – 2005 Issue The Town issued $5,600,000 principal amount of 2005 Certificates of Participation (2005 COPs) on March 1, 2005. The purpose of the 2005 COPs was to provide funds to finance the acquisition and improvement of certain property for use as a public parking facility and other capital improvements with the Town. The 2005 COPs in the amount of $3,155,000 mature through March 1, 2026, and bear interest rates ranging from 4.000% to 4.625%. The 2005 COPs in the amount of $965,000 mature through March 1, 2030, and bear interest at the rate of 4.625% per annum. The 2005 COPs in the amount of $1,480,000 mature through March 1, 2035, and bear interest at the rate of 4.625% per annum. The 2005 COPs are payable semiannually on each March 1 and September 1, commencing September 1, 2005. The 2005 COPs are subject to optional and mandatory early redemption provisions. The 2005 COPs represent lease payments (Lease Payments) to be paid by the Town under a Lease Agreement, dated as of March 23, 2005, by and between the Authority and the Town, for a lease of certain real property and improvements (Property). The Lease Payments will be in amounts calculated to be sufficient to pay principal and interest with respect to the Certificates when due. The Lease Payments are payable by the Town from its General Fund for the right to the use and possession by the Town of the Property. The annual debt service requirements for the 2005 COPs outstanding at June 30, 2020, are as follows: For the Years Ending June 30,Principal Interest Total 2021 $ 175,000 $ 165,332 $ 340,332 2022 180,000 157,676 337,676 2023 190,000 149,800 339,800 2024 200,000 141,250 341,250 2025 205,000 132,250 337,250 2026-2030 1,180,000 511,063 1,691,063 2031-2035 1,480,000 211,825 1,691,825 Total $ 3,610,000 $ 1,469,196 $ 5,079,196 Compensated Absences The Town's liability for vested and unpaid compensated absences (accrued vacation and sick pay) has been accrued and amounts to $1,049,029 at June 30, 2020. It is estimated that $110,000 will be needed to cover employees who leave employment within one year. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 62 Note 8 – Long-Term Obligations (Continued) B. Fiduciary Fund Financial Statements Summary of changes in long-term obligations for the year ended June 30, 2020 was as follows: Due Due in Balance Balance Within More than Description July 1, 2019 Additions Retirements June 30, 2020 One Year One Year Loans payable 2,450,000$ -$ (165,000)$ 2,285,000$ 180,000$ 2,105,000$ Total 2,450,000$ -$ (165,000)$ 2,285,000$ 180,000$ 2,105,000$ Classification Loan Payable The Authority issued $3,570,000 principal amount of Taxable Revenue Bonds, 2001 Series A (Bonds) on December 1, 2001. The proceeds of the Bonds were loaned to the former CDA pursuant to a Loan Agreement, dated as of December 1, 2001 and used to finance low and moderate income housing project within the project area. The Bonds in the amount of $35,000 matured through August 1, 2006, and bore interest at the rate of 6.15% per annum. The Bonds in the amount of $260,000 mature through August 1, 2011, and bear interest at the rate of 7.25% per annum. The Bonds in the amount of $1,170,000 mature through August 1, 2020, and bear interest at the rate of 8.15% per annum. The Bonds in the amount of $2,105,000 mature through August 1, 2028, and bear interest at the rate of 8.50% per annum. The Bonds are payable seminannually on each February 1 and August 1, commencing August 1, 2002. The Bonds are subject to optional and mandatory early redemption provisions. The Bonds are special obligations of the Authority payable from and secured by loan payments made by the former CDA under the Loan Agreement and certain other amounts on deposit in the funds and accounts established under the Indenture. The Loan Agreement is secured by the tax increment revenues of the former CDA. This loan has been transferred to the Successor Agency Trust Fund. The annual debt service requirements for the Bonds outstanding at June 30, 2020 are as follows: For the Years Ending June 30,Principal Interest Total 2021 $ 180,000 $ 186,261 $ 366,261 2022 195,000 170,638 365,638 2023 210,000 153,425 363,425 2024 230,000 134,725 364,725 2025 250,000 114,325 364,325 2026-2029 1,220,000 218,026 1,438,026 Total $ 2,285,000 $ 977,400 $ 3,262,400 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 63 Note 9 – Defined Contribution Pension Plan A. Section 401(a) Qualified Defined Contribution Pension Plan All qualified Town employees participate in the Section 401(a) qualified defined contribution pension plan as allowed under the Internal Revenue Code. The plan type sponsored by the Town is the Money Purchase Plan (Plan), which was last amended on July 1, 2010. The Plan is a defined contribution retirement plan in which the employer's contribution is nondiscretionary and is based on a formula that is not related to profits. The Plan sponsor guarantees no benefit and bears no investment risk while the Plan participants bear all investment risk and have no guaranteed level of benefits. An administrative committee comprised of Town personnel governs the Plan. The Town Council has the authority to establish or amend the Plan's provisions. The Plan's provisions and contribution requirements are established and may be amended by Town Council resolution. Eligible employees begin participating the first day of the month following their employment date of work. The Plan is entirely funded by Town contributions of 15% of the participants' gross pay for employees who contribute 5% of their salary to the deferred compensation plan. The Town's contributions vest at 20% per plan year of uninterrupted employment. Participants are eligible to begin receiving benefits at age 55 and are required to begin receiving benefits no later than April after age 70-1/2. The employees may also roll their funds to another retirement plan upon separation of service. The Town's payroll for employees covered by the Plan for the year ended June 30, 2020, was $9,038,846. Total employee contributions paid by the Town amounted to $1,349,311 or 14.93% of covered payroll and of total payroll. The Plan's assets are invested with Lincoln National Life, a mutual fund company that offers participants multiple mutual fund category selections from which they can choose. As of June 30, 2020, the Plan had 157 participants and the market value of the Plan amounted to $22,691,894. B. Section 415(m) Benefit Restoration Plan Qualified Town employees may participate in a Section 415(m) benefit restoration plan (415 Plan) as allowed under the Internal Revenue Code. The 415 Plan is a qualified governmental excess benefit arrangement for employees who are not able to receive their entire contribution to the Section 401(a) Plan because of the application of Internal Revenue Code Section 415. The 415 Plan is a defined contribution retirement plan in which the employer's contribution is nondiscretionary and is based on a formula that is not related to profits. The Plan sponsor guarantees no benefit and bears no investment risk while the Plan participants bear all investment risk and have no guaranteed level of benefits. Participants are eligible to begin receiving benefits at age 55 and are required to begin receiving benefits no later than April after age 70-1/2. The Plan's assets are invested with a mutual fund company that offers participants multiple mutual fund category selections from which they can choose. Total employee contributions paid by the Town amounted to $41,307. As of June 30, 2020, the Plan had two participants and the market value of the Plan amounted to $285,012. The Defined Contribution Pension Plan and the Benefit Restoration Plan are not included in the accompanying financial statements. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 64 Note 10 – Fund Balance Classification At June 30, 2020, fund balances are classified as follows: Regional Traffic Lighting Impact Fee Capital and Special Improvement Non-Major General Landscape Revenue Project Governmental Fund Fund Fund Fund Funds Total Fund Balances: Nonspendable Due from Successor Agency of Former CDA $ 5,059,401 $ - $ - $ - $ - $ 5,059,401 Prepaid items 107,707 - - - - 107,707 Total nonspendable 5,167,108 - - - - 5,167,108 Restricted Special revenue - 1,686,327 4,688,816 - 19,770,545 26,145,688 Debt services 815,484 - - - - 815,484 Total restricted 815,484 1,686,327 4,688,816 - 19,770,545 26,961,172 Committed Capital projects 5,019,915 - - 24,932,895 9,140,013 39,092,823 Operating reserve 13,409,768 - - - - 13,409,768 Contingency 766,446 - - - - 766,446 Reward fund 10,000 - - - - 10,000 Compensated absences/personnel 1,195,339 - - - - 1,195,339 Total committed 20,401,468 - - 24,932,895 9,140,013 54,474,376 Assigned Townwide bonus program 26,000 - - - - 26,000 Town Council 5,000 - - - - 5,000 EBRCS - - - - - - Emergency preparedness COVID-19 115,951 - - - - 115,951 Finance temporary salaries - - - - - - Information technology consulting services 10,000 - - - - 10,000 Human resources temporary salaries - - - - - - Human resources claims - - - - - - ED retail consultant 21,937 - - - - 21,937 Transportation equipment maintenance 12,000 - - - - 12,000 Lighting and landscape - 2,617,844 - - - 2,617,844 Total assigned 190,888 2,617,844 - - - 2,808,732 Total fund balance 26,574,948$ 4,304,171$ 4,688,816$ 24,932,895$ 28,910,558$ 89,411,388$ Major Funds Operating Reserve The Town maintains a minimum Operating Reserve of 20% of the fiscal year operating budget, which may only be used in the event of a financial emergency, subject to Town Council authorization. Town Resolution No. 35-98 defines the purpose and uses of the General Fund Operating Reserve. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 65 Note 11 - Risk Management The Town participates in the Municipal Pooling Authority (MPA), a joint powers agreement between 19 cities, which provides insurance coverage for liability, auto, property and workers' compensation claims. Claim liabilities are accrued when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. The MPA covers claims in an amount up to $29,000,001. The Town has a deductible of $5,000 per claim for liability cases and up to these pay for workers' compensation claims. The MPA is self-insured up to $1,000,000 per claim and has excess coverage to a maximum of $29,000,000. The MPA is governed by a board consisting of representatives from each member municipality. The Board, which controls the operations of the MPA, including the selection of management and the approval of operating budgets, is independent of any influence by member municipalities beyond their representation on the Board. The Town's net general liability premium payments to the MPA in the amount of $643,321 for fiscal year 2019/2020 are in accordance with formulas established by the MPA. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. Estimates of deductibles for incurred, but not reported, (IBNR) liability claims are included in the Town's claims estimates and are based upon historical experiences as calculated by the MPA. During the year, the Town did not receive a dividend from the MPA based on the results of prior years' actitivites. The following provides a reconciliation of the amount accrued for estimated out of pocket amounts to be paid for IBNR deductibles: Beginning Claims and Payments for End of Year Changes in Current and of Year Fiscal Year Liability Estimates Prior Years Liability 2017-2018 45,746$ 20,040$ (23,867)$ 41,919$ 2018-2019 41,919 3,072 (10,481) 34,510 2019-2020 34,510 33,060 (13,580) 53,990 The Town has had no settlements that exceeded insurance coverage in the last three fiscal years, and no changes in insurance coverage from the prior year. Because dividends cannot be guaranteed and may fluctuate significantly, these types of results should not be used to forecast future years' results. Insurance cost 643,321$ Less: Dividend received - Net insurance cost 643,321$ DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 66 Note 11 - Risk Management (Continued) The MPA's audited condensed financial information as of and for the year ended June 30, 2019, are as follows: Total assets 71,223,097$ Total deferred outflows of resources 452,032$ Total liabilities 45,604,371$ Total deferred inflows of resources 57,584$ Total net position 26,013,174$ Total operating revenues 29,091,046$ Total operating expenses 21,684,370$ Net operating (loss)7,406,676$ Non-operating revenues (expenses)3,150,613$ Change in net position 10,557,289$ Detailed financial information may be obtained from the Municipal Pooling Authority (MPA) in Walnut Creek, California. Note 12 - Commitments and Contingencies Lawsuits The Town is a defendant in a number of lawsuits which have arisen in the normal course of business. While substantial damages are alleged in some of these actions, their outcome cannot be predicted with certainty. In the opinion of the Town Attorney, these actions, when finally adjudicated, will not have a material adverse effect on the financial position of the Town. Annual Appropriations Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the Town is restricted as to the amount of annual appropriations, and if certain proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or refunded to the taxpayers through revised tax rates or revised fee schedules. For the fiscal year ended June 30, 2020, the Town’s appropriations limit totals $42,044,414 and the Town’s appropriations subject to limitation were $21,447,986. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2020 67 Note 12 – Commitments and Contingencies (Continued) 2019/20 Appropriation Limit Proposition 4, passed by the voters in 1978, requires that the Town Council adopt an annual appropriation limit for proceeds of taxes. This limit fixes the amount of general tax revenue that can be appropriated in a given fiscal year. Any excess must be returned to the taxpayers. The limit is adjusted each year by established adjustment factors. Proposition 111, passed by the voters in June 1990, allows each local agency's governing body to annually choose which adjustment factors are to be used. The Town Council has the discretion to choose one of two inflation factors: (1) population growth in California per capita income or (2) growth in nonresidential assessed valuation from new construction within the Town. Additionally, the Town Council may choose from one of two population adjustment factors: population growth within the Town or population growth within Contra Costa County. The Town chose to use the population growith within Contra Costa County. The chosen population adjustment factor is multiplied by the growth in California per capita income. Construction Commitments The Town has several outstanding or planned construction projects as of June 30, 2020. These projects are evidenced by contractual commitments with contractors. As of June 30, 2020, the Town's outstanding contractual commitments amount were $2,816,385. DR A F T 11 . 0 2 . 2 0 2 0 68 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 69 REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Required Supplementary Information (Unaudited) For the Year Ended June 30, 2020 70 Note 1 – Budgetary Information The Town follows these procedures in establishing the budgetary data for all governmental funds except for capital projects funds:  Town Council determines community needs, priorities and opportunities for the upcoming year commencing July 1.  By June 30, the Town Manager submits to the Town Council a proposed operating budget for the year commencing July 1. The operating budget includes proposed expenditures and the means of financing them.  Public hearings are conducted to obtain taxpayer comments.  The budget is legally enacted through passage of a resolution during a Town Council meeting in the month of June.  The Town Manager is authorized to transfer budgeted amounts within an activity, for example, within a program (legal, finance, etc.). The Town Manager is able to authorize the purchase of office equipment instead of the original budgeted for expense to pay for consultants, for example. However, any revisions that alter the total expenditures (increase/decrease budget for a program) must be approved by the Town Council.  Formal budgeting is employed as a management control device during the year.  Budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP). Budgeted amounts are as originally adopted or as amended by the Town Council. Individual amendments were not material in relation to the original appropriations. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2020 71 Note 2 – Budgetary Comparison Schedule General Fund Variance Original Final From Final Budget Budget Actual Budget REVENUES: Property taxes $ 14,908,865 $ 15,153,865 $ 16,025,356 $ 871,491 Sales taxes 5,740,221 5,740,221 5,740,046 (175) Other taxes 2,349,753 2,349,753 2,249,988 (99,765) Charges for services 2,101,780 2,101,780 1,413,021 (688,759) Licenses and permits 365,150 365,150 356,849 (8,301) Intergovernmental 1,000 1,000 34,107 33,107 Fines and forfeitures 175,000 175,000 128,312 (46,688) Use of money and property 1,007,737 1,007,737 2,563,838 1,556,101 Miscellaneous 197,178 197,178 218,639 21,461 Total revenues 26,846,684 27,091,684 28,730,156 1,638,472 EXPENDITURES: Current: General government 1,787,218 2,278,190 1,905,768 372,422 Police services 10,251,608 10,284,796 9,527,174 757,622 Maintenance services 2,421,901 2,515,108 2,144,361 370,747 Development services 1,138,328 1,120,288 1,065,708 54,580 Administrative services 3,786,615 4,008,371 3,698,300 310,071 Recreation, arts, & community services 4,155,463 4,186,771 3,195,525 991,246 Capital outlay 18,100 18,100 - 18,100 Total expenditures 23,559,233 24,411,624 21,536,836 2,874,788 REVENUES OVER (UNDER) EXPENDITURES 3,287,451 2,680,060 7,193,320 4,513,260 OTHER FINANCING SOURCES (USES): Proceeds from sale of property - - 3,274,939 3,274,939 Transfers in 1,397,554 1,467,554 297,553 (1,170,001) Transfers out (4,685,005) (4,147,614) (11,459,475) (7,311,861) Total other financing sources (uses) (3,287,451) (2,680,060) (7,886,983) (5,206,923) NET CHANGE IN FUND BALANCE $ - $ - (693,663) $ (693,663) FUND BALANCE: Beginning of year 27,268,611 End of year $ 26,574,948 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2020 72 Note 2 – Budgetary Comparison Schedule (Continued) Lighting and Landscape Special Revenue Fund Variance Original Final From Final Budget Budget Actual Budget REVENUES: Special assessments $ 3,022,785 $ 3,022,785 $ 3,038,347 $ 15,562 Use of money and property 8,999 8,999 62,164 53,165 Miscellaneous 88,898 88,898 111,318 22,420 Total revenues 3,120,682 3,120,682 3,211,829 91,147 EXPENDITURES: Current: Maintenance services 304,756 308,405 - 308,405 Lighting and landscape 4,260,346 4,304,569 3,703,613 600,956 Development services 291,209 291,209 - 291,209 Administrative services 2,426 2,426 2,973 (547) Recreation, arts, & community services 27,504 27,504 - 27,504 Capital outlay 3,750 3,750 - 3,750 Total expenditures 4,889,991 4,937,863 3,706,586 1,231,277 REVENUES OVER (UNDER) EXPENDITURES (1,769,309) (1,817,181) (494,757) 1,322,424 OTHER FINANCING SOURCES (USES) Transfers in 900,000 1,000,000 1,000,000 - Transfers out (292,039) (292,039) (292,039) - Total other financing sources (uses) 607,961 707,961 707,961 - NET CHANGE IN FUND BALANCE $ (1,161,348) $ (1,109,220) 213,204 $ 1,322,424 FUND BALANCE: Beginning of year 4,090,967 End of year $ 4,304,171 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2020 73 Note 2 – Budgetary Comparison Schedule (Continued) Regional Traffic Impact Fees Special Revenue Fund Variance Original Final From Final Budget Budget Actual Budget REVENUES: Development fees -$ -$ 229,368$ 229,368$ Intergovernmental 114,632 114,632 - (114,632) Use of money and property - - 205,853 205,853 Miscellaneous 1,310 1,310 - (1,310) Total revenues 115,942 115,942 435,221 319,279 EXPENDITURES: Current: Administrative services 10,398 10,398 2,784 7,614 Capital outlay 1,391,049 1,391,049 - 1,391,049 Total expenditures 1,401,447 1,401,447 2,784 1,398,663 NET CHANGE IN FUND BALANCE (1,285,505)$ (1,285,505)$ 432,437 1,717,942$ FUND BALANCE: Beginning of year 4,256,379 End of year 4,688,816$ DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2020 74 Note 3 – Modified Approach for Town Street Infrastructure Capital Assets The Town defines infrastructure as the basic physical assets including the street system; traffic control improvements; park and recreation lands and improvement system; storm water conveyance systems; and site amenities such as parking and landscaped areas used by the Town in the conduct of its business. Each major infrastructure system can be divided into subsystems. For example, the street system can be divided into asphalt pavements, concrete curb and gutters, medians, traffic control devices (signs, signals and pavement markings), landscaping and land. Subsystem detail is not presented in these Basic Financial Statements; however, the Town maintains detailed information on these subsystems. The Town has elected to use the "Modified Approach" for infrastructure reporting for its Streets Pavement System. Eligible infrastructure capital assets are not required to be depreciated under the following requirements:  The Town manages the eligible infrastructure capital assets using an asset management system with characteristics of: (1) an up-to-date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate annual amount to maintain and preserve at the established condition assessment level.  The Town documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and disclosed condition assessment level. In April 2020, the Town commissioned a study to update the physical condition assessment of the arterials and collector for residential streets. The prior assessment study was completed in December 2017. 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. Town owned streets are classified based on land use, access and traffic utilization into the following four classifications: arterial/major, secondary, collector and local. This condition assessment will be performed at least every three years. Street assessments have historically been funded with grants and performed approximately every three years. Each street was assigned a physical condition based on potential defects. A Pavement Condition Index (PCI), a nationally recognized index, was assigned to each street and expressed in a continuous scale from 0 to 100, where 0 is assigned to the least acceptable physical condition and 100 is assigned to the physical characteristics of a new street. The following conditions were defined: PCI Conditions PCI Rating Very Good 70-100 Good 50-69 Poor 26-49 Very Poor 0-25 DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2020 75 Note 3 – Modified Approach for Town Street Infrastructure Capital Assets (Continued) The Town's policy is to achieve a minimum average rating of 70 for all streets, which is a "very good" rating. As of June 30, 2020, the Town’s street system was rated at a PCI index of 81 on the average with the detail condition as follows: Street Condition % of Streets Very Good (PCI 70-100)82% Good (PCI 50-69)13% Poor (PCI 26-49)4% Very Poor (PCI 0-25)1% 100% The Town’s streets are constantly deteriorating as a result of following four factors: (1) traffic using the streets; (2) the sun’s ultra-violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development interests trenching operations; and (4) water damage from natural precipitation and other urban runoff. The Town is continuously taking actions to arrest the deterioration through short-term maintenance activities such as pothole patching, street sweeping, and sidewalk repairs. The Town expended $966,845 of the General Fund monies on street maintenance for the fiscal year ended June 30, 2020. These expenditures delayed deterioration. The Town has estimated that the amount of annual expenditures required to maintain the Town’s streets at the average PCI rating of 70 through the year 2020 is a minimum of $3,000,000. A schedule of estimated annual amount calculated to maintain and preserve its streets at the current level compared to actual expenditures for street maintenance for the last ten years is presented below. The availability and use of other funds has enabled the Town to maintain the underlying drainage, associated curbs and gutters and to repair small but costly pavement areas needing complete replacement. Other Funds Total PCI Fiscal Year Final Budget Actual Actual Actual Rating 2010-11 $ 2,000,000 $ 1,780,787 $ 4,292,945 $ 6,073,732 73 2011-12 2,000,000 332,348 1,767,382 2,099,730 70 2012-13 2,000,000 3,219,853 1,269,507 4,489,360 72 2013-14 3,000,000 914,271 583,827 1,498,098 74 2014-15 3,000,000 2,800,816 1,359,695 4,160,511 74 2015-16 3,000,000 684,250 708,280 1,392,530 76 2016-17 3,000,000 1,417,001 2,986,762 4,403,763 75 2017-18 3,000,000 6,184,143 1,906,277 8,090,420 80 2018-19 3,000,000 3,629,281 3,865,363 7,494,644 78 2019-20 3,000,000 966,845 140,711 1,107,556 81 General Fund The Town also has an on-going street rehabilitation program funded in the Capital Improvement Program that is intended to improve the condition rating of Town streets. The rehabilitation program is formulated based on deficiencies identified as a part of its Pavement Management System. As of June 30, 2020, approximately 18% of the Town's streets were rated below the average standard of 70. The Town will continue to rehabilitate these segments of the streets. Total deficiencies (deferred maintenance) identified in the Pavement Management System amounted to approximately $11,700,000 for all streets. DR A F T 11 . 0 2 . 2 0 2 0 76 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 77 SUPPLEMENTARY INFORMATION DR A F T 11 . 0 2 . 2 0 2 0 78 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 79 NON-MAJOR GOVERNMENTAL FUNDS DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Non-Major Governmental Funds 80 SPECIAL REVENUE FUNDS PEG Fund Any state video franchisee offering service within the Town pays sixty cents ($0.60) per month per subscriber to support Public, Educational and Governmental ("PEG") channel facilities. This fund is restricted to capital expenditures allowing the Town to provide PEG programming to residents. Gas Tax Fund This fund is used to account for the portion of the taxes paid on the purchase of gasoline, which the Town receives from the State of California. Use of the fund is restricted to street and related improvements and maintenance costs. Building/Planning Fund This fund receives fees for planning applications and permits and building inspection and plan review fees collected during the building permit process. Use of this fund is restricted to offsetting the costs of providing building and planning services to permittees. Development Engineering Fund This fund receives fees for permits and plan review for engineering and subdivision applications. Use of this fund is restricted to offsetting the costs of providing these services. Child Care Fund This Fund receives child care fees paid by new developments. All funds are restricted to the development or promotion of child care facilities within Danville. Stormwater Pollution Control Program (SPCP) Fund This Fund is used to account for National Pollution Discharge Elimination Services (NPDES) assessments paid by property owners for administration, inspection and maintenance of storm drain systems, including street sweeping, necessary to comply with the stormwater pollution permits issued by the Regional Water Quality Control Board. Measure C/J Fund Since 1988, Contra Costa County voters have paid a one-half cent sales tax for transportation purposes to be collected through 2034. Eighteen percent of the funds collected throughout the County are distributed back to each local jurisdiction on the basis of population and road miles. Receipt of these funds is tied to compliance with the Town’s General Plan Growth Management Element. Use of this fund is restricted to street and pavement management and transportation planning. Donations and Contributions Fund The Town receives donations and contributions for selected programs such as the police K-9 program and downtown beautification. Use of these funds is restricted to the specific terms of the individual donation. General Development Impact Fees Fund The Town levies a number of development impact fees to mitigate the impacts of new development, primarily transportation impact fees. The use of these funds is limited by the specific purpose of the individual fee and the impact to be mitigated. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Non-Major Governmental Funds 81 SPECIAL REVENUE FUNDS Public Safety Fund Special revenues for police programs are reported in this fund. Included are SLESF funds provided by the State, Abandoned Vehicle and Asset Seizure revenues. The use of these funds is limited to use by the Police Department by the specific purpose of the fee. Old Town Parking In-Lieu Fund A development impact mitigation fee imposed on new developments in the Downtown Business District which rely, at least in part, on off-site public parking. Use of the Fund is restricted to the provision of additional Town-owned parking. Solid Waste Vehicle Impact Fee Fund This fund receives impact fees collected through the solid waste franchise to partially offset the impacts associated with solid waste, recycling and yard waste refuse vehicles using Town streets. The use of this Fund is restricted to street and pavement rehabilitation. Low and Moderate Income Housing Fund Prior to the State of California’s dissolution of redevelopment agencies in 2011, the Town’s Community Development Agency maintained a Low and Moderate Income Housing Fund as required by the law. Upon dissolution, the Town opted to create a Successor Housing Agency to assume all of the housing assets and liabilities of the former CDA. The use of this Fund is restricted to the creation, rehabilitation or addition of low or moderate income housing within the Town. CAPITAL PROJECTS FUNDS Asset Replacement General Fund Contributions are made into this Fund from the General Fund for the eventual replacement and refurbishment of fixed assets. Asset Replacement Library Fund Contributions are made into this Fund from private donations and the General Fund for the eventual replacement and refurbishment of Library equipment. Civic Facilities Capital Projects Fund This Fund receives contributions from the General Fund and is used to account for the construction of community facilities such as the Danville Library, Community Center, Town Offices, Oak Hill Park Community Center and future new park and recreation facilities. Park Facilities Fund Contributions are made into this Fund from the General Fund for the construction and renovation of parks within the Town. Northeast Road Improvements Assessment District Fund During the period from 1985 to 1990, the Northeast Road Improvements Assessment District (NERIAD) were formed within the Town of Danville to construct improvements in these areas. DR A F T 11 . 0 2 . 2 0 2 0 Town of Danville Non-Major Governmental Funds 82 Tassajara Road Improvements Assessment District Fund Assessment District formed for the Tassajara Ranch developments to fund the development of Diablo Vista Park, traffic improvements to mitigate project related impacts, and maintenance of existing improvements for the benefit of district properties. Sycamore Valley Assessment District Fund Development impact fees are collected on residential units in excess of the original 278 units located within the Sycamore Valley Benefit District. Funds are used for traffic mitigation, projects and maintenance of existing improvements for the benefit of the benefit district properties. Technology Fund This Fund was created in FY 2011/12 and receives contributions from the General Fund for the implementation of the Town's five-year Technology Master Plan. DR A F T 11 . 0 2 . 2 0 2 0 Building/ Development PEG Gas Tax Planning Engineering Child Care ASSETS Cash and investments $ 281,518 $ 3,293,083 $ 3,418,677 $ 1,629,667 $ 296,357 Cash and investments with fiscal agent - - - - - Receivables (net of allowances): Accounts 20,138 - - - - Interest 1,215 9,085 - - 906 Total assets $ 302,871 $ 3,302,168 $ 3,418,677 $ 1,629,667 $ 297,263 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 81 71,874 54,619 6,478 63 Accrued wages - 33,850 66,756 5,496 - Retention payable - - - - - Deposits payable - - - 65,170 - Unearned revenue - - 3,213 - - Total liabilities 81 105,724 124,588 77,144 63 Fund Balances: Restricted 302,790 3,196,444 3,294,089 1,552,523 297,200 Committed - - - - - Total fund balances 302,790 3,196,444 3,294,089 1,552,523 297,200 Total liabilities and fund balances $ 302,871 $ 3,302,168 $ 3,418,677 $ 1,629,667 $ 297,263 (Continued) Town of Danville Non-Major Governmental Funds Combining Balance Sheet June 30, 2020 Special Revenue 83 DR A F T 11 . 0 2 . 2 0 2 0 Stormwater Pollution Donation General Control and Development Public Program Measure C/J Contributions Impact Fees Safety ASSETS Cash and investments $ 2,053,702 $ 2,053,280 $ 175,109 $ 3,896,389 $ 484,906 Cash and investments with fiscal agent - - - - - Receivables (net of allowances): Accounts 142,076 29,960 - 20,869 4,927 Interest 6,680 6,121 524 11,799 1,821 Total assets $ 2,202,458 $ 2,089,361 $ 175,633 $ 3,929,057 $ 491,654 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 20,041 64,192 398 41,106 121 Accrued wages 89 7,940 - - 1,284 Retention payable - - - 8,615 - Deposits payable - - - - - Unearned revenue - - - - - Total liabilities 20,130 72,132 398 49,721 1,405 Fund Balances: Restricted 2,182,328 2,017,229 175,235 3,879,336 490,249 Committed - - - - - Total fund balances 2,182,328 2,017,229 175,235 3,879,336 490,249 Total liabilities and fund balances $ 2,202,458 $ 2,089,361 $ 175,633 $ 3,929,057 $ 491,654 (Continued) Special Revenue Town of Danville Non-Major Governmental Funds Combining Balance Sheet (Continued) June 30, 2020 84 DR A F T 11 . 0 2 . 2 0 2 0 Low and Old Town Solid Waste Moderate Asset Asset Parking In- Vehicle Impact Income Replacement Replacement Lieu Fees Housing General Library ASSETS Cash and investments $ 559,542 $ 619,198 $ 1,199,056 $ 2,855,303 $ 859,384 Cash and investments with fiscal agent - - - - - Receivables (net of allowances): Accounts - - - - - Interest 1,672 - 4,050 6,104 2,177 Total assets $ 561,214 $ 619,198 $ 1,203,106 $ 2,861,407 $ 861,561 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 113 - 283 438 154 Accrued wages - - - - - Retention payable - - - - - Deposits payable - - - - - Unearned revenue - - - - - Total liabilities 113 - 283 438 154 Fund Balances: Restricted 561,101 619,198 1,202,823 - - Committed - - - 2,860,969 861,407 Total fund balances 561,101 619,198 1,202,823 2,860,969 861,407 Total liabilities and fund balances $ 561,214 $ 619,198 $ 1,203,106 $ 2,861,407 $ 861,561 (Continued) Special Revenue Capital Projects Town of Danville Non-Major Governmental Funds Combining Balance Sheet (Continued) June 30, 2020 85 DR A F T 11 . 0 2 . 2 0 2 0 Northeast Road Tassajara Sycamore Improvements Ranch Valley Civic Park Special Assessment Assessment Facilities Facilities Assessment District Distict ASSETS Cash and investments $ 384,724 $ 3,093,262 $ 463,535 $ 34,854 $ 22,725 Cash and investments with fiscal agent - - 813,920 - - Receivables (net of allowances): Accounts - 25,156 - - - Interest 1,289 6,897 7,239 120 29 Total assets $ 386,013 $ 3,125,315 $ 1,284,694 $ 34,974 $ 22,754 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 97 229,706 177 1 2 Accrued wages - - - - - Retention payable 180 3,536 - - - Deposits payable - - - - - Unearned revenue - 25,156 - - - Total liabilities 277 258,398 177 1 2 Fund Balances: Restricted - - - - - Committed 385,736 2,866,917 1,284,517 34,973 22,752 Total fund balances 385,736 2,866,917 1,284,517 34,973 22,752 Total liabilities and fund balances $ 386,013 $ 3,125,315 $ 1,284,694 $ 34,974 $ 22,754 (Continued) Capital Projects Town of Danville Non-Major Governmental Funds Combining Balance Sheet (Continued) June 30, 2020 86 DR A F T 11 . 0 2 . 2 0 2 0 Capital Projects Total Other Technology Governmental Fund Funds ASSETS Cash and investments $ 825,069 $ 28,499,340 Cash and investments with fiscal agent - 813,920 Receivables (net of allowances): Accounts - 243,126 Interest - 67,728 Total assets $ 825,069 $ 29,624,114 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 2,327 492,271 Accrued wages - 115,415 Retention payable - 12,331 Deposits payable - 65,170 Unearned revenue - 28,369 Total liabilities 2,327 713,556 Fund Balances: Restricted - 19,770,545 Committed 822,742 9,140,013 Total fund balances 822,742 28,910,558 Total liabilities and fund balances $ 825,069 $ 29,624,114 (Concluded) Town of Danville Non-Major Governmental Funds Combining Balance Sheet (Continued) June 30, 2020 87 DR A F T 11 . 0 2 . 2 0 2 0 88 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 Building/ Development PEG Gas Tax Planning Engineering Child Care REVENUES: Special assessments -$ -$ -$ -$ -$ Other taxes 82,193 1,850,136 - - - Charges for services - - 297,354 308,177 - License and permits - - 10,527 - - Development fees - - 1,845,627 2,820 - Intergovernmental - - - - - Use of money and property 6,186 53,173 - - 6,436 Miscellaneous - 224 - - - Total revenues 88,379 1,903,533 2,153,508 310,997 6,436 EXPENDITURES: Current: General government 14,464 - - - - Police services - - - - - Maintenance services - 712,163 - - - Development services - 250,175 2,130,125 348,461 - Administrative services 321 2,406 - - 264 Recreation, arts & community services - - - - - Capital outlay - - - - - Total expenditures 14,785 964,744 2,130,125 348,461 264 REVENUES OVER (UNDER) EXPENDITURES 73,594 938,789 23,383 (37,464) 6,172 OTHER FINANCING SOURCES (USES): Transfers in - - - - - Transfers out (75,000) - (100,000) - (600) Total other financing sources (uses)(75,000) - (100,000) - (600) NET CHANGE IN FUND BALANCES (1,406) 938,789 (76,617) (37,464) 5,572 FUND BALANCES: Beginning of year 304,196 2,257,655 3,370,706 1,589,987 291,628 End of year 302,790$ 3,196,444$ 3,294,089$ 1,552,523$ 297,200$ (Continued) Special Revenue Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2020 89 DR A F T 11 . 0 2 . 2 0 2 0 Stormwater Pollution Donation General Control Measure and Development Public Program C/J Contributions Impact Fees Safety REVENUES: Special assessments 556,326$ -$ -$ -$ -$ Other taxes - - - - - Charges for services 3,010 - - - - License and permits - - - - - Development fees - - - 217,822 - Intergovernmental - 931,033 - 14,643 179,632 Use of money and property 39,200 32,004 2,986 123,475 9,612 Miscellaneous - - 20,850 141,929 - Total revenues 598,536 963,037 23,836 497,869 189,244 EXPENDITURES: Current: General government - - 1,782 - - Police services - - 9,934 - 121,402 Maintenance services 314,970 - 11,025 309,016 - Development services 311,755 413,487 - - - Administrative services 1,947 1,393 155 3,418 471 Recreation, Arts & Community Services - - - 60,951 - Capital outlay 2,900 214,507 - - - Total expenditures 631,572 629,387 22,896 373,385 121,873 REVENUES OVER (UNDER) EXPENDITURES (33,036) 333,650 940 124,484 67,371 OTHER FINANCING SOURCES (USES): Transfers in - - - - - Transfers out - - - - - Total other financing sources (uses)- - - - - NET CHANGE IN FUND BALANCES (33,036) 333,650 940 124,484 67,371 FUND BALANCES: Beginning of year 2,215,364 1,683,579 174,295 3,754,852 422,878 End of year 2,182,328$ 2,017,229$ 175,235$ 3,879,336$ 490,249$ (Continued) Special Revenue Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended June 30, 2020 90 DR A F T 11 . 0 2 . 2 0 2 0 Low and Old Town Solid Waste Moderate Asset Asset Parking In- Vehicle Impact Income Replacement Replacement Lieu Fees Housing General Library REVENUES: Special assessments -$ -$ -$ -$ -$ Other taxes - 539,772 - - - Charges for services - - - - - License and permits - - - - - Development fees 175,426 - - - - Intergovernmental - - - - - Use of money and property 12,803 - 22,788 112,723 31,632 Miscellaneous - - - 10,782 - Total revenues 188,229 539,772 22,788 123,505 31,632 EXPENDITURES: Current: General government - - - - - Police services - - - - - Maintenance services - - - - 23,310 Development services - - - - - Administrative services 451 - 1,996 5,111 666 Recreation, arts & community services - - - - - Capital outlay - - - 122,169 - Total expenditures 451 - 1,996 127,280 23,976 REVENUES OVER (UNDER) EXPENDITURES 187,778 539,772 20,792 (3,775) 7,656 OTHER FINANCING SOURCES (USES): Transfers in - - - 300,000 - Transfers out - - - - - Total other financing sources (uses)- - - 300,000 - NET CHANGE IN FUND BALANCES 187,778 539,772 20,792 296,225 7,656 FUND BALANCES: Beginning of year 373,323 79,426 1,182,031 2,564,744 853,751 End of year 561,101$ 619,198$ 1,202,823$ 2,860,969$ 861,407$ (Continued) Special Revenue Capital Projects Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended June 30, 2020 91 DR A F T 11 . 0 2 . 2 0 2 0 Northeast Road Tassajara Sycamore Improvements Ranch Valley Civic Park Special Assessment Assessment Facilities Facilities Assessment District District REVENUES: Special assessments -$ -$ -$ -$ -$ Other taxes - - - - - Charges for services - - - - - License and permits - - - - - Development fees - - - - - Intergovernmental - - - - - Use of money and property (55,512) 147,349 11,545 629 4,862 Miscellaneous - 400,400 - - - Total revenues (55,512) 547,749 11,545 629 4,862 EXPENDITURES: Current: General government - - - - - Police services - - - - - Maintenance services 20,222 762,328 - - - Development services - - - - - Administrative services 443 2,145 1,090 3 8 Recreation, arts & community services - 227,091 - - - Capital outlay 77,363 73,374 - - - Total expenditures 98,028 1,064,938 1,090 3 8 REVENUES OVER (UNDER) EXPENDITURES (153,540) (517,189) 10,455 626 4,854 OTHER FINANCING SOURCES (USES): Transfers in - - - - - Transfers out - - (4,914) - - Total other financing sources (uses)- - (4,914) - - NET CHANGE IN FUND BALANCES (153,540) (517,189) 5,541 626 4,854 FUND BALANCES: Beginning of year 539,276 3,384,106 1,278,976 34,347 17,898 End of year 385,736$ 2,866,917$ 1,284,517$ 34,973$ 22,752$ (Continued) Capital Projects Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended June 30, 2020 92 DR A F T 11 . 0 2 . 2 0 2 0 Capital Projects Total Other Technology Governmental Fund Funds REVENUES: Special assessments -$ 556,326$ Other taxes - 2,472,101 Charges for services - 608,541 License and permits - 10,527 Development fees - 2,241,695 Intergovernmental - 1,125,308 Use of money and property - 561,891 Miscellaneous - 574,185 Total revenues - 8,150,574 EXPENDITURES: Current: General government - 16,246 Police services - 131,336 Maintenance services - 2,153,034 Development services - 3,454,003 Administrative services 30,170 52,458 Recreation, arts & community services - 288,042 Capital outlay - 490,313 Total expenditures 30,170 6,585,432 REVENUES OVER (UNDER) EXPENDITURES (30,170) 1,565,142 OTHER FINANCING SOURCES (USES): Transfers in - 300,000 Transfers out - (180,514) Total other financing sources (uses)- 119,486 NET CHANGE IN FUND BALANCES (30,170) 1,684,628 FUND BALANCES: Beginning of year 852,912 27,225,930 End of year 822,742$ 28,910,558$ (Concluded) Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended June 30, 2020 93 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Other taxes 91,304$ 91,304$ 82,193$ (9,111)$ Use of money and property - - 6,186 6,186 Total revenues 91,304 91,304 88,379 (2,925) EXPENDITURES: Current: General government 20,376 23,395 14,464 8,931 Administrative services 514 514 321 193 Capital outlay 276,566 276,566 - 276,566 Total expenditures 297,456 300,475 14,785 285,690 REVENUES OVER (UNDER) EXPENDITURES (206,152) (209,171) 73,594 282,765 OTHER FINANCING SOURCES (USES): Transfers out (100,000) (75,000) (75,000) - Total other financing sources (uses)(100,000) (75,000) (75,000) - NET CHANGE IN FUND BALANCE (306,152)$ (284,171)$ (1,406) 282,765$ FUND BALANCE: Beginning of year 304,196 End of year 302,790$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual PEG Special Revenue Fund For the Year Ended June 30, 2020 94 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Other taxes 1,904,289$ 1,904,289$ 1,850,136$ (54,153)$ Use of money and property 14,828 14,828 53,173 38,345 Miscellaneous - - 224 224 Total revenues 1,919,117 1,919,117 1,903,533 (15,584) EXPENDITURES: Current: Maintenance services 797,233 906,483 712,163 194,320 Development services 438,458 1,939,861 250,175 1,689,686 Administrative services 4,903 4,903 2,406 2,497 Capital outlay 500 500 - 500 Total expenditures 1,241,094 2,851,747 964,744 1,887,003 NET CHANGE IN FUND BALANCE 678,023$ (932,630)$ 938,789 1,871,419$ FUND BALANCE: Beginning of year 2,257,655 End of year 3,196,444$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Gas Tax Special Revenue Fund For the Year Ended June 30, 2020 95 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Charges for services 351,200$ 351,200$ 297,354$ (53,846)$ Licenses and permits - - 10,527 10,527 Development fees 1,856,000 1,856,000 1,845,627 (10,373) Miscellaneous 5,000 5,000 - (5,000) Total revenues 2,212,200 2,212,200 2,153,508 (58,692) EXPENDITURES: Current: Development services 2,401,099 2,670,625 2,130,125 540,500 Capital outlay 1,000 1,000 - 1,000 Total expenditures 2,402,099 2,671,625 2,130,125 541,500 REVENUES OVER (UNDER) EXPENDITURES (189,899) (459,425) 23,383 482,808 OTHER FINANCING SOURCES (USES) Transfers out (100,000) (100,000) (100,000) - Total other financing sources (uses)(100,000) (100,000) (100,000) - NET CHANGE IN FUND BALANCE (289,899)$ (559,425)$ (76,617) 482,808$ FUND BALANCE: Beginning of year 3,370,706 End of year 3,294,089$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Building and Planning Special Revenue Fund For the Year Ended June 30, 2020 96 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Charges for services 137,350$ 137,350$ 308,177$ 170,827$ Development fees 500 500 2,820 2,320 Total revenues 137,850 137,850 310,997 173,147 EXPENDITURES: Current: Development services 404,062 418,862 348,461 70,401 Total expenditures 404,062 418,862 348,461 70,401 NET CHANGE IN FUND BALANCE (266,212)$ (281,012)$ (37,464) 243,548$ FUND BALANCE: Beginning of year 1,589,987 End of year 1,552,523$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Development Engineering Special Revenue Fund For the Year Ended June 30, 2020 97 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES Use of money and property 1,199$ 1,199$ 6,436$ 5,237$ Total revenues 1,199 1,199 6,436 5,237 EXPENDITURES Current: Administrative services 207 207 264 (57) Total expenditures 207 207 264 (57) REVENUES OVER (UNDER) EXPENDITURES 992 992 6,172 5,180 OTHER FINANCING SOURCES (USES) Transfers out (600) (600) (600) - Total other financing sources (uses)(600) (600) (600) - NET CHANGE IN FUND BALANCE 392$ 392$ 5,572 5,180$ FUND BALANCE: Beginning of year 291,628 End of year 297,200$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Child Care Special Revenue Fund For the Year Ended June 30, 2020 98 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Special assessments 562,154$ 562,154$ 556,326$ (5,828)$ Charges for services 1,010 1,010 3,010 2,000 Intergovernmental (11,780) (11,780) - 11,780 Use of money and property 9,536 9,536 39,200 29,664 Total revenues 560,920 560,920 598,536 37,616 EXPENDITURES: Current: Maintenance services 378,557 383,557 314,970 68,587 Development services 270,252 330,631 311,755 18,876 Administrative services 1,383 1,383 1,947 (564) Recreation, Arts & Community Services 3,651 3,651 - 3,651 Capital outlay 166,000 166,000 2,900 163,100 Total expenditures 819,843 885,222 631,572 253,650 NET CHANGE IN FUND BALANCE (258,923)$ (324,302)$ (33,036) 291,266$ FUND BALANCE: Beginning of year 2,215,364 End of year 2,182,328$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Stormwater Pollution Control Program (SPCP) Special Revenue Fund For the Year Ended June 30, 2020 99 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Intergovernmental 6,619,421$ 6,619,421$ 931,033$ (5,688,388)$ Use of money and property 10,139 10,139 32,004 21,865 Total revenues 6,629,560 6,629,560 963,037 (5,666,523) EXPENDITURES: Current: Maintenance services 293,603 293,603 - 293,603 Development services 2,783,464 3,873,464 413,487 3,459,977 Administrative services 1,518 1,518 1,393 125 Capital outlay 3,869,915 3,899,915 214,507 3,685,408 Total expenditures 6,948,500 8,068,500 629,387 7,439,113 REVENUES OVER (UNDER) EXPENDITURES (318,940) (1,438,940) 333,650 1,772,590 NET CHANGE IN FUND BALANCE (318,940)$ (1,438,940)$ 333,650 1,772,590$ FUND BALANCE: Beginning of year 1,683,579 End of year 2,017,229$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure C/J Special Revenue Fund For the Year Ended June 30, 2020 100 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Use of money and property 974$ 974$ 2,986$ 2,012$ Miscellaneous 3,760 19,760 20,850 1,090 Total revenues 4,734 20,734 23,836 3,102 EXPENDITURES: Current: General government 1,500 1,500 1,782 (282) Police services - 21,000 9,934 11,066 Maintenance services 2,584 12,584 11,025 1,559 Administrative services 275 275 155 120 Total expenditures 4,359 35,359 22,896 12,463 NET CHANGE IN FUND BALANCE 375$ (14,625)$ 940 15,565$ FUND BALANCE: Beginning of year 174,295 End of year 175,235$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Donations and Contributions Special Revenue Fund For the Year Ended June 30, 2020 101 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Development fees -$ -$ 217,822$ 217,822$ Intergovernmental 19,376 19,376 14,643 (4,733) Use of money and property - - 123,475 123,475 Miscellaneous 182,599 182,599 141,929 (40,670) Total revenues 201,975 201,975 497,869 295,894 EXPENDITURES: Current: Maintenance services 823,374 823,374 309,016 514,358 Development services 854,927 871,927 - 871,927 Administrative services 3,371 3,371 3,418 (47) Recreation, Arts & Community Services 439,125 544,125 60,951 483,174 Capital outlay 213,900 213,900 - 213,900 Total expenditures 2,334,697 2,456,697 373,385 2,083,312 NET CHANGE IN FUND BALANCE (2,132,722)$ (2,254,722)$ 124,484 2,379,206$ FUND BALANCE: Beginning of year 3,754,852 End of year 3,879,336$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Development Impact Fees Special Revenue Fund For the Year Ended June 30, 2020 102 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Intergovernmental 119,000$ 119,000$ 179,632$ 60,632$ Use of money and property 1,246 1,246 9,612 8,366 Total revenues 120,246 120,246 189,244 68,998 EXPENDITURES: Current: Police services 140,000 140,000 121,402 18,598 Administrative services 263 263 471 (208) Total expenditures 140,263 140,263 121,873 18,390 NET CHANGE IN FUND BALANCE (20,017)$ (20,017)$ 67,371 87,388$ FUND BALANCE: Beginning of year 422,878 End of year 490,249$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Safety Special Revenue Fund For the Year Ended June 30, 2020 103 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Development fees -$ -$ 175,426$ 175,426$ Use of money and property - - 12,803 12,803 Total revenues - - 188,229 188,229 EXPENDITURES: Current: Administrative services 512 512 451 61 Total expenditures 512 512 451 61 NET CHANGE IN FUND BALANCE (512)$ (512)$ 187,778 188,290$ FUND BALANCE: Beginning of year 373,323 End of year 561,101$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Old Town Parking In-Lieu Special Revenue Fund For the Year Ended June 30, 2020 104 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Other taxes 482,182$ 482,182$ 539,772$ 57,590$ Total revenues 482,182 482,182 539,772 57,590 EXPENDITURES: Current: Development services - 475,000 - 475,000 Total expenditures - 475,000 - 475,000 NET CHANGE IN FUND BALANCE 482,182$ 7,182$ 539,772 532,590$ FUND BALANCE: Beginning of year 79,426 End of year 619,198$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Solid Waste Vehicle Impact Fee Special Revenue Fund For the Year Ended June 30, 2020 105 DR A F T 11 . 0 2 . 2 0 2 0 Variance From Original Final Actual Final Budget REVENUES: Use of money and property -$ -$ 22,788$ 22,788$ Total revenues - - 22,788 22,788 EXPENDITURES: Current: Administrative services - - 1,996 (1,996) Total expenditures - - 1,996 (1,996) NET CHANGE IN FUND BALANCE -$ -$ 20,792 20,792$ FUND BALANCE: Beginning of year 1,182,031 End of year 1,202,823$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Low and Moderate Income Housing Special Revenue Fund For the Year Ended June 30, 2020 106 DR A F T 11 . 0 2 . 2 0 2 0 Balance Balance July 1, 2019 Additions Deletions June 30, 2020 Deposits Fund ASSETS Cash and investments 2,116,446$ 554,605$ (1,523,498)$ 1,147,553$ Cash and investments with fiscal agents 231,618 16,455 - 248,073 Total assets 2,348,064$ 571,060$ (1,523,498)$ 1,395,626$ LIABILITIES Accounts payable 828,338$ 758,104$ (1,521,518)$ 64,924$ Deposits 1,519,726 559,803 (748,827) 1,330,702 Total liabilities 2,348,064$ 1,317,907$ (2,270,345)$ 1,395,626$ Total Agency Funds ASSETS Cash and investments 2,116,446$ 554,605$ (1,523,498)$ 1,147,553$ Cash and investments with fiscal agents 231,618 16,455 - 248,073 Total assets 2,348,064$ 571,060$ (1,523,498)$ 1,395,626$ LIABILITIES Accounts payable 828,338$ 758,104$ (1,521,518)$ 64,924$ Deposits 1,519,726 559,803 (748,827) 1,330,702 Total liabilities 2,348,064$ 1,317,907$ (2,270,345)$ 1,395,626$ Town of Danville Agency Funds Combining Statement of Changes in Assets and Liabilities For the Year Ended June 30, 2020 107 DR A F T 11 . 0 2 . 2 0 2 0 108 This page intentionally left blank. DR A F T 11 . 0 2 . 2 0 2 0 109 STATISTICAL SECTION DR A F T 11 . 0 2 . 2 0 2 0 2011 2012 2013 2014 2015 Governmental Activities: Net investment in capital assets 139,431,946$ 142,812,475$ 144,710,384$ 145,858,981$ 149,697,964$ Restricted 40,454,304 49,692,031 50,198,481 48,477,964 23,655,107 Unrestricted 49,520,377 46,716,135 46,009,779 51,728,377 69,968,657 Total Governmental Activities Net Position 229,406,627$ 239,220,641$ 240,918,644$ 246,065,322$ 243,321,728$ Primary Government: Net investment in capital assets 139,431,946$ 142,812,475$ 144,710,384$ 145,858,981$ 149,697,964$ Restricted 40,454,304 49,692,031 50,198,481 48,477,964 23,655,107 Unrestricted 49,520,377 46,716,135 46,009,779 51,728,377 69,968,657 Total Primary Governmental Net Position 229,406,627$ 239,220,641$ 240,918,644$ 246,065,322$ 243,321,728$ (Accrual Basis of Accounting) Fiscal Year Town of Danville Net Position by Component Last Ten Fiscal Years 110 DR A F T 11 . 0 2 . 2 0 2 0 2016 2017 2018 2019 2020 Governmental Activities: Net investment in capital assets 154,909,051$ 155,792,439$ 162,998,663$ 166,215,901$ 174,968,722$ Restricted 26,812,236 24,437,153 23,784,733 24,398,492 26,961,172 Unrestricted 68,822,679 72,257,190 64,907,258 65,271,882 61,659,221 Total Governmental Activities Net Position 250,543,966$ 252,486,782$ 251,690,654$ 255,886,275$ 263,589,115$ Primary Government: Net investment in capital assets 154,909,051$ 155,792,439$ 162,998,663$ 166,215,901$ 174,968,722$ Restricted 23,655,107 24,437,153 23,784,733 24,398,492 26,961,172 Unrestricted 69,968,657 72,257,190 64,907,258 65,271,882 61,659,221 Total Primary Governmental Net Position 248,532,815$ 252,486,782$ 251,690,654$ 251,690,654$ 263,589,115$ Note: The Town of Danville does not have any business-type activities. (Accrual Basis of Accounting) Fiscal Year Town of Danville Net Position by Component (Continued) Last Ten Fiscal Years 0 50 100 150 200 250 2011 2012 2013 2014 20152016 2017 2018 2019 2020 Go v e r n m e n t a l  ac t i v i t i e s  (i n  mi l l i o n s ) Fiscal Year Net Position by Component      Net investment in capital assets   Restricted   Unrestricted 111 DR A F T 11 . 0 2 . 2 0 2 0 2011 2012 2013 2014 2015 Expenses: Governmental activities: General Government 1,727,619$ 1,672,908$ 1,657,519$ 1,707,946$ 1,527,466$ Police Services 7,301,762 7,518,544 7,592,846 7,192,736 8,565,667 Maintenance Services & Lighting & Landscape 5,508,781 6,284,672 7,803,026 6,136,448 7,589,476 Development Services 13,388,097 8,909,136 10,298,111 7,545,035 14,348,084 Administrative Services 2,049,307 2,105,205 2,461,355 2,301,375 3,244,813 Recreation Services 3,405,850 3,373,081 3,360,852 3,711,977 3,877,829 Interest on long-term debt 732,585 367,482 430,191 415,129 369,274 Total governmental activities expenses 34,114,001 30,231,028 33,603,900 29,010,646 39,522,609 Total primary government expenses 34,114,001$ 30,231,028$ 33,603,900$ 29,010,646$ 39,522,609$ Program Revenues: Governmental Activities: Charges for Services: General Government 6,208$ -$ -$ -$ -$ Police Services 293,550 323,053 312,873 499,517 429,625 Maintenance Services, Lighting & Landscape 3,028,247 3,040,340 3,021,029 3,110,836 3,033,384 Development Services 2,757,149 3,028,929 3,757,908 3,686,295 4,196,817 Administrative Services - -- - - Recreation, Arts & Community Services 1,645,913 1,754,367 1,810,376 2,178,636 2,433,110 Operating grants and contributions 798,926 804,432 748,772 933,466 1,110,167 Capital grants and contributions 6,728,897 2,492,782 1,877,029 1,936,672 1,676,661 Total governmental activities program revenues 15,258,890$ 11,443,903$ 11,527,987$ 12,345,422$ 12,879,764$ Total primary government program revenues 15,258,890$ 11,443,903$ 11,527,987$ 12,345,422$ 12,879,764$ Net (Expense)/Revenue Governmental activities (18,855,111)$ (18,787,125)$ (22,075,913)$ (16,665,224)$ (26,642,845)$ Total Primary Government, Net Expenses (18,855,111)$ (18,787,125)$ (22,075,913)$ (16,665,224)$ (26,642,845)$ Notes: 1. Depreciation was netted against program expenditures beginning in 2004. 2. The Town of Danville does not have any business-type activities. *FY 2008-09 Transportation Services program was combined with Development Services program **FY 2014-15: Legislative, Town Manager and Legal Services programs were combined with General Government Community Development program was combined with Development Services (Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Net Position Last Ten Fiscal Years 112 DR A F T 11 . 0 2 . 2 0 2 0 2016 2017 2018 2019 2020 Expenses: Governmental activities: General Government 1,592,763$ 1,658,023$ 1,821,906$ 1,648,107$ 1,988,737$ Police Services 8,914,297 9,107,939 9,668,148 9,908,945 9,824,261 Maintenance Services & Lighting & Landscape 8,262,373 7,963,358 7,824,106 8,512,749 9,400,476 Development Services 5,233,296 8,568,817 12,113,185 12,589,561 5,769,915 Administrative Services 4,080,262 3,690,675 3,511,181 3,625,899 3,816,145 Recreation, Arts & Community Services 3,847,434 4,129,417 4,016,368 4,273,896 3,794,125 Interest on long-term debt 364,866 345,931 345,473 325,210 322,951 Total governmental activities expenses 32,295,291 35,464,160 39,300,367 40,884,367 34,916,610 Total primary government expenses 32,295,291$ 35,464,160$ 39,300,367$ 40,884,367$ 34,916,610$ Program Revenues Governmental Activities: Charges for Services: General Government 10$ 30$ 30$ 1,126$ -$ Police Services 424,470 314,597 295,805 308,210 296,126 Maintenance Services, Lighting & Landscape 3,036,737 3,142,080 3,060,686 3,046,475 3,059,330 Development Services 4,285,454 3,575,751 3,792,303 4,473,140 3,374,462 Administrative Services 35,186 36,308 36,400 38,126 31,693 Recreation, Arts & Community Services 2,079,801 2,196,610 2,058,014 2,041,182 1,427,112 Operating grants and contributions 950,437 911,003 1,205,123 2,132,610 1,873,835 Capital grants and contributions 1,276,567 2,591,351 2,521,475 3,880,922 1,358,781 Total governmental activities program revenues 12,088,662$ 12,767,730$ 12,969,836$ 15,921,791$ 11,421,339$ Total primary government program revenues 12,088,662$ 12,767,730$ 12,969,836$ 15,921,791$ 11,421,339$ Net (Expense)/Revenue Governmental activities (20,206,629)$ (22,696,430)$ (22,696,430)$ (24,962,576)$ (23,495,271)$ Total Primary Government, Net Expenses (20,206,629)$ (22,696,430)$ (22,696,430)$ (24,962,576)$ (23,495,271)$ Notes: 1. Depreciation was netted against program expenditures beginning in 2004. 2. The Town of Danville does not have any business-type activities. *FY 2008-09 Transportation Services program was combined with Development Services program **FY 2014-15: Legislative, Town Manager and Legal Services programs were combined with General Government Community Development program was combined with Development Services (Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Net Position (Continued) Last Ten Fiscal Years 113 DR A F T 11 . 0 2 . 2 0 2 0 2011 2012 2013 2014 2015 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes 13,283,437$ 12,967,656$ 12,242,443$ 12,716,297$ 13,593,483$ Sales taxes 3,531,936 3,835,342 3,897,260 3,947,577 4,098,412 Motor Vehicle taxes 199,005 21,557 22,337 18,486 17,857 Franchise Taxes 2,039,307 2,067,703 2,098,137 2,155,691 2,215,165 Other taxes 361,872 366,926 374,354 385,044 391,856 Investment earnings 1,399,674 915,317 251,901 900,451 636,474 Miscellaneous 1,605,554 1,470,094 2,360,129 1,514,199 1,559,647 Gain (loss) on sale of capital assets - - - - - Transfers from Successor Agency 795,191 790,542 769,972 Special item - 6,956,544 1,732,164 - - Total governmental activities 22,420,785$ 28,601,139$ 23,773,916$ 22,428,287$ 23,282,866$ Total primary government 22,420,785$ 28,601,139$ 23,773,916$ 22,428,287$ 23,282,866$ Change in Net Position Governmental activities 3,633,660$ 6,525,226$ 7,108,692$ (4,214,558)$ 3,076,237$ Total primary government 3,633,660$ 6,525,226$ 7,108,692$ (4,214,558)$ 3,076,237$ Note: The Town of Danville does not have any business-type activities. (Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Net Position (Continued) Last Ten Fiscal Years 114 DR A F T 11 . 0 2 . 2 0 2 0 2016 2017 2018 2019 2020 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes 14,153,561$ 13,978,818$ 14,629,253$ 15,354,728$ 16,025,356$ Sales taxes 4,569,470 5,546,298 5,914,835 6,126,449 5,753,805 Motor Vehicle taxes 17,629 19,203 22,821 21,310 35,829 Franchise Taxes 2,299,491 2,419,118 2,588,989 2,609,820 2,836,124 Other Taxes 404,744 371,237 362,196 390,562 367,376 Investment earnings 1,265,876 296,610 368,995 3,028,554 3,183,434 Miscellaneous 741,674 1,235,646 854,998 834,318 1,838,208 Gain (loss) on sale of capital assets - - - - 345,523 Transfers from Successor Agency 780,818 772,316 792,316 792,456 812,456 Special item 3,195,604 - - - - Total governmental activities 27,428,867$ 24,639,246$ 25,534,403$ 29,158,197$ 31,198,111$ Total primary government 27,428,867$ 24,639,246$ 25,534,403$ 29,158,197$ 31,198,111$ Change in Net Position Governmental activities 4,732,437$ 1,942,816$ (7,796,128)$ 4,195,621$ 7,702,840$ Total primary government 4,732,437$ 1,942,816$ (7,796,128)$ 4,195,621$ 7,702,840$ Note: The Town of Danville does not have any business-type activities. Fiscal Year Town of Danville Changes in Net Position (Continued) Last Ten Fiscal Years (Accrual Basis of Accounting) 115 DR A F T 11 . 0 2 . 2 0 2 0 This page intentionally left blank. 116 DR A F T 11 . 0 2 . 2 0 2 0 Community Development Agency Tax Property Motor Business Fiscal Property Sales Increment Franchise Transfer Vehicle License & Year Tax (1) Tax (2)Tax Tax Tax Other Taxes Total 2011 10,994,774$ 3,531,936$ 1,949,292$ 2,039,307$ 339,371$ 199,005$ 361,872$ 18,862,486$ 2012 11,243,968 3,835,342 1,371,457 2,067,703 352,231 21,557 366,926 19,415,557 2013 11,809,390 3,897,260 - 2,098,137 433,053 22,337 374,354 19,259,184 2014 12,221,986 3,947,577 - 2,155,691 494,311 18,486 385,044 18,634,531 2015 13,076,172 4,098,412 - 2,215,165 517,311 17,857 391,856 19,223,095 2016 12,534,667 4,569,470 - 2,299,491 568,870 17,629 404,744 20,316,773 2017 13,392,392 5,546,298 - 2,419,118 586,426 19,203 371,237 20,394,871 2018 13,980,610 5,914,835 - 2,588,989 648,643 22,821 362,196 22,334,674 2019 14,740,670 6,126,449 - 2,609,820 614,058 21,310 390,562 24,502,869 2020 15,175,356 5,753,805 - 2,836,124 850,000 35,829 367,376 25,018,490 Note: 1. The State shifted revenues from motor vehicle fees/tax and sales tax to property tax beginning 2005. 2. The former Community Development Agency was dissolved by AB x1 26 on January 31, 2012. Town of Danville Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (Accrual Basis of Accounting) 117 DR A F T 11 . 0 2 . 2 0 2 0 2011 2012 2013 2014 2015 General Fund Nonspendable -$ -$ -$ -$ -$ Restricted -809,519 809,536 809,635 809,718 Committed 18,334,708 17,697,557 17,670,672 17,118,585 17,067,689 Assigned 8,327,574 8,430,419 9,247,992 9,482,365 9,397,184 Total General Fund 26,662,282 26,937,495 27,728,200 27,410,585 27,274,591 All Other Governmental Funds Special revenue funds Restricted 30,370,267 28,429,093 27,540,889 28,492,880 24,215,659 Committed - -- - - Assigned - - - - - Debt service fund Restricted 1,031,209 808,787 811,282 811,448 813,511 Unassigned (8,063,814) - - - - Capital projects funds Restricted 340,851 - - 356,953 356,953 Committed 16,814,633 40,669,255 39,639,637 42,268,737 39,887,688 Assigned 22,804,473 - - - 2,183,781 Total all other Governmental Funds 63,297,619 69,907,135 67,991,808 71,930,018 67,457,592 Total Governmental Funds 89,959,901$ 96,844,630$ 95,720,008$ 99,340,603$ 94,732,183$ Note: Information presented according to GASB 54 which was implemented in 2010 (Modified Accrual Basis of Accounting) Fiscal Year Town of Danville Fund Balances of Governmental Funds Last Ten Fiscal Years 118 DR A F T 11 . 0 2 . 2 0 2 0 2016 2017 2018 2019 2020 General Fund Nonspendable 10,427,986$ 9,427,986$ 8,427,986$ 7,325,019$ 5,167,108$ Restricted 809,504 809,820 813,965 820,547 815,484 Committed 18,374,622 17,249,253 17,868,716 19,005,310 20,401,468 Assigned 344,844 313,036 169,060 117,735 190,888 Total General Fund 29,956,956 27,800,095 27,279,727 27,268,611 26,574,948 All Other Governmental Funds Special revenue funds Restricted 26,129,555 23,594,077 22,970,768 23,577,945 26,145,688 Committed - - - - - Assigned - - - 2,469,321 2,617,844 Debt service fund Restricted - - - - - Unassigned - - - - - Capital projects funds Restricted - - - - - Committed 38,430,064 42,743,649 36,532,398 37,060,728 34,072,908 Assigned 2,364,889 2,507,297 2,574,079 - - Total all other Governmental Funds 66,924,508 68,845,023 62,077,245 63,107,994 62,836,440 Total Governmental Funds 96,881,464$ 96,645,118$ 89,356,972$ 90,376,605$ 89,411,388$ Note: Information presented according to GASB 54 which was implemented in 2010 (Modified Accrual Basis of Accounting) Fiscal Year Town of Danville Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years 119 DR A F T 11 . 0 2 . 2 0 2 0 2011 2012 2013 2014 2015 REVENUES: Property Taxes 13,283,437$ 12,967,656$ 12,242,443$ 12,716,297$ 13,593,483$ Sales Taxes 3,531,862 3,835,342 3,897,260 3,943,899 4,080,378 Gas & Other Taxes 3,960,259 3,818,359 3,731,881 3,999,378 4,033,766 Special assessments 3,579,045 3,572,176 3,580,120 3,579,918 3,574,570 Charges for services 3,379,595 3,641,623 4,602,791 2,455,673 2,792,321 Licenses and permits 360,957 366,886 374,354 385,033 391,856 Development fees 1,101,893 144,416 1,207,211 2,926,192 3,166,893 Intergovernmental 5,134,660 1,276,852 155,815 181,003 547,347 Fines and forfeitures 219,432 190,982 237,209 248,965 242,325 Uses of money and property 1,943,830 1,463,143 870,157 1,507,294 1,379,939 Miscellaneous 1,079,236 1,802,671 972,999 1,060,380 1,589,780 Total Revenues 37,574,206 33,080,106 31,872,240 33,004,032 35,392,658 EXPENDITURES: Current: General Government 1,683,425 1,667,416 1,658,489 1,708,465 1,526,324 Police services 7,128,461 7,300,734 7,374,868 6,980,859 8,356,060 Maintenance services 1,958,607 2,403,824 4,362,329 2,547,337 3,728,641 Lighting and landscape 3,029,522 3,288,256 2,991,535 3,043,620 3,105,346 Development services 11,027,548 7,458,197 9,588,981 6,920,225 14,097,237 Administrative services 1,998,345 1,901,419 2,446,641 2,207,468 3,362,284 Recreation, Arts & Community services 3,307,586 3,245,655 3,242,901 3,593,125 3,523,333 Capital outlay 7,592,460 5,763,393 1,342,965 2,382,338 5,102,019 Debt service: Principal 395,000 420,000 - - - Interest and fiscal charges 744,521 503,764 - - - Total Expenditures 38,865,475 33,952,658 33,008,709 29,383,437 42,801,244 REVENUES OVER (UNDER) EXPENDITURES (1,291,269) (872,552) (1,136,469) 3,620,595 (7,408,586) OTHER FINANCING SOURCES (USES): Proceeds from sale of assets - - - - Transfers in 13,547,919 7,385,966 5,272,109 6,248,451 6,300,714 Transfers out (13,547,919) (7,385,966) (5,272,109) (6,248,451) (6,300,714) Total other financing sources (uses)- - - - - Extraordinary/Special item*- 7,757,281 11,847 - - NET CHANGE IN FUND BALANCES (1,291,269)$ 6,884,729$ (1,124,622)$ 3,620,595$ (7,408,586)$ Debt service as a percentage of noncapital expenditures 3.78%3.39%0.00%0.00%0.00% Notes: 1. Revenues & expenditures were categorized differently prior to the implementation of GASB 34 in 2002. 2. Assets transferred from the former Community Development Agency (CDA) of the Town of Danville to the Successor Agency Trust Fund Modified Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years 120 DR A F T 11 . 0 2 . 2 0 2 0 2016 2017 2018 2019 2020 REVENUES: Property Taxes 14,153,561$ 13,978,818$ 14,629,253$ 15,354,728$ 16,025,356$ Sales Taxes 4,558,712 5,535,422 5,910,069 6,124,320 5,740,046 Gas & Other Taxes 3,270,354 3,264,713 3,645,895 3,581,582 3,594,673 Special assessments 3,590,353 3,554,065 3,775,380 4,310,196 4,722,089 Charges for services 2,752,180 2,859,100 2,874,896 2,867,332 2,021,562 Licenses and permits 404,744 371,237 362,196 396,710 367,376 Development fees 3,705,128 3,096,371 3,275,723 4,286,391 2,471,063 Intergovernmental 1,026,474 1,918,820 1,735,441 2,853,143 1,208,170 Fines and forfeitures 267,732 163,825 167,822 187,979 128,312 Uses of money and property 2,024,361 995,448 1,054,042 3,924,193 4,265,728 Miscellaneous 1,155,013 897,019 279,040 424,954 944,642 Total Revenues 36,908,612 36,634,838 37,709,757 44,311,528 41,489,017 EXPENDITURES: Current: General Government 1,591,047 1,622,521 1,830,739 1,624,096 1,922,014 Police services 8,691,261 8,881,254 9,426,989 9,690,883 9,658,510 Maintenance services 4,381,322 3,686,266 3,339,317 3,305,068 4,411,816 Lighting and landscape 3,127,403 3,374,354 3,644,177 4,067,377 3,703,613 Development services 4,986,759 8,186,500 11,741,330 12,346,910 5,549,402 Administrative services 4,000,431 3,536,546 3,472,727 3,555,297 3,777,435 Recreation, Arts & Community services 3,467,371 3,693,259 3,697,618 3,920,497 3,508,142 Capital outlay 6,466,296 2,102,572 8,692,182 4,781,767 13,198,241 Debt service: Principal - - - - - Interest and fiscal charges - - - - - Total Expenditures 36,711,890 35,083,272 45,845,079 43,291,895 45,729,173 REVENUES OVER (UNDER) EXPENDITURES 196,722 1,551,566 (8,135,322) 1,019,633 (4,240,156) OTHER FINANCING SOURCES (USES): Proceeds from sale of assets - - - - 3,274,939 Transfers in 8,710,450 9,937,410 7,276,333 8,765,719 11,932,028 Transfers out (8,710,450) (9,937,410) (7,276,333) (8,765,719) (11,932,028) Total other financing sources (uses)- - - - 3,274,939 Extraordinary/Special item*3,195,604 - - - - NET CHANGE IN FUND BALANCES 3,392,326$ 1,551,566$ (8,135,322)$ 1,019,633$ (965,217)$ Debt service as a percentage of noncapital expenditures 0.00%0.00%0.00%0.00%0.00% Notes: 1. Revenues & expenditures were categorized differently prior to the implementation of GASB 34 in 2002. 2. Assets transferred from the former Community Development Agency (CDA) of the Town of Danville to the Successor Agency Trust Fund (Modified Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years 121 DR A F T 11 . 0 2 . 2 0 2 0 This page intentionally left blank. 122 DR A F T 11 . 0 2 . 2 0 2 0 Fiscal Year Less: Total Taxable Total Ended Tax Exempt Assessed Direct June 30 Secured Unsecured Secured Unsecured Property Value Rate 2011 9,194,600,681$ 51,396,726$ 2,863,007$ 43,431,719$ 172,439,273$ 9,119,852,860$ 0.10367% 2012 9,170,986,676 50,217,076 2,604,516 47,076,779 173,327,421 9,097,557,626 0.10319% 2013 9,236,967,610 52,627,724 2,468,870 41,018,620 172,442,279 9,160,640,545 0.10323% 2014 9,812,406,625 52,547,546 2,315,399 39,737,234 171,279,730 9,735,727,074 0.07827% 2015 10,526,929,712 44,289,615 2,298,728 45,995,923 169,288,561 10,450,225,417 0.07752% 2016 11,231,575,805 49,320,732 3,732,903 42,680,915 170,375,283 11,156,935,072 0.07758% 2017 11,904,105,603 47,645,411 3,290,428 43,296,151 172,930,520 11,825,407,073 0.07763% 2018 12,497,304,292 48,065,757 3,371,837 45,354,774 176,396,870 12,417,699,790 0.07767% 2019 13,131,043,886 53,546,262 5,685,542 48,122,854 184,522,193 13,053,876,351 0.07769% 2020 13,815,833,911 53,545,615 5,301,255 49,668,729 176,668,847 13,747,680,663 0.07772% Note: In 1978 the voters of the State of California passed Proposition 13 which limited basic property 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 increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new owner. At those times, the new assessed value is the purchase price. The estimated market value of taxable property is not available. Town of Danville Assessed Value Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Assessed Value Real Property Personal Property 123 DR A F T 11 . 0 2 . 2 0 2 0 Total San Ramon Bay Area Direct & Fiscal County Valley Unified Rapid Transit Overlapping Year Danville Wide 1 School District (BART) Miscellaneous Rate 2011 0.10367% 1.00% 0.0641% 0.0031% 0.0234% 1.19539% 2012 0.10319% 1.00% 0.0664% 0.0041% 0.0217% 1.19943% 2013 0.10323% 1.00% 0.0705% 0.0043% 0.0214% 1.16917% 2014 0.07827% 1.00% 0.0696% 0.0075% 0.0138% 0.07827% 2015 0.07752%1.00% 0.0651% 0.0045% 0.0121% 0.07752% 2016 0.07758%1.00% 0.0624% 0.0026% 0.0125% 0.07758% 2017 0.07763%1.00% 0.0652% 0.0080% 0.0152% 0.07763% 2018 0.07767%1.00% 0.0552% 0.0084% 0.0135% 0.07767% 2019 0.07769% 1.00% 0.0750% 0.0070% 0.0131% 0.07769% 2020 0.07720% 1.00% 0.0750% 0.1200% 0.0282% 0.07720% Note: 1 Countywide rate of 1% is levied with the proceeds distributed to all taxing agencies according to formulas specified by State legislature. 2 Individual agencies' rates are for payments of voter approved indebtedness. Town of Danville Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (Rate Expressed in Percentage) 124 DR A F T 11 . 0 2 . 2 0 2 0 Fiscal Total Tax Year Levied and Delinquent Ended Collected for Percentage Tax Collected Percentage June 30 Fiscal Year of Levy Collections Amount of Levy 2011 12,944,065$ 100% n/a 12,944,065$ 100% 2012 12,967,656 100% n/a 12,967,656 100% 2013 12,242,443 100% n/a 12,242,443 100% 2014 13,190,148 100% n/a 13,190,148 100% 2015 14,171,661 100% n/a 14,171,661 100% 2016 14,736,156 100% n/a 14,736,156 100% 2017 14,430,722 100% n/a 14,430,722 100% 2018 14,629,254 100% n/a 14,629,254 100% 2019 15,928,730 100% n/a 15,928,730 100% 2020 16,678,857 100% n/a 16,678,857 100% Note: 1. The data in this table includes basic and supplemental city property taxes, Redevelopment Agency tax increments, ERAF refunds, property tax in-lieu of motor vehicle license fees and the sales tax triple flip. 2. Contra Costa County assesses, bills, collects and distributes property taxes to all taxing entities including the Town. Under a State law, known as the Teeter Plan, the County remits the entire amount levied to the Town. The County handles all delinquencies and retains all interest and penalities. Source: County of Contra Costa Last Ten Fiscal Years Collected Within the Fiscal Year of the Levy Total Collections To Date Property Tax Levies and Collections Town of Danville 125 DR A F T 11 . 0 2 . 2 0 2 0 Certificate Taxable Total Percentage Fiscal of Revenue Bonds Primary of Personal Per Year Participation Loan Payable Government Income Capita 2011 9,940,000$ 3,345,000$ 13,285,000$ **314.70$ 2012 9,590,000 -9,590,000 **226.98 2013 9,230,000 -9,230,000 **216.06 2014 8,860,000 -8,860,000 **205.35 2015 8,860,000 -8,860,000 **202.79 2016 8,055,000 -8,055,000 **187.92 2017 7,635,000 -7,635,000 **178.12 2018 7,195,000 -7,195,000 **167.85 2019 6,735,000 -6,735,000 **148.77 2020 6,255,000 -6,255,000 **140.16 Note: 1. COP is paid with property tax increment of the Property Tax Trust Fund. 2. Taxable Revenue Bonds Loan Payable was transferred to the Successor Agency Trust Fund. 3. Bank notes for child care facilities and capital leases. 4. Reliable information is not available. Town of Danville Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities 126 DR A F T 11 . 0 2 . 2 0 2 0 General Tax Less: Amount Fiscal Obligation Allocation Available in Year Bonds Bonds Debt Service Fund Total (net) 2011 -$ -$ -$ -$ 2012 - - - - 2013 - - - - 2014 - - - - 2015 - - - - 2016 - - - - 2017 - - - - 2018 - - - - 2019 - - - - 2020 - - - - Note: The Town of Danville does not have any General Bonded debt. Town of Danville Ratios of General Bonded Debt Outstanding Outstanding General Bonded Debt Last Ten Fiscal Years 127 DR A F T 11 . 0 2 . 2 0 2 0 2019-2020 Assessed Valuation:13,123,354,151$ Redevelopment Incremental Valuation 12,488,223,390$ Adjusted Assessed Valuation: Total Debt Town's Share of OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/19 % Applicable (1)Debt (6/30/20) Bay Area Rapid Transit District 809,660,000$ 1.746% 14,136,664$ Contra Costa Community College District 397,065,000 6.422% 25,499,514 San Ramon Valley Unified School District 448,665,000 26.536% 119,057,744 East Bay Regional Park District 178,710,000 2.765% 4,941,332 SUBTOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 163,635,254$ DIRECT AND OVERLAPPING GENERAL FUND DEBT: Contra Costa County General Fund Obligations 261,890,558$ 6.400% 16,760,996$ Contra Costa County Pension Obligations 122,585,000 6.400% 7,845,440 San Ramon Valley Unified School District General Fund Obligations 25,187,287 26.536% 6,683,698 San Ramon Valley Fire Protection District - COP 16,357,475 26.676% 4,363,520 Town of Danville Certificates of Participation (COP) 6,735,000 100% 6,735,000 SUBTOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 42,388,654$ Less: Contra Costa County obligations supported from revenue funds (6,577,221) TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 35,811,433$ OVERLAPPING TAX INCREMENT DEBT (Successor Agency) 2,450,000$ 100% 2,450,000$ TOTAL DIRECT DEBT 6,735,000$ TOTAL GROSS OVERLAPPING DEBT 201,738,908$ TOTAL NET OVERLAPPPING DEBT 195,161,687$ GRAND TOTAL DIRECT AND OVERLAPPING DEBT 208,473,908$ NET COMBINED TOTAL DEBT 201,896,687$ (1) (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. Ratios to 2019/20 Assessed Valuation: Total Overlapping Tax and Assessment Debt 1.25% Total Direct Debt ($7,635,000)0.05% Gross Combined Total Debt 1.59% Net Combined Total Debt 1.54% Ratios to Redevelopment Successor Agency Incremental Valuation ($405,524,438): Total Overlapping Tax Increment Debt 0.60% Source: California Municipal Statistics, Inc. notes, revenue bonds, mortgage revenue bonds, tax allocation bonds, obligations and capital lease obligations. Town of Danville Direct and Overlapping Governmental Activities Debt Current Year The percentage of overlapping debt applicable to the Town is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the Town divided by the district's total taxable assessed value. Note - This schedule presents fiscal capacity and debt for overlapping governments. It is intended to demonstrate the total property tax burden on the taxpayers within Danville and the total debt that their property taxes will be expected to pay. This schedule excludes tax and revenue anticipation 128 DR A F T 11 . 0 2 . 2 0 2 0 Taxable Percentage of Taxable Percentage of Assessed Total Taxable Assessed Total Taxable Employer Value Rank Assessed Value Value Rank Assessed Value Danville Livery & Mercantile 50,412,601$ 1 0.38%41,185,731$ 1 0.44% ROIC California, LLC 45,695,608 2 0.34% Reg8 Tassajara Crossing, LLC 40,587,349 3 0.31%34,876,502 2 0.38% Costco Wholesale Corporation 29,199,357 4 0.22%22,147,385 3 0.24% Rose Garden Associates Danville, LLC 28,027,326 5 0.21%18,860,000 5 0.20% MM Danville Apartments, LLC 27,677,490 6 Danville Park RE LLC 19,517,030 7 0.15% Rassier Properties Danville Medical Ctr. 16,825,099 8 0.13% Montair Associates, LLC 16,456,167 9 0.12%14,221,295 9 0.15% Danville Senior Living, LLC 14,152,000 10 0.10%12,522,431 10 0.13% GS Associates - Joint Venture 21,705,309 4 0.23% Danville 1500, LLC 18,454,000 6 0.20% Davidon Homes 17,259,123 7 0.19% Danville Park Investors 14,361,600 8 0.15% Totals 288,550,027$ 1.96% 215,593,376$ 2.31% Note: The amounts shown above include assessed value data for both the Town and the Successor Agency. Because of the many ways a business or individual can hold title, the above list is an approximation of the top taxpayers within the Town of Danville. Source: HdL Town of Danville Principal Property Taxpayers Current Year and Nine Fiscal Years Ago 2020 2011 129 DR A F T 11 . 0 2 . 2 0 2 0 2011 2012 2013 2014 2015 Debt Limit 341,994,482$ 341,158,411$ 343,524,020$ 365,089,765$ 391,883,453$ Total net debt applicable to limit - - - - - Legal debt margin 341,994,482$ 341,158,411$ 343,524,020$ 365,089,765$ 391,883,453$ Total net debt applicable to the limit as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% Note: The Government Code of the State of California provides for a legal debt limit of 3.75% of gross assessed valuation. Source: County of Contra Costa Town of Danville Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year 130 DR A F T 11 . 0 2 . 2 0 2 0 2016 2017 2018 2019 2020 Debt Limit 418,385,065$ 443,452,765$ 465,663,742$ 489,520,363$ 515,538,025$ Total net debt applicable to limit - - - - - Legal debt margin 418,385,065$ 443,452,765$ 465,663,742$ 489,520,363$ 515,538,025$ Total net debt applicable to the limit as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% Assessed Value 13,747,680,663$ Add back: exempt real property 176,668,847 Total assessed value 13,924,349,510$ Debt Limit (3.75% of assessed value) 515,538,025$ Total net debt applicable to limit - Legal Debt Margin 515,538,025$ Note: The Government Code of the State of California provides for a legal debt limit of 3.75% of gross assessed valuation. Source: County of Contra Costa Legal Debt Margin Calculation for Fiscal Year 2020 Town of Danville Legal Debt Margin Information (Continued) Last Ten Fiscal Years Fiscal Year 131 DR A F T 11 . 0 2 . 2 0 2 0 Fiscal Tax Tax Year Increment Principal Interest Coverage1 Increment Principal Interest Coverage 2011 1,528,523$ 335,000$ 462,991$ 1.92 420,770$ 60,000$ 281,530$ 1.23 2012 1,099,265 350,000 449,391 1.38 272,192 70,000 276,818 0.78 2013 1,188,645 360,000 435,192 1.49 404,571 80,000 271,020 1.15 2014 - 370,000 420,541 - - 95,000 263,889 - 2015 - 395,000 404,973 - - 105,000 255,739 - 2016 - 410,000 388,256 - - 120,000 246,570 - 2017 - 420,000 370,819 - - 130,000 236,383 - 2018 - 440,000 352,316 - - 140,000 225,380 - 2019 - 460,000 332,456 - - 155,000 213,359 - 2020 - 480,000 311,356 - - 165,000 200,289 - Note: 1. Fund balance used to cover debt service Debt Service Debt Service Town of Danville Pledged-Revenue Coverage Last Ten Fiscal Years Certificates of Participation Taxable Revenue Bond 132 DR A F T 11 . 0 2 . 2 0 2 0 Median Persons per Per Personal Public Household Household Capita Income School Unemployment Year Population 1 Income 2 Unit 3 Income 2 (in thousands)Enrollment 4 Rate 5 2011 42,215 141,879 2.81 64,412$ ** 28,987 5.9% 2012 42,450 133,888 2.73 63,404 ** 29,884 4.9% 2013 42,720 **2.75 **** 30,757 3.8% 2014 43,146 **2.77 **** 31,398 3.3% 2015 43,691 140,809 2.79 **** 31,954 4.1% 2016 42,865 **2.97 **** 32,255 3.9% 2017 43,355 ** ****** 32,425 3.5% 2018 44,396 ******** 32,504 2.9% 2019 45,270 ******** 32,138 2.7% 2020 44,626 ******** 31,911 10.0% Note: Per Capita Income and Personal Income is for County of Contra Costa since reliable Town specific data is not available. Sources: 1. California State Department of Finance 2. For FYE 2007 the actual median household income was projected at a growth rate of .8%. For FY 2011: SperlingViews; www.bestplaces.net/economy/city/california/danville For FY 2012: US Census Bureau, 2009-2011 American Community Survey: $133,888 +/- $10,705 3. U.S. Department of Commerce Census, Bureau American Community Surveys 4. California Department of Education (Schools within the San Ramon Valley Unified School District) 5. California State Employment Development Department **Figures not available Town of Danville Demographic and Economic Statistics Last Ten Fiscal Years 133 DR A F T 11 . 0 2 . 2 0 2 0 Number of % of Number of % of Employer Employees 1 Rank Top 10 Employees 1 Rank Top 10 Keller Williams Realty 342 1 29.9%345 1 27.6% Costco 204 2 17.8%195 2 15.6% Safeway, Inc.98 3 8.6%101 4 8.1% Trader Joe's 82 4 7.2%77 7 6.2% Brookfield Calwest Builders 80 5 7.0% Crow Canyon Management Corp.74 6 6.5%95 5 7.6% J. Rockcliff Realtors 72 7 6.3%89 6 7.1% Lunardi's Market 67 8 5.9%63 10 5.0% Danville Nursing & Rehabilitation Center 66 9 5.8%66 9 5.3% Sunrise Assisted Living of Danville 60 10 5.2%72 8 5.8% Pacific Gas & Electric 145 3 11.6% Total Employees: 1,145 1,248 Note: 1. Data complied from Town of Danville Business License Division. Town of Danville Principal Employers in the Town of Danville Current Year and Previous Year 2020 2019 134 DR A F T 11 . 0 2 . 2 0 2 0 Function 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Legislative 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Administration 4.00 4.00 4.00 4.00 6.75 6.50 8.25 8.25 7.75 7.75 Legal 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Police Services* 34.75 35.75 34.75 34.00 36.75 37.75 37.75 37.75 37.75 37.75 Development Services 25.25 25.25 24.25 25.50 25.50 29.75 27.00 27.00 26.50 25.50 Transportation Services 4.50 4.50 4.50 4.25 4.25 3.25 3.75 3.25 3.00 3.00 Community Services Maintenance 23.00 23.00 24.00 24.00 29.00 31.00 31.00 31.00 31.00 31.00 Recreation, Arts & Community Services 15.25 15.50 15.50 15.25 37.75 37.75 38.25 38.25 42.00 42.00 Finance 5.50 5.50 5.50 5.50 5.25 5.25 5.25 5.25 5.00 5.00 Support Services 3.00 3.00 3.00 3.00 4.50 4.50 4.50 4.50 4.50 4.50 Community Events** 1.50 0.25 0.25 0.25 0.50 0.50 0.50 0.50 0.50 0.50 Human Resources 2.00 2.00 2.00 2.00 2.00 2.50 2.50 2.50 2.25 2.25 Total 121.75 120.75 120.75 119.75 119.75 154.25 160.75 160.75 160.25 161.25 Source: Adopted Town Budgets * includes 30 County contract sworn officers in FY 2016/17 FY 2014-15: Legislative, Administration and Legal were combined with General Government **Community Services and Special Events were combined with Recreation, Arts & Community Services Town of Danville Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years Fiscal Year 135 DR A F T 11 . 0 2 . 2 0 2 0 Function 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Police:1 Arrests 745 654 701 574 618 515 500 447 391 281 Traffic violations 4,563 2,109 4,220 6,001 5,345 3,875 2,605 3,702 2,786 2,482 Parking violations 1,700 1,398 2,009 2,373 1,619 1,625 1,774 1,367 1,593 1,346 Public works: Street resurfacing (miles) 5.72 9.7 24 18.7 14.2 24 15.2 5.9 5.5 10.23 Pot holes repaired 134 110 151 160 111 181 249 84 309 149 Parks and recreation: Course registration 18,352 17,396 20,101 22,191 17,176 18,147 20,352 19,174 18,146 13,593 Facility rentals/permits 2 13,401 13,790 13,915 13,894 816 716 804 786 638 538 Picnic rentals 385 505 511 535 460 241 413 406 354 205 Note: 1. Police Statistics are reported end of calendar year 2. Facility rentals were previously tracked by the number of bookings, which may have included multiple bookings on one rental permit. As a result of the implementation of Active Network, a new registration software, rentals are now tracked only by rental permit. Source: Various Town departments Town of Danville Operating Indicators by Function Last Ten Fiscal Years Fiscal Year 136 DR A F T 11 . 0 2 . 2 0 2 0 Function 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Police: Stations 1111111111 Patrol units 16 16 14 12 13 12 13 13 13 13 Public works: Street (miles) 144.6 144.6 144.6 144.6 144.6 144.6 144.6 144.6 157.89 158.15 Street lights 3,207 3,449 1,417 1,417 1,417 1,417 1,417 1,158 1,158 1,158 Signalized intersections 51 51 51 51 52 51 52 54 54 54 Parks and recreation: Parks acreage 312.45 312.5 312.5 312.5 312.5 312.5 312.5 312.5 312.5 312.5 Parks 5555555555 Swimming pools 0000000000 Tennis courts 0 7 10 10 10 10 10 10 10 10 Community centers 3333333333 Source: Various Town departments Town of Danville Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year 137 DR A F T 11 . 0 2 . 2 0 2 0 This page intentionally left blank. 138 DR A F T 11 . 0 2 . 2 0 2 0