ML12030A247

City of Riverside, Comprehensive Annual Financial Report, Year Ended June 30, 2011

ML12030A247
Person / Time
Site:	San Onofre
Issue date:	10/14/2011
From:	Barber S, Sundeen P City of Riverside, CA, Southern California Edison Co
To:	Office of Nuclear Reactor Regulation
References
Download: ML12030A247 (128)

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CITY OF RIVERSIDE COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2011 TABLE OF CONTENTS INTRODUCTORY SECTION Page Letter of T ransm ittal ........................................................................................................ i GFOA Certificate of Achievement ....................................................................................... v Legislative and C ity O fficials ............................................................................................. vi O rganization C hart ........................................................................................................ vi FINANCIAL SECTION R eport of Independent A uditors .......................................................................................... 1 Management's Discussion and Analysis ................................................................................. 3 Basic Financial Statements:

Government-wide Financial Statements:

Statem ent of N et Assets ......................................................................................... 21 Statem ent of A ctivities ........................................................................................... 22 Fund Financial Statements:

Balance Sheet - Governmental Funds .......................................................................... 23 Reconciliation of the Balance Sheet of Governmental Funds to Statement of Net Assets .............. 24 Statement of Revenues, Expenditures and Changes in Fund Balances - Govermnental Funds ......... 25 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .................................................. 26 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -

G eneral Fund ................................................................................................ 27 Statement of Net Assets - Proprietary Funds ................................................................. 28 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds .............. .30 Statement of Cash Flows - Proprietary Funds ................................................................ 31 Statement of Fiduciary Assets and Liabilities- Fiduciary Fund - Agency Fund ..........................

N otes to Financial Statem ents ...................................................................................... 34 Combining and Individual Fund Statements and Schedules:

Combining Balance Sheet - Nonmajor Governmental Funds .............................................. 63 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor G overnm ental Funds ....................................................................................... 65 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -

Nonm ajor Governm ental Funds ............................................................................ 67 Combining Statement of Net Assets -Nonmajor Enterprise Funds ......................................... 71 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - Nonmajor Enterprise F unds ............................................................................................. 73 Combining Statement of Cash Flows -Nonmajor Enterprise Funds ...................................... 74

CITY OF RIVERSIDE COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30,2011 TABLE OF CONTENTS FINANCIAL SECTION (CONT.)

Combining Statement of Net Assets - Internal Service Funds ............................................... 77 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - Internal Service F u n d s .......................................................................................................... 78 Combining Statement of Cash Flows - Internal Service Funds ............................................. 79 Combining Statement of Changes in Assets and Liabilities - Fiduciary Fund ............................ 81 Capital Assets Used in the Operation of Governmental Funds:

Schedule by Source .......................................................................................... 83 STATISTICAL SECTION Table I Net Assets by Component - Last Ten Fiscal Years ............................................................ 85 2 Changes in Net Assets - Last Ten Fiscal Years ................................................................. 86 3 Fund Balances of Governmental Funds........................................ 88 4 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years ............................. 89 5 Business-Type Activities Electricity Revenues By Source - Last Ten Fiscal Years ...................... 91 6 Governmental Activities Tax Revenues By Source - Last Ten Fiscal Years ............................... 92 7 Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years ............ 93 8 Direct and Overlapping Property Tax Rates - Last.Ten Fiscal Years ...................................... 94 9 Principal Property Taxpayers - Current Year and Nine Years Ago ......................................... 95 10 Property Tax Levies and Collections - Last Nine Fiscal Years .............................................. 96 11 Electricity Sold by Type of Customer- Last Ten Fiscal Years ............................................. 97 12 Electricity Rates - Last Ten Fiscal Y ears ....................................................................... 98 13 Top 10 Electricity Customers - Current Year and Nine Years Ago ........................................ 99 14 Ratios of Outstanding Debt by Type - Last Ten Fiscal Years .............................................. 100 15 Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years ..................................... 101 16 D irect and Overlapping Debt .................................................................................... 102 17 Legal Debt Margin Information - Last Ten Fiscal Years .................................................... 104 18 Pledged-Revenue Coverage Governmental Activity Debt - Last Ten Fiscal Years ..................... 105 19 Pledged-Revenue Coverage Business Type Activity Debt - Last Ten Fiscal Years .................... 106 20 Demographic and Economic Statistics - Last Ten Calendar Years ....................................... 107 21 Principal Employers - Current Year and Nine Years Ago ................................................. 108 22 Full-Time Equivalent City Government Employees by Function - Last Ten Fiscal Years ............ 109 23 Operating Indicators by Function - Last Ten Fiscal Years ................................................ 110 24 Capital Asset Statistics by Function - Last Ten Fiscal Years .............................................. III

-Y tit RJ VE RS ID F:

October 14, 2011 To the Honorable Mayor, Members of the City Council and Citizens of the City of Riverside:

It is our pleasure to submit the Comprehensive Annual Financial Report (CAFR) of the City of Riverside (the City) for the fiscal year ended June 30, 2011.

This report consists of management's representations conceming the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefits, internal controls have been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The City's financial statements have been audited by Moss Adams LLP, a firm of certified public accountants. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unqualified opinion on the City's financial statements for the fiscal year ended June 30, 2011. The independent auditor's report is presented as the first component of the financial section of this CAFR.

The independent audit of the financial statements of the City was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on internal controls and compliance with legal requirements, with emphasis on those involving the administration of federal awards. These reports are available in the City's separately issued Single Audit Report.

Management has provided an overall analysis of the financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City's MD&A

can be found immediately following the report of the independent auditors.

Profile of the City of Riverside The City of Riverside, incorporated on October 11, 1883, is located in the western portion of Riverside County about 60 miles east of Los Angeles. The City currently occupies a land area of 81.507 square miles.

The City operates under the council-manager form of government, with a seven-member council elected by ward for four-year overlapping terms. The mayor is elected at large for a four-year term and is the presiding officer of the Council, but does not have a vote except in the case of a tie. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the City Manager, City Attorney and City Clerk. The City Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the day-to-day operations of the City, and for appointing the heads of various departments. The Council is elected on a non-partisan basis.

The City provides a full range of services which include general government, public safety (police, fire, disaster preparedness and building inspection), construction and maintenance of highways and streets, economic development, culture and recreation, electric, water, airport, refuse, sewer, and senior citizen/handicap transportation. In addition to general City activities, the Council is financially accountable for the Riverside Redevelopment Agency, Riverside Housing Authority, Riverside Public Financing Authority and the Riverside Municipal Improvements Corporation; therefore, these entities are included as an integral part of the City's financial statements. Additional information on these legally separate entities can be found in Note 1 in the notes to the financial statements.

The annual budget serves as the foundation for the City's financial planning and control. The City Manager presents the proposed budget to the City Council for review at least thirty-five calendar days prior to the beginning of each fiscal year. The Council is required to hold public hearings on the proposed budget and to adopt a final budget no later than June 30, which is the close of the City's fiscal year. The appropriated budget is prepared by fund and department. Department heads may make transfers of appropriations within a department. Transfers of appropriations between departments, however, require the approval of the Council.

Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented on page 27 as part of the basic financial statements for the governmental funds. For governmental funds other than the general fund, with appropriated annual budgets, this comparison is presented in the governmental fund subsection of this report, which begins on page 67.

Local economy: The City is located in the Inland Empire, which consists of Riverside and San Bernardino Counties (the "MSA").

The population of the Inland Empire at approximately 4.2 million is larger than 24 states. The City leads the Inland Empire in most measures of economic power, including population, income, employment, bank deposits, assessed valuation, office space and college enrollment. The population of the City is 304,051, which places it as the sixth largest in Southern California.

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Until recently the MSA has experienced a very strong economic environment. However, unemployment is currently at 14.8%. The budget for the City for fiscal year 2011/2012 projects a 12% increase in expenditures, but is balanced. The increase in expenditures is largely related to capital outlay.

The MSA is projected to grow rapidly in future years because land values remain well below those in Los Angeles, Orange and San Diego Counties. Among the City's challenges is a lack of available space for manufacturing and industrial development within current boundaries.

Priorities for the future: A Citywide Strategic Planning document has been developed through a series of meetings, workshops, and surveys with the community, elected officials, and City employees. The plan, as updated, sets forth five goals as follows:

• Economic Development

• Environmental Leadership

• Transportation

• Livable Communities and Neighborhoods

• Arts and Innovation Long-term financial planning. Annually, the City updates a five (5) year Capital Improvement Program (CIP). Planned capital expenditures during fiscal years 2011/12 - 2015/16 total approximately $832 million. The projects encompass all seven Council wards and enhance the life of all residents. Funding comes from multiple sources, including existing funds; General Fund certificates of participation; Redevelopment Agency tax allocation bonds; and regional, state and federal funds. In addition to routine electric, water, sewer and transportation-related projects, the CIP includes improvements to parks in the City; railroad grade separations; library, museum, convention center and Municipal Auditorium improvements/expansions/rehabilitations; and, public safety projects.

Financial policies. A portion of fund balance within the General Fund is set aside and designated for future economic contingencies.

The amount that has been set aside is equal to approximately 15% of General Fund expenditures.

Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Riverside for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2010. This was the twenty third consecutive year that the City has received this prestigious award. The City received this award for publishing an easily readable and efficiently organized CAFR that satisfied both GAAP and applicable legal requirements.

This award is valid for a period of one year only. We believe that our current CAFR continues to meet the Program's requirements and we are submitting it to the GFOA again this year.

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The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Division, particularly the leadership of Jason AI-Imam, Controller. We would like to express our appreciation to all members of the Division who assisted and contributed to its preparation. Credit also must be given to the Mayor and the City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City's finances.

Respectfully submitted, Scott C. Barber Paul C. Sundeen Interim City Manager Assistant City Manager/CFO/Treasurer iv

Certificate of The Government Finance Officers Association of the United States Achievement and Canada (GFOA) awarded a Certificate of Achievement for for Excellence Excellence in Financial Reporting to the City of Riverside for our in Financial Comprehensive Annual Financial Report for the fiscal year ended Reporting Presented to June 30, 2010.

City of Riverside California In order to be awarded a Certificate of Achievement, a governmental For its Comprehensive Annual unit must publish an easily readable and efficiently organized Financial Report for the Fiscal Year Ended Comprehensive Annual Financial Report, whose contents conform to June 30, 2010 A Certificate of Achirvnemnt for Excellence in Financial program standards. Such reports must satisfy both generally accepted Reporting is presented by the Government Finance Officers Association of the United States and Canada to accounting principles and applicable legal requirements.

government units and public employee retirement systems whose cotnprihensive annual financial reports (CAFRs) acrhiee the highest standardsb in governrnint accounting and finantitl repoting.

A Certificate of Achievement is valid for a period of one year only.

We believe our current report continues to meet the Certificate of

• a"UI president Achievement Program requirements, and we are submitting it to GFOA to determine its eligibility for another certificate.

iwi IL~ ~ Executtve Director V

ORGANIZATION CHART LEGISLATIVE OFFICIALS Ronald 0. Loveridge ...................................................................... Mayor Mike Gardner .................................................. Councilmember- Ward 1 Andy Melendrez .............................................. Councilmember- Ward 2 Rusty Bailey .................................................... Councilmember- Ward 3 Paul Davis ....................................................... Councilmember-Ward 4 Chris Mac Arthur ............................................. Councilmember-Ward 5 Nancy Hart ...................................................... Councilmember- Ward 6 Steve Adams ................................................... Councilmember - Ward 7 CITY OFFICIALS Scott C. Barber ..................................................... Interim City Manager*

Belinda Graham .................................................. Assistant City Manager Deanna Lorson ................................................... Assistant City Manager Paul C. Sundeen ........................................ Assistant City Manager/CFO

_ _Mark S. Ripley .................................................................. Airport Director Colleen J. Nicol ....................................................................... City Clerk*

Gregory P. Priamos ........................................................... City Attorney*

Tom Boyd ........................................................................... City Engineer Sergio G. Diaz ................................................................... Chief of Police Steve Reneker .................................................. Chief Information Officer Dan Chudy ............................ Interim Community Development Director Emilio Ramirez ...................................................... Development Director Brent A. Mason ............................................................. Finance Director Steve Earley ............................................................................. Fire Chief Kris Martinez .................................................. General Services Director Rhonda Strout .............................................. Human Resources Director Tonya Kennon ................................................................. Library Director Ennette Morton ............................................................ Museum Director Ralph Nufiez ........................................... Parks and Recreation Director David Wright ....................................... General Manager - Public Utilities Siobhan Foster ...................................................... Public Works Director

• Appointed by City Council vi

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REPORT OF INDEPENDENT AUDITORS Honorable Mayor and Members of the City Council City of Riverside 3900 Main Street Riverside, California We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Riverside, California ("the City"), as of and for the year ended June 30, 2011, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Riverside, California, as of June 30, 2011, and the respective changes in financial position, and cash flows, where applicable, and the respective budgetary comparison for the general fund for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards,we have also issued our report dated October 14, 2011 on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standardsand should be considered in assessing the results of our audit.

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Honorable Mayor and Members of the City Council City of Riverside The Management's Discussion and Analysis on pages 3 through 19 is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor fund financial statements, and other schedules, listed in the table of contents as supplementary information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

The accompanying introductory and statistical sections, as listed in the table of contents, are presented for the purpose of additional analysis and are not a required part of the basic financial statements. This information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and, accordingly, we express no opinion on it.

Los Angeles, California October 14, 2011 2

Management's Discussion and Analysis As management of the City of Riverside, we offer this narrative overview and analysis of financial activities for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here in conjunction with additional information furnished in our letter of transmittal, which can be found on page i of this report. All amounts, unless otherwise indicated, are expressed in thousands of dollars.

Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City's basic financial statements, compromised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains certain supplementary information.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private-sector business.

The statement of net assets presents information on all of the City's assets and liabilities, with the excess of assets over liabilities reported as net assets. Over time, increases or decreases in the net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

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

The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business type activities). The governmental activities of the City include general government, public safety, highways and streets, and culture and recreation. The business type activities of the City include Electric, Water, Sewer, Refuse, Public Parking, Airport and Transportation services.

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The government-wide financial statements include the City and its component units. The City's component units are the Riverside Redevelopment Agency, Riverside Housing Authority, Riverside Public Financing Authority, and the Riverside Municipal Improvements Corporation. Although legally separate, these entities function for all practical purposes as departments of the City and therefore have been blended as part of the primary government.

Both the Governmental Activities and the Business Type Activities are presented on the accrual basis of accounting, a basis of accounting that differs from the modified accrual basis of accounting used in presenting governmental fund financial statements. Note 1 of the Notes to the Basic Financial Statements fully describe these bases of accounting. Proprietary funds, discussed below, also follow the accrual basis of accounting.

The government-wide financial statements can be found on pages 21-22 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories:

governmental, proprietary, and fiduciary.

Governmental funds. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year.

It is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. Reconciliations to facilitate this comparison are provided for both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances. The major reconciling items relate to capital assets and debt. In the Governmental Funds, acquisitions of capital assets are treated as "expenditures" because upon purchase of a capital asset, cash used for the acquisition is no longer available for other purposes. The issuance of debt provides cash, which is now available for specified purposes. Accordingly, at the end of the fiscal year, the unreserved fund balances of the Governmental Funds reflect spendable resources available for appropriation by the City Council.

Spendable balances are not presented on the face of the government-wide financial statements.

The City maintains seventeen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the Redevelopment Agency Debt Service Fund, the COPS Debt Service Fund, the Capital Outlay Fund, and the Redevelopment Capital Project Fund all of which are major funds. Data from the other twelve governmental funds are combined into a single, aggregated 4

presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and can be found on pages 63-70 in this report.

The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided to demonstrate compliance with this budget.

The governmental fund financial statements can be found on pages 23-27 of this report.

Proprietary funds. The City maintains two different types of proprietary funds, enterprise and internal service funds. Enterprise funds are used to report the same functions presented as business type activities in the government-wide financial statements. The City uses enterprise funds to account for Electric, Water, Sewer, Refuse, Parking, Airport and Transportation services. Internalservice funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for self-insured insurance programs, central stores and its fleet of vehicles. Because these services predominantly benefit governmental rather than business type functions, they have been included within governmental activities in the government-wide financial statements. Internal service funds are presented as proprietary funds because both enterprise and internal service funds follow the accrual basis of accounting.

Proprietary funds provide the same type of information as the government-wide financial statements (business type activities), only in more detail. The proprietary fund financial statements provide separate information for the Electric, Water and Sewer operations, all of which are considered to be major funds of the City. The four remaining proprietary funds noted above are combined into a single, aggregated presentation. All internal service funds are also combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the non-major proprietary funds and the internal service funds is provided in the form of combining statements and can be found on pages 71-80 in this report.

The basic proprietary fund financial statements can be found on pages 28-32 of this report.

Agency funds. Agency funds are used to account for situations where the City's role is purely custodial. Agency funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City's own programs. All assets reported in agency funds are offset by a liability; the accrual basis of accounting is used to recognize receivables and payables.

The agency fund financial statement can be found on page 33 of this report, and the combining statement can be found on page 81.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements begin on page 34 of this report.

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Government-wide Financial Analysis The following table presents a summarization of the City's assets, liabilities and net assets for its governmental and business type activities. As noted earlier, a government's net asset position may serve over time as a useful indicator of its financial position.

Governmental Business type Activities Activities Total 2011 2010 2011 2010 2011 2010 Current and other assets $620,030 $645,237 $ 930,414 $ 867,615 $1,550,444 $1,512,852 Capital assets, net 1,214,316 1,168,832 1,338,272 1,220,188 2,552,588 2,389,020 Total assets 1,834,346 1,814,069 2,268,686 2,087,803 4,103,032 3,901,872 Current liabilities 91,317 98,782 137,667 157,389 228,984 256,171 Long-term liabilities 732,476 710,688 1,163,610 990,212 1,896,086 1,700,900 Total liabilities 823,793 809,470 1,301,277 1,147,601 2,125,070 1,957,071 Net assets:

Invested in capital assets, net of related debt 1,019,892 976,614 654,974 660,619 1,674,866 1,637,233 Restricted 80,820 108,932 56,397 59,863 137,217 168,795 Unrestricted (90,159) (80,947) 256,038 219,720 165,879 138,773 Total net assets $S1,010553 $1-004,599 $967,409 $940202 $1979X2 $ 1.944.801

• Certain reclassifications of prior year data have been made in order to enhance their comparability with current year figures.

The City's assets exceeded liabilities by $1,977,962 at June 30, 2011, an increase of $33,161 from June 30, 2010.

By far the largest portion of the City's net assets (85 percent) reflects its investment in capital assets (i.e., land, buildings, machinery, equipment and infrastructure), net of any related debt that is still outstanding used to acquire those assets and net of unspent bond proceeds and cash held in bond reserve accounts. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.

An additional portion of the City's net assets (8 percent) represents resources that are subject to external restrictions on how they may be used. The remaining unrestricted net assets may be used to meet the government's ongoing obligations to citizens and creditors. Of this amount, $256,038 is held by the business type activities and a negative $90,159 is held by the governmental activities. The Riverside Redevelopment Agency (the Agency), a blended component unit of the City, represents $103,289 of negative unrestricted net assets for 2011 and was a negative $81,490 in the prior year. The remaining governmental activities of the City have positive 6

unrestricted net assets of $13,132 in 2011 and $543 in 2010. Unrestricted net assets for governmental activities decreased in total in comparison to the prior year, which is primarily attributable to the Redevelopment Agency.

The Agency exists to finance improvements that serve to remediate blight within the City. Often these activities do not result in a residual asset, but rather underwrite the cost of a development activity deemed beneficial in meeting the Agency's objectives. The resulting statement of net assets reflects the debt obligation to be repaid through future tax revenues, without an offsetting asset.

While this is the routine functioning of such an entity, when blended with the City, its negative unrestricted net assets causes the governmental activities to report a negative position.

The City's total net assets increased by $33,161 during the current fiscal year, which reflects growth in governmental activities

($5,954) and growth in business type activities ($27,207) activities. Governmental operating results is discussed on page 9 and business-type operating results is discussed on page 15.

On the following page is a condensed summary of activities of the City's governmental and business type operations for the period ended June 30, 2011 with the prior fiscal year presented for comparative purposes. Also included in the following analysis are revenue and expense graphs to aid in understanding the results of the current year's activities.

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Governmental Business Type Activities Activities Total 2011 2010 2011 2010 2011 2010 Revenues:

Program Revenues:

Charges for services $42,481 $41,324 $434,581 $420,017 $477,062 $461,341 Operating Grants and Contributions 21,127 32,853 2,159 2,487 23,286 35,340 Capital Grants and Contributions 38,138 23,395 7,337 6,838 45,475 30,233 General Revenues:

Sales taxes 44,157 39,645 - - 44,157 39,645 Property taxes 100,802 104,087 - 100,802 104,087 Other taxes and fees 35,644 34,279 - - 35,644 34,279 Investment income 7,439 8,289 17,548 21,271 24,987 29,560 Other 9,544 3344 4808 7447 14,352 10,791 Total revenues 299,332 287216 466,433 458,060 765,765 745,276 Expenses:

General government 102,877 119,676 - - 102,877 119,676 Public safety 123,061 118,868 - - 123,061 118,868 Highways and streets 24,082 22,036 - - 24,082 22,036 Culture and recreation 44,098 37,679 - - 44,098 37,679 Interest on long-term debt 33,638 32,049 - - 33,638 32,049 Electric - - 275,922 256,860 275,922 256,860 Water - - 56,390 55,402 56,390 55,402 Sewer - - 42,276 41,248 42,276 41,248 Refuse - - 20,046 20,527 20,046 20,527 Airport - - 2,320 2,206 2,320 2,206 Transportation - - 3,493 3,368 3,493 3,368 Public Parking - - 4401 4,024 4,401 4,024 Total expenses 327,756 330,308 404848 383,635 732,604 713,943 Increase (decrease) in net assets before transfers (28,424) (43,092) 61,585 74,425 33,161 31,333 Transfers, net 34,378 40,153 (34,378) (40,153) - _

Increase (decrease) in net assets 5,954 (2,939) 27,207 34,272 33,161 31,333 Net assets - beginning 1,004,599 1,007,538 940,202 905,930 1,944,801 1,913,468 Net assets - ending $1.010.553 $1.004.599967_4_9 _940.202 $ 1.977.962 &L.944.801 8

Governmental activities. Net assets for governmental activities increased by $5,954, accounting for a 0.1 percent increase in total net assets. Governmental net assets in the prior fiscal year decreased by $2,939. Key elements of this year's activity in relation to the prior year are as follows:

Revenues:

" Sales tax revenue increased by $4.5 million (11%) due to an increase in taxable sales. Higher fuel prices and usage, robust sales of new autos and rebounds in restaurants and general consumer goods helped boost overall receipts.

" Property tax revenue decreased by $3.2 million (3%) due to a decline in assessed property values, which was offset by an increase in grants and contributions of $3 million.

Expenses:

• While variances between years exist for the various expense functions, the total net decrease was approximately $2.5 million. The more significant items are as follows:

- In May 2010 and May 2011, payments from the redevelopment agency were made to the Supplemental Educational Revenue Augmentation Fund ("SERAF") in the amount of $17 million and $3.5 million, respectively, as required by State Legislation.

The SERAF payment that was made in the current year was $13.5 million less than the prior year.

- Depreciation expense increased by $4 million (13%) due a $91 million increase in depreciable capital assets in the current year and $141 million in the prior year, which is a 22 percent increase over the two-year period.

- Increased costs associated with interest expense ($1.6 million) and compensated absences ($1 million).

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Expenses and Programs Revenues - Governmental Activities - Fiscal Year Comparison 2011 vs. 2010

$140,000

$120,000 -

W11 Expenses M'10 Expenses

$100,000 -

C'11 Program revenues D'10 Program revenues

$80,000 -

$60,000-

$40,000

$20,000 K

$0 I General Public safety Highways and Culture and Interest on government streets recreation long-term debt 10

Revenues by Source - Governmental Activities - Fiscal Year Comparison 2011 2010 Capital grants and Capital grants and contributions contributions 12.7% 8.1%

Operating grants and contributions 11.4%

Property taxes 33.7% Property taxes Charges iir services 36.2 %

14.4%

Miscellaneous 1.2%

Investment income 2.9%

Intergovemmeemal, Other Sales taxes ergovermmental, / Ot her].9 j unrestricted 0.9% 13.8  %

unrestricted 0 Franchise taxes 0.5% Franchise taxes 0.4% Utility users taxes" 1.6% Utility users taxiesJ 1.6%

8.9% 9%

11

Business-type activities. Business type activities increased the City's net assets by $27,207, accounting for a 1 percent increase in total net assets. The net assets of business type activities increased by $34,272 in the prior year. Key elements of this year's activity in relation to the prior year are as follows:

• In 2011, charges for services increased $14,564 to $434,581. The increase primarily related to increases in Sewer and Water revenues, which is explained in further detail as follows:

• Sewer charges for services increased by $5,427 (20%). New rates and charges went into effect on July 1, 2010 for residential, commercial and industrial customers. Rates for basic single family and multi-family dwellings increased by 24%, which is the primary reason for the increase in Sewer charges for services (approximately $4 million).

" Water charges for services increased by $4,550 (8%) primarily due to an increase of approximately $4 million in retail sales.

The increase in retail sales was primarily due to recent rate increases required to support the Water Utility's Master, Water Supply and Asset Management Plans, offset by a 3% reduction in retail consumption.

• Expenses increased $21,213 primarily due to a $19 million increase in Electric Utility operating expenses, which primarily related to an increase in transmission costs and distribution expenses.

Revenues by Source - Business Type Activities - Fiscal Year Comparison 2011 2010 Operating grants and contributions 0.5% Operating grants and contributions Capital grants and - 0.5%

Capital grants and contributions contributions 1.6%

1-5%

Investment Income Charges for services_-

4.6%

93.2%

3.7% Charges for services-91.7% iscellaneous Miscellaneous 1% 1.7%

12

Financial Analysis of the City's Funds Governmentalfunds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fiend balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

The following table summarizes the balance sheet of the City's General, Redevelopment Debt Service, COPS Debt Service, Capital Outlay, Redevelopment Capital Projects, and Other Governmental Funds. As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

Redevelopment COPS General Fund Debt Service Debt Service 2011 2010 2011 2010 2011 2010 Totalassets $ 212,468 $ 129,623 $ 46,531 $ 45,140 $ 33,454 $ 32,917 Total liabilities $ 51,625 $ 50,433 $ 23,425 $ 24,225 $ 34 $ 37 Fund balances Nonspendable 26,646 27,437 - - - -

Restricted 82,249 10,535 23,106 20,915 33,420 32,880 Assigned 15,589 9,195 - - -

Unassigned 36,359 32,023 - - -

Total 160,843 79,190 23,106 20,915 33,420 32,880 Total liabilities and fund balances $ 212,468 $ 129,623 $ 46,531 $ 45,140 $ 33,454 $ 32,917 Redevelopment Other Total Capital Outlay Capital Projects Governmental Funds Governmental Funds 2011 2010 2011 2010 2011 2010 2011 2010 Totalassets $ 48,975 $ 42,324 $ 126,943 $ 199,412 $ 97.290 $ 102,771 $ 565,661 $ 552,187 Total liabilities $ 35,468 $ 21.433 $ 75,049 $ 61,918 $ 32,962 $ 33,383 $ 218,563 $ 191,429 Fund balances Nonspendable - - 1 1 1,625 1,621 28,272 29,059 Restricted 13,507 20,891 51,893 137,493 62,703 67,767 266,878 290,481 Assigned - - - - - 15,589 9,195 Unassigned - - - 36,359 32,023 Total 13,507 20,891 51,894 137,494 64,328 69,388 347,098 360,758 Total liabilities and fund balances $ 48,975 $ 42,324 $ 126,943 $ 199,412 $ 97,290 $ 102,771 $ 565,661 $ 552,187 13

As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $347,098, a decrease of $13,660 in comparison with the prior year. About 8% of this amount ($28,272) is nonspendable, which comprises the portion of fund balance that cannot be spent due to form. Approximately 77% ($266,878) of fund balance is restricted, which represents the portion of fund balance that is subject to externally enforceable limitations by law, enabling legislation or limitations imposed by creditors or grantors. $15,589 (4%) of fund balance is constrained by the City's intent to utilize fund balance for specific purposes, which is reported within the fund balance classification assigned. The remainder of the fund balance is unassigned, meaning it is available for spending at the City's discretion. Of that amount, $32,000 has been set aside for future economic contingencies, leaving $4,359; at June 30, 2010 the comparable amount was $2,023. The City's governmental funds reported combined total assets of $565,661 at June 30, 2011, an increase of $13,474 in comparison with the prior year which was offset by an increase of $27,134 in total liabilities. The primary reason for the overall decrease in related fund balances is due to expenditure of capital projects in the Redevelopment Capital Projects Fund.

The General Fund is the principal operating fund of the City. At the end of the current fiscal year, total fund balance equaled

$160,843 in comparison to $79,190 in the prior year. The portion of fund balance classified as unassigned was $36,359, most of which was set aside for future economic contingencies. Fund balance increased during the current year by $81,653 in comparison to an increase of $1,811 in the prior year. The primary reason for this is due to the transfer of $78,896 of land held for resale from the Redevelopment Capital Projects Fund.

The Redevelopment Debt Service Fund has a total fund balance of $23,106 all of which is restricted. A net increase of $2,191 in the fund balance occurred during the current year primarily due to the sale of agency parcels for the construction of the Fox Entertainment Plaza.

Fund balance for the Certificates of Participation Debt Service Fund increased by $540.

Fund balance for the Capital Outlay Fund decreased by $7,384. The primary reason for this is due to a number of large capital projects related to the 91 freeway interchanges and grade separation projects.

Fund balance for the Redevelopment Capital Projects Fund decreased by $85,600. This is largely related to the transfer of $78,896 of land held for resale to the General Fund, as discussed earlier.

14

Proprietar funds. The City's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Unrestricted net assets of the Electric, Water and Sewer operations at the end of the year amounted to $199,057, $52,181, and $2,746 respectively. The total change in net assets for these funds was an increase of $10,069, an increase of $23,739 and a decrease of

$5,418, respectively as a result of routine operations.

The Electric Fund reported strong operating results, with retail revenues exceeding the previous all-time record, primarily from the effects of rate increases in years prior to fiscal year 2011 along with an expanded customer base which was partially offset by a reduction in consumption. Retail sales (residential, commercial, industrial, and other sales) represent 83.4% of total revenues. Retail sales, net of reserve/recovery were $278,406 and $274,206 for years ended June 30, 2011 and 2010, respectively. Total expenses, excluding transfers, increased $19 million (7.6%), which primarily related to an increase in transmission costs and distribution expenses.

The Water Fund reported strong operating results, with retail sales exceeding the previous year's results. Retail sales (residential, commercial, industrial, and other sales) represent 65% of total revenues. Retail sales, net of reserve/recovery were $55,186 and

$51,147 for years ended June 30, 2011 and 2010, respectively. The increase in sales was primarily due to recent rate increases to support the Water Utility's Master, Water Supply and Asset Management Plans, partially offset by a 3% reduction in retail consumption.

Net assets of the Sewer Fund decreased by $5,418 and $9,549 for years ended June 30, 2011 and 2010, respectively. Total revenues increased by $6,088 (19%) primarily as a result of a rate increase. However, total expenses increased by $1,957 (5%) primarily as a result of an increase in routine operating expenses.

15

General Fund Budgetary Highlights Original Final Actual Variance with Budget Budget Amounts Final Budget Total Revenues $154,974 $174,633 $170,906 $ 03.727)

Expenditures:

General Government 2.958 2.958 9,347 (6,389)

Public Safety 131,726 148,129 138,620 9,509 Highways & Streets 14,528 17,940 14,587 3,353 Culture & Recreation 24,506 30,629 25,360 5,269 Capital Outlay - 1,617 1,617 Debt Service 13,794 44.497 44,225 272 Total Expenditures 187,512 245.770 "233,756 12,014 Deficiency of Revenue Under Expenditures (32,538) (71.137) (62,850) 8,287 Other Financing Sources 32,538 140,575 144,503 3,928 Net Change in Fund Balances - 69,438 81,653 12,215 Beginning Fund Balance 79,190 79,190 79,190_

Ending Fund Balance 279.190 L4828 $160.843 $1Z.215 Final budgeted revenues increased from the amount originally budgeted as a result of grant related programs and financing associated with capital projects.

Actual amounts differed from the final fund budget as follows:

Li Approximately $10.7 million of grant revenue was budgeted but not actually received during the year since the related grant expenditures had not been incurred.

u Actual tax revenue was more than the amounts budgeted for sales taxes ($4.2 million), property taxes ($1 million), and utility user taxes ($800 thousand) due to higher than anticipated taxable sales, assessed property values, and utility revenues.

Li Actual expenditures were less than budgeted amounts by approximately $12 million. This is primarily associated with capital projects not completed during the year (which are carried over to the next fiscal year).

16

Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for governmental and business type activities as of June 30, 2011 amounted to

$2,552,588 (net of accumulated depreciation). This investment includes land, intangibles, buildings and improvements, machinery and equipment, park facilities, roads, highways, and bridges. The total increase in the City's net investment in capital assets for the current fiscal year was $163,568 ($45,484 for governmental activities including internal service funds and $118,084 for business type activities).

Major capital improvements during the current fiscal year included: new infrastructure, consisting primarily of street improvements

($29 million); Sewer system improvements ($29 million); Electric Utility upgrades ($75 million) and Water Utility upgrades ($19 million).

Construction in progress totaled $131,211 at June 30, 2011. Some of the major projects in process are various Sewer system improvements, a 203 KV transmission substation, and the Evans Reservoir Replacement Project. Depreciation expense during the fiscal year was $37,258 for governmental activities and $48,875 for business type activities.

City of Riverside's Capital Assets (net of depreciation)

Governmental Business Type Activities Activities Total 2011 2010 2011 2010 2011 2010 Land $290,692 $280,446 $ 34,905 $ 34,820 $ 325,597 $ 315,266 Intangibles 16,128 6,307 16,128 6,307 Buildings 123,319 127,421 144,579 144,774 267,898 272,195 Improvements other than Buildings 154,601 118,333 1,005,897 835,239 1,160,498 953,572 Machinery and equipment 19,754 24,427 29,114 29,575 48,868 54,002 Infrastructure 602,388 572,999 602,388 572,999 Construction in progress 23,562 45,206 107,649 169,473 131,211 214,679 Total $1.214.316 $1.338.272 $1.220.18 $2.552.588 $2.389.020 Additional information on the City's capital assets can be found in note 5 on page 42 of this report.

17

Long-term debt. At the end of the current fiscal year, the City had total debt outstanding of $1,896,086 which includes bonded debt of $1,732,935.

City of Riverside's Long-Term Debt Governmental Business Type Activities Activities Total 2011 2010 2011 2010 2011 2010 Revenue Bonds $305,195 $278,867 $1,071,554 $968,393 $1,376,749 $1,247,260 General Obligation Bonds 16,845 17,533 16,845 17,533 Pension Obligation Bonds 132,095 136,050 132,095 136,050 Certificates of Participation 207,246 211,212 207,246 211,212 Notes Payable 7,749 8,191 31,178 7,249 38,927 15,440 Loans Payable 1,100 1,100 45,569 46,669 1,100 Capital Leases 6,670 6,303 1,720 2,151 8,390 8,454 Landfill Capping 6,915 7,380 6,915 7,380 Arbitrage Liability 102 27 102 27 Compensated Absences 21,153 20,101 21,153 20,101 Claims liability 26,615 25,541 26,615 25,541 Net OPEB Obligation 7,808 5,790 5,625 4,063 13,433 9,853 Water Acquisition Rights 947 949 947 949 Total 2732.47_ $1.163.610 $990,212 $1.896.086; $1.700.900 The City's total debt increased by $195,186 (11 percent) during the current fiscal year primarily due to the issuance of $255,830 of Electric and Water Revenue Bonds.

The City's Water Utility maintains "AA+" and "AA" ratings, from Standard & Poors and Fitch, respectively, for their revenue bonds, while the Electric Utility maintains "AA-" ratings from both rating agencies. The City's general obligation bond ratings are "AA-"

and "AA", respectively.

State statutes limit the amount of general obligation debt a governmental entity may issue to 15 percent of its total adjusted assessed valuation. The legal debt limit was $614,887 at June 30, 2011, which applies only to general obligation debt. At June 30, 2011, the City had $16,845 of general obligation debt, resulting in available legal debt capacity of $598,042.

18

Additional information on the City's long-term debt can be found in note 6 beginning on page 43 of this report.

Economic Factors and Next Year's Budget and Rates LI Unemployment in the City of Riverside is 14.8% as compared to 13.7% for the prior year.

L- The required contribution rates as a percentage of payroll for the City's retirement program, including the employee portion which is paid by the City, will be changing effective July 1, 2011 as follows:

" Miscellaneous Plan -22.507% to 26.438%

• Safety Plan - 29.756% to 34.303%

At the time of budget preparation for fiscal year 2012, the economic outlook for the City was considered to be stable. The General Fund Budget for fiscal year 2012 of approximately $211 million was adopted as balanced, not having to utilize any reserves. It represents an increase from the prior year of approximately 8%, principally as a result of increases to retirement costs, absorption of costs previously funded by the Redevelopment Agency, consolidation of the Neglected Property Abatement Fund and an increase in the amount contributed to the Self-Insurance Trust Fund.

Request for information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City Manager's Office, Finance Division, 3900 Main Street City of Riverside, CA 92522.

19

- i I-City of Riverside Statement of Net Assets June 30, 2011 (amounts expressed in thousands)

Governmental Business-type Assets Activities Activities Total Cash and investments 8 162,084 $ 248,586 $ 410,670 Receivables, net 111,536 52,043 163.579 Inventory 7,435 1,184 8,619 Nuclear material inventory 1,905 1,905 Prepaid items 412 12,662 13.074 Deposits 400 400 Deferred charges - other 122,414 42,022 164.436 Deferred charges - derivative instruments 9,496 10,016 19,512 Internal balances (3,257) 3,257 Land and improvements held for resale 94,097 94.097 Restricted assets:

Cash and cash equivalents 36,295 36,295 Cash and investments at fiscal agent 91,988 521,631 613,619 Other 813 813 Capital leases receivable 23,425 23,425 Land and other capital assets not being depreciated 314,254 158,682 472,936 Capital assets (net of accumulated depreciation) 900,062 1,179,590 2,079,652 Total assets 1,834,346 2,268,686 4,103,032 Liabilities Accounts payable and other current liabilities 40.923 22,666 63,589 Accrued interest payable 9,635 12,793 22,428 Deferred revenue 2,029 1,656 3,685 Deposits 23,908 3,711 27.619 Current liabilities payable from restricted assets 5,726 5,726 Deferred charges - derivative instruments 482 482 Derivative instruments 14,822 22,664 37,486 Decommissioning liability 67,969 67,969 Noncurrent liabilities:

Due within one year 67,198 29,157 96,355 Due in more than one year 665,278 1,134,453 1,799,731 Total liabilities 823,793 1,301,277 2,125,070 Net Assets Invested in capital assets, net of related debt 1,019.892 654,974 1,674,866 Restricted for:

Expendable:

Capital projects 18,609 18,609 Debt service 48,063 48,063 Economic development 9,658 9,658 Landfill capping 2,247 2,247 Public morks 12,923 12,923 Housing 38,005 38,005 Programs 6,087 6,087 Nonexpendable 1,625 1.625 Unrestricted (90,159) 256,038 165,879 Total net assets 1,010,553 $ 967,409 $ 1,977,962 The notes to the financial statements are an integral part of this statement.

21

City of Riverside Statement of Activities For the fiscal year ended June 30, 2011 (amounts expressed In thousands)

Net (Expense) Revenue and Program Revenues Changes in Net Assets Indirect Operating Capital Expenses Charges for Grants and Grants and Governmental Business type Functions/Programs Expenses Allocation Services Contributions Contributions Activities Activities Total Governmental activities:

General government $ 102,877 $ (41,395) $ 14,241 $ 8,422 $ 44 $ (38,775) $ (38.775)

Public safety 123,061 22,294 8,075 8,209 (129,071) (129.071)

Highways and streets 24,082 11,007 16,985 745 38,027 20.668 20,668 Culture and recreation 44,098 8,094 3,180 3,751 67 (45,194) (45,194)

Interest on long-term debt 33,638 (33,638) (33,638)

Total governmental activities 327,756 - 42,481 21,127 38,138 (226,010) (226,010)

Business type activities:

Electric 275,922 313,703 4,056 $ 41,837 41,837 Water 56,390 62,084 1,982 7,676 7,676 Sewer 42,276 32,769 575 (8,932) (8,932)

Refuse 20,046 19,134 (912) (912)

Airport 2,320 1,342 (978) (978)

Transportation 3,493 344 2,159 714 (276) (276)

Public parking 4,401 5,205 10 814 814 Total business type activities 404,848 434,581 2,159 7,337 39,229 39,229 Total $ 732,604 $ 477,062 $ 23,286 $ 45,475 (226,010) 39.229 (186,781)

General revenues:

Taxes:

Sales 44,157 44,157 Property 100,802 100,802 Utility users 26,691 26,691 Franchise 4,937 4,937 Other 2,731 2,731 Intergovernmental, unrestricted 1,285 1.285 Investment income 7,439 17,548 24,987 Miscellaneous 9,544 4,808 14,352 Subtotal 197,586 22.356 219,942 Transfers, net 34,378 (34,378)

Total general revenues and transfers 231,964 (12,022) 219,942 Change in net assets 5,954 27,207 33,161 Net assets - beginning 1,004,599 940,202 1.944,801 Net assets - ending $ 1,010,553 $ 967,409 $ 1,977,962 The notes to the financial statements are an integral part of this statement.

22

City of Riverside Balance Sheet Governmental Funds June 30, 2011 (amounts expressed in thousands)

Certificates of Other Total Redevelopment Participation Redevelopment Governmental Governmental Assets General Fund Debt Service Debt Service Capital Outlay Capital Projects Funds Funds Cash and investments $ 42,944 $ 15,416 $ 470 $ - $ 65,494 $ 33,524 $ 157,848 Cash and investments at fiscal agent 5,349 7,406 25,269 5.719 45,654 2,591 91,988 Receivables (net of allowance for uncollectibles)

Interest 416 113 - 93 216 289 1,127 Property taxes 6,203 - 305 - - - 6,508 Sales tax 9,641 - 9,641 Utility billed 736 - - - - 736 Accounts 9,187 171 11,673 200 291 21,522 Intergovernmental 3,032 - 31,313 1 3,760 38,106 Notes 35 - - 10,921 22,734 33,690 Capital lease receivable - 23,425 - - 23,425 Prepaid items 411 - - I 412 Deposits - 177 223 400 Due from other funds 31,980 - - - - 31,980 Advances to other funds 26,200 7,410 - 20,571 54,181 Land & improvements held for resale 76,334 - - 4,233 13,530 94,097 Total assets: $ 212,468 $ 46,531 $ 33,454 $ 48,975 $ 126,943 $ 97,290 $ 565,661 Liabilities and fund balances Uabilities:

Accounts payable $ 5,319 $ - $ 34 $ 3,995 $ 12,260 $ 1,349 $ 22,957 Accrued payroll 15,013 - - 73 25 15,111 Retainage payable 362 224 1,105 1,691 Intergovernmental 169 - - - - 169 Deferred revenue 6,455 23,425 1,349 3,332 24,480 59,041 Deposits 23,872 - - - 36 23,908 Due to other funds - 30,124 - 1,851 31,975 Advances from other funds 435 - - - 59,160 4,116 63,711 Total liabilities: 51,625 23,425 34 35,468 75,049 32,962 218,563 Fund balances:

Nonspendable:

Inventories, prepaids and noncurrent receivables 446 447 Advances to other funds 26,200 26,200 Permanent fund principal 1,625 1,625 Restricted for:

Housing and redevelopment 76,334 51,893 44,678 172,905 Debt service 5,349 23,106 33,420 61,875 Transportation and public works 13,507 12,952 26,459 Other purposes 566 5,073 5,639 Assigned to:

General government 1,839 1,839 Public safety 1,957 1,957 Highways and streets 436 436 Culture and recreation 459 459 Continuing projects 10,898 10,898 Unassigned 36,359 - 36,359 Total fund balances 160,843 23,106 33,420 13,507 51.894 64,328 347,098 Total liabilities and fund balances $ 212,468 $ 46,531 $ 33,454 $ 48,975 $ 126,943 $ 97,290 $ 565,661 The notes to the financial statements are an integral part of this statement.

23

CITY OF RIVERSIDE RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS June 30, 2011 (amounts expressed in thousands)

Total fund balances - governmental funds $347,098 Amounts reported for governmental activities in the Statement of Net Assets are different because:

Capital assets net of accumulated depreciation used in governmental activities that are not current financial resources and, therefore, are not reported in the funds 1,211,224 Issuance costs from issuing debt are expenditures at the fund level but are deferred and subject to capitalization and amortization in the Statement of Net Assets. 13,307 Pension contributions were expenditures at the fund level but are deferred as a net pension asset and subject to capitalization and amortization in the Statement of Net Assets. 112,038 Revenues that do not meet the "availability" criteria for revenue recognition and therefore, are deferred in the funds. 57,012 Accrued interest payable for the current portion of interest due on various debt issues has not been reported in the governmental funds. (9,635)

Long-term liabilities, as listed below, are not due and payable in the current period and therefore are not reported in the funds.

Bonds payable $ (447,620)

Certificates of participation payable (211,345)

Notes payable (7,749)

Capital leases payable (6,670)

Commercial loan (1,100)

Bond premiums (6,888)

Net OPEB obligation (7,458)

Compensated absences (20,689)

(709,519)

The City uses derivative instruments to hedge its exposure to changing interest rate:

through the use of interest rate swaps. The following related items have been reflected in the Statement of Net Assets.

Fair value of interest rate swap $ (14,822)

Deferred amount related to the hedgeable portion of the derivative instrumen 9,496 (5,326)

Internal service funds are used by management to charge the costs of insurance, centralized purchasing and fleet management to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the Statement of Net Assets. (5,646)

Net assets of governmental activities $1,010,553 24

City of Riverside Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Certificates of Other Total Redevelopment Participation Redevelopment Governmental Governmental General Fund Debt Service Debt Service Capital Outlay Capital Projects Funds Funds Revenues Taxes $ 123,505 $ 44,650 $ $ $ $ 11,163 $ 179,318 Licenses and permits 6,717 - 940 7,657 Intergovernmental 11,104 200 30,720 89 18,969 61,082 Charges for services 10,687 - - - 33 10,720 Fines and forfeitures 5,244 - 3,684 8,928 Special assessments 3,954 - 1,096 315 - 649 6,014 Rental and investment income 2,964 2,213 1,529 450 2,445 572 10,173 Miscellaneous 6,731 372 - 1,911 3,406 4,185 16,605 Total revenues 170,906 47,435 2,625 33,396 5,940 40,195 300,497 Expenditures Current:

General government 9,347 426 24 8,983 7,310 26,090 Public safety 138,620 2,374 140,994 Highways and streets 14,587 14,587 Culture and recreation 25,360 18,848 137 44,345 Capital outlay 1,617 40,780 35,711 27,581 105,689 Debt service:

Principal 36,844 39,145 4,175 - 9,100 89,264 Interest 7,207 14,551 9,863 990 - 32,611 Bond issuance costs 174 - - - - 174 Total expenditures 233,756 54,122 14,062 40,780 64,532 46,502 453,754 Excess (deficiency) of revenues over (under) expenditures (62,850) (6,687) (11,437) (7,384) (58,592) (6,307) (153,257)

Other financing sources (uses):

Transfers in 121,348 35,369 11,977 29,554 16,383 214,631 Transfers out (9,539) (28,491) (117,905) (24,345) (180,280)

Issuance of long term debt 30,775 65,000 9,100 104,875 Capital lease proceeds 2,000 2,000 Sales of capital assets (81) 2,000 - (3,657) 109 (1,629)

Total other financing sources and uses 144,503 8,878 11,977 (27,008) 1,247 139,597 Net change in fund balances 81,653 2,191 540 (7,384) (85,600) (5,060) (13,660)

Fund balances - beginning 79,190 20,915 32,880 20,891 137,494 69,388 360,758 Fund balances - ending $ 160,843 $ 23,106 $ 33,420 $ 13,507 $ 51,894 $ 64,328 $ 347,098 The notes to the financial statements are an integral part of this statement.

25

CITY OF RIVERSIDE RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the year ended June 30, 2011 (amounts expressed in thousands)

Net change in fund balances-total governmental funds ($13,660)

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

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period, as listed below:

Capital Asset additions $ 81,698 Depreciation Expense (36,475) 45,223 Revenues in the statement of activities that do not meet the "availability" criteria for revenue recognition and therefore are not reported as revenue in the funds. 1,547 The amortization of the net pension asset reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as an expenditure in the governmental funds. (2,679)

The issuance of long-term debt (e.g., bonds, leases, notes) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds immediately report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The net effect of these differences in the treatment of long-term debt and related items is listed below:

Principal repayments 89,264 Other post-employment benefit liabilities (1,929)

Compensated absences (1,033)

Interest (525)

Premiums on the issuance of LTD (41)

Proceeds from LTD (104,875)

Capital lease proceeds (2,000) (21,139)

Internal service funds are used by management to charge the costs of insurance, centralized purchasing and fleet management to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. (3,338)

Change in net assets of governmental activities $ 5,954 The notes to the financial statements are an integral part of this statement.

26

City of Riverside Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund For the year ended June 30, 2011 (amounts expressed In thousands)

Budgeted Amounts Actual Variance with Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Original Final Amounts Final Budget Revenues Public safety:

Taxes $ 117,754 $ 117,754 $ 123,505 $ 5,751 Police 80,820 93,061 85,616 7,445 Licenses and permits 7,329 7,329 6,717 (612) Fire 40,409 44,439 42,497 1,942 Intergovernmental 2,255 21,755 11,104 (10,651) Animal regulation 3,917 4,041 3,933 108 Charges for services 9,889 9,926 10,687 761 Building and zoning inspection 2,147 2,155 2,085 70 Fines and forfeitures 5,070 5,070 5,244 174 Street lighting 4,433 4,433 4,489 (56)

Special assessments 4,090 4,212 3,954 (258) Total public safety 131,726 148,129 138,620 9,509 Rental and investment income 1,580 1,580 2,964 1,384 Miscellaneous 7,007 7,007 6,731 (276) Highways and streets 14,528 17,940 14,587 3,353 Total revenues 154,974 174,633 170,906 (3,727) Culture and recreation 24,506 30,629 25,360 5,269 Expenditures Capital Outlay - 1,617 1,617_

General government:

Mayor 1,017 1,017 966 51 Debt service:

Council 1,183 1,183 1,173 10 Principal 6,349 36,949 36,844 105 Manager 13,931 13,931 12,107 1,824 Interest 7,445 7,445 7,207 238 Attorney 4,108 4,108 4,226 (118) Bond issuance costs 103 174 (71)

Clerk 1,300 1,300 1,093 207 Total debt service 13,794 44,497 44,225 272 Community Development 4,479 4,479 3,571 908 Human Resources 3,007 3,007 2,741 266 Total expenditures 187,512 245,770 233,756 12,014 General Services 8,434 8,434 6,539 1,895 Information System 14,280 14,280 11,670 2,610 Deficiency of revenue under expenditures (32,538) (71,137) (62,850) 8,287 Development 7,162 7,162 6,656 506 Other financing sources (uses)

Subtotal 58,901 58,901 50,742 8,159 Transfers in 39,695 117,274 121,348 4,074 Allocated expenditures (55,943) (55,943) (41,395) (14,548) Transfers out (7,222) (9,539) (9,539)

Issuance of long term debt 30,775 30,775 Total general government 2,958 2,958 9,347 (6,389) Capital Lease Proceeds 2,000 2,000 continued Sale of capital assets 65 65 (81) (146)

Total other financing sources 32,538 140,575 144,503 3,928 The notes to the financial statements are an integral part of this statement.

Net change in fund balances 69,438 81,653 12,215 Fund balance, beginning 79,190 79,190 79,190 Fund balance, ending $ 79,190 $ 148,628 $ 160,843 $ 12,215 27

City of Riverside Statement of Net Assets Proprietary Funds June 30, 3011 (amounts expressed in thousands)

Business-type Activities - Enterprise Funds Governmental Other Enterprise Total Enterprise Activities-internal Assets Electric Water Sewer Funds Funds Service Funds Current assets:

Cash and investments $ 168,905 $ 56,804 $ 17,720 $ 5,157 $ 248,586 $ 4,236 Receivables (net allowances for uncollectibles)

Interest 1,381 435 60 71 1,947 57 Utility billed 13,694 3,125 1,228 619 18,666 Utility unbilled 12,986 3,306 1,213 580 18,085 Accounts 8,783 2,496 247 369 11,895 92 Intergovernmental 61 458 233 698 1,450 57 Nuclear materials inventory 1,905 1,905 Inventory 1,184 1,184 7,435 Prepaid items 12,660 2 12,662 Due from other funds 4,195 4,195 Restricted assets:

Cash and cash equivalents 26,119 7,929 2,247 36,295 Cash and investments at fiscal agent 270,273 61,287 174,524 15,547 521,631 Public benefit programs receivable 697 116 813 Total current assets 521,659 135,958 196,409 25,288 879,314 11,877 Non-current assets:

Advances to other funds 5,558 18,439 23,997 11,975 Deferred charges - other 19,864 7,437 4,670 10,051 42,022 1,541 Deferred charges - derivative instruments 10,016 10,016 Capital assets:

Land 7,645 10,861 2,698 13,701 34,905 Intangible assets 9,821 6,307 16,128 Buildings 20,712 15,673 189,342 16,015 241,742 1,488 Accumulated depreciation - buildings (5,090) (4,008) (83,813) (4,252) (97,163) (211)

Improvements other than buildings 925,524 472,678 75,897 23,994 1,498,093 Accumulated depreciation - improvements other than buildings (335,124) (138,163) (13,352) (5,557) (492,196)

Machinery and equipment 25,910 13,331 9,224 17,735 66,200 9,605 Accumulated depreciation - machinery and equipment (12,129) (8,983) (5,373) (10,601) (37,086) (8,005)

Construction in progress 44,665 24,568 26,853 11,563 107,649 215 Total non-current assets 717,372 399,701 224,585 72,649 1,414,307 16,608 Total assets 1,239,031 535,659 420,994 97,937 2,293,621 28,485 Continued 28

City of Riverside Statement of Net Assets Proprietary Funds June 30, 3011 (amounts expressed in thousands)

Business-type Activities - Enterprise Funds Governmental Other Enterprise Total Enterprise Activities-Internal Liabilities Electric Water Sewer Funds Funds Service Funds Current liabilities:

Accounts payable 10,902 3,210 3,515 1,516 19,143 926 Accrued payroll 5,129 1,749 1,174 846 8,898 533 Retainage payable 150 106 96 352 Unearned revenue 1,656 1,656 Deposits 3,033 678 3,711 Due to other funds 5 5 4,195 Capital leases - current 388 7 395 Water stock acquisitions - current 150 150 Landfill capping - current 200 200 Notes payable - current 807 807 Claims and judgements - current 9,900 Current liabilities payable from restricted assets:

Revenue bonds 20,940 4,545 25,485 Notes payable 1,428 692 2,120 Accrued interest 6,382 1,891 4,520 12,793 Other payables 2,936 1,228 823 739 5,726 350 Total current liabilities 51,288 13,557 10,820 5,776 81,441 15,904 Non-current liabilities:

Revenue bonds 594,613 208,315 243,141 1,046,069 Notes payable 44,141 5,878 23,801 73,820 Capital leases 1,303 22 1,325 Advances from other funds 12,381 5,327 3,408 3,814 24,930 1,512 Decommissioning liability 67,969 67,969 Deferred charges - derivative instruments 482 482 Derivative instruments 17,216 5,448 22,664 Claims and judgements 16,715 Water stock acquisitions 797 797 Landfill capping 6,715 6,715 -

Total non-current liabilities 737,623 220,369 252,427 34,352 1,244,771 18,227 Total liabilities 788,911 233,926 263,247 40,128 1,326,212 34,131 Net Assets Invested in capital assets, net of related debt 225,055 241,552 134,859 53,508 654,974 3,092 Restricted for debt service 22,237 5,684 20,142 48,063 Restricted for landfill capping 2,247 2,247 Restricted for programs 3,771 2,316 6,087 Unrestricted 199,057 52,181 2,746 2,054 256,038 (8,738)

Total net assets $ 450,120 $ 301,733 $ 157,747 $ 57,809 $ 967,409 $ (5,646)

The notes to the financial statements are an integral part of this statement.

29

City of Riverside Statement of Revenues, Expenses, and Changes In Fund Net Assets Proprietary Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Business-type Activities - Enterprise Funds Governmental Other Enterprise Total Enterprise Activities-Internal Electric Water Sewer Funds Funds Service Funds Operating revenues:

Charges for services $ 313,703 $ 62,084 $ 32,769 $ 26,025 $ 434,581 $ 15,792 Operating expenses:

Personnel services 35,386 11,670 9,133 8,072 64,261 3,705 Contractual services 7,361 2,281 900 5,044 15,586 220 Maintenance and operation 167,925 8,845 8,534 6,666 191,970 2,120 General 14,382 11,865 5,518 4,312 36,077 1,780 Materials and supplies 792 803 3,008 1,340 5,943 210 Claims/Insurance 1,166 628 482 266 2,542 10,736 Depreciation and amortization 27,690 11,386 6,379 3,841 49,296 783 Total operating expenses 254,702 47,478 33,954 29,541 365,675 19,554 Operating income (loss) 59,001 14,606 (1,185) (3,516) 68,906 (3,762)

Non-operating revenues (expenses):

Operating grants 2,159 2,159 Interest income 10,368 2,635 4,443 102 17,548 497 Other 2,117 910 (623) 1,055 3,459 91 Gain (loss) on retirement of capital assets 400 1,251 (306) 4 1,349 (16)

Capital improvement fees 575 575 Interest expense and fiscal charges (21,220) (8,912) (8,322) (719) (39,173) (148)

Total non-operating revenues (expenses) (8,335) (4,116) (4,233) 2,601 (14,083) 424 Income before capital contributions and transfers 50,666 10,490 (5,418) (915) 54,823 (3,338)

Cash capital contributions 2,925 1,356 714 4,995 Noncash capital contributions 1,131 626 10 1,767 Transfers in 5,531 17,114 22,645 Transfers out (50,184) (5,847) (992) (57,023)

Change in net assets 10,069 23,739 (5,418) (1,183) 27,207 (3,338)

Total net assets - beginning 440,051 277,994 163,165 58,992 940,202 (2,308)

Total net assets - ending $ 450,120 $ 301,733 $ 157,747 $ 57,809 $ 967,409 $ (5,646)

The notes to the financial statements are an integral part of this statement.

30

City of Riverside Proprietary Funds Statement of Cash Flows For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Governmental Other Total Activities-Enterprise Enterprise Internal Electric Water Sewer Funds Funds Service Funds Cash flows from operating activities:

Cash received from customers and users $ 308.733 $ 60,023 $ 33,703 $ 26,202 $ 428,661 $ 20,537 Cash paid to employees for services (33,976) (11,187) (8,719) (7.778) (61,660) (3,553)

Cash paid to other suppliers of goods or services (189,073) (22,914) (17,894) (17,164) (247,045) (18,452)

Other receipts 2.117 910 (623) 1,055 3,459 91 Net cash provided (used) by operating activities 87,801 26,832 6,467 2,315 123,415 (1,377)

Cash flows from noncapital financing activities:

Transfers out (50,184) (5,847) (992) (57,023)

Operating grants 1,543 1,543 Advances from interfund receivables 2,421 2,421 Payments on interfund receivables (324) (139) (89) (7,269) (7,821) (689)

Advances to other funds (3,545) (306) (3,851) 1,627 Net cash provided (used) by noncapital financing activities (54,053) (5,986) 2,026 (6,718) (64,731) 938 Cash flows from capital and related financing activities:

Proceeds from the sale of revenue bonds, including premium 140,857 140,857 Issuance costs (1,124) (402) (1,526)

Purchase of capital assets (50,331) (29,754) (28,592) (4,979) (113,656) (1,044)

Purchase of nuclear fuel (1,554) (1,554)

Proceeds (loss) from the sale of capital assets 495 18,379 15 4 18,893 (16)

Proceeds from the long-term obligations 24,608 24,608 Principal paid on long-term obligations (23,086) (4,660) (679) (50) (28,475)

Interest paid on long-term obligations (24,985) (9,268) (10.891) (712) (45,856) (148)

Capital improvement fees 575 575 Capital contributions 2,925 3,706 714 7,345 Net cash provided (used) for capital and related financing activities 43,197 (21.999) (39,572) 19,585 1,211 (1,208)

Cash flows from investing activities:

Purchase of investments 273 6,998 7,271 Income from investments 9,900 2,385 4.428 78 16,791 494 Net cash provided by investing activities 10,173 9,383 4.428 78 24,062 494 Net change in cash and cash equivalents 87,118 8,230 (26,651) 15,260 83,957 (1,153)

Cash and cash equivalents, beginning (including $110,095 for Electric,

$87,736 for Water, $211,184 for Sewer and $2,466 for Other Enterprise Funds in restricted accounts.) 280,387 117,106 218,895 7,691 624,079 5,389 Cash and cash equivalents, ending (including $198,600 for Electric,

$68,532 for Water, $174,524 for Sewer and $17,794 for Other Enterprise Funds in restricted accounts.) $ 367,505 $ 125,336 $ 192,244 $ 22,951 $ 708,036 $ 4,236 continued 31

City of Riverside Proprietary Funds Statement of Cash Flows For the fiscal year ended June 30, 2011 (amounts expressed in thousands) continued Governmental Other Total Activities-Enterprise Enterprise Internal Electric Water Sewer Funds Funds Service Funds Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating Income (loss) $ 59,001 $ 14,606 $ (1,185) $ (3,516) $ 68,906 $ (3,762)

Other receipts 2,117 910 (623) 1,055 3,459 91 Adjustments to reconcile operating income to net cash provided (used) by operating activities:

Depreciation and amortization 27,690 11,386 6,379 3,841 49,296 783 Amortization of pension costs 291 125 80 54 550 35 Amortization (bum) of nuclear fuel 1,449 1,449 (Increase) decrease in utility billed receivables 639 (192) (321) (28) 98 (Increase) decrease in utility unbilled receivables (66) (231) (245) 67 (475)

(Increase) decrease in accounts receivable (4,630) (1,272) 1,432 146 (4,324) (47)

(Increase) decrease in intergovernmental receivables (36) (430) 68 (8) (406) (18)

(Increase) decrease in prepaid items (1,912) 3 1 20 (1,888)

(Increase) in nuclear materials inventory (80) (80)

(Increase) in inventory (33) (33) (1,420)

Increase (decrease) in accounts payable (2,785) 1,507 509 832 63 123 Increase (decrease) in accrued payroll 348 16 98 41 503 28 Increase (decrease) in retainage payable 67 (48) 71 (1) 89 Increase in other payable 1,153 388 236 199 1,976 89 (Decrease) in intergovernmental payables (7) (7)

Increase in deposits 145 64 209 (Decrease) in due to other funds (222) (222) 1,647 Increase in claims and judgments 1,074 Increase in decommissioning liabilitity 4,417 4,417 (Decrease) in landfill capping _ (165) (165)

Net cash provided by operating activities $ 87,801 $ 26,832 $ 6,467 $ 2,315 $ 123,415 $ (1,377)

Schedule of noncash financing and investing activities:

The Electric Fund issued bonds to refund debt issued in 2008. The $56,450 proceeds were deposited immediately into an irrevocable trust for the defeasance of $56,450 of outstanding bond principal.

The Water Fund issued bonds to refund debt issued in 2008. The $59,000 proceeds were deposited immediately into an irrevocable trust for the defeasance of $59,000 of outstanding bond principal.

Contribution in aid $ 1,131 $ 626 $ - $ 10 $ 1,767 $ -

The notes to the financial statements are an integral part of this statement.

32

City of Riverside Statement of Fiduciary Assets and Liabilities Fiduciary Fund - Agency Fund June 30, 2011 (amounts expressed in thousands)

Agency Fund Assets:

Cash and investments $ 8,655 Cash and investments at fiscal agent 8,962 Interest receivable 58 Property tax receivables 262 Total assets $ 17,937 Liabilities:

Accounts payable $ 28 Held for bond holders 17,909 Total liabilities $ 17,937 The notes to the financial statements are an integral part of this statement 33

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

1. Summary of Significant Accounting Policies Complete financial statements for each of the individual component units except the Riverside Municipal Improvement Corporation and Riverside The City of Riverside (City) was incorporated on October 11, 1883 as a Housing Authority (which do not generate financial statements) may be Charter City and operates under a Council-Manager form of Government. obtained from the City's Finance Department, 3900 Main Street, Riverside, The more significant accounting policies reflected in the financial statements California, 92522 or online at www.riversideca.Qov.

are summarized as follows:

A. Reporting Entity B. Government-wide and Fund Financial Statements These financial statements present the City and its component units, entities The government-wide financial statements (i.e., the statement of net assets for which the City is financially accountable. Blended component units are and the statement of activities) report information on all of the nonfiduciary legally separate entities, but in substance are part of the City's operations activities of the City and its component units. Interfund activity has been and their data is combined with that of the City's. The City has no component removed from these statements except for utility charges, as this would units that meet the criteria for discrete presentation. All of the City's distort the presentation of function costs and program revenues.

component units have a June 30 year end. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business type Blended Component Units activities, which rely to a significant extent on fees and charges for support.

Riverside Redevelopment Agency (Redevelopment Agency) was established The statement of activities demonstrates the degree to which the direct in 1967 by the City. The Redevelopment Agency's primary purpose is to expenses of a given function or segment are offset by program revenues.

eliminate blighted areas in the City by encouraging commercial development. Direct expenses are those that are clearly identifiable with a specific function City Council members serve as the Redevelopment Agency's directors and or segment. Program revenues include 1) charges to customers or have full accountability for fiscal matters.

applicants who purchase, use, or directly benefit from goods, services, or Riverside Housing Authority (Housing Authority) was established in 2006 by privileges provided by a given function or segment and 2) grants and the City. The Housing Authority's primary purpose is to provide safe and contributions that are restricted to meeting the operational or capital sanitary housing accommodations for persons with low or moderate income. requirements of a particular function or segment. Taxes and other items not City Council members serve as the Housing Authority's commissioners and properly included among program revenues are reported instead as general have full accountability for fiscal matters. revenues. Indirect expenses are allocated to the various functions based on a proportionate utilization of the services rendered. Such allocations consist Riverside Public Financing Authority (Public Financing Authority) was of charges for accounting, human resources, information technology and organized in December 1987 by the City and the Redevelopment Agency. other similar support services.

The purpose of the Public Financing Authority is to provide financing for public capital improvements to the City or the Redevelopment Agency. City Separate financial statements are provided for governmental funds, Council members serve as the Public Financing Authority's directors and proprietary funds, and fiduciary funds, even though the latter are excluded have full accountability for fiscal matters. from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as Riverside Municipal Improvements Corporation (Municipal Improvements separate columns in the fund financial statements.

Corporation) was created in 1978 and operates under provisions of the Nonprofit Public Benefit Corporation Law of the State of California. The C. Measurement Focus, Basis of Accounting and Financial Municipal Improvements Corporation's primary purpose is to provide Statement Presentation financing assistance by obtaining land, property and equipment on behalf of the City. Three members of the City Council serve as the Municipal The government-wide financial statements are reported using the economic Improvements Corporation's directors and have full accountability for fiscal resources measurement focus and the accrual basis of accounting for the matters. proprietary fund financial statements. Agency funds report only assets and 34

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands) liabilities, therefore have no measurement focus. Revenues are recorded to accrual. Other revenue items such as fines and permits are considered to when earned and expenses are recorded when a liability is incurred, be measurable and available only when the government receives cash, and regardless of the timing of related cash flows. Property taxes are recognized are therefore not susceptible to accrual.

as revenues in the year for which they are levied on the property. Grants and similar items are recognized as revenue as soon as all eligibility The government reports the following major governmental funds:

requirements have been met. An allowance for doubtful accounts is maintained for the utility and other miscellaneous receivables. The General fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those Governmental fund financial statements are reported using the current required to be accounted for in another fund.

financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable The Redevelopment Agency's debt service fund accounts for the and available. Revenues are considered to be available when they are resources accumulated and payments made for principal and interest on collectible within the current period or soon enough thereafter to pay liabilities long-term obligation debt of the Redevelopment Agency.

of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current The Certificates of Participation (COPS) debt service fund accounts for fiscal period, except for revenue associated with neglected property the resources accumulated and payments made for principal, interest and abatement which is eleven (11) months and except for grant revenue, trustee fees on certificates of participation.

including reimbursements received from Transportation Uniform Mitigation Fees, which is (6) months and sales tax revenue which is seven (7) months, The Capital Outlay fund accounts for the construction and installation of as described below. Grant revenue is recognized if received within six (6) street and highway capital improvements for the City, including months of year end to enable the matching of revenue with applicable improvements funded by the 1/ % sales tax approved by Riverside County expenditures. Expenditures generally are recorded when a liability is in 1988.

incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and The Redevelopment Agency's capital project fund accounts for the judgments, are recorded only when payment is due. acquisition, relocation, demolition and sale of land for those portions of the City designated to be in need of redevelopment activities.

In 2004, the State temporarily began to exchange 25% of sales taxes for an equal amount of property taxes to securitize a short-term State bond issue. The government reports the following major proprietary funds:

The State bond issue will remain outstanding for an uncertain number of years, but is currently estimated not to exceed eight (8) years. These in-lieu The Electric fund accounts for the activities of the City's electric sales taxes will be paid to the City by the State on a different calendar than distribution operations.

sales taxes, which are paid monthly, three months in arrears. The vast majority of the in-lieu amount will be paid during the applicable fiscal year; The Water fund accounts for the activities of the City's water distribution however, the final payment of the in-lieu sales taxes will not be paid until the operations.

January following the end of the applicable fiscal year. The City has budgeted this final payment in the current fiscal year and will continue this The Sewer fund accounts for the activities of the City's sewer systems.

practice during this temporary period, effectively extending the availability period to seven (7) months for the in-lieu sales taxes and thus provide Additionally, the government reports the following fund types:

consistency in the reporting of sales tax revenue.

Internal service funds account for self-insurance, central stores and Property taxes, special assessments, sales taxes, franchise taxes, licenses, central garage on a cost reimbursement basis.

charges for services, amounts due from other governments and interest associated with the current fiscal period are all considered to be susceptible 35

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

The agency (fiduciary) fund is used to account for special assessments recognize the corresponding change in the fair value of investments in the that service no-commitment debt. year in which the change occurred. Fair value is determined using published market prices.

The permanent fund is a governmental fund that is used to report resources that are legally restricted to the extent that only earnings, and Cash accounts of all funds are pooled for investment purposes to enhance not principal, may be used for purposes that support the City's Library safety and liquidity while maximizing interest earnings. Investments are programs. Non-expendable net assets on the Statement of Net Assets stated at fair value. All highly liquid investments (including restricted assets) includes $1 million of permanent fund principal which are considered with a maturity of 90 days or less when purchased are considered cash nonexpendable net assets. equivalents. Cash and investments held on behalf of proprietary funds by the City Treasurer are considered highly liquid and are classified as cash Pronouncements regarding accounting and financial reporting issued by the equivalents for the purpose of presentation in the Statement of Cash Flows.

Financial Accounting Standards Board prior to December 1, 1989 generally are followed in both the government-wide and proprietary fund financial E. Restricted Cash and Investments statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Certain proceeds of Enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to the statement of net assets because their use is limited by applicable bond this same limitation. The City has elected not to follow subsequent private- covenants. Additionally, unspent proceeds received from the City's landfill sector guidance. capping surcharge are also recorded as restricted assets.

F. Land and Improvements Held for Resale Amounts reported as program revenues include 1) charges to customers for goods, services, or privileges provided, 2) operating grants and contributions, Land and improvements held for resale are generally acquired under and 3) capital grants and contributions, including special assessments. Developer Disposition Agreements in the normal course of Redevelopment Internally dedicated resources are reported as general revenues rather than Agency activity. The Developer Disposition Agreements provide for transfer as program revenues. Likewise, general revenues include all taxes. of property to developers after certain redevelopment obligations have been fulfilled. Additionally, the General fund has acquired property which is to be Proprietary funds distinguish operating revenues and expenses from non- held for resale at a later date. This property is carried at cost until an event operating items. Operating revenues and expenses generally result from occurs to indicate a lower net realizable value.

providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The sewer fund also G. Inventory recognizes as operating revenue the portion of connection fees intended to Supplies are valued at cost using the average-cost method. Costs are recover the cost of connecting new customers to the system. Operating charged to user departments when consumed rather than when purchased.

expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital H. Prepaid Items assets. All revenues and expenses not meeting this definition are reported Payments to vendors for services benefiting future periods are recorded as as non-operating revenues and expenses.

prepaid items and expenditures are recognized when items are consumed.

D. Cash and Investments I. Capital Assets and Nuclear Fuel The City values its cash and investments in accordance with the provisions of Government Accounting Standards Board (GASB) Statement No. 31, Capital Assets "Accounting and Financial Reporting for Certain Investments and External Investment Pools (GASB 31)," which requires governmental entities, Capital assets, which include property, plant, equipment, and infrastructure including governmental external investment pools, to report certain assets ( e.g., roads, bridges, sidewalks, right of way, and similar items), are investments at fair value in the statement of net assets/balance sheet and 36

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands) reported in the applicable governmental or business-type activities columns The liability associated with these benefits is reported in the government-in the government-wide financial statements. The government defines capital wide statements. Vacation and sick leave of proprietary funds is recorded as assets as assets with an initial, individual cost of more than five thousand an expense and as a liability of those funds as the benefits accrue to dollars and an estimated useful life in excess of one year. Such assets are employees.

recorded at historical cost or estimated historical cost if purchased or constructed. Costs include: labor; materials; interest during construction; K. Derivative Instruments allocated indirect charges such as engineering, construction and transportation equipment, retirement plan contributions and other fringe The City's derivative instruments are accounted for in accordance with benefits. Donated capital assets are recorded at estimated fair market value Government Accounting Standards Board (GASB) Statement No. 53, at the date of donation. Intangible assets that cost more than one hundred "Accounting and Financial Reporting for Derivative Instruments" (GASB 53),

thousand dollars with useful lives of at least three years are capitalized and which requires the City to report its derivative instruments at fair value.

are recorded at cost. Donated intangible assets are recorded at estimated Changes in fair value for effective hedges that are achieved with derivative fair market value at the date of donation. instruments are reported as deferrals in the statements of net assets.

The costs of normal maintenance and repairs that do not add to the value of The City uses derivative instruments to hedge its exposure to changing the asset or materially extend asset lives are not capitalized. Capital assets interest rates through the use of interest rate swaps. The City had debt that other than land are depreciated using the straight-line method. was layered with "synthetic fixed rate" swaps, which was refunded in 2008 and 2011. At the time of the refunding, hedge accounting ceased to be Nuclear Fuel applied. The balance of the deferral account for each swap was included in the net carrying amount of the new bonds. The swaps were also employed The Electric Utility amortizes the cost of nuclear fuel to expense using the "as as a hedge against the new debt. Hedge accounting was applied to that burned" method. In accordance with the Nuclear Waste Disposal Act of portion of the hedging relationship, which was determined to be effective.

1982, the Electric Utility is charged one dollar per megawatt-hour of energy The negative fair value of the interest rate swaps related to the new hedging generated by the City's share of San Onofre Nuclear Generating Station's relationship has been recorded and deferred on the statement of net assets.

Units 2 and 3 to provide for estimated future storage and disposal of spent See Note 9 for further discussion related to the City's interest rate swaps.

fuel. The Electric Utility pays this fee to its operating agent, Southern California Edison Company, on a quarterly basis. Various transactions permitted in the Utility's Power Resources Risk Management Policies may be considered derivatives, including energy J. Compensated Absences and/or gas transactions for swaps, options, forward arrangements and congestion revenue rights. The Utility has determined that all of its contracts City employees receive 10 to 25 vacation days a year based upon length of including congestion revenue rights fall under the scope of "normal service. A maximum of two years' vacation accrual may be accumulated and purchases and normal sales" and are exempt from GASB 53.

unused vacation is paid in cash upon separation.

L. Long-Term Obligations City employees generally receive one day of sick leave for each month of employment with unlimited accumulation. Upon retirement or death, certain Lonq-Term Debt employees or their estates receive a percentage of unused sick leave paid in a lump sum based on longevity. The General, Redevelopment Agency In the government-wide financial statements and proprietary fund types in the Capital Projects Housing and Community Development Special Revenue, fund financial statements, long-term debt and other long-term obligations are Electric and Water funds have been primarily used to liquidate such reported as liabilities in the applicable governmental activities, business-type balances. activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are classified as deferred charges 37

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands) and amortized over the life of the bonds using the effective interest method. long-term loans, notes receivable, and property held for resale, unless Bonds payable are reported net of the applicable bond premium or discount. the proceeds are restricted, committed or assigned. Also, amounts that must be maintained intact legally or contractually, such as the In the fund financial statements, government fund types recognize bond principal of a permanent fund are reported within the nonspendable issuance costs as expenditures during the current period. The face amount category.

of debt issued is reported as other financing sources. Premiums received on

• Restricted fund balance is the portion of fund balance that is subject to debt issuances are reported as other financing sources while discounts on externally enforceable limitations by law, enabling legislation or debt issuance are reported as other financing uses. limitations imposed by creditors or grantors.

" Committed fund balance is the portion of fund balance that is subject to Decommissioning self-imposed constraints due to formal action of the City Council. No amounts have been reported within this category of fund balance.

Federal regulations require the Electric Utility to provide for the future " Assigned fund balance is the portion of fund balance that is decommissioning of its ownership share of the nuclear units at San Onofre. constrained by the City's intent to utilize fund balance for a specific The Electric Utility established a trust account to accumulate resources for purpose. The authority to assign fund balance has been delegated by the decommissioning of the nuclear power plant and restoration of the City Council to the City's chief financial officer.

beachfront at San Onofre. Each year the Electric Utility recognizes an " Unassigned fund balance is the residual classification that includes all expense in the amount of the contribution to the trust account. The funding spendable amounts in the General Fund not contained in other will occur over the useful life of the generating plant. classifications.

Amounts held in the trust account are classified as restricted assets in the When expenditures are incurred for purposes for which both restricted and accompanying balance sheet. To date, the Electric Utility has set aside unrestricted (committed, assigned or unassigned) fund balances are

$63,552 in cash and investments with the trustee as Riverside's estimated available, the City's policy is to use restricted amounts before unrestricted share of the decommissioning cost of San Onofre. Based on a cost estimate amounts. Within unrestricted resources, committed resources are used first completed by Southern California Edison and approved by the California followed by assigned resources, and finally unassigned resources.

Public Utilities Commission, the Electric Utility plans to set aside approximately $1,600 per year to fund this obligation. The plant site 0. Net Assets easement at San Onofre terminates May 2024. The plant must be decommissioned and the site restored by the time the easement terminates. Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt, consists of capital M. Claims and Judgments Payable assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or Claims and judgments payable are recognized when it is probable that a improvement of those assets. Net assets invested in capital assets, net of liability has been incurred and the amount of loss can be reasonably related debt excludes unspent debt proceeds. Net assets are reported as estimated. Such claims, including an estimate for claims incurred but not restricted when there are limitations imposed on their use either through reported at year end, are recorded as liabilities in the appropriate internal legislation adopted by the City or through external restrictions imposed by service fund. creditors, grantors or laws or regulations of other governments. Restricted resources are used first to fund appropriations.

N. Fund Equity P. Interfund Transactions In the fund financial statements, governmental fund balance is made up of the following components: Interfund transactions are accounted for as revenues and expenditures or

• Nonspendable fund balance is the portion of fund balance that cannot expenses. Transactions, which constitute reimbursements, are eliminated in be spent due to form. Examples include inventories, prepaid amounts, 38

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands) the reimbursed fund and accounted for as expenditures or expenses in the first installment is due November 1 and is delinquent on December 10. The fund to which the transaction is applicable. second installment is due February 1 and is delinquent on April 10. Property taxes receivable represent current and prior years' uncollected tax levies, During the year, transactions occur between individual funds for goods adjusted for uncollectable amounts.

provided or services rendered. Related receivables and payables are classified as "due from/to other funds" on the accompanying fund level S. Use of Estimates statements. The noncurrent portion of long-term interfund loans receivable The preparation of financial statements in conformity with accounting are reported as interfund receivables/payables and, for governmental fund principles generally accepted in the United States of America requires types, are equally offset by a fund balance reserve to indicate that the management to make estimates and assumptions that affect the reported receivable does not constitute available expendable financial resources.

amounts of assets and liabilities, disclosure of contingent assets and Interfund payables also include accrued interest, which has been offset by liabilities at the date of the financial statements, and the reported amounts of deferred revenue. revenue and expenditures. Specifically, the City has made certain estimates Any residual balances outstanding between the governmental activities and and assumptions relating to the revenues due and expenditures incurred business-type activities are reported in the government-wide financial through fiscal year end, collectability of its receivables, the valuation of statements as "internal balances". property held for resale, the useful lives of capital assets, and the ultimate outcome of claims and judgments. Actual results may differ from those Q. Deferred Revenue estimates and assumptions.

Governmental and proprietary funds report unearned revenue on the T. Implementation of New GASB Pronouncement statement of net assets. Unearned revenues arise when the government receives resources before it has a legal claim to them, as when grant monies The City adopted Governmental Accounting Standards Board (GASB) are received prior to meeting all eligibility requirements. In subsequent Statement No. 54, "Fund Balance Reporting and Governmental Fund Type periods, when both revenue recognition criteria are met, or when the Definitions". This new accounting standard enhances the usefulness of fund government has a legal claim to the resources, revenue is recognized. balance information by providing clearer fund balance classifications that can Deferred revenues arise in governmental funds when potential revenue does be more consistently applied and by clarifying the existing governmental fund not meet both the "measurable" and "available" criteria for recognition in the type definitions. This statement established fund balance classifications that current period. The majority of the City's governmental fund unearned comprise a hierarchy based on the extent to which a government is bound to revenue for June 30, 2011 relates to unearned revenue on a capital lease. observe constraints imposed upon the use of the resources reported in See Note 4. governmental funds.

R. Property Tax Calendar 2. Legal Compliance - Budgets Under California law, general property taxes are assessed for up to 1% of the Budgets are adopted on a basis consistent with accounting principles property's assessed value. General property taxes are collected by the generally accepted in the United States of America. Annual appropriated counties along with other special district taxes and assessments and voter budgets are adopted for all departments within the general, special revenue approved debt. General property tax revenues are collected and pooled by and capital project funds. Formal budgets are not employed for debt service the county throughout the fiscal year and then allocated and paid to the funds because debt indenture provisions specify payments. The permanent county, cities and school districts based on complex formulas prescribed by fund is not budgeted.

State statutes.

During the period December through February of each fiscal year, Property taxes are calculated on assessed values as of January 1 for the department heads prepare estimates of required appropriations for the ensuing fiscal year. On July 1 of the fiscal year the levy is placed and a lien following fiscal year. These estimates are compiled into a proposed is attached to the property. Property taxes are due in two installments. The operating budget that includes a summary of proposed expenditures and 39

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands) financial resources and historical data for the preceding fiscal year. The Authorized Investments operating budget is presented by the City Manager to the City Council for review. Public hearings are conducted to obtain citizen comments. The City Under provisions of the City's investment policy, and in accordance with Council generally adopts the budget during one of its June meetings. The California Government Code Section 53601, the City Treasurer may invest or City Manager is legally authorized to transfer budgeted amounts between deposit in the following types of investments:

divisions and accounts within the same department. Transfer of Max Max % of appropriations between departments or funds and increased appropriations Maturity Portfolio must be authorized by the City Council. Expenditures may not legally exceed Securities of the U.S. Gov't.

budgeted appropriations at the departmental level within a fund. All and its sponsored agencies 5 Years 100%

appropriations shall lapse at the end of the fiscal year to the extent they have Repurchase Agreements 1 Year 100%

not been expended or lawfully encumbered, except for appropriations for Reverse Repurchase Agreements 90 Days 20%

capital projects which shall continue to their completion. Negotiable Certificates of Deposit 5 Years 30%

Bankers Acceptances 180 Days 40%

3. Cash and Investments Commercial Paper of "prime" quality 270 Days 25%

Cash and investments at fiscal year-end consist of the following: Local Agency Investment Fund (State Pool) N/A 100%

Mutual Funds N/A 20%

Investments $ 435,250 Medium-Term Corporate Notes 5 Years 30%

Investments at fiscal agent 629,218 Local Agency Bonds N/A N/A 1,064,468 Cash on hand and deposits with financial institutions 369 Investments in Medium Term Corporate Notes may be invested in securities Non-negotiable certificates of deposit 13,364 rated A or. better by Moody's or Standard and Poor's rating services and no

$1.078,201 more than 15% of the market value of the portfolio may be invested in one corporation.

The amounts are reflected in the government-wide statement of net assets: The City's investment policy provides two exceptions to the above; one is for investments authorized by debt agreements (described below) and the other Cash and investments $ 410,670 for funds reserved in the San Onofre Nuclear Generating Station Restricted cash and cash equivalents 36,295 613,619 Decommissioning Account for which the five-year maturity limitation may be Restricted cash and investments at fiscal agent extended to the term of the operating license.

Total per statement of net assets 1,060,584 Fiduciary fund cash and investments 17,617 Investments Authorized by Debt Agreements

$1,078.201 Provisions of debt agreements, rather than the general provisions of the The City follows the practice of pooling cash and investments of all funds California Government Code or the City's investment policy, govern except for funds required to be held by outside fiscal agents under the investments of debt proceeds held by bond fiscal agents. Permitted provisions of bond indentures, which are administered by outside agencies. investments are specified in related trust agreements and include the following:

Interest income earned on pooled cash and investments is allocated monthly to funds based on the beginning and month-end balances. Interest income Securities of the U.S. Government and its sponsored agencies from cash and investments held at fiscal agents is credited directly to the Bankers' Acceptances rated in the single highest classification related account. Bank deposits are covered by federal depository insurance Commercial Paper rated in the single highest classification for the first $250 or by collateral held in the pledging bank's trust department Investments in money market funds rated in the single highest in the name of the City. classification 40

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Municipal obligations rated Aaa/AAA or general obligations of states with Disclosures Relating to Credit Risk ratings of at least A2/A or higher by both Moody's and S&P Investment Agreements Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the No maximum percentage of the related debt issue or maximum investment in assignment of a rating by a nationally recognized statistical rating one issuer is specified. organization.

Disclosures Relatina to Interest Rate Risk Presented below is the actual rating as of year-end for each investment type:

Interest rate risk is the risk that changes in market interest rates will Ratings as of Year End adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City's investment policy requires that Investment Type Total AAA AA A Unrated the interest rate risk exposure be managed by purchasing a combination of Money Market Funds $ 30,009 $ 19,498 $10,511 $ - $ -

shorter term and longer term investments and by timing cash flows from Federal Agency Securities 192,084 192,084 maturities so that a portion of the portfolio is maturing or coming close to Corp Medium Term Notes 51,954 51,954 maturity evenly over time as necessary to provide the cash flow and liquidity Local Agency Bonds 33,300 33,300 State Investment Pool 123,329 123,329 needed for operations. Negotiable CDs 4,574 4,574 Held by Fiscal Agent Information about the sensitivity of the fair values of the City's investments Money Market Funds 29,570 13,958 15,612 (including investments held by fiscal agent) to market interest rate State Investment Pool 90,631 90,631 Investment Contracts 414,871 414,871 fluctuations is provided by the following table that shows the distribution of Commercial Paper 5,261 5,261 the City's investments by maturity: Fed Agency Securities 64,582 64,582 Corp Med Term Notes 24,303 182573 5,730 Total S229.04

$1.91 $682311 Remaining Maturity (in Months) 12 13 to 24 25 to 60 More than Investment Type Total Months Months Months 60 Months Concentration on Credit Risk or Less Money Market Funds The investment policy of the City contains no limitations on the amount that

$ 30,009 $ 30,009 $ $ $

Federal Agency Securities 192,084 16,635 71,238 104,211 can be invested in any one issuer beyond that stated above. Investments in Corp Medium Term Notes 51,954 10,122 15,669 26,163 - any one issuer (other than U.S. Treasury securities, money market funds, Local Agency Bonds 33,300 33,300 and external investment pools) that represent 5% or more of total City State Investment Pool 123,329 123,329 - investments are as follows:

Negotiable CDs 4,574 248 4,326 Held by Fiscal Agent Money Market Funds 29,570 29,570 Issuer Investment Type Reported Amount State Investment Pool Trinity Funding Investment Contract $249,105 90,631 90,631 Deutsche Bank Securities Inc.

Investment Contracts Investment Contract $140,257 414,871 150,493 76,260 173,403 14,715 Commercial Paper 5,261 5,261 Fed Agency Securities 64,582 3,416 15,017 26,817 19,332 Custodial Credit Risk Corp Med Term Notes 24,303 1,230 3,154 11,674 8,245 Total $1.064,46a___8 Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the The City assumes that callable investments will not be called. possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-41

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands) dealer) to a transaction, a government will not be able to recover the value of 5. Capital Assets its investment or collateral securities that are in the possession of another party. The City's investment policy requires that a third party bank trust Below and on the following page is a summary of changes in the capital department hold all securities owned by the City. All trades are settled on a assets during the fiscal year ended June 30, 2011.

delivery vs. payment basis through the City's safekeeping agent. The City has no deposits with financial institutions; bank balances are swept daily into Beginning Deletions/ Ending a money market account. Governmental activities: Balance Additions Transfers Balance Capital assets, not depreciated:

Land $ 280,446 $ 10,246 $- $ 290,692 Investment in State Investment Pool Construction in progress 45,206 23,124 (44,768) 23,562 Total capital assets not depreciated 325,652 33.370 (44.768) 314,254 The City is a voluntary participant in the Local Agency Investment Fund Capital assets being depreciated:

(LAIF) that is regulated by California Government Code Section 16429 under Buildings 165,017 84 165,101 the oversight of the Treasurer of the State of California. The fair value of the Improvements City's investment in this pool is reported in the accompanying financial other than Buildings 159,501 43,410 - 202,911 statements at amounts based upon the City's pro-rata share of the fair value Machinery and Equipment 75,442 2,694 (3,633)

- 74,503 Infrastructure 800 754 48.336 849,090 provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost Total capital assets being of that portfolio). The balance available for withdrawal is based on the depreciated 1,20,714 94,54 (3.633) 1,291605 accounting records maintained by LAIF, which are recorded on an amortized Less accumulated depreciation for:

cost basis. Buildings (37,596) (4,186) - (41,782)

Improvements

4. Capital Lease Receivable other than Buildings (41,168) (7,142) (48,310)

Machinery and Equipment (51,015) (6,983) 3,249 (54,749)

The Redevelopment Agency has a direct financing lease arrangement with Infrastructure (227.755) (18,947) (246.702)

Total accumulated depreciation (357.534) (37,258) 3.249 (391.543) the State of California (the State) for a twelve-story office building. The lease Total capital assets being term is for thirty years and the State takes ownership of the facility at the depreciated, net 843,180 57,266 (384) 900,062 conclusion of that term. The lease calls for semi-annual payments not less Governmental activities than the debt service owed by the Redevelopment Agency on the lease capital assets, net j$jlBi&B3 $90l636i s12I4a~Mfi revenue bonds issued for the purchase and renovation of the building. The future minimum lease payments to be received are as follows:

2012 $ 2,413 2013 2,443 2014 2,473 2015 2,507 2016 2,533 Thereafter 24,227 Total Due 36,596 Less: amount applicable to interest (13.171)

Total capital lease receivable $3a-425 42

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Business type activities: Beginning Deletions/ Ending Balance Additions Transfers Balance Business type activities:

Capital assets, not depreciated: Electric $27,690 Land $ 34,820 $ 155 $ (70) $ 34,905 Water 11,386 Intangibles 6,307 9,821 16,128 Sewer 6,379 Construction in progress 169.473 159 221 (221,045) 107,649 Total capital assets not depreciated 210,600 169,197 (221,115) 158,682 Refuse 1,373 Special Transportation 561 Capital assets being depreciated:

Buildings 236,280 5,462 241,742 Airport 620 Improvements Public Parking 866 other than Buildings 1,293,535 208,155 (3,597) 1,498,093 Total depreciation expense -

Machinery and Equipment 66405 7431 (7636) 66200 business type activities Total capital assets being depreciated 1,596,220 221,048 (1,23 1,806,035 Less accumulated depreciation for: 6. Long-Term Obligations Buildings (91,506) (5,658) (97,163)

Improvements Changes in Long-Term Obligations: Below is a summary of changes in long-other than Buildings (458,296) (36,967) 3,067 (492,196)

Machinery and Equipment term obligations during the fiscal year:

(36,830) (6.250) 5,994 (37,086)

Total accumulated depreciation (586.632) (48.875) 9U062 (626,445)

Total capital assets being Governmental Activities:

depreciated, net 1,009,88 172,173 (2.171) 1,179,590 Due Beginning Ending Within Business type activities Balance* Additions Reductions Balance One Year capital assets, net $1.2018 I Redevelopment Agency bonds $278,867 $ 65,000 $ 38,672 $305,195 $ 7,240 Estimated useful lives used to compute depreciation are as follows: General Obligation Bonds 17,533 688 16,845 725 Buildings and Improvements 30-50 years Pension Obligation Improvements other than Buildings 20-99 years Bonds 136,050 30,775 34,730 132,095 35,555 Machinery and Equipment 3-15 years Certificates of Infrastructure 20-100 years Participation 211,212 3,966 207,246 4,750 Capital leases 6,303 2,000 1,633 6,670 1,340 Depreciation expense was charged to functions of the government as Notes Payable 8,191 442 7,749 588 Commercial Loan 1,100 9,100 9,100 1,100 follows:

Compensated Absences 20,101 7,836 6,784 21,153 7,100 Governmental activities: Claims liability 25,541 10,576 9,502 26,615 9,900 General government $ 4,548 Net OPEB Public safety 4,361 Obligation 5,790 2,962 944 7,808 Highways and streets, including depreciation of Total general infrastructure assets 20,502 Culture and recreation 7,847 Total depreciation expense - governmental activities 43

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Business-type activities:

Due $141,840 2008 Electric Refunding/Revenue Bonds; Beginning Ending Within Series A and C. The bonds were issued at a variable Balance Additions Reductions Balance One Year rate; however the City entered into an agreement to Revenue Bonds $968,393 $242,732 $ 139,571 $1,071,554 $25,485 convert to a fixed rate of 3.1% for the Series A bonds Loan Payable 45,569 45,569 1,428 and 3.2% for the C bonds. For information on the swap Notes Payable 7,249 25,000 1,071 31,178 1,499 agreements see note 9. Bonds are due in annual Capital Leases 2,151 431 1,720 395 Landfill Capping 7,380 465 6,915 200 installments from $1,325 to $8,560 through October 1, Arbitrage Liability 27 75 102 2035. 140,965 Water Stock Acquisition $209,740 2008 Electric Revenue Bonds; Series D fixed Rights 949 2 947 150 rate bonds, 3.6% to 5.0%, due in annual installments Net OPEB from $125 to $24,960 through October 1, 2038. 209,740 Obligation 4,063 2,5 790 5,2 Total ~~ $iA42.3M Si16U3.61 1E $34,920 2009 Electric Refunding/Revenue Bonds; Series A fixed rate bonds, 0.35% to 5.0%, due in The following debt has been issued for the purpose of generating capi tal annual installments from $450 to $6,105 through resources for use in acquiring or constructing municipal facilities or October 1, 2018. The bonds refunded the 1998 series infrastructure projects. The Redevelopment Agency does issue debt for t he and partially refunded the 2001 series. 27,425 above purposes as well as for redevelopment related purposes such as housing and blight removal. $140,380 2010 Electric Revenue Bonds; Series A and B fixed rate bonds, 3% to 4.9%, due in annual Lonq-Term Obliqations at June 30, 2011: installments from $2,300 to $33,725 through October 1, 140,380 Princip)al 2040.

Revenue Bonds: Outstandirng

$56,450 2011 Electric Revenue Refunding Bonds; Electric Series A. The bonds were issued at a variable rate; however the City entered into an agreement to convert

$47,215 2001 Electric Revenue Bonds; 2.9% to 5.25%, to a fixed rate of 3.2%. For information on the swap due in annual installments from $2,855 to $4,280 agreements see note 9. Bonds are due in annual through October 1, 2016 (partially advance refunded in installments from $725 to $5,175 through October 1, 2005 and 2009, with final maturity in 2013). $ 7,52 25 2035.

$75,405 2003 Electric Revenue Bonds; 2.0% to 5.0%, Subtotal 619,275 due in annual installments from $1,035 to $8,535 Add: Unamortized bond premium 10,091 through October 1, 2013. 23,665 Less: Unamortized deferred bond refunding costs (13,813)

$615,553

$27,500 2004 Electric Revenue Bonds; Series A fixed rate bonds, 4.0% to 5.5%, due in annual installments Water from $2,615 to $3,695 through October 1, 2014. 13,125 $20,000 2001 Water Revenue Bonds; 2.6% to 5.0%,

due in annual installments from $345 to $585 through October 1, 2031 (partially advance refunded in 2005 and 2009, with final maturity in 2014). $1,470 44

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Remaining revenue bond debt service payments will be made from revenues

$58,235 2008 Water Revenue Bonds; Series B fixed of the Electric, Water and Sewer Enterprise funds. Annual debt service rate bonds, 4.0% to 5.0%, due in annual installments requirements to maturity are as follows:

from $1,210 to $7,505 through October 1, 2038. 58,235 Electric Utility Fund Water Utility Fund

$31,895 2009 Water Refunding/Revenue Bonds; Fiscal Year Principal Interest Total Principal Interest Total Series A fixed rate bonds, 0.65% to 5.0%, due in annual installments from $500 to $3,835 through 2012 $ 20,940 $ 26,531 $47,471 $ 4,545 $ 8,840 $13,385 2013 21,905 25,551 47,456 4,695 8,678 13,373 October 1, 2020. The bonds refunded the 1998 series 2014 20,685 24,543 45,228 4,870 8,487 13,357 and partially refunded the 2001 series. 31,370 2015 14,480 23,745 38,225 5,015 8,276 13,291 2016 15,415 23,113 38,528 5,260 8,046 13,306

$67,790 2009 Water Revenue Bonds; Series B fixed 2017-2021 68,380 108,340 176,720 28,175 36,753 64,928 2022-2026 81,705 94,398 176,103 33,990 30,773 64,763 rate bonds, 3.33% to 4.13%, due in annual installments 2027-2031 99,720 75,736 175,456 41,110 23,417 64,527 from $2,475 to $4,985 through October 1, 2039. 67,790 2032-2036 122,650 51,670 174,320 49,955 14,296 64,251 2037-2041 153,395 19,753 173,148 40,250 3,234 43,484 Premium

$59,000 2011 Water Refunding/Revenue Bonds; (Discount) 10,091 10,091 4,797 4,797 Series A. The bonds were issued at a variable rate; Refunding however the City entered into an agreement to convert Costs (13,813) - (13,813) (982 - (9,802) to a fixed rate of 3.2%. For information on the swap Total $473a3B $1-088,933 $212,860 agreements see note 9. Bonds are due in annual Sewer Utility Fund installments from $800 to $3,950 through October 1, Fiscal Year Principal Interest Total 2035. $-

2012 $10,847 $10,847 2013 6,760 10,712 17,472 Subtotal 217,865 2014 7,035 10,436 17,471 Add: Unamortized bond premium 4,797 2015 7,325 10,149 17,474 Less: Unamortized deferred bond refunding costs 2016 7,660 9,811 17,471 (9,802) 2017-2021 39,810 43,746 83,556

$212,860 2022-2026 31,900 36,416 68,316 Sewer 2027-2031 40,050 28,260 68,310 2032-2036 50,520 17,796 68,316

$240,910 2009 Sewer Revenue Bonds; Series A & B 2037-2041 49,850 4,802 54,652 Premium 2,221 2,221 fixed rate bonds, 3.65% to 5.0%, due in annual Total $243-131 *3182.9Th installments from $5,555 to $13,350 through August 1, 2039. $240,910 Principal Add: Unamortized bond premium 2,231 Redevelopment Agency Bonds: Outstanding

$243,141

$13,285 1991 Public Financing Authority Revenue Total Revenue Bonds $1.071.554 Bonds, Series A, Multiple Project Areas; $1,470 serial revenue bonds 7.15% to 7.6%, due in annual installments from $100 to $145 through February 1, 2003; and $4,175 term bonds, 8.0%, due in annual installments from $155 to $450 through February 1, 2018 (portion not refunded). $ 130 45

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the vear ended June 30. 2011 (amounts expressed in thousands)

$17,025 1999 University Corridor/Sycamore Canyon $40,435 Downtown/Airport Merged Project Area, 2003 Merged Project Area, Tax Allocation Bonds, Series A; Tax Allocation and Refunding Bonds; $32,720 serial

$6,205 serial bonds, 3.4% to 4.7% due in annual bonds 2.0% to 5.25% due in annual installments from installments from $40 to $570 through August 1, 2014; $1,220 to $1,955 through August 1, 2023; and $7,715

$4,810 term bonds at 4.75% due August 1, 2021; and term bonds at 5.0% due in annual installments from

$6,010 term bonds at 5.0% due August 1, 2027. 12,950 $195 to $2,060 through August 2034. 31,285

$6,055 1999 University Corridor/Sycamore Canyon $24,115 2005 Housing Set-Aside Tax Allocation Bonds; Merged Project Area, Subordinate Tax Allocation $17,025 serial bonds 3.0% to 4.625% due in annual Bonds, Series B; $1,900 serial bonds, 4.5% to 5.5% installments from $505 to $1,165 through August 1, due in annual installments from $35 to $190 through 2025; $2,425 term bonds at 5.0% due August 1, 2028; September 1, 2013; $1,135 term bonds at 5.5% due and $4,665 term bonds at 4.85% due August 1, 2034. 20,555 September 1, 2018; and $3,020 term bonds at 5.625%

due September 1, 2027. 4,700 $8,340 Downtown/Airport Merged Project Area and Casa Blanca Project Area 2007 Tax Allocation Bonds,

$20,395 1999 Casa Blanca Project Area, Tax Tax Exempt, Series A, serial bonds 4.0% to 4.25% due Allocation Bonds, Series A; $8,925 serial bonds, 3.4% in annual installments from $20 to $590,000 through to 4.7% due in annual installments from $455 to $780 August 1, 2025; $4,980 term bonds at 4.5% due August through August 1, 2014; $2,565 term bonds at 4.75% 1, 2029; $410 term bonds at 4.375% due August 1, due August 1, 2017; $4,035 term bonds at 4.75% due 2037. 8,280 August 1,2021; and $4,870 term bonds at 5.0% due August 1, 2025. 14,395 $1,465 California Statewide Communities Development Authority 2005 Taxable Revenue Bonds, Series A

$4,550 Arlington Redevelopment Project, 2004 Tax (CRA/ERAF Loan Program); 3.87% to 5.01% due in Allocation Bonds, Series A; $420 term bonds at 3.8% annual installments of $105 to $180 through August 1, due August 1, 2014; $615 term bonds at 4.6% due 2015. 675 August 1, 2024; and $3,515 term bonds at 4.7% due August 1, 2034. 4,310 $14,850 Downtown/Airport Merged Project Area and Casa Blanca Project Area 2007 Tax Allocation Bonds,

$2,975 Arlington Redevelopment Project Area, 2004 Taxable, Series B, $4,050 term bonds at 5.2% due Tax Allocation Bonds; Series B: 5.5% due in annual August 1, 2017; $10,800 term bonds at 5.8% due installments from $85 to $235 through August 1, 2024. 2,385 August 1, 2028. 13,785

$26,255 State of California Department of General $89,205 University Corridor/Sycamore Canyon Merged Services Project, 2003 Lease Revenue Refunding Project Area, Arlington Project Area, Hunter Bonds, Series A; 2.0% to 5.0% due in annual Park/Northside Project Area, Magnolia Center Project installments from $545 to $2,230 through October 1, Area, and La Sierra/Arlanza Project Area 2007 Tax 2024. 20,710 Allocation Bonds, Tax-Exempt, Series C, serial bonds

$4,810 State of California Department of General 4.0% to 5.0% due in annual installments from $50 to Services Project, 2003 Lease Revenue Refunding $3,210 through August 1, 2025; $17,955 term bonds at Bonds, Series B; $310 serial bonds 1.20% to 1.42% 4.5% due August 1, 2030; $47,775 term bonds at 5.0%

through October 1, 2004; $620 term bonds at 3.090% due August 1, 2037. 88,675 due Oct. 1, 2008; $1,110 term bonds at 4.340% due Oct. 1, 2014 and $2,770 term bonds at 5.480% due $43,875 University Corridor/Sycamore Canyon Merged Oct. 1, 2024. 3,540 Project Area, Arlington Project Area, Hunter 46

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Park/Northside Project Area, Magnolia Center Project Remaining debt service will be paid by the Redevelopment Agency Debt Area, and La Sierra/Arlanza Project Area 2007 Tax Service Funds from future property tax revenues. Annual debt service Allocation Bonds, Taxable, Series D, $15,740 term requirements to maturity are as follows:

bonds due August 1, 2017; $28,135 term bonds due August 1,2032. 39,210 Fiscal Year Principal Interest Total 2012 $ 7,240 $ 15,417 $ 22,657

$5,000 Magnolia Redevelopment Project Area, 2011 2013 7,575 14,415 21,990 Taxable Tax Allocation Bonds Series A; Interest at the 2014 7,930 14,073 22,003 rate of 5% per annum paid semi-annually on May 1 and 2015 8,310 13,712 22,022 November 1, commencing May 1, 2012. Bonds are 2016 8,520 13,330 21,850 due in annual installments from $80 to $920 through 2017-2021 52,430 59,516 111,946 November 1, 2041. The bonds were purchased by the 2022-2026 65,955 43,997 109,952 City and are held in the City's investment pool. 1,000 2027-2031 56,480 28,092 84,572

$17,700 University Corridor/Sycamore Canyon Merged 2032-2036 51,730 14,875 66,605 Project Area, 2011 Taxable Tax Allocation Bonds 2037-2041 27,300 3,468 30,768 Series A; Interest at the rate of 5% per annum paid 2042-2046 5,415 135 5,550 semi-annually on May I and November 1, commencing Premium 5,956 5,956 May 1, 2012. Bonds are due in annual installments Refunding Costs 354 354 from $845 to $3,480 through November 1, 2037. The Total $305.195 $221.030 $526.225 bonds were purchased by the City and are held in the Principal City's investment pool.

10,000 General Obligation Bonds: Outstandinq

$17,300 Downtown/Airport/Hunter Park/Northside Merged Project Area, 2011 Taxable Tax Allocation $20,000 Fire Facility Projects, Election of 2003 General Bonds Series A; Interest at the rate of 5% per annum Obligation Bond; 3.0% to 5.5%, due in annual paid semi-annually on May 1 and November 1, installments from $410 to $1,740 through August 1, commencing May 1, 2012. Bonds are due in annual 2024. $16,640 installments from $285 to $1,365 through November 1, Add: Unamortized bond premium 205 2041. The bonds were purchased by the City and are Total General Obligation Bonds $16.845 held in the City's investment pool. 17,300 Remaining general obligation bond debt service payments will be made from

$20,000 La Sierra/Arlanza Redevelopment Project unrestricted revenues of the General fund. Annual debt service requirements Area, 2011 Taxable Tax Allocation Bonds Series A; to maturity are as follows:

Interest at the rate of 5% per annum paid semi-annually on May 1 and November 1, commencing May 1, 2012. Fiscal Year Principal Interest Total Bonds are due in annual installments from $1,870 to 2012 $ 725 $ 766 $1,491

$3,130 through November 1, 2041. The bonds were 2013 780 737 1,517 purchased by the City and are held in the City's 2014 840 706 1,546 investment pool. 5,000 2015 900 671 1,571 Subtotal 298,885 2016 965 634 1,599 Add: Unamortized bond premium 5,956 2017-2021 6,015 2,438 8,453 Add: Unamortized deferred bond refunding costs 354 2022-2025 6,415 724 7,139 Total Redevelopment Agency Bonds $305,195 Premium 205 205 Total $1 .84 47

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

$19,945 2006 Galleria at Tyler Public Improvements Principal Certificates of Participation; 4.0% to 5.0%, due in Pension Obligation Bonds: Outstanding annual installments from $435 to $1,270 through September 1, 2036. 19,945

$89,540 California Statewide Community Development Authority (Public Safety) 2004 Taxable Pension $128,300 2008 Riverside Renaissance Certificates of Obligation Bond; 2.65% to 5.896%, due in annual Participation; issued at a variable rate; however the installments from $1,125 to $10,715 through June 1, $ 77,055 City entered into an agreement to convert to a fixed 2023. rate of 3.4%. For information on the swap agreement 125,400 see note 9. Due in annual installments from $2,900 to

$30,000 2005 Taxable Pension Obligation Bonds $7,200 through March 1, 2037.

Series A; 3.85% to 4.78%, due in annual installments

$630 to $3,860 through June 1,2020. 24,265 $20,660 2010 Recovery Zone Facility Hotel Project Certificates of Participation; 4.0% to 5.5%, due in

$30,775 2011 Taxable Pension Obligation Refunding annual installments from $415 to $1,410 through March Bond Anticipation Notes; rate at June 30, 2011 was 1,2040.

1.33%, $30,775 due June 1, 2012.

Subtotal 211,345 Total Pension Obligation Bonds $132.095 Add: Unamortized bond premium 727 Less: Unamortized deferred bond refunding costs (4,826)

Remaining pension obligation bond debt service payments will be made from Total Certificates of Participation $207246 unrestricted revenues of the General fund. Annual debt service requirements to maturity are as follows: Remaining certificates of participation debt service payments will be made from unrestricted revenues of the Debt Service funds. Annual debt service Fiscal Year Principal Interest Total requirements to maturity are as follows:

2012 $ 35,555 $ 5,901 $41,456 2013 5,475 5,357 10,832 Fiscal Year Principal Interest Total 2014 6,230 5,080 11,310 2012 $ 4,750 $ 8,326 $13,076 2015 7,050 4,759 11,809 2013 4,920 8,155 13,075 2016 7,930 4,391 12,321 2014 5,085 7,979 13,064 2017-2021 49,410 14,442 63,852 2015 5,680 7,785 13,465 2022-2023 20,445 1,837 22,282 2016 5,990 7,560 13,550 Total $173*862 2017-2021 33,490 34,172 67,662 2022-2026 39,675 26,930 66,605 Principal 2027-2031 46,730 18,453 65,183 Certificates of Participation: Outstanding 2032-2036 51,335 8,264 59,599 2037-2040 13,690 950 14,640

$53,185 2003 Riverside Public Financing Authority Premium 727 727 Certificates of Participation; 2.0% to 5.0%, due in Refunding Costs (4,826) (4,826)

Total $2O7.246 $128.54 annual installments from $755 to $2,830 through September 1, 2033. $45,340 48

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Principal Remaining notes payable debt service payments will be made from Outstanding unrestricted revenues of the Redevelopment Agency.

Loan Payable - Electric Fund:

Annual debt service requirements to maturity are as follows:

The City entered into the Clearwater Power Plant Redevelopment Agency Purchase and Sale Agreement dated March 3, 2010 Fiscal Year Principal Interest Total with the City of Corona for the acquisition of Clearwater 2012 $ 588 $ 544 $ 1,132 Cogeneration Facility (Clearwater) located in Corona. 2013 636 513 1,149 The total purchase price for Clearwater is $46,569, and 2014 1,011 503 1,514 will be funded through a series of semi-annual 2015 743 440 1,183 payments ranging from $1,158 to $2,664 through 2013, 2016 782 346 1,128 and $182 to $413 in 2014 and 2015. In addition, two 2017-2021 1,461 1,596 3,057 payments of $36,406 and $7,367 are due in 2013 and 2022-2026 471 1,238 1,709 2015, respectively, and will be funded primarily from 2027-2031 777 933 1,710 bond proceeds. 2032-2036 1,280 430 1,710 Total Principal Notes Payable - Redevelopment Agency: Outstanding Principal Notes payable - Enterprise Funds: Outstanding These notes payable have been issued to promote development and expansion within the City's Sewer fund loan from State of California for redevelopment areas. Cogeneration project, 2.336%, payable in net annual installments of $339, beginning January 29, 2003 Pepsi Cola Bottling Company of Los Angeles, 10.5%, through January 29, 2021 $3,038 payable in net annual installments of $341, subject to recording of completion. $2,987 Sewer fund loan from State of California for Headworks project, 1.803%, payable in net annual installments of HUD Section 108 loan for University Village, 5.36% to $477, beginning November 6, 1999 through November 7.66%, payable in semi-annual installments beginning 6, 2018 3,532 August 1, 1996 of $272 to $425 through August 1, 2015 1,740 Public parking fund loan from City National Bank for Fox Entertainment Plaza project, 3.85%, payable in net HUD Section 108 loan for Mission Village annual installments of $1,747, beginning June 16, 2011 Project, 6.15% to 6.72%, payable in through December 16, 2031 semi-annual installments beginning August 1, 1999 of $110 to $420 Total notes payable - Enterprise Funds $311-78 through August 1, 2018 2,695 Note payable to California Housing Finance Agency, interest at 3%, payable in annual installments of $88 through 2013, for housing projects. 327 Total notes payable - Redevelopment Agency 49

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Remaining notes payable debt service payments will be made from Current Year Refundings:

unrestricted revenues of the Sewer fund. Annual debt service requirements to maturity are as follows: On April 28, 2011, $56,450 of Electric Refunding/Revenue Series A Bonds Sewer Fund were sold with an all-in true interest cost of 3.89% to refund $56,450 of Fiscal Year Principal Interest Total previously outstanding 2008 Electric Refunding/Revenue Series B Bonds.

2012 $ 692 $125 $ 817 The refunding resulted in a difference between the reacquisition price and 2013 705 112 817 the net carrying amount of the old debt of $193. The difference is being 2014 718 99 817 charged to operations using the proportional method.

2015 731 86 817 2016 745 72 817 On May 26, 2011, $59,000 of Water Refunding/Revenue Series A Bonds 2017-2021 2,979 150 3,129 were sold with an all-in true interest cost of 3.33% to refund $59,000 of Total $6.570 $644 $7214 previously outstanding 2008 Water Refunding/Revenue Bonds. The refunding resulted in a difference between the reacquisition price and the net Public Parking Fund carrying amount of the old debt of $434. The difference is being charged to Fiscal Year Principal Interest Total operations using the proportional method.

2012 $ 807 $ 940 $ 1,747 2013 838 909 1,747 Capital Leases:

2014 871 876 1,747 2015 905 842 1,747 The City leases various equipment through capital leasing arrangements in 2016 940 807 1,747 the governmental and proprietary fund types. These activities are recorded 2017-2021 5,277 3,457 8,734 for both governmental and business-type activities in the government-wide 2022-2026 6,386 2,348 8,734 financial statements. The assets and related obligations under leases in 2027-2031 7,727 1,007 8,734 governmental funds are not recorded in the fund statements. For proprietary 2032 857 17 874 funds, the assets and their related liabilities are reported directly in the fund.

Total $24.6708 $11.203 $35811 Amortization applicable to proprietary assets acquired through capital lease arrangements is included with depreciation for financial statement Principal presentation. The assets acquired through capital leases are as follows:

Contracts - Enterprise Funds: Outstanding Governmental Business-Type Water stock acquisition rights payable on Asset Activities Activities demand to various water companies $947 Buildings and improvements $1,103 $-

Equipment 5,595 2.763 Commercial Loan: Subtotal 6,698 2,763 Less: Accumulated depreciation (1.789) (579)

The City has a $20,000 commercial loan with City National Bank, which is Total being used to purchase, rehabilitate and resell foreclosed homes. As of June 30, 2011, the City had borrowed $1,100 and had $18,900 available for future borrowing. The interest rate is based on "prime" less 75 basis points, which was 2.5% as of June 30, 2011. Interest is paid monthly. Principal is due in full on July 1, 2012.

50

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed inthousands)

The future minimum lease obligations as of June 30, 2011 were as follows:

Debt Service Governmental Business-type Annual Amount of Annual Debt Service Coverage Years Endinq June 30, Activities Activities Pledged Revenue Payments (of all Ratio 2012 $1,568 $ 442 Description of (net of expenses, debt secured by for FYE 2013 Pledged Revenue where required) this revenue) 6/30/11 1,425 442 Tax increment:

2014 1,190 442 Non-Housing $39,165 $15,372 2.55 2015 1,098 428 Housing 6,997 2,771 2.53 2016 1,099 65 Electric revenues 106,299 48,116 2.21 Water revenues 49,108 14,063 3.49 Thereafter 744 10,197 12.48 Sewer revenues 817 Copiers 319 29 Total Minimum lease payments 7,443 1,848 There are also a number of limitations and restrictions contained in Less: Amount representing interest Assessment Bond indentures. The City believes they are in compliance with (rates ranging from 2.5% to 9%) (773) (128) all significant limitations and restrictions.

Total capital lease payable $6.670 $17-20 Defeasance of Debt:

The following are legally required debt service cash reserves. These amounts, at a minimum, are held by the City or fiscal agents at June 30, In prior years, the City defeased certain bonds by placing the proceeds of 2011: new bonds in an irrevocable trust to provide for all future debt service payments on the old debt issues. Accordingly, the trust account assets and General Iona-term obliaations: liability for the defeased debt issues are not included in the City's financial Redevelopment Agency $ 7,034 statements.

Certificates of Participation 13,765 Total $20-.M9 At June 30, 2011, the following amounts are considered defeased:

Enterprise funds: $22,237 2001 Electric Revenue Bonds $17,600 Electric 2001 Water Revenue Bonds 14,995 Water 5,684 1993 Sewer Revenue Bonds 9,265 Sewer 204142 Total $48O063 Landfill Capping:

The City and its component units have a number of debt issuances State and Federal laws and regulations require the City to place a final cover outstanding that are collateralized by the pledging of certain revenues. The on all active landfills when closed and to perform certain maintenance and amount and term of the remainder of these commitments are indicated in the monitoring functions at the landfill site for 30 years after closure. To comply debt service to maturity tables presented in the accompanying notes. The with these laws and regulations, the City is funding the costs of closure and purposes for which the proceeds of the related debt issuances were utilized "final capping" of the Tequesquite landfill located in the City. This area, are disclosed in the debt descriptions in the accompanying notes. For the comprised of approximately 120 acres, operated as a "Class II Sanitary current year, debt service payments as a percentage of the pledged gross Landfill" until its closure in 1985. During its operation, the landfill did not revenue (or net of certain expenses where so required by the debt accept hazardous waste and no clean up and abatement or cease and desist agreement) are indicated in the table on the following page. The debt service orders have been issued to the City. The capacity used at June 30, 2011 was coverage ratios also approximate the relationship of debt service to pledged 100%.

revenue for the remainder of the term of the commitment.

51

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

The estimated costs as determined by an independent consultant and 8. Other Long-Term Obligations updated by the City's Engineering Department are associated with flood control upgrades, remediation of possible ground water contamination and Assessment Districts Bonds (Not obligations of the City) control of methane gas. All potential costs have been recognized in the financial statements. There is the potential for these estimates to change As of June 30, 2011, the City has several series of Assessment District due to inflation, deflation, technology, or change in laws or regulations. To Bonds outstanding in the amount of $53,667. Bonds issued for fund the cost, the City imposed a landfill capping surcharge on customers improvements in certain special assessment districts, in accordance with the effective August 1, 1988. The minimum unamortized estimated cost is provisions of the Municipal Improvements Acts, are liabilities of the property recorded as a deferred charge in the accompanying financial statements of owners and are secured by liens against the assessed property. The City the Refuse fund and is being amortized on a straight-line basis over the Treasurer acts as an agent for the property owners in collecting the remaining post closure period, currently 22 years. assessments, forwarding the collections to bondholders and initiating foreclosure proceedings, if applicable. Since the debt does not constitute an

7. Risk Management obligation of the City, it is not reflected as a long-term obligation of the City and is not reflected in the accompanying basic financial statements.

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; Conduit Debt Obligations and natural disasters. Property insurance coverage has a limit of

$1,000,000, with a deductible of $50. Earthquake and flood insurance Mortgage Revenue Bonds outstanding of $8,610 and Industrial Development coverage has a limit of $25,000, with a deductible of 5% for earthquake and Revenue Bonds of $11,275 are not included in the accompanying financial

$100 for flood. Workers' compensation insurance coverage has a limit of statements. These bonds are special obligations of third parties and payable

$25,000, with a self-insured retention of $3,000 per occurrence. The City solely from and secured by a pledge of the receipts received from the carries commercial insurance in the amount of $20,000 for general and auto acquired mortgage loans and certain other reserve funds and related monies.

liability claims greater than $3,000. There were no claims settled in the last The bonds are not payable from any other revenues or assets of the City or three fiscal years that exceed insurance coverage. Internal service funds Redevelopment Agency. Neither the faith and credit nor the taxing power of have been established to account for and finance the uninsured risks of loss. the City, the Redevelopment Agency, the State of California or any political subdivision thereof is pledged to the payment of the principal and interest on All funds of the City participate in the Risk Management program and make the bonds.

payments to the Internal Service Funds based on actuarial estimates of the amounts needed to fund prior and current year claims and incidents that 9. Derivative Instruments have been incurred but not reported. Interfund premiums are accounted for as quasi - external transactions and are therefore recorded as revenues of Interest Rate Swaps the Internal Service funds in the fund financial statements.

The City has five cash flow hedging derivative instruments, which are pay-Changes in the self-insurance trust fund's claims liability amounts are: fixed swaps. These swaps were employed as a hedge against debt that was refunded in 2008 and 2011. At the time of the refunding, hedge accounting Unpaid Claims, June 30, 2009 $24,958 ceased to be applied. The balance of the deferral account for each swap is Incurred claims (including IBNR's) 11,047 included in the net carrying amount of the new bonds. The swaps were also Claim payments and adjustments (10.464) employed as a hedge against the new debt. Hedge accounting was applied Unpaid Claims, June 30, 2010 25,541 to that portion of the hedging relationship, which was determined to be Incurred claims (including IBNR's) 10,576 effective.

Claim payments and adjustments (9.502)

Unpaid Claims, June 30, 2011 52

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 f A ; fk A For the Yar endedJune 30.2011 ,a, ItUitouQVAU[=ZcaV " LIIJOO V-0 J0 Below is a summary of the derivative activity for the year ended June 30, As of June 30, 2011 rates were as follows:

2011:

Change in 2011 Water 2011 Electric Fair Value Fair Value Refunding/ Refunding/

Notional as of for Fiscal Revenue Revenue Amount 6130/11 Year Bonds Bonds Series A Series A Governmental Activities 2008 Renaissance Certificates of Participation 128,300 (14,822) 3,831 Terms Rates Rates Business-Type Activities Interest rate swap:

2008 Electric Refunding/Revenue Bonds Series A 84,515 (7,028) 1,719 Fixed payment to counterparty Fixed 3.20000% 3.20100%

2008 Electric Refunding/Revenue Bonds Series C 57,325 (5,108) 1,569 62.68 LIBOR 2011 Electric Refunding/Revenue Bonds Series A 56,450 (5,080) 1,569 Variable payment from counterparty + 12 bps (0.24207%) (0.24534%)

2011 Water Refunding/Revenue Bonds Series A 59,000 (5,448) 1,682 Net interest rate swap payments 2.95793% 2.95566%

Variable-rate bond coupon payments 0.22550% 0.14349%

Objective: In order to lower borrowing costs as compared to fixed-rate Synthetic interest rate on bonds 183Aa% 3.OLS915%

bonds, the City entered into interest rate swap agreements in connection with its $141,840 2008 Electric Revenue Bonds (Series A and C), $56,450 2011 2008 Electric 2008 Electric Electric Revenue Bonds and $59,000 2011 Water Revenue Bonds. Also, in Refunding/ Refunding/

2008, the City entered into an additional interest rate swap agreement in Revenue Revenue connection with its $128,300 2008 Certificates of Participation. Bonds Bonds Series C Series A Terms: Per the existing swap agreements, the City pays a counterparty a Terms Rates Rates fixed payment and receives a variable payment computed as 62.68% of the Interest rate swap:

London Interbank Offering Rate ("LIBOR") one month index plus 12 basis Fixed payment to counterparty Fixed 3.20400% 3.11100%

points for the Electric and Water swaps. For the COP swap, the City again 62.68 LIBOR Variable payment from counterparty + 12 bps (0.59206%) (0.58955%)

pays a fixed payment and receives a variable payment computed as 63.00% Net interest rate swap payments 2.61194% 2.52145%

of the LIBOR one month index plus 7 basis points. The swaps have notional Variable-rate bond coupon payments 0.58498% 0.58891%

amounts equal to the principal amounts stated above. The notional value of Synthetic interest rate on bonds _139692% _3M_0.36%

the swaps and the principal amounts of the associated debt decline by $975 to $7,200 until the debt is completely retired in fiscal year 2037.

COP 2008 The bonds and the related swap agreements for the 2008A Electric Revenue Bonds Bonds mature on October 1, 2029, 2008C Electric and 2011A Electric and 2011A Water Revenue/Refunding Bonds mature on October 1, 2035. The Terms Rates Interest rate swap:

2008 Certificates of Participation mature on March 1, 2037. Fixed payment to counterparty Fixed 3.36200%

63.00 LIBOR Variable payment from counterparty + 7 bps (0.57662%)

Net interest rate swap payments 2.78538%

Variable-rate bond coupon payments 0.62476%

Synthetic interest rate on bonds 34_101A%

53

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Fair Value: As of June 30, 2011, in connection with all swap arrangements, Variable-Rate Bonds the transactions had a total negative fair value of <$37,486>. Because the Fiscal Year Interest coupons on the City's variable-rate bonds adjust to changing interest rates, Ending Rate the bonds do not have a corresponding fair value decrease. The fair value June 30 Principal Interest Swaps, Net Total was developed by a pricing service using the zero-coupon method. This 2012 $ 6,450 $1,825 $ 10,511 $ 18,786 method calculates the future net settlement payments required by the swap, 2013 6,675 2,688 17,165 26,528 assuming that the current forward rates implied by the yield curve correctly 2014 6,900 2,656 16,978 26,534 anticipate future spot interest rates. These payments are then discounted 2015 8,975 2,623 16,784 28,382 using the spot rates implied by the current yield curve for hypothetical zero- 2016 16,700 2,581 16,535 35,816 coupon bonds due on the date of each future net settlement of the swap. 2017-2021 68,850 12,520 80,400 161,770 2022-2026 76,300 10,820 71,045 158,165 Credit risk: As of June 30, 2011, the City was not exposed to credit risk 2027-2031 85,415 8,497 58,921 152,833 because the swap had a negative fair value. The swap counterparties, Bank 2032-2036 98,350 5,585 43,860 147,795 of America, J.P. Morgan Chase & Co. and Merrill Lynch were rated A+, A+ 2037 7,200 45 201 7,446 and A respectively by Standard & Poor's. To mitigate the potential for credit Total $381,815 $49,840 $332,400 $764,055 risk, the swap agreements require the fair value of the swap to be collateralized by the counterparty with U.S. Government securities if the 10. Economic Contingency counterparties' rating decreases to negotiated trigger points. Collateral would be posted with a third-party custodian. At June 30, 2011, there is no A portion of unassigned fund balance within the General Fund is set aside for requirement for collateral posting for any of the outstanding swaps. future economic contingencies. The amount that has been set aside is equal to approximately 15% of General Fund expenditures.

Basis risk: As noted above, the swaps expose the City to basis risk should the relationship between LIBOR and the variable interest rate, changing the 11. Interfund Assets, Liabilities and Transfers synthetic rate on the bonds. If a change occurs that results in the rates' moving to convergence, the expected cost savings may not be realized. Due From/To Other Funds: These balances resulted from expenditures being incurred prior to receipt of the related revenue source.

Termination risk: The derivative contract uses the International Swap The following table shows amounts receivable/payable between funds within Dealers Association Master Agreement, which includes standard termination the City at June 30, 2011:

events, such as failure to pay and bankruptcy. The Schedule to the Master Receivable Fund Payable Fund Amount Agreement includes an "additional termination event." That is, a swap may General Nonmajor Governmental Funds $1,851 be terminated by the City if either counterparty's credit quality falls below Capital Outlay Fund 30,124 "BBB-" as issued by Standard and Poor's. The City or the counterparty may Nonmajor Enterprise Funds 5 terminate a swap if the other party fails to perform under the terms of the 31,980 contract. If a swap is terminated, the variable-rate bond would no longer carry a synthetic interest rate. Also, if at the time of termination a swap has a Electric Central Stores

• 43195 negative fair value, the City would be liable to the counterparty for a payment Total equal to the swap's fair value.

• Internal service fund Swap payments and associated debt: As of June 30, 2011, the debt service requirements of the variable-rate debt and net swap payments assuming current interest rates remain the same, for their term are summarized in the following table. As rates vary, variable-rate bond interest payments and net swap payments will vary.

54

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Transfers In/Out: Transfers are used to (1) move revenues to the fund that Advances To/From Other Funds: These balances consist of advances used statute or budget requires to expend them, (2) move receipts restricted to to fund capital projects in advance of related financing/assessments and for debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, (3) record the difference between the other long-term borrowing purposes.

sales price and original carrying value of capital assets transferred between The following table shows amounts advanced from funds within the City to funds, (4) transfer properties to the General Fund to be held as security for other funds within the City at June 30, 2011: advances owed by the Redevelopment Capital Project Fund, (5) use unrestricted revenues collected in the General fund to finance various Receivable Fund Payable Fund Amount programs accounted for in the other funds in accordance with budgetary General Electric $12,381 operations.

Redevelopment Capital Projects 704 Water 5,327 The following table shows amounts transferred to/from funds within the City Sewer 3,408 as of June 30, 2011:

Nonmajor Governmental Funds 578 Transfer In Fund Transfer Out Fund Amount Nonmajor Enterprise Funds 2,290 General Electric $33,070 Self-Insurance Trust

• 223 Water 5,847 Central Stores

• 234 1,055 Redevelopment Capital Project 78,896 Central Garage

• Nonmajor Governmental Funds 3 535 26,200 121,348 COPS Debt Service Fund Redevelopment Redevelopment Debt Redevelopment Capital Project 32,041 Capital Projects 7,410 Service Nonmajor Governmental Funds 3,176 Nonmajor Enterprise Funds 152 Nonmajor Governmental Redevelopment 35,369 Capital Projects 20,571 COPS Debt Service Fund General Fund 7,222 Redevelopment Capital Project 210 Redevelopment Debt Service 245 Self-Insurance Trust

• Nonmajor Enterprise Funds 1,524 Nonmajor Governmental Funds 3,460 General 435 Nonmajor Enterprise Funds 840 Nonmajor Governmental Funds 3,538 11,977 Redevelopment Capital Projects 6,478 Redevelopment Capital General Fund 108 11,975 Projects Redevelopment Debt Service 28,246 Sewer Redevelopment Capital Nonmajor Governmental Funds 1,200 Projects 18,439 29,554 Electric Redevelopment Capital Nonmajor Governmental General Fund 2,209 Projects Funds Redevelopment Capital Project 1,200 Nonmajor Governmental Funds 12,974 Total 16,383 55

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 1011 IVU" #SI itju O*Ij VQQV Q ýAUI I

t IIIUO VUQC" AOV Q1 Electric Redevelopment Capital Project1 of the defendants, the settlement has not been approved by the court and no trial date for the remainder of the case.

Water Electric 17,11II4

14. City Employees Retirement Plan Total $237,276 (A) Plan Description. The City of Riverside contributes to the California Public 1 The Electric Fund transferred capital assets with an original carrying value Employees Retirement System (CaIPERS), an agent multiple employer of $27 to the Redevelopment Capital Projects Fund for $5,558. The public employee defined benefit pension plan. CaIPERS provides retirement difference in interfund transfers at the fund level is due to the difference in and disability benefits, annual cost-of-living adjustments, and death benefits measurement focus and basis of accounting between governmental funds to plan members and beneficiaries. CalPERS acts as a common investment and proprietary funds. and administrative agent for participating public entities within the State of California. PERS issues a publicly available financial report that includes

12. Deficit Fund Balances/Net Assets financial statements and required supplementary information for the cost sharing plans that are administered by PERS. Benefit provisions and all other Deficit net assets exist in the Self-Insurance Internal Service Trust Fund requirements are established by state statute and City ordinance. Copies of

($13,554). The deficit in this fund will be primarily reduced based on a rate CalPERS annual financial report may be obtained from their executive increase implemented in the subsequent fiscal year. Management's analysis office: 400 P Street, Sacramento, CA 95814.

shows that continuing cost control together with the rate increase will eliminate these deficits over the next few years. (B) Funding Policy. For each of the fiscal years shown on the following page, the City has contributed at the actuarially determined rate provided by PERS'

13. Litigation actuaries. Participants are required to contribute 8% (9% for safety The City continues to participate in key FERC dockets impacting the City's employees) of their annual covered salary. The City makes the contributions Electric Utility, such as the California Independent System Operator's (ISO) required of City employees on their behalf and for their account. The Market Redesign and Technology Upgrade (MRTU). contribution requirements of plan members and the City are established and may be amended by CalPERS.

The Electric and Water Utilities are defendants in various lawsuits arising in (C) Annual Pension Cost. The required contribution was determined as part the normal course of business. Present lawsuits and other claims against the of the June 30, 2008 actuarial valuation using the entry age normal actuarial Electric and Water Utilities are incidental to the ordinary course of operations cost method. The actuarial assumptions included (a) 7.75% investment rate and are largely covered by the City's self-insurance program. In the opinion of return (net of administrative expenses), (b) projected salary increases of of management and the City Attorney, such claims and litigation will not have 3.25% per year compounded annually, attributable to inflation, and (c) 3.0%

a materially adverse effect upon the financial position or results of operation expected long term inflation. The actuarial value of CalPERS assets was of the City. determined using techniques that smooth the effects of short-term volatility in the market value of investments (smoothed market value). All changes in the The Water Utility is also a plaintiff in a lawsuit against the manufacturers and unfunded actuarial accrued liability due to plan amendments, changes in distributors of methyl tertiary-butyl ether (MTBE) and its by-products, and of actuarial assumptions, or changes in actuarial methodology are amortized fuel containing these chemicals, arising out of the threat to the Water Utility separately as a level percentage of pay over a closed 20-year period. All wells of contamination with those chemicals from leaking underground gains or losses are tracked and amortized over a rolling 30-year period with storage tanks. the exception of special gains and losses in fiscal years 2008-2009, 2009-The defendants removed this lawsuit to federal court and then transferred the 2010 and 2010-2011. Each of these years' gains or losses has been isolated case to the Judicial Panel on Multidistrict Litigation, New York, where it was and amortized over fixed and declining 30 year periods (as opposed to the consolidated with all other pending MTBE water contamination litigation current rolling 30 year amortization).

cases in the country. Although the City has tentatively settled with a number 56

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Three-year trend information for CalPERS: 15. Other Post-Employment Benefits Fiscal Annual Net Pension The City provides healthcare benefits to retirees in the form of an implied rate Year Pension  % of APC Obligation subsidy. Retirees and active employees are insured together as a group, June 30 Plan Cost (APC) Contributed (Asset) thus creating a lower rate for retirees than if they were insured separately.

2009 Misc $14,735 94.7% (57,548) Although the retirees are solely responsible for the cost of their health 2009 Safety 12,543 91.0% (85,909) insurance benefits through this plan, the retirees are receive the benefit of a 2010 Misc 16,463 93.8% (56,529) lower rate. The difference between these amounts is the implied rate 2010 Safety 13,949 89.0% (84,369) subsidy, which is considered an other post-employment benefit (OPEB) 2011 Misc 16,888 92.4% (55,253) under GASB 45.

2011 Safety 14,956 86.7% (82,379)

Retiree coverage terminates either when the retiree becomes covered under A total of $137,632 of net pension assets is included as a deferred charge in another employer health plan, or when the retiree reaches Medicare eligibility the Government-wide Statement of Net Assets. The deferred charge relating age, which is currently age 65. Spousal coverage is available until the retiree to the net pension assets is amortized in accordance with the method used becomes covered under another employer health plan, attains Medicare by CalPERS for calculating actuarial gains and losses over a 19-year period.

eligibility age, or dies. However, the retiree benefit continues to the surviving Determination of Net Pension Asset as of June 30, 2011: spouse if the retiree elects the CalPERS survivor annuity.

Misc Safety The contribution requirements are established by the City Council. The City Annual required contribution $ 15,612 12,966 is not required by law or contractual agreement to provide funding other than Interest on net pension asset (4,381) (6,539) the pay-as-you-go amount necessary to provide current benefits to eligible Adjustment to annual required contribution 5,657 8,529 retirees and beneficiaries.

Annual pension cost 16,888 14,956 Less contributions made (15.612) (12,966) The City's annual OPEB cost (expense) is reported based on the annual Decrease in net pension asset 1,276 1,990 required contribution of the employer (ARC), an amount actuarially Net pension asset, beginning of year (56,529) (84,369) determined in accordance with GASB 45. The ARC represents a level of Net pension asset, end of year funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liability (or funding excess)

Schedule of funding for CalPERS: (UAAL) over a period not to exceed thirty years. The ARC for the year ended Entry June 30, 2011 was $5,617, which consisted of normal cost of $2,852 and Age Unfunded/ UAAL amortization of $2,765. The ARC as a percentage of payroll was 3%

Normal (Overfunded)

Actuarial Actuarial UAAL as for the year ended June 30, 2011.

Actuarial Accrued Actuarial Accrued Annual a % of Valuation Liability Value of Liability Funded C overed Covered As of June 30, 2009, the most recent actuarial valuation date, the OPEB plan Plan Date (AAL) Assets (UAAL) Ratio Payroll Payroll was 0.0% funded. The actuarial accrued liability for benefits was $54.9 Misc. 6/30/08 $779,481 $ 48,870 94.1 $110,870 million, and the actuarial value of assets was $0, resulting in an unfunded

$828,351 44.1 Misc. 6/30/09 921,349 810,929 110,420 88.0 110,318 100.1 actuarial accrued liability (UAAL) of $54.9 million.

Misc. 6/30/10* 952,499 846,368 106,131 88.9 106,590 99.6 Safety 6/30/08 608,192 570,661 37,531 93.8 63,966 58.7 Safety 6/30/09 660,742 595,018 65,724 90.1 63,924 102.8 Safety 6/30/10* 685,213 621,107 64,106 90.6 61,778 103.8

• Information presented is for the most recent valuation date available.

57

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands)

Determination of the Net OPEB Obligation as of June 30, 2011: 16. Commitments and Contingencies Annual required contribution $ 5,617 A. Long-Term Electric Utility Commitments Interest on net OPEB obligation 443 Amortization of net OPEB obligation (746) Intermountain Power Agency Annual benefit pension cost 5,314 Less contributions made (1,734) The Electric Utility has entered into a power purchase contract with Increase in net OPEB obligation 3,580 Intermountain Power Agency (IPA) for the delivery of electric power. The Net OPEB liability, beginning of year 9$853 Electric Utility's share of IPA power is equal to 7.6 percent, or approximately Net OPEB liability, end of year $13-433 137.1 MW, of the net generation output of IPA's 1,800 MW coal-fueled generating station located in central Utah. The contract expires in 2027 and Actuarial valuations involve estimates of the value of reported amounts and the debt fully matures in 2024.

assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plan and the annual required The contract constitutes an obligation of the Electric Utility to make payments contributions of the employer are subject to continual revision as actual solely from operating revenues. The power purchase contract requires the results are compared to past expectations and new estimates are made Electric Utility to pay certain minimum charges that are based on debt service about the future. The method used by the actuary was the entry age normal requirements. Such payments are considered a cost of production.

cost method. The actuarial assumptions included (a) discount rate of 4.50%,

(b) 3% inflation, (c) projected salary increases of 3.25% annually and (d) Southern California Public Power Authority healthcare cost trend rates ranging from 4.5% to 9.4%.

On November 1, 1980, the City of Riverside joined with the Imperial Irrigation Projections of benefits are based on the substantive plan (the plan as District and the cities of Los Angeles, Anaheim, Vernon, Azusa, Banning, understood by the employer and plan members) and include the types of Colton, Burbank, Glendale and Pasadena to create the Southern California benefits in force at the valuation date and the pattern of sharing benefit costs Public Power Authority (SCPPA) by a Joint Powers Agreement under the between the city and the plan members to that point. Actuarial calculations laws of the State of California. As of July 2001, the City of Cerritos was reflect a long-term perspective and employ methods and assumptions that admitted as a member. The primary purpose of SCPPA is to plan, finance, are designed to reduce short-term volatility in actuarial accrued liabilities and develop, acquire, construct, operate and maintain projects for the generation the actuarial value of assets. and transmission of electric energy for sale to its participants. SCPPA is governed by a Board of Directors, which consists of one representative for Three-year trend information: each of the members. During the 2010-11 and 2009-10 fiscal years, the Electric Utility paid approximately $18,725 and $15,151, respectively, to Fiscal Year Actual  % of ARC SCPPA under various take-or-pay contracts. These payments are reflected June 30, ARC Contributions Contributed as a component of production and purchased power or transmission expense in the financial statements.

2009 $4,386 $1,290 29%

2010 5,291 1,440 27% The projects and the Electric Utility's proportionate share of SCPPA's 2011 5,617 1,734 31% obligations, including final maturities and contract expirations are as follows:

Fiscal Year Annual  % of OPEB Cost Net OPEB Project Percent Share Entitlement June 30, OPEB Cost Contributed Obligation Palo Verde Nuclear Generating Station (PV) 5.40% 12.3MW Southern Transmission System (STS) 10.20% 244.0MW 2009 $4,386 29% 6,192 Hoover Dam Uprating (Hoover) 31.90% 30.0MW 2010 5,101 28% 9,853 Mead - Phoenix Transmission (MPP) 4.00% 18.0MW 2011 5,314 33% 13,433 Mead - Adelanto Transmission (MAT) 13.50% 118.0MW 58

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 t~~~ll IC21I IVU"

~I'.JI Itka WAU1 O C Vaaý "

ILIIJO VU00" Il AAJ 01 Terms of Take or Pay Commitments payment schedule as debt service and vary each year. The costs incurred for the year ended June 30, 2011 and 2010, are as follows (in thousands):

As part of the take-or-pay commitments with IPA and SCPPA, the Electric Utility has agreed to pay its share of current and long-term obligations. Fiscal Year IPA Pv STS MAT MPP Hoover Total Management intends to pay these obligations from operating revenues 2011 $29,530 $2,792 $2,460 $ 298 $ 43 $ 100 $35,223 2010 $27,458 $2,991 $1,779 $ 265 $ 40 $ 68 $32,601 received during the year that payment is due. A long-term obligation has not been recorded on the accompanying financial statements for these These costs are included in production and purchased power or transmission commitments. Take-or-pay commitments terminate upon the later of contract expense on the Statements of Revenues, Expenses and Changes in Equity.

expiration or final maturity of outstanding bonds for each project.

B. Other Commitments Interest rates on the outstanding debt associated with the take-or-pay obligations range from variable rates from 0.03 percent to 3.00 percent and Power Purchase Agreements:

fixed rates from 1.0 percent to 6.38 percent. The schedule below details the amount of principal and interest that is due and payable by the Electric Utility The Electric Utility executed two firm power purchase agreements with as part of the take-or-pay contract for each project in the fiscal year Bonneville Power Administration (BPA). The first agreement with BPA was indicated. for the purchase of firm capacity (23 megawatts in the summer months and 16 megawatts in the winter months) beginning February 1, 1991, for a period SCPPA Fiscal of 20 years. This agreement terminated on March 3, 2011. The second BPA Year IPA PV STS Hoover MPP MAT Total agreement is for the purchase of capacity (50 megawatts during the summer months and 13 megawatts during the winter months) beginning April 30, 2011 $22,118 $ 666 $ 4,680 $ 706 $ 318 $ 3,090 $ 31,578 1996, for 20 years. Effective May 1, 1998, these summer and winter capacity 2012 20,017 669 9,478 704 318 3,087 34,273 2013 22,712 672 8,544 705 318 3,092 36,043 amounts increased to 60 megawatts and 15 megawatts, respectively, for the 2014 21,154 676 8,565 703 266 3,064 34,428 remainder of the second agreement.

2015 23,942 680 8,595 702 273 3,061 37,253 Thereafter 1,369 81,235 1,399 1,287 14,528 218,356 118,538 W228"48 2 922 The Electric Utility had an agreement with Deseret for five megawatts of Total capacity and associated energy from January 1, 1992, through December 31, 1994, then increasing to 52 megawatts of capacity and associated Take-or-pay commitments expire upon final maturity of outstanding bonds for energy through December 31, 2009. A notice of termination of the power each project. Final fiscal year maturities are as follows: purchase agreement was provided to Deseret effective March 31, 1998, resulting in litigation which was settled on July 31, 1999. Under the terms of Project Final Maturity Date the settlement agreement, the notice of termination was rescinded and the Intermountain Power Project 2024 power purchase agreement was amended to reflect substantial price Palo Verde Nuclear Generating System 2017 reductions after fiscal year 2002 through the term of the agreement in 2009.

Southern Transmission System 2027 In exchange, Riverside Public Utilities paid Deseret $25,000 from Electric Hoover Dam Upgrading 2017 fund reserves, which is reflected on the balance sheets as deferred Mead-Phoenix Transmission 2020 purchased power. On July 1, 2002, the Electric Utility began to amortize the Mead-Adelanto Transmission 2020 $25,000, and will continue to amortize the remaining balance over the term of the agreement using the straight-line method.

In addition to debt service, Riverside's entitlements require the payment of fuel costs, operating and maintenance, administrative and general and other On June 6, 2003 and July 8, 2003, the Public Utilities Board and the City miscellaneous costs associated with the generation and transmission Council respectively, adopted a RPS to increase procurement of renewable facilities discussed above. These costs do not have a similar structured resources to reach a target of 20% of the Utility's energy by 2015. On March 59

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands) 16, 2007, the Public Utilities Board approved a new RPS, increasing the meltdown in the financial markets. In November 2010, the City entered into targets to 20% and 25% by 2010 and 2015, respectively. On May 4, 2007, the Amended and Restated PPA I and terminated PPA II. The Amended and the Public Utilities added an additional target of 33% by 2020. Restated PPA I reduced the geothermal power deliveries from 64 MW to 46 MW with the new commercial operation date extended to April 1, 2014.

The contracts in the following table were executed as part of compliance with Measurable milestone dates and enforceable agreement termination "off-this standard. The Utility also has an agreement with Bonneville Power ramps" for the City were built into this agreement to allow the City the Administration for the purchase of energy credits that add to the total unilateral ability to terminate the Amended and Restated PPA I. On February renewable portfolio. 15, 2011 Shoshone Renaissance failed the first milestone as established in the Amended and Restated PPA I. The City notified Shoshone Renaissance Long-term renewable power purchase agreements: in March 2011 of the City's intent to terminate the Amended and Restated Estimated PPA I by April 1, 2011 and provided an opportunity to Shoshone Maximum Contract Annual Cost Renaissance to cure its failure to reach the first milestone. However, Supplier Type Contract Expiration for 2011 Shoshone Renaissance failed to provide evidence to cure its default by April Wintec Wind 8.0MW 11/10/2021 $ 198 1, 2011. Thus, the City provided the final termination notice to Shoshone Salton Sea Power Geothermal 46.0MW 5/31/2020 21,139 Total 54.0MW S21.337 Renaissance and the Amended and Restated PPA I was terminated on April 1,2011.

All contracts are contingent on energy production from specific related generating facilities. Riverside has no commitment to pay any amounts Construction Commitments:

except for energy produced on a monthly basis from these facilities.

As of June 30, 2011, the Electric Utility had major commitments of On August 23, 2005, the City Council approved an amendment to the Power approximately $19,290, with respect to unfinished capital projects, of which Purchase Agreement between Salton Sea and the City. The agreement $17,248 is expected to be funded by bonds and $2,042 funded by rates.

increases the amount of renewable energy available to the City from the current 20 MW to 46 MW effective June 1, 2009 through May 31, 2020, at As of June 30, 2011, the Water Utility had major commitments of the same price under the current contract until 2013, with escalation approximately $15,709 with respect to unfinished capital projects which is thereafter based on an inflationary type index. Similar to other renewable expected to be funded by bonds.

power purchase agreements, the City is only obligated for purchases of C. Jointly-Owned Utility Project energy delivered to the City.

Pursuant to a settlement agreement with SCE, dated August 4, 1972, the On November 10, 2006, the City of Riverside entered into a second City was granted the right to acquire a 1.79 percent ownership interest in San Renewable Power Purchase Agreement with Wintec Energy, Ltd for wind Onofre Nuclear Generating Station (SONGS), Units 2 and 3, equating to 19.2 generation capacity of up to 8 MW. The contract term is for 15 years, with MW and 19.3 MW respectively, of the available capacity. In the settlement additional capacity available upon completion of Wintec's Facility II Wind agreement, SCE agreed to provide the necessary transmission service to Turbine Project. The developer is encountering challenges in finding suitable deliver the output of SONGS to Riverside. SCE and the City entered into the wind turbines to complete the project and the project is expected to continue SONGS Participation Agreement that sets forth the terms and conditions to be delayed. under which the City, through the Electric Utility, participates in the ownership and output of SONGS. Other participants in this project include SCE, 75.05 On June 19, 2008, and December 12, 2008, respectively the City of percent; San Diego Gas & Electric Company, 20.00 percent; and the City of Riverside entered into two separate Renewable Power Purchase Anaheim, 3.16 percent. Maintenance and operation of SONGS remain the Agreements with Shoshone Renaissance, LLC (Renaissance). The contract responsibility of SCE, as operating agent for the City.

term for each agreement is 30 years, and provides a combined 96 megawatts of geothermal energy. Like the majority of renewable projects, During 2006, the FERC, Nuclear Regulatory Commission and the California Renaissance continues to experience difficulty securing financing due to the Public Utility Commission (CPUC) approved the transfer of Anaheim's shares 60

CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2011 (amounts expressed in thousands) to SCE, and as a result, SCE's ownership was increased to 78.21 percent in plus earnings on the Decommissioning Trust Fund of $2,836 and $2,898 for SONGS units 2 and 3. fiscal years June 30, 2011 and June 30, 2010, respectively. The Electric Utility's portion of current and long-term debt associated with SONGS is The original operating license for SONGS units 2 and 3 was set to expire in included in the accompanying financial statements.

2013; however, this was subsequently extended due to a construction recapture provision, and now expires February 16, 2022 and November 15, 17. State Assembly Bills lX 26 and 27 2022 for Units 2 and 3 respectively. During fiscal year ended June 30, 2006, the City Council approved participation in SONGS through the extended On June 29, 2011 Governor Brown signed Assembly Bills 1X 26 and 27 as operations date. It has been reported that SCE is pursuing a license part of the State's budget package. Assembly Bill 1X 26 requires that extension from the Nuclear Regulatory Commission ("NRC") to continue California redevelopment agencies immediately suspend activities and only operations through 2042, although the City has not approved its participation allows activity to meet existing obligations, preserve its assets and prepare in the project through the extended term. for potential dissolution of the agency. Assembly Bill 1X 27 provides a means for redevelopment agencies to continue to exist and operate via a SCE, as operating agent, declared an "operating impairment" due to Voluntary Alternative Redevelopment Program by adopting an ordinance deterioration of the steam generators ("SGs"), which would have likely agreeing to make certain payments to help alleviate the State budget crisis in resulted in permanent shutdown of the plant in 2009-2010 timeframe. The fiscal year 2011-12 and annual payments each fiscal year thereafter.

estimated cost to replace the steam generators (SGs) is $680,000, of which approximately $12,200 would represent the City's share. Replacement of the The League of California Cities and the California Redevelopment SGs is expected to enable plant operations through at least 2022, and Association (CRA) filed a lawsuit on July 18, 2011 on behalf of cities, perhaps beyond if NRC approval is obtained. The City Council has approved counties and redevelopment agencies petitioning the California Supreme participation in the replacement of the SGs. The SG replacement for SONGS Court to overturn Assembly Bills 1X 26 and 27 on the grounds that they Unit 2 was completed in April 2010 and the SG replacement for Unit 3 was violate the California Constitution. On August 11, 2011, the California completed in February 2011. Supreme Court issued a stay of all of Assembly Bill 1X 27 and most of Assembly Bill 1X 26. The California Supreme Court stated in its order that Due to the Fukushima nuclear power plant crisis in Japan early this year, "the briefing schedule is designed to facilitate oral argument as early as NRC has instituted a comprehensive review of disaster preparedness of all possible in 2011, and a decision before January 15, 2012."

nuclear power plants currently in operation in the U.S. SONGS has participated and is continuing to participate in this comprehensive disaster On August 9, 2011, Ordinance No. 7138 was adopted, indicating that the preparedness assessment effort. The ultimate outcome of this assessment agency will comply with the Voluntary Alternative Redevelopment Program in is currently undetermined. order to permit the continued existence and operation of the agency, in the event Assembly Bills 1X 26 and/or 27 are upheld as constitutional. The initial There are no separate financial statements for the jointly-owned utility plant payment by the agency is estimated to be $19.6 million with one half due on since each participant's interests in the utility plant and operating expenses January 15, 2012 and the other half due May 15, 2012. Thereafter, an are included in their respective financial statements. The Electric Utility's 1.79 estimated $4.6M will be due annually. The semi-annual payments will be percent share of the capitalized construction costs for SONGS totaled due on January 15 and May 15 of each year and would increase or decrease

$159,907 and $152,586 for fiscal years ended June 30, 2011 and 2010, with changes in tax increment. Additionally, an increased amount would be respectively. due to schools if any new debt is incurred. Assembly Bill 1X 27 allows a one-year reprieve on the agency's obligation to contribute 20% of tax increment All acquisitions or construction of capital assets are depreciated through to the low-and-moderate-income housing fund so as to permit the agency to 2022, to include the construction recapture extension period. The assemble sufficient funds to make its initial payments.

accumulated depreciation amounted to $133,260 and $126,837 for the fiscal years ended June 30, 2011 and 2010, respectively. The Electric Utility made provisions for future decommissioning costs of $1,581 for both fiscal years 61

mE -

-I 9zz-_

Nonmajor Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes.

Urban Areas Security Initiative (UASI) Fund - To account for UASI grants received from the U.S. Department of Homeland Security.

Special Gas Tax Fund - To account for the construction and maintenance of the road network system of the City. Financing is provided by the City's share of state gasoline taxes which state law requires to be used to maintain streets.

Air Quality Improvement Fund - To account for qualified air pollution reduction programs funded by the South Coast Air Quality Management District.

Housing and Community Development Fund - To account for Federal grants received from the Department of Housing and Urban Development (HUD). The grants are used for the development of a viable urban community by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons with low and moderate incomes.

Redevelopment Agency Fund - To account for the portion of Redevelopment tax increment monies which California Redevelopment Law requires be set aside for the development of low and moderate income housing.

National Pollution Discharge Elimination System (NPDES) - To account for storm drain maintenance and inspection required for California storm water permits. Activities are funded by a special assessment district of Riverside County, California.

Neglected Property Abatement Fund - To account for revenues and expenditures associated with the neglected property abatement activities of the Code Enforcement Division of the Community Development Department.

Housing Authority Fund - To account for revenues and expenditures associated with housing activities for persons with low or moderate income.

Capital Projects Funds Capital Projects Funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.

Special Capital Improvements Fund - To account for the acquisition, construction and installation of capital improvements and a Community Facilities District within the City.

Storm Drain Fund - To account for the acquisition, construction and installation of storm drains in the City.

Transportation Fund - To account for the construction and installation of street and highway improvements in accordance with Articles 3 and 8 of the Transportation Development Act of 1971 of the State of California.

Permanent Fund Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs.

Library Special Fund - To account for the monies held in trust for the benefit of the Riverside City Public Library System.

City of Riverside Combining Balance Sheet Nonmajor Governmental Funds June 30, 2011 (amounts expressed in thousands)

Special Revenue Housing &

Urban Areas Security Air Quality Community Redevelopment Neglected Property Assets Initiative Gas Tax Improvements Development Agency NPDES Storm Drain Abatement Cash and investments $ $ 13,050 $ 610 $ 68 $ 11,469 $ $

Cash and investments at fiscal agent - - - 192 Receivable (net of allowance for uncollectibles):

Interest 104 4 112 Accounts 14 Intergovernmental 725 205 2,499 228 Notes 6,864 15,870 Advances to other funds 20,571 Land & improvements held for resale - - 1,677 -

Total assets $ 725 $ 13,359 $ 616 $ 11,126 $ 48,214 $ 229 $

Liabilities and fund balances Liabilities:

Accounts payable $ 32 $ 143 $ 11 $ 588 $ 172 $ 2 $

Accrued payroll 25 Retainage payable 898 49 Deferred revenue 8,541 15,823 Deposits 26 Due to other funds 693 931 227 Advance from other funds - - 578 -

Total liabilities 725 1,041 11 10,712 16,021 229 Fund balances Restricted for:

Housing and redevelopment 414 32,193 Transportation and public works 12,318 605 -

Total fund balances - 12,318 605 414 32,193 Total liabilities and fund balances $ 725 $ 13,359 $ 616 $ 11,126 $ 48,214 $ 229 63

City of Riverside Combining Balance Sheet Nonmajor Governmental Funds June 30, 2011 (amounts expressed in thousands)

Permanent Special Revenue Capital Projects Fund Total Nonmajor Housing Special Capital Governmental Assets Authority Total Improvement Storm Drain Transportation Total Library Special Funds Cash and investments $ 232 $ 25,429 $ 2,103 $ 4,326 $ 41 $ 6,470 $1,625 $ 33,524 Cash and investments at fiscal agent 192 2,399 - - 2,399 - 2,591 Receivable (net of allowance for uncollectibles):

Interest 8 235 22 32 54 289 Property taxes Accounts 14 277 - 277 291 Intergovernmental 3,657 - 103 103 3,760 Notes 22,734 - - 22,734 Advances to other funds - 20,571 - 20,571 Land & improvements held for resale 11,853 13,530 - - - - 13,530 Total assets $ 12,093 $ 86,362 $ 4,801 $ 4,358 $ 144 $ 9,303 $ 1,625 $ 97,290 Liabilities and fund balances Liabilities:

Accounts payable $ 12 $ 960 $ 24 $ 365 $ - $ 389 $ - $ 1,349 Accrued payroll 25 - - - - 25 Retainage payable 947 158 - - 158 - 1,105 Deferred revenue - 24,364 - 1 115 116 - 24,480 Deposits 10 36 - - - - 36 Due to other funds - 1,851 - - - 1,851 Advance from other funds - 578 3,538 3,538 - 4,116 Total liabilities 22 28,761 3,720 366 115 4,201 - 32,962 Fund balances Nonspendable:

Permanent fund principal 1,625 1,625 Restricted for:

Housing and redevelopment 12,071 44,678 - - 44,678 Transportation and public works 12,923 - - 29 29 - 12,952 Other purposes - 1,081 3,992 - 5,073 - 5,073 Total fund balances 12,071 57,601 1,081 3,992 29 5,102 1,625 64,328 Total liabilities and fund balances $ 12,093 $ 86,362 $ 4,801 $ 4,358 $ 144 $ 9,303 $ 1,625 $ 97,290 64

City of Riverside Combining Statement of Revenue, Expenditures, and Changes In Fund Balances Nonmajor Governmental Funds For the fiscal year ended June 30, 2011 (amounts expressed In thousands)

Special Revenue Housing &

Urban Area Security Air Quality Community Redevelopment Neglected Property initiative Gas Tax Improvement Development Agency NPDES Storm Drain Abatement Revenues Taxes $ 72 $ 35 $ 89 $ 11,163 $

Intergovernmental 2,374 7,253 352 8,951 Charges for services 33 Fines and forfeitures 3,684 Special assessments 228 421 Rental and investment income 325 18 33 16 Miscellaneous - 151 3,725 220 - -

Total revenues 2,374 7,578 521 12,709 11,399 228 4,138 Expenditures Current:

General government 603 955 1,866 3,530 Public Safety 2,374 Capital outlay 6,414 10,946 3,693 228 Debt service:

Principal S- - - 9,100 Total expenditures 2,374 6,414 603 11,901 14,659 228 3,530 Excess (deficiency) of revenues over (under) expenditures 1,164 (82) 808 (3,260) 608 Other financing sources (uses)

Transfers in 1,474 Transfers out (14,676) (3,530)

Proceeds from Issuance of long-term debt 9,100 Sales of capital assets 197 Total other financing sources (uses) - - - (3,905) (3,530)

Net change in fund balances 1,164 (82) 808 (7,165) (2,922)

Fund balances - beginning 11,154 687 (394) 39,358 2,922 Fund balances - ending $ $ 12,318 $ 605 $ 414 $ 32,193 $ $

65

City of Riverside Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Permanent Special Revenue Capital Prolects Fund Total Nonmajor Housing Special Capital Library Governmental Authority Total Improvement Storm Drain Transportation Total Special Funds Revenues Taxes $ $ 11,163 $ - $ - $ $ - $ - $ 11,163 Licenses and permits - 852 88 940 - 940 Intergovernmental 18,930 - - 39 39 - 18,969 Charges for services 33 - - - - - 33 Fines and forfeitures 3,684 - - - - 3,684 Special assessments 649 - - - - - 649 Rental and investment income 34 426 - 94 - 94 52 572 Miscellaneous - 4,096 - - - 89 4,185 Total revenues 34 38,981 852 182 39 1,073 141 40,195 Expenditures Current:

General government 12 6,966 244 100 344 7,310 Public Safety 2,374 2,374 Culture and recreation 137 137 Capital outlay 1,624 22,905 3,656 892 128 4,676 27,581 Debt service:

Principal - 9,100 - - - - - 9,100 Total expenditures 1,636 41,345 3,900 992 128 5,020 137 46,502 Excess (deficiency) of revenues over (under) expenditures (1,602) (2,364) (3,048) (810) (89) (3,947) 4 (6,307)

Other financing sources (uses)

Transfers in 14,909 16,383 - - - 16,383 Transfers out (2,674) (20,880) (3,465) (3,465) (24,345)

Proceeds from Issuance of long-term debt - 9,100 9,100 Sales of capital assets (88) 109 109 Total other financing sources (uses) 12,147 4,712 (3,465) - - (3,465) - 1,247 Net change in fund balances 10,545 2,348 (6,513) (810) (89) (7,412) 4 (5,060)

Fund balances - beginning 1,526 55,253 7,594 4,802 118 12,514 1,621 69,388 Fund balances - ending $ 12,071 $ 57,601 $ 1,081 $ 3,992 $ 29 $ 5,102 $ 1,625 $ 64,328 66

City of Riverside Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Nonmajor Governmental Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Special Revenue Urban Area Security Initiative Gas Tax Air Quality Improvement Variance Variance Variance Final to Final Final to Final Final to Final Budget Actual Budget Budget Actual Budget Budget Actual Budget Revenues Taxes $ $ $ $ $ $ - $ $

Intergovernmental 9,696 2,374 (7,322) 7,568 7,253 (315) 330 352 22 Licenses and permits Charges for services Fines and forfeitures Special assessments Rental and investment income 150 325 175 18 18 Miscellaneous 131 151 20 Total revenues 9,696 2,374 (7,322) 7,718 7,578 (140) 461 521 60 Expenditures Current:

General government 9,785 2,374 7,411 1,003 603 400 Culture and recreation Capital outlay 18,499 6,414 12,085 Total expenditures 9,785 2,374 7,411 18,499 6,414 12,085 1,003 603 400 Excess (deficiency) of revenues over (under) expenditures (89) 89 (10,781) 1,164 11,945 (542) (82) 460 Other financing sources (uses)

Transfers in Transfers out Sale of capital assets Total other financing sources Net change in fund balances (89) 89 (10,781) 1,164 11,945 (542) (82) 460 Fund balances (deficit), beginning 11,154 11,154 687 687 Fund balances (deficit), ending $ (89) $ $ 89 $ 373 $ 12,318 $ 11,945 $ 145 $ 605 $ 460 (continued) 67

City of Riverside Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Nonmajor Governmental Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Special Revenue Housing & Community Development Redevelopment Agency NPDES Storm Drain Variance Variance Variance Final to Final Final to Final Final to Final Budget Actual Budget Budget Actual Budget Budget Actual Budget Revenues Taxes $ $ $ $ 9,586 $ 11,163 $ 1,577 $ - $ - $

Intergovernmental 7,692 8,951 1,259 Licenses and permits Charges for services Fines and forfeitures Special assessments 399 228 (171)

Rental and investment income 25 33 8 214 16 (198)

Miscellaneous 390 3,725 3,335 5 220 215 Total revenues 8,107 12,709 4,602 9,805 11,399 1,594 399 228 (171)

Expenditures Current:

General government 959 955 4 33,119 1,866 31,253 Culture and recreation Capital outlay 25,562 10,946 14,616 8,426 3,693 4,733 434 228 206 Debt service Principal 9,100 9,100 Total expenditures 26,521 11,901 14,620 50,645 14,659 35,986 434 228 206 Excess (deficiency) of revenues over (under) expenditures (18,414) 808 19,222 (40,840) (3,260) 37,580 (35) - 35 Other financing sources (uses)

Transfers in 1,474 1,474 Transfers out - - - (14,840) (14,676) 164 Proceeds from issuance of long-term debt - - -9,100 9,100 Sale of capital assets 197 197 Total other financing sources - - - (5,740) (3,905) 1,835 Net change in fund balances (18,414) 808 19,222 (46,580) (7,165) 39,415 (35) 35 Fund balances (deficit), beginning (394) (394) 39,358 39,358 Fund balances (deficit), ending $ (18,808) $ 414 $ 19,222 $ (7,222) $ 32,193 $ 39,415 $ (35) $ $ 35 (continued) 68

City of Riverside Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Nonmajor Governmental Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Special Revenue Capital Projects Neglected Property Abatement Housing Authority Capital Outlay Redevelopment Variance Variance Variance Variance Final to Final Final to Final Final to Final Final to Final Budget Actual Budget Budget Actual Budget Budget Actual Budget Budget Actual Budget Revenues Taxes $ $ 8, $ 37$ -0$ ( $

Intergovernmental 85,402 30,720 (54,682) 769 89 (680)

Licenses end permits Charges for services 33 33 Fines and forfeitures 3,000 3,684 684 Special assessments 500 421 (79) 35 315 280 Rental and investment income 34 34 175 450 275 809 2,445 1,636 Miscellaneous 2.100 1,911 (189) 23 3,406 3,383 Total revenues 3,500 4,138 638 34 34 87.712 33.396 (54,316) 1,601 5,940 4,339 Expenditures Current:

General government 3,867 3,530 337 1,817 12 1,805 13,366 8,983 4,383 Culture and recreation 15.393 18,848 (3.455)

Capital outlay 1,624 (1,624) 101,545 40,780 60,765 127,390 35,711 91.679 Debt service Principal Interest

- 990 (990)

Total expenditures 3,867 3,530 337 1,817 1,636 181 101,545 40,780 60,765 156,149 64,532 91,617 Excess (deficiency) of revenues over (under) expenditures (367) 608 975 (1,817) (1,602) 215 (13,833) (7,384) 6,449 (154.548) (58,592) 95,956 Other financing sources (uses)

Transfers in 14,559 14,909 350 21,952 29,554 7,602 Transfers out (3,530) (3,530) (1,200) (2,674) (1,474) (117,365) (117,905) (540)

Proceeds from issuance of long-term debt 65,000 65,000 Sale of capital assets -- - -(88) (88)-- - (3,657) (3,657)

Total other financing sources - (3,530) (3,530) 13,359 12,147 (1,212) ..-............... (30,413) (27,008) 3.405 Net change in fund balances (367) (2,922) (2,555) 11,542 10,545 (997) (13,833) (7,384) 6,449 (184,961) (85,600) 99,361 Fund balances (deficit), beginning 2,922 2,922 1,526 1,526 - 20,891 20,891 - 13,494 137,494 124,000 Fund balances (deficit), ending $ 2,555 $ $ (2,555) $ 13,068 $ 12,071 $ (997) $ 7,058 $ 13,507 $ 6.449 $ (171.467) $ 51,894 $ 223,361 (continued) 69

City of Riverside Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Nonmajor Governmental Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Capital Projects Special Capital Improvement Storm Drain Transportation Variance Variance Variance Final to Final Final to Final Final to Final Budget Actual Budget Budget Actual Budget Budget Actual Budget Revenues Taxes $ - $ $ $ $6 $ $ $

Intergovernmental 449 39 (410)

Licenses and permits 852 852 65 88 23 Charges for services Fines and forfeitures Special assessments Rental and investment income 60 94 34 Miscellaneous Total revenues 852 852 125 182 57 449 39 (410)

Expenditures Current:

General government 549 244 305 100 100 Culture and recreation Capital outlay 7,861 3,656 4,205 3,732 892 2,840 539 128 411 Debt service Principal Interest Total expenditures 8,410 3,900 4,510 3,832 992 2,840 539 128 411 Excess (deficiency) of revenues over (under) expenditures (8,410) (3,048) 5,362 (3,707) (810) 2,897 (90) (89) 1 Other financing sources (uses)

Transfers in Transfers out (3,465) (3,465)

Sale of capital assets Total other financing sources (3,465) (3,465)

Net change in fund balances (11,875) (6,513) 5,362 (3,707) (810) 2,897 (90) (89)

Fund balances (deficit), beginning 7,594 7,594 4,802 4,802 118 118 Fund balances (deficit), ending $ (4,281) $ 1,081 $ 5,362 $ 1,095 $ 3,992 $ 2,897 $ 28 $ 29 $ 1 70

Nonmajor Enterprise Funds Enterprise Funds are used to account for the operations that are financed and operated in a manner similar to private business enterprises. The City's intent is to demonstrate that the cost of services provided to the general public on a continuing basis is financed or recovered through user charges; or the City has decided that the periodic determination of net income is appropriate for accountability purposes.

Airport Fund - To account for the operations of the City's airport.

Refuse Fund - To account for the operations of the City's solid waste and sanitation program which provides for the collection and disposal of solid waste on a user charge basis to residents and businesses.

Transportation - To account for the operations of the City's Senior Citizens' and Handicapped Transportation System in accordance with Article 4 of the Transportation Development Act of 1971 (SB325) of the State of California. Federal Transit Administration Funds are also accounted for in this fund.

Public Parking - To account for the operations and construction of the City's public parking facilities.

City of Riverside Combining Statement of Net Assets Nonmajor Enterprise Funds June 30, 2011 (amounts expressed in thousands)

Assets Airport Refuse Transportation Public Parking Total Current assets:

Cash and investments $ 2 $ 1,378 $ 1,167 $ 2,610 $ 5,157 Receivables (net of allowance for uncollectibles)

Interest 30 9 32 71 Utility billed 619 619 Utility unbilled 580 580 Accounts 106 198 9 56 369 Intergovernmental 639 59 698 Restricted assets:

Cash and cash equivalents 2,247 2,247

- 2,24715,547 Cash and investments at fiscal agent 15,547 Total current assets 108 5,052 1,824 18,304 25,288 Non-current assets:

Deferred charges - other 238 9,014 624 175 10,051 Capital assets:

Land 9,988 3,713 13,701 Buildings 2,114 22 13,879 16,015 Accumulated depreciation-buildings (1,062) (9) (3,181) (4,252)

Improvements other than buildings 18,032 47 5,915 23,994 Accumulated depreciation-improvements other than buildings (4,779) (4) (774) (5,557)

Machinery and equipment 412 11,687 3,954 1,682 17,735 Accumulated depreciation-machinery and equipment (217) (7,303) (2,080) (1,001) (10,601)

Construction in progress 1,077 191 10,295 11,563 Total non-current assets: 25,803 13,398 2,745 30,703 72,649 Total assets 25,911 18,450 4,569 49,007 97,937 (continued) 71

City of Riverside Combining Statement of Net Assets Nonmajor Enterprise Funds June 30, 2011 (amounts expressed in thousands)

Liabilities Airport Refuse Transportation Public Parking Total Current liabilities:

Accounts payable 111 692 21 692 1,516 Accrued payroll 49 592 118 87 846 Unearned revenue 1,656 1,656 Due to other funds 5 5 Capital leases-current 7 7 Notes-current 807 807 Landfill capping-current 200 200 Other payables 46 419 192 82 739 Total current liabilities 211 1,903 1,994 1,668 5,776 Non-current liabilities:

Notes payables 23,801 23,801 Capital leases 22 22 Advances from other funds 233 1,273 612 1,696 3,814 Landfill capping 6,715 6,715 Total non-current liabilities 233 7,988 634 25,497 34,352 Total liabilities 444 9,891 2,628 27,165 40,128 Net Assets Invested in capital assets, net of related debt 25,565 4,384 2,092 21,467 53,508 Restricted for landfill capping 2,247 2,247 Unrestricted (98) 1,928 (151) 375 2,054 Total net assets $ 25,467 $ 8,559 $ 1,941 $ 21,842 $ 57,809 72

City of Riverside Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Nonmajor Enterprise Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Airport Refuse Transportation Public Parking Total Operating revenues:

Charges for services $ 1,342 $ 19,134 $ 344 $ 5,205 $ 26,025 Operating expenses:

Personnel services 718 4,360 1,917 1,077 8,072 Contractual services 59 3,825 18 1,142 5,044 Maintenance and operation 276 5,471 447 472 6,666 General 237 3,660 313 102 4,312 Materials and supplies 366 793 173 8 1,340 Insurance 29 105 46 86 266 Depreciation and amortization 619 1,795 561 866 3,841 Total operating expenses 2,304 20,009 3,475 3,753 29,541 Operating Income (loss) (962) (875) (3,131) 1,452 (3,516)

Nonoperating revenues (expenses):

Operating grants 2,159 2,159 Interest income 85 2 15 102 Other 117 200 74 664 1,055 Gain/loss on retirement of capital assets 2 2 4 Interest expense and fiscal charges (16) (37) (18) (648) (719)

Total non-operating revenues 101 250 2,219 31 2,601 Income before capital contributions and transfers (861) (625) (912) 1,483 (915)

Cash capital contributions 714 714 Noncash capital contributions 10 10 Transfers out - - - (992) (992)

Change in net assets (861) (625) (198) 501 (1,183)

Total net assets - beginning 26,328 9,184 2,139 21,341 58,992 Total net assets - ending $ 25,467 $ 8,559 $ 1,941 $ 21,842 $ 57,809 73

City of Riverside Combining Statement of Cash Flows Nonmajor Enterprise Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Trans- Public Airport Refuse portation Parking Totals Cash flows from operating activities:

Cash received from customers and users $ 1,334 $ 19,224 $ 338 $ 5,306 $ 26,202 Cash paid to employees for services (698) (4,206) (1,842) (1,032) (7,778)

Cash paid to other suppliers of goods or services (894) (14,131) (976) (1,163) (17,164)

Other receipts 117 200 74 664 1,055 Net cash provided (used) by operating activities (141) 1,087 (2,406) 3,775 2,315 Cash flows from noncapital financing activities:

Transfers out (992) (992)

Operating grants 99 1,444 1,543 Payments on interfund receivables (1) (33) (16) (7,219) (7,269)

Net cash provided (used) by noncapital financing activities 98 (33) 1,428 (8,211) (6,718)

Cash flows from capital and related financing activities:

Purchase of capital assets (93) (481) (4,405) (4,979)

Proceeds from the sale of capital assets 2 2 4 Principal paid on long-term obligations (50) (50)

Proceeds from on long-term obligations 24,608 24,608 Interest paid on long-term obligations (16) (30) (18) (648) (712)

Capital contributions 714 714 Net cash provided (used) for capital and related financing activities (159) (28) 217 19,555 19,585 Cash flows from investing activities:

Income from investments 1 70 5 2 78 Net cash provided by investing activities 1 70 5 2 78 Net change in cash and cash equivalents (201) 1,096 (756) 15,121 15,260 Cash and cash equivalents, beginning 203 2,529 1,923 3,036 7,691 Cash and cash equivalents, ending $ 2 $ 3,625 $ 1,167 $ 18,157 $ 22,951 continued 74

City of Riverside Combining Statement of Cash Flows Nonmajor Enterprise Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Trans- Public Airport Refuse portation Parking Totals Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating Income (loss) $ (962) $ (875) (3,131) 1,452 $ (3,516)

Other receipts 117 200 74 664 1,055 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation and amortization 619 1,795 561 866 3,841 Amortization of pension costs 6 30 14 4 54 (Increase) in utility billed receivable (28) (28)

Decrease in utility unbilled receivable 67 67 (Increase) decrease in accounts receivable (8) 51 (6) 109 146 (Increase) in intergovernmental receivable (8) (8)

Decrease in prepaid items 20 20 Increase in accounts payable 74 110 1 647 832 Increase in accrued payroll 17 9 15 41 (decrease) in retainage payable (1) (1)

Increase in other payable 14 107 52 26 199 (Decrease) in due to other funds (222) (222)

(Decrease) in landfill capping - (165) - (165)

Net cash provided (used) by operating activities $ (141) $ 1,087 $ (2,406) $ 3,775 $ 2,315 75

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Internal Service Funds Internal Service Funds are used to account for the financing of goods and services provided by one City department to other City departments on a cost-reimbursement basis.

Self-Insurance Trust - To account for the operations of the City's self-insured workers' compensation, unemployment and liability programs.

Central Stores Fund - To account for the operations of the City's centralized supplies inventory, including receiving and delivery services provided to City departments.

Central Garage Fund - To account for the maintenance and repair of all city-owned vehicles and motorized equipment, except for Police vehicles.

City of Riverside Combining Statement of Net Assets Internal Service funds June 30, 2011 (amounts expressed in thousands)

Self-Insurance Assets Trust Central Stores Central Garage Totals Current assets:

Cash and investments $ 1,306 $ $ 2,930 $ 4,236 Receivables (net of allowance for uncollectibles):

Interest 35 22 57 Accounts 29 63 92 Intergovernmental 57 752 57 Inventory - 6,683 7,435 Total current assets 1,427 6,683 3,767 11,877 Advances to other funds 11,975 11,975 Deferred charges 228 239 1,074 1,541 Capital assets:

Buildings 1,488 1,488 Accumulated depreciation-buildings (211) (211)

Machinery and equipment 148 9,457 9,605 Accumulated depreciation-machinery and equipment (142) (7,863) (8,005)

Construction in Progress 215 215 Capital assets (net of accumulated depreciation) 6 3,086 3,092 Total noncurrent assets 12,203 245 4,160 16,608 Total assets 13,630 6,928 7,927 28,485 Liabilities Current liabilities:

Accounts payable 265 189 472 926 Accrued payroll 34 95 404 533 Due to other funds 4,195 4,195 Claims and judgements - current 9,900 9,900 Other payables 47 56 247 350 Total current liabilities 10,246 4,535 1,123 15,904 Noncurrent liabilities:

Advances from other funds 223 234 1,055 1,512 Claims and judgements 16,715 16,715 Total noncurrent liabilities 16,938 234 1,055 18,227 Total liabilities 27,184 4,769 2,178 34,131 Net Assets Invested in capital assets 6 3,086 3,092 Unrestricted (13,554) 2,153 2,663 (8,738)

Total net assets $ (13,554) $ 2,159 $ .5,749 $ (5,646) 77

City of Riverside Combining Statement of Revenues, Expenses, and Changes In Fund Net Assets Internal Service Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Self-Insurance Trust Central Stores Central Garage Totals Operating revenues:

Charges for services $ 7,581 $ 1,313 $ 6,898 $ 15,792 Operating expenses:

Personnel services 455 606 2,644 3,705 Contractual services 67 153 220 Maintenance and operation 2 26 2,092 2,120 General 846 330 604 1,780 Materials and supplies 1 15 194 210 Claims/Insurance 10,692 9 35 10,736 Depreciation and amortization 4 779 783 Total operating expenses 12,063 990 6,501 19,554 Operating income (loss) (4,482) 323 397 (3,762)

Non-operating revenues (expenses):

Interest income 425 72 497 Other 85 6 91 Gain (loss) on retirement of capital assets (16) (16)

Interest expense and fiscal charges (110) (7) (31) (148)

Total non-operating revenue (expenses) 400 (7) 31 424 Change in net assets (4,082) 316 428 (3,338)

Total net assets - beginning (9,472) 1,843 5,321 (2,308)

Total net assets - ending $ (13,554) $ 2,159 $ 5,749 $ (5,646) 78

City of Riverside Combining Statement of Cash Flows Internal Service Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Self-Insurance Central Central Trust Stores Garage Total Cash flows from operating activities:

Cash received from customers and users $ 8,678 $ 1,313 $ 10,546 $ 20,537 Cash paid to employees for services (432) (577) (2,544) (3,553)

Cash paid to other suppliers of goods or services (11,775) (73) (6,604) (18,452)

Other 85 6 91 Net cash provided (used) by operating activities (3,444) 663 1,404 (1,377)

Cash flows from noncapital financing activities:

Payments on interfund payables (6) (656) (27) (689)

Advances to other funds 1,627 1,627 Net cash (used) by noncapital financing activities 1,621 (656) (27) 938 Cash flows from capital and related financing activities:

Interest paid on long-term obligation (110) (7) (31) (148)

Loss from the sale of capital assets (16) (16)

Purchase of capital assets (1,044) (1,044)

Net cash (used) for capital and related financing activities (110) (7) (1,091) (1,208)

Cash flows from investing activities:

Income from investments 431 63 494 431 63 494 Net increase (decrease) in cash and cash equivalents (1,502) 349 (1,153)

Cash and cash equivalents, beginning 2,808 2,581 5,389 Cash and cash equivalents, ending $ 1,306 $ $ 2,930 $ 4,236 continued 79

City of Riverside Combining Statement of Cash Flows Internal Service Funds For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Self-Insurance Central Central Reconciliation of operating income to net cash provided Trust Stores Garage Total (used) by operating activities:

Operating income (loss) $ (4,482) $ 323 $ 397 $ (3,762)

Other 85 - 6 91 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation and amortization 4 779 783 Amortization of pension costs 5 5 25 35 (Increase) in account receivable (28) (19) (47)

(Increase) decrease in intergovernmental receivable (27) 9 (18)

(Increase) in inventory (1,242) (178) (1,420)

Increase (decrease) in accounts payable (89) (98) 310 123 Increase in other payable 13 15 61 89 Increase in accrued payroll 5 9 14 28 Increase in due to other funds 1,647 1,647 Increase in claims and judgments 1,074 _ 1,074 Net cash provided (used) by operating activities $ (3,444) $ 663 $ 1,404 $ (1,377) 80

Fiduciary Fund The City's Fiduciary Fund is comprised of an Agency Fund, which is used to account for special assessments that service no-commitment debt.

City of Riverside Fiduciary Fund - Agency Fund Combining Statement of Changes in Assets and Liabilities For the fiscal year ended June 30, 2011 (amounts expressed in thousands)

Balance Balance July 1, 2010 Additions Deductions June 30, 2011 Assets:

Cash and investments $ 11,119 $ 7,334 $ 9,798 $ 8,655 Cash and investments at fiscal agent 8,930 8,864 8,832 8,962 Interest receivable 52 572 566 58 Property taxes receivable 267 270 275 262 Total assets $ 20,368 $ 17,040 $ 19,471 $ 17,937 Liabilities:

Accounts payable $ 5 $ 136 $ 113 28 Held for bond holders 20,363 7,476 9,930 17,909 Total liabilities $ 20,368 $ 7,612 $ 10,043 $ 17,937 81

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City of Riverside Capital Assets Used in the Operation of Governmental Funds Schedule By Source June 30, 2011 (amounts expressed in thousands)

Governmental funds capital assets:

Land $ 290,692 Buildings and improvements 165,101 Improvements other than buildings 202,911 Machinery and equipment 849,090 Infrastructure 74,503 Construction in progress 23,562 Total governmental funds capital assets $ 1,605,859 Investments in governmental funds capital assets by source:

Certificates of participation $ 120,956 Gifts 310,779 Operating revenue 417,002 General obligation bonds 4,483 Revenue bonds 21,104 County contracts and grants 397 State grants 1,026 Asset forfeiture - state 2,278 Asset forfeiture - federal 147 Housing and community development grants 33,703 Other federal grants 768 Community facilities bonds 2,118 Assessment district bonds 29,309 Capital leases 18,452 RDA tax increment bonds 5,405 Capital projects funds 637,932 Total governmental funds capital assets $ 1,605,859 83

Z=

Statistical Section This part of the City's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

Contents Page Financial Trends 85 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.

Revenue Capacity 91 These schedules contain information to help the reader assess the factors affecting the City's ability to generate property and sales taxes.

Debt Capacity 100 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information 107 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.

Operating Information 109 These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

Table 1 City of Riverside Net Assets by Component Last Ten Fiscal Years (accrual basis of accounting) (in thousands)

Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Governmental activities Invested in capitalassets, net of related debt $ 465,803 $ 471,380 $ 484,784 $ 515,354 $ 622,336 $ 712,801 $ 850,740 $ 950,496 $ 976,614 $ 1,019,892 Restricted 115,352 106,862 137,126 154,957 158,038 107,982 102,677 98,903 108,932 80,820 Unrestricted (59,893) (10,227) (41,353) (46,419) (51,261) (34,245) (31,429) (41,861) (80,947) (90,159)

Total governmental activities net assets $ 521,262 $ 568,015 $ 580,557 $ 623,892 $ 729,113 $ 786,538 $ 921,988 $ 1,007,538 $ 1,004,599 $1,010,553 Business-type activities Invested in capital assets, net of related debt $ 293,936 $ 323,094 $ 341,041 $ 402,377 $ 425,285 $ 520,059 $ 601,999 $ 659,904 $ 660,619 $ 654,974 Restricted 38,535 40,869 49,242 54,540 71,386 57,613 43,341 38,621 59,863 56,397 Unrestricted 177,537 181,985 217,762 229,462 250,041 242,966 225,281 207,405 219,720 256,038 Total business-type activities net assets $ 510,008 $ 545,948 $ 608,045 $ 686,379 $ 746,712 $ 820,638 $ 870,621 $ 905,930 $ 940,202 $ 967,409 Primary government Invested in capitalassets, net of related debt $ 759,739 $ 794,474 $ 825,825 $ 917,731 $ 1,047,621 $1,232,860 $1,452,739 $ 1,610,400 $1,637,233 $ 1,674,866 Restricted 153,887 147,731 186,368 209,497 229,424 165,595 146,018 137,524 168,795 137,217 Unrestricted 117,644 171,758 176,409 183,043 198,780 208,721 193,852 165,544 138,773 165,879 Total primary govemment net assets $ 1,031,270 $ 1,113,963 $ 1,188,602 $ 1,310,271 $ 1,475,825 $1,607,176 $1,792,609 $ 1,913,468 $ 1,944,801 $1,977,962 85

Table 2 City of Riverside Changes In Net Assets Last Ten Fiscal Years (accrual basis of accounting) (in thousands) Page 1 of 2 Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Expenses Governmental activities:

General government $ 47,245 $ 59,530 $ 63,000 $ 58,460 $ 74,458 $ 105,486 $ 113,897 $102,665 $119,676 $102,877 Public safety 80,944 88,969 102,500 110,969 120,470 114,312 122,783 127,350 118,868 123,061 Highways and streets 6,819 15,625 22,017 20,364 20,757 22,556 26,986 18,731 22,036 24,082 Culture and Recreation 29,607 29,236 22,988 26,353 32,602 28,016 31,659 24,121 37,679 44,098 Interest on long-term debt 7,727 7,696 10,996 15,885 16,358 26,378 34,075 34,361 32,049 33,638 Total governmental activities expenses 172,342 201,056 221,501 232,031 264,645 296,748 329,400 307,228 330,308 327,756 Business-type activities:

Electric 215,131 186,917 196,727 200,030 226,186 232,346 271,412 269,209 256,860 275,922 Water 28,978 29,715 33,921 36,709 39,486 42,108 47,570 53,931 55,402 56,390 Sewer 19,214 20,053 23,273 26,108 27,299 29,510 31,209 34,853 41,248 42,276 Refuse 10,821 11,577 11,510 12,841 14,546 16,490 18,430 18,425 20,527 20,046 Airport 1,045 1,151 1,088 1,185 1,004 1,201 1,418 1,734 2,206 2,320 Transportation 1,735 2,110 2,286 2,557 2,917 2,831 3,190 3,194 3,368 3,493 Public parking - 1,392 1,389 824 2,701 3,762 4,093 5,095 4,024 4,401 Total business-type activities expenses 276,924 252,915 270,194 280,254 314,139 328,248 377,322 386,441 383,635 404,848 Total primary government expenses $ 449,266 $ 453,971 $ 491,695 $ 512,285 $ 578,784 $ 624,996 $ 706,722 $693,669 $713,943 $732,604 Program Revenues Governmental activities:

Charges for services:

General government $ 20,265 $ 22,675 $ 26,160 $ 25,995 $ 24,683 $ 10,245 $ 23,969 $ 13,691 $ 12,933 $ 14,241 Public safety 5,855 6,427 6,799 6,982 5,845 12,410 9,924 8,414 8,177 8,075 Highways and streets 18,891 20,867 22,286 23,108 25,412 30,563 19,695 14,391 17,847 16,985 Culture and recreation 4,671 8,304 5,056 7,002 7,716 8,302 4,370 3,168 2,367 3,180 Operating grants and contributions 7,257 12,716 12,935 16,140 13,150 12,101 15,024 23,313 32,853 21,127 Capital grants and contributions 19,528 2,144 1,136 5,292 18,618 10,557 115,982 69,745 23,395 38,138 Total governmental activities program revenues 76,467 73,133 74,372 84,519 95,424 84,178 188,964 132,722 97,572 101,746 Business-type activities:

Charges for services:

Electric 216,106 204,293 233,102 252,322 259,572 278,888 305,299 314,164 309,910 313,703 Water 29,527 28,637 32,382 34,002 37,613 47,080 49,855 54,923 57,534 62,084 Sewer 20,457 21,172 21,672 21,967 21,510 24,057 22,525 23,247 27,342 32,769 Refuse 11,220 11,795 13,759 14,492 15,160 15,833 16,289 18,394 18,712 19,134 Airport 1,089 1,046 1,051 1,088 1,162 1,263 1,423 1,232 1,315 1,342 Transportation 116 170 185 200 238 302 313 336 328 344 Public parking 2,385 2,760 2,961 2,837 3,431 3,717 4,332 4,876 5,205 Operating grants and contributions 2,992 3,663 1,723 2,261 2,704 1,939 3,308 1,929 2,487 2,159 Capital grants and contributions 1,877 4,976 26,390 32,317 29,293 40,066 29,215 17,288 6,838 7,337 Total business-type activities program revenues 283,384 278,137 333,024 361,610 370,089 412,859 431,944 435,845 429,342 444,077 Total primary government program revenues $ 359,851 $ 351,270 $ 407,396 $ 446,129 $ 465,513 $ 497.037 $ 620,908 $568,567 $526,914 $545,823 (continued) 86

Table 2 City of Riverside Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) (in thousands) Page 2 of 2 Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net Revenues (Expense)

Governmental activities $ (95,875) $(127,923) $ (147,129) $(147,512) $ (169,221) $ (212,570) $ (140,436) $ (174,506) $(232,736) $(226,010)

Business-type activities 6,460 25,222 62,830 81,356 55,950 84,611 54,622 49,404 45,707 39,229 Total primary government net expense $ (89,415) $(102,701) $ (84.299) $ (66,156) $ (113,271) $ (127,959) $ (85,814) $ (125,102) $(187,029) $(186,781)

General Revenues and Other Changes in Net Assets Governmental activities:

Taxes Sales $ 38,467 $ 41,691 $ 46,624 $ 53,348 $ 57,522 $ 55,666 $ 50,526 $ 41,882 $ 39,645 $ 44,157 Property 29,471 33,584 35,911 61,553 80,934 106,114 114,176 116,420 104,087 100,802 Utility Users 18,510 19,928 21,362 22,133 23,502 25,384 26,267 25,964 25,975 26,691 Franchise 4,070 3,811 4,261 4,481 4,813 5,031 4,972 5,144 4,477 4,937 Other 2,777 2,967 3,213 3,828 4,372 3,581 3,795 2,912 2,488 2.731 Intergovernmental, unrestricted 14,848 15,533 12,528 1,795 1,747 1,863 2,074 4,569 1,339 1,285 Unrestricted grants and contributions 18,710 15,220 39,653 29,743 Investment earnings 11,058 8,064 1,284 7,815 10,150 18,582 25,670 15,941 8,289 7,439 Miscellaneous 5,079 2,241 5,476 5,756 26,173 4,228 9,480 5,137 3,344 9,544 Transfers 18,057 18,218 10,302 14,918 25,576 31,171 32,326 42,087 40,153 34,378 Contributions (2,800)

Total governmental activities 142.337 146.037 156.871 190.847 274,442 281.363 269.286 260.056 229.797 231.964 Business-type activities:

Unrestricted grants and contributions 12,638 15,972 16,988 22,756 Investment income 12,780 9,115 5,016 7,548 11,259 23,402 21,271 17,548 Miscellaneous 5,624 3,849 4,553 7,362 18,700 3,498 4,931 4,590 7,447 4,808 Special item 7,900 (3,014)

Transfers (18,057) (18 2181 (10.3021 (14.9181 (25.5761 (31.1711 (32.3261 (42.0871 (40.1531 (34.378) 20 885 (18218) (103021 1149181 (255761 (31 1711 (323261 (42087) (120221 Total business-type activities 10.718 (7331* (3 0221 4.383 (10.685"1 (4.6391 (14.0951 (11 4351 Total primary government 163,222 156.755 156.138 187.825 278.825 270.678 264.647 245,961 218,362 219.942 Change in Net Assets Governmental activities $ 46,462 $ 18.114 $ 9.742 $ 43,335 $ 105.221 $ 68,793 $ 128.850 $ 85.550 $ (2.939) $ 5.954 Business-type activities 27.345 35.940 62.097 78.334 60.333 73.926 49.983 35.309 34.272 27.207 Total primary government $ 73,807 $ 54,054 $ 71,839 $ 121,669 $ 165,554 $ 142,719 $ 178,833 $ 120,859 $ 31,333 $ 33,161 87

Table 3 City of Riverside Fund Balances of Governmental Funds As of June 30, 2011 (modified accrual basis of accounting, in thousands)

General fund Nonspendable $ 26,646 Restricted 82,249 Assigned 15,589 Unassigned 36,359 Total general fund 160,843 All other governmental funds Nonspendable 1,626 Restricted:

Housing and redevelopment 96,571 Debt service 56,526 Transportation and public works 26,459 Other purposes 5,073 Total all other governmental funds $ 186,255 The City of Riverside implemented GASB 54 in the fiscal year ended June 30, 2011.

The City has elected to show one year of data for this schedule.

88

Table 4 City of Riverside Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis accounting) (in thousands) Page 1 of 2 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Revenues:

Taxes $ 93,879 $ 102,286 $ 113,118 $ 142,056 $ 170,638 $ 191,131 $ 200,438 $ 192,322 $ 177,255 $ 179,318 Licenses and permits 12,317 14,394 11,343 14,389 16,351 12,984 10,027 7,368 6,899 7,657 Intergovernmental 47,410 43,829 42,609 42,568 55,178 47,934 79,423 86,873 60,550 61,082 Charges for services 7,866 8,878 10,046 11,299 11,538 11,914 11,325 9,099 9,570 10,720 Fines and forfeitures 2,346 2,095 2,188 2,006 2,098 2,778 4,573 6,213 7,512 8,928 Special assessments 5,420 6,324 10,259 6,272 6,247 6,170 5,245 5,431 5,464 6,014 Use of money and property 13,017 11,255 10,587 10,915 14,324 22,587 27,970 18,620 11,173 10,173 Miscellaneous 4,816 5,042 7,133 9,996 8,502 6,164 12,796 7,596 7,082 16,605 Total revenues $ 187,071 $ 194,103 $ 207,283 $ 239,501 $ 284,876 $ 301,662 $ 351,797 $ 333,522 $ 285,505 $ 300,497 Expenditures:

General government $ 27,748 $ 22,031 $ 25,108 $ 21,800 $ 25,193 $ 39,093 $ 26,177 $ 25,995 $ 23,835 $ 26,090 Public safety 91,245 96,487 107,386 117,267 126,007 139,739 151,773 145,802 138,594 140,994 Highways and streets 10,551 12,034 11,990 11,695 11,281 19,722 25,209 18,452 14,987 14,587 Culture and recreation 23,835 27,579 24,836 28,939 31,017 31,039 30,622 26.859 40,373 44,345 Capital outlay 41,058 39,098 50,333 64,127 121,978 149,325 171,952 180,394 131,908 105,689 Debt Service:

Principal 6,174 4,470 2,422 8,599 9,733 12,045 11,257 44,349 48,078 89,264 Interest 7,785 7,785 9,945 15,025 19,205 21,330 31,239 33,033 31,267 32,611 Debt issuance costs - - 950 1,538 - 2,551 697 259 231 174 Total expenditures $ 208,396 $ 209,484 $ 232,970 $ 268,990 $ 344,414 $ 414,844 $ 448,926 $475,143 $ 429,273 $ 453,754 Excess of revenues over (under) expenditures $ (21,325) $ (15,381) $ (25,687) $ (29,489) $ (59,538) $ (113,182) $ (97,129) $(141,621) $(143,768) $(153,257)

(contnued) 89

Table 4 City of Riverside Changes In Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis accounting) (in thousands) Page 2 of 2 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Other financing sources (uses):

Transfers in $ 31,305 $ 36,202 $ 41,440 $ 49,944 $ 59,545 $ 84,306 $ 62,841 $ 100,797 $ 88,303 $ 214,631 Transfers out (13,248) (17,984) (31,338) (35,026) (33,969) (53,135) (30,515) (58,710) (48,150) (180,280)

Sales of general capital assets 153 1,314 (675) 6,230 1,281 541 8,931 (5,798) 529 (1,629)

Advances from other funds - 81 - - - - - - - -

Long-term obligation proceeds 8,454 750 247,594 85,578 20,969 295,190 164,408 30,425 52,360 104,875 Capital lease proceeds - - - - - - - - 3,116 2,000 Premiums (discounts) on bonds issued 113 4,455 (539) -

Payments to refunded bond agent - - (58,657) (9,167) - - (148,975) - - -

Total other financing sources (uses) 26,664 20,363 198,364 97,672 47,826 331,357 56,690 36,514 95,619 139,597 Special item - pension contribution - - (88,300) (32,141) - - - - - -

Net change in fund balances $ 5,339 $ 4,982 $ 84,377 $ 36,042 $ (11,712) $218,175 $ (40,439) $ (74,907) $ (48,149) $ (13,660)

Debt service as a percentage of noncapital expenditures 7.823% 6.545% 7.173% 15.301% 13.777% 14.011% 17.225% 26.145% 23.278% 35.114%

(1) (2) (3) (4) (5)

(1) Debt service decreased upon the retirement of the 1977 Civic Center Authority Bonds.

(2) Increase in debt service related to the issuance of the 2003 and 2004 Redevelopment Agency Tax Allocation Bonds.

(3) Increase in debt service related to the issuance of the 2007 Redevelopment Agency Tax Allocation Bonds and 2008 Riverside Renaissance Certificates of Participation.

(4) Increase relates to $30 million refinancing of 2005B pension bonds that took place in May 2008, which became due in-full in June 2009. The $30 million Pension Bond Anticipation Notes have been paid in-full and immediately re-issued each year in 2009, 2010 and 2011.

(5) Increase in debt service related to one-time early redemption of $31.7 million of 2011 Redevelopment Tax Allocation Bonds and $9.1 million of loan proceeds that were drawn-down during the year and re-paid within the year.

90

Table 5 City of Riverside Business-Type Activities Electricity Revenue By Source Last Ten Fiscal Years (accrual basis of accounting) (in thousands)

Other Fiscal Residential Commercial Industrial Wholesale Other Transmission Operating Total Year Sales Sales Sales Sales Sales Revenue Revenue Revenues 2002 $ 64,625 $ 46,265 $ 49,487 $ 46,505 $ 7,447 $ - $ 1,777 $ 216,106 2003 68,649 48,974 52,380 17,806 5,619 8,661 2,230 204,319 2004 80,872 57,079 56,117 9,581 6,354 20,917 2,182 233,102 2005 79,786 59,998 59,157 15,249 6,337 20,213 12,697 253,437 2006 85,243 53,773 71,084 11,952 7,139 20,043 9,183 258,417 2007 94,426 55,421 83,698 9,913 5,713 20,097 9,536 278,804 2008 99,981 60,768 92,697 14,805 5,425 19,211 12,405 305,292 2009 105,525 65,532 97,100 4,674 5,684 18,673 12,250 309,438 2010 107,301 65,091 97,458 1,466 5,639 21,100 11,855 309,910 2011 107,792 64,039 102,067 124 5,529 22,091 12,061 313,703 The City started receiving Transmission Revenue in 2003.

91

Table 6 City of Riverside Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) (in thousands)

Utility Fiscal Sales Property Users Franchise Other Total Year Tax Tax Tax Tax Tax Taxes 2002 $ 38,467 $ 29,471 $ 18,510 $ 4,070 $ 2,777 $ 93,295 2003 41,691 33,584 19,928 3,811 2,967 101,981 2004 46,624 35,911 21,362 4,261 3,213 111,371 2005 53,348 61,553 22,133 4,481 1,795 143,310 2006 57,522 80,934 23,502 4,813 4,372 171,143 2007 55,666 106,114 25,384 5,031 3,581 195,776 2008 50,526 114,176 26,267 4,972 3,795 199,736 2009 41,882 116,420 25,964 5,144 2,912 192,322 2010 39,645 104,087 25,975 4,477 2,488 176,672 2011 44,157 100,802 26,691 4,937 2,731 179,318 92

Table 7 City of Riverside Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in thousands) city Redevelopment Agency Fiscal Total Year Taxable Taxable Direct Ended Less: Assessed Less: Assessed Tax June 30 Secured Unsecured Exemptions Value Secured Unsecured Exemptions Value Rate 2002 12,103,179 799,323 (2,129,115) 10,773,387 1,240,768 205,181 (16,263) 1,429,686 0.267 2003 13,071,416 980,529 (2,406,961) 11,644,984 1,390,108 276,506 (27,690) 1,638,924 0.268 2004 14,188,658 845,858 (2,526,503) 12,508,013 1,508,478 228,775 (30,286) 1,706,967 0.264 2005 15,540,982 951,211 (2,751,844) 13,740,349 1,775,655 158,148 (33,654) 1,900,149 0.266 2006 17,557,341 1,058,995 (4,002,177) 14,614,159 2,914,600 210,025 (51,992) 3,072,633 0.309 2007 20,672,126 1,140,891 (5.417,388) 16,395,629 4,145,700 410,625 (93,261) 4,463,064 0.304 2008 23,618,776 1,291,972 (6,960,666) 17,950,082 5,509,441 553,124 (138,490) 5,924,075 0.334 2009 24,428,633 1,330,053 (7,515,667) 18,243,019 5,998,768 581,943 (224,025) 6,356,686 0.343 2010 22,644,262 1,299,353 (7,103,040) 16,840,575 5,598,484 564,825 (266,257) 5,897,052 0.349 2011 22,056,793 1,260,923 (6,920,720) 16,396,996 5,396,219 544,906 (268,323) 5,672,802 0.347 Notes:

In 1978 the voters of the State of California passed Proposition 13 which limited 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 re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Assessed valuations are based on 100 percent of estimated actual value.

Source: Riverside County Auditor-Controller 93

Table 8 City of Riverside Direct and Overlapping Property Tax Rates (Rate per $100 of Assessed Valuation)

Last Ten Fiscal Years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Basic Levy' 2 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Unified School Districts Debt Service 0.151 0.250 0.210 0.234 0.220 0.155 0.185 0.291 0.326 0.334 City of Riverside Debt Service - - - 0.011 0.009 0.008 0.006 0.007 0.006 0.006 Eastern Municipal Water Improvement District 0.024 0.024 0.022 0.023 0.010 0.009 0.008 - - -

Metropolitan Water District Original Area 0.008 0.007 0.006 0.006 0.005 0.005 0.005 0.004 0.004 0.004 Riverside City Community College Debt Service - - - 0.018 0.018 0.018 0.013 0.013 0.012 0.015 Rubidoux Community Service Debt Service 0.004 0.004 0.003 0.003 - - - - - -

3 Total Direct & Overlapping Tax Rates 1.187 1.285 1.241 1.295 1.262 1.195 1.217 1.315 1.348 1.359 City's Share of 1% Levy Per Prop 13I 0.145 0.145 0.145 0.145 0.145 0.145 0.145 0.145 0.145 0.145 General Obligation Debt Rate - - - 0.011 0.009 0.009 0.006 0.007 0.006 0.006 5

Redevelopment Rate 1.008 1.007 1.006 1.006 1.005 1.005 1.005 1.004 1.004 1.004 Total Direct Rater 0.267 0.268 0.264 0.266 0.309 0.304 0.334 0.343 0.349 0.347 1 In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of the various intergovernmental overlapping debt.

2 Includes: Alvord Unified School District, Corona Norco Unified School District, Jurupa Unified School District, Moreno Valley Unified School District, Riverside Unified School District and Val Verde Unified School District.

3 Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.

4 City's share of 1% levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figures.

5 RDA rate is based on the largest RDA tax rate area (TRA) and includes only rate(s) from indebtedness adopted prior to 1989 per California State statue. RDA direct and overlapping rates are applied only to the incremental property values.

6 Total Direct Rate is the weighted average of all individual direct rates.

Source: Riverside County Assessor 2001/02 - 2010/11 Tax Rate Table.

94

Table 9 City of Riverside Principal Property Taxpayers Current Year and Nine Years Aao CurntYaadNieYar a (i thuans (i2touans 2011 2002 Percentage of Percentage of Taxable Total Taxable Taxable Total Taxable Assessed Assessed Assessed Assessed Property Owner Value Rank Value Value Rank Value Tyler Mall $ 185,497 1 0.8%

La Sierra University 122,345 2 0.5%

Riverside Healthcare System 105,573 3 0.5% 87,571 3 0.7%

State Street Bank & Trust Co of Calif 87,419 4 0.4% 91,163 2 0.7%

Fountains South Bay, LLC 81,594 5 0.4%

MEF Realty 78,406 6 0.4%

Rohr Inc 76,435 7 0.3% 75,982 4 0.6%

Mission Grove Plaza, LP 75,147 8 0.3%

Press Enterprise Co 74,222 9 0.3% 42,140 10 0.4%

Canyon Springs Marketplace Corp 68,969 10 0.3%

Charter Communication 52,215 6 0.4%

Metal Container Corp 48,464 7 0.4%

Ohio Teacher Retirement 140,395 1 1.1%

Toro Company 47,629 8 0.4%

Lyon Corona Pointe 53,667 5 0.4%

Mission Grove Park Apartments 45,819 9 0.4%

Totals $ 955,607 4.3% 685,045 5.5%

Notes:

The amounts shown above include assessed value data for both the City and the Redevelopment Agency.

Source: Riverside County Assessor 2010/11 and 2001/02 Combined Tax Rolls 95

Table 10 City of Riverside Property Tax Levies and Collections Last Nine Fiscal Years (in thousands)

Collections Fiscal Year Taxes Collected within the in Ended Levied for Fiscal Year of the Levy Subsequent Total Collections To Date June 30 Fiscal Year Amount Percentage of Levy Years Amount Percentage of Levy 2003 $ 25,809 25,479 98.72% 250 25,729 99.69%

2004 31,829 31,429 98.74% 292 31,721 99.66%

2005 36,825 36,332 98.66% 346 36,678 99.60%

2006 52,532 51,815 98.64% 494 52,309 99.58%

2007 69,246 67,046 96.82% 1,850 68,896 99.49%

2008 83,996 82,345 98.03% 810 83,155 99.00%

2009 86,251 84,134 97.55% 1,117 85,251 98.84%

2010 77,228 74,491 96.46% 1,015 75,506 97.77%

2011 74,608 72,327 96.94% 72,327 96.94%

Note:

The table reflects amounts related to the City and the Redevelopment Agency. The amounts collected by the Redevelopment Agency include monies that were passed-through to other agencies. Current tax levies are the original charge as provided by the County of Riverside. Current tax collections do not include supplemental taxes, aircraft taxes or other property taxes.

Source: Riverside County Auditor Controller's Office and City Finance Division The City of Riverside has elected to show nine years of data for this schedule.

96

Table 11 City of Riverside Electricity Sold by Type of Customer, Last Ten Fiscal Years (in millions of kilowatt-hours) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Type of Customer:

Residential 600.0 618.0 707.0 675.0 696.0 748.0 734.0 733.0 701.0 666.0 Commercial 434.0 451.0 522.0 530.0 474.0 456.0 441.0 433.0 406.0 400.0 Industrial 629.0 658.0 687.0 707.0 810.0 924.0 960.0 946.0 906.0 912.0 Wholesale sales 541.0 378.0 354.0 470.0 287.0 295.0 357.0 137.0 44.0 7.0 Other 53.0 49.0 52.0 50.0 58.0 39.0 34.0 33.0 32.0 31.0 Total 2,257.0 2,154.0 2,322.0 2,432.0 2,325.0 2,462.0 2,526.0 2,282.0 2,089.0 2,016.0 Total direct rate Monthly Base Rate 1 3.06 3.18 3.28 3.36 3.36 5.00 11.35 13.06 18.06 18.06 Rate per 250 KWH 20.18 20.98 21.65 22.20 22.20 22.20 25.88 25.88 25.88 25.88 Rates are based on a monthly base rate plus energy charge for the first 250 KWH.

The Utility charges an excess use rate over 250 KWH.

Source: Riverside Public Utilities, Finance Services 97

Table 12 City of Riverside Electricity Rates Last Ten Fiscal Years (Average Rate in Dollars per Kilowatt-Hour)

Fiscal Year Ended June 30 Residential Commercial Industrial Other 2002 0.10768 0.10615 0.07844 0.11206 2003 0.10990 0.10779 0.07901 0.11869 2004 0.11439 0.10936 0.08167 0.12271 2005 0.11813 0.11321 0.08369 0.12768 2006 0.12222 0.11330 0.08798 0.12373 2007 0.12621 0.12164 0.09059 0.14493 2008 0.13613 0.13781 0.09658 0.16099 2009 0.14389 0.15122 0.10271 0.17169 2010 0.15307 0.16014 0.10756 0.17876 2011 0.16173 0.16001 0.11194 0.18089 NOTE:

Rates are based on a monthly base rate plus an energy charge for the first 250 KWH. The Utility charges an excess use rate over 250 KWH.

Source: Riverside Public Utilities, Finance Services 98

Table 13 City of Riverside Top 10 Electricity Customers Current Year and Nine Years Ago 2011 2002 Percent of Percent of Electricity Total Electric Electricity Total Electric Electricity Customer Charges Revenues Charges Revenues Local University $9,446,847 3.38% N/A N/A Local Government 7,676,133 2.75% N/A N/A Local Government 6,597,628 2.36% N/A N/A Local School District 4,139,323 1.48% N/A N/A Corporation 3,634,707 1.30% N/A N/A Corporation 2,605,188 0.93% N/A N/A Hospital 2,181,356 0.78% N/A N/A Shopping Mall 2,051,562 0.73% N/A N/A Corporation 1,966,308 0.70% N/A N/A Local School District 1,925,538 0.69% N/A N/A

$42,224,590 15.10% N/A N/A Retail Sales Per Financial Statements $279,427,397 N/A - not available Source: Riverside Public Utilities, Finance Services 99

Table 14 City of Riverside Ratios of Outstanding Debt by Type Last Ten Fiscal Years (in thousands)

Governmental Activities General Revenue Pension Certificates Fiscal Obligation Redevelopment Revenue Assessment Obligation of Capital Notes/Loans Year Bonds Bonds Bonds Bonds Bonds Participation Leases Payable 2002 111,880 525 135 5,150 6,430 11,096 2003 109,615 4,650 5,517 11,447 2004 20,285 131,590 89,540 58,706 8,938 11,057 2005 20,280 144,024 148,280 57,336 7,431 10,645 2006 19,858 140,195 146,470 55,571 6,008 10,215 2007 19,331 296,598 144,450 192,874 4,929 9,759 2008 18,774 292,244 142,170 200,273 9,391 9,040 2009 18,171 285,743 139,410 198,268 7,455 8,749 2010 17,533 278,867 136,050 211,212 6,303 9,291 2011 16,845 305,195 132,095 207,246 6,670 8,849 Business-Type Activities Total Percentage Debt Fiscal Revenue Notes/Loans Capital Primary of Personal Per Year Bonds Payable Leases Government Income 1 Capita1 2002 355,621 6,966 571 498,374 10.51% 1.90 2003 342,559 11,524 498 485,810 9.89% 1.79 2004 440,970 11,066 439 772,591 15.02% 2.79 2005 419,581 10,459 392 818,428 14.98% 2.91 2006 509,577 9,841 317 898,052 15.47% 3.13 2007 482,929 9,211 253 1,160,334 18.67% 4.01 2008 720,749 8,569 211 1,401,421 21.51% 4.80 2009 670,512 7,915 2,574 1,342,931 20.15% 4.54 2010 968,393 7,249 2,151 1,637,049 24.83% 5.44 2011 1,071,554 76,747 1,720 1,826,921 27.58% 6.01 1 These ratios are calculated using personal income and population data for the prior calendar year.

Source: City of Riverside Notes to Financial Statements and Statistical Table 20.

100

Table 15 City of Riverside Ratios of General Bonded Deb t Outstanding Last Ten Fiscal Years (in thousands, except per capita amount)

General Certificates Tax Percent of Fiscal Obligation Pension of Allocation Assessed Per 3 2 Capita Year Bonds Bonds Participation Bonds 1 Total Value 2002 5,150 111,880 1 17,030 1.09% 446 2003 - 4,650 109,615 1 14,265 0.98% 422 2004 20,285 89,540 58,706 131,590 3 00,121 2.40% 1,083 2005 20,280 148,280 57,336 144,024 69,920 2.69% 1,316 2006 19,858 146,470 55,571 140,195 3 62,094 2.48% 1,264 2007 19,331 144,450 192,874 296,598 53,253 3.98% 2,26C 6

2008 18,774 142,170 200,273 292,244 6 53,461 3.64% 2,239 2009 18,171 139,410 198,268 285,743 6 41,592 3.52% 2,167 2010 17,533 136,050 211,212 278,867 6 43,662 3.82% 2,140 2011 16,845 132,095 207,246 305,195 61,381 4.03% 2,175 Notes:

General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (which, the City has none.)

I Amount presented is net of restricted resources held for the repayment of outstanding debt principal.

2 Assessed value has been used because the actual value of taxable property is not readily available in the State of California.

3 These ratios are calculated using population data for the prior calendar year.

Source: City of Riverside Notes to Financial Statements and Reserve Cash Reconciliation maintained by City Finance Division.

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Table 16 City of Riverside Direct and Overlapping Debt As of June 30, 2011 (in thousands) Page 1 of 2 Total City Assessed Valuation $ 22,069,798 Less Redevelopment Agency Incremental Valuation 5,672,802 Adjusted Assessed Valuation $ 16,396,996 Estimated Outstanding Share of Percentage Debt Overlapping Applicable 2 06/3012011 Debt Overlapping Tax and Assessment Debt:

Metropolitan Water District 0.931% $ 2,120 $ 20 Riverside City Community College District 28.871% 68,344 19,732 Alvord Unified School District 62.592% 131,584 82,361 Riverside Unified School District 84.087% 130,032 109,340 Corona-Norco Unified School District 0.002% 5 Jurupa Unified School District 0.003% 2 Moreno Valley Unified School District 6.164% 2,722 168 Alvord Unified School District Community District No.2006-1 68.691% 5,852 4,020 Riverside Unified School District Community Facilities Districts 88.730-100% 94,691 84,019 City of Riverside Community Facilities Districts 100% 15,222 15,222 City of Riverside 1915 Act Bonds 100% 32,105 32,105 Total Overlapping Tax and Assessment Debt: 482,679 $ 346,987 (continued) 102

Table 16 City of Riverside Direct and Overlapping Debt As of June 30, 2011 (in thousands) Page 2 of 2 Overlapping Other Debt:

Riverside County General Fund Obligations 11.370% $ 80,811 9,188 Riverside County Pension Obligations 11.370% 41,722 4,744 Riverside County Board of Education Certificates of Participation 11.370% 702 80 Alvord Unified School District Certificates of Participation 62.592% 1,269 794 Corona-Norco Unified School District Certificates of Participation 0.002% 1 Jurupa Unified School District Certificates of Participation 0.003%

Moreno Valley Unified School District Certificates of Participation 6.164% 1,261 78 Riverside Unified School District General Fund Obligations 84.047% 12,453 10,466 Total Overlapping Other Debt 138,219 25,350 Total Net Overlapping Debt $ 620,898 372,337 City Direct Debt 360,152 Total Direct and Overlapping Debt 732,489 (1)

(1) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.

(2) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.

Overlapping governments are those that coincide at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.

Source: HdL Coren & Cone 103

Table 17 City of Riverside Legal Debt Margin Information Last Ten Fiscal Years (in thousands) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Assessed valuation $10,773,387 $11,644,984 $12,508,013 $13,740,349 $14,614,159 $16,395,629 $17,950,082 18,243,019 16,840,575 16,396,996 Conversion percentage 25% 25% 25% 25% 25% 25% 25% 25% 25% 25%

Adjusted assessed valuation 2,693,347 2,911,246 3,127,003 3,435,087 3,653,540 4,098,907 4,487,521 4,560,755 4,210,144 4,099,249 Debt limit percentage 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%

Debt limit 404,002 436,687 469,050 515,263 548,031 614,836 673,128 684,113 631,522 614,887 Total net debt applicable to limit: - - 20,285 20,280 19,858 19,331 18,774 18,171 17,533 16,845 Legal debt margin 404,002 436,687 448,765 494,983 528,173 595,505 654,354 665,942 613,989 598,042 Total net debt applicable to the limit as a percentage of debt limit 0.0% 0.0% 4.3% 3.9% 3.6% 3.1% 2.8% 2.7% 2.8% 2.7%

The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect a the time that the legal debt margin was enacted by the State of California for local governments located within the State.

Source: City of Riverside, Statistical Table 6 and Notes to Financial Statements.

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Table 18 City of Riverside Pledged-Revenue Coverage Governmental Activity Debt Last Ten Fiscal Years (in thousands)

Tax Allocation Bonds Debt Service Pledged Fiscal Year Revenue 1 Principal Interest Coverage 2002 14,859 2,745 7,252 1.49 2003 16,180 2,694 7,371 1.61 2004 17,410 1,873 9,599 1.52 2005 21,242 4,507 6,307 1.96 2006 35,268 4,390 7,236 3.03 2007 35,966 3,185 7,663 3.32 2008 50,911 3,305 12,988 3.12 2009 50,270 5,360 12,856 2.76 2010 48,843 5,675 13,316 2.57 2011 46,162 5,915 12,228 2.54 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

1 Amount has been calculated in accordance with the provisions set forth in the debt covenants.

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Table 19 City of Riverside Pledged-Revenue Coverage Business Type Activity Debt Last Ten Fiscal Years (in thousands)

Electric Revenue Bonds Water Revenue Bonds Less: Net Less: Net Fiscal Pledged Operating Available Debt Service Pledged Operating Available Debt Service 1 1 1 Year Revenue Expenses Revenue Principal Interest Coverage Revenue Expenses' Revenue Principal Interest Coverage 2002 $ 229,529 $ 190,426 $ 39,103 $ 7,385 $ 9,841 2.27 $ 43,215 $ 19,244 $ 23,971 $ 3,215 $ 2,941 3.89 2003 211,553 157,450 54,103 7,840 10,966 2.88 36,837 19,928 16,909 3,895 2,720 2.56 2004 239,842 168,162 71,680 10,780 10,183 3.42 47,093 23,767 23,326 4,010 2,622 3.52 2005 262,350 164,159 98,191 14,555 12,143 3.68 45,348 26,436 18,912 4,045 2,591 2.85 2006 265,086 184,421 80,665 15,015 15,245 2.67 66,226 27,028 39,198 3,875 3,790 5.11 2007 289,784 187,700 102,084 18,815 14,200 3.09 55,699 29,461 26,238 4,300 3,454 3.38 2008 314,733 219,680 95,053 19,460 16,790 2.62 67,312 33,827 33,485 4,355 4,275 3.88 2009 320,447 202,904 117,543 20,572 24,941 2.58 60,886 35,639 25,247 4,473 6,728 2.25 2010 320,560 199,040 121,520 21,574 22,572 2.75 61,985 35,953 26,032 4,533 8,008 2.08 2011 319,177 212,878 106,299 23,029 25,087 2.21 84,328 35,220 49,108 4,799 9,263 3.49 2

Sewer Revenue Bonds Less: Net Fiscal Pledged Operating Available Debt Service 1 1 Year Revenue Expenses Revenue Principal Interest Coverage 2010 $31,470 $26,865 $4,605 $666 $151 5.64 2011 37,772 27,575 10,197 692 125 12.48 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

1 Amounts have been calculated in accordance with the provisions set forth in the debt covenants. Total operating expenses exclusive of depreciation.

2 $240,910 of Sewer Revenue Bonds were issued August 6, 2009 106

Table 20 City of Riverside Demographic and Economic Statistics Last Ten Calendar Years Per Personal Capita Calendar Income 2 Personal Unemployment 3

2 Year Population1 (in thousands) Income Rate 2001 262,164 4,741,313 18,085 5.5 2002 270,805 4,914,404 18,147 6.5 2003 277,177 5,145,118 18,563 6.6 2004 281,192 5,462,823 19,427 6.1 2005 286,572 5,806,339 20,261 5.4 2006 289,045 6,214,628 21,501 5.1 2007 291,814 6,514,489 22,324 6.1 2008 296,038 6,665,142 22,514 8.6 2009 300,769 6,592,294 21,918 13.7 2010 304,051 6,623,143 21,783 14.8 Sources:

1 California State Department of Finance.

2 Demographic Estimates for 2001-2009 are based on the last available Census. Projections are devloped by incorporating all fo the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries. Demographic Estimates for 2010 are per the US Cenus Bureau, most recent American Community Survey.

3 State of California Empolyment Development Department.

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Table 21 City of Riverside Principal Employers Current Year and Nine Years Ago 2011 2002 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment County of Riverside 10,137 1 6.5% N/A N/A N/A University of California 5,390 2 3.5% N/A N/A N/A Riverside Unified School District 4,867 3 3.1% N/A N/A N/A Kaiser 4,000 4 2.6% N/A N/A N/A City of Riverside 2,647 5 1.7% N/A N/A N/A Riverside Community Hospital 2,200 6 1.4% N/A N/A N/A Riverside Community College District 1,864 7 1.2% N/A N/A N/A Riverside County Office of Education 1,710 8 1.1% N/A N/A N/A Alvord Unified School District 1,689 9 1.1% N/A N/A N/A Parkview Community Hospital 1,350 10 0.9% N/A N/A N/A Total 35,854 23.1% N/A N/A N/A - not available Source: City of Riverside, Development Department 108

Table 22 City of Riverside Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Function General government 313.29 314.39 318.36 331.88 377.15 412.22 436.35 439.10 433.40 431.40 Public safety Police 1 560.65 569.65 567.83 568.83 589.33 618.33 637.33 591.93 589.93 589.93 Fire 217.65 218.65 219.65 221.11 221.73 251.73 254.21 254.21 255.46 255.46 Firefighters and Police Officers 552.00 561.00 557.00 557.46 566.46 620.46 632.46 633.46 632.46 632.46 Highways and streets 266.10 280.10 285.10 281.35 262.35 286.35 318.35 369.65 349.50 348.11 Sanitation 44.49 44.49 48.49 48.49 59.49 60.29 64.29 58.60 59.00 56.00 Culture and recreation 282.93 301.97 302.92 300.92 311.45 324.26 339.52 340.71 328.07 328.07 Airport 6.00 6.00 6.00 6.00 6.00 7.00 7.00 7.00 7.00 9.50 Water 123.00 123.00 130.00 130.00 133.00 142.00 167.00 167.00 177.65 180.15 Electric 282.60 291.60 295.60 305.60 337.60 351.35 404.60 408.10 419.45 448.50 Total 2,096.71 2,149.85 2,173.95 2,194.18 2,298.10 2,453.53 2,628.65 2,636.30 2,619.46 2,647.12 In fiscal year 2009 the Crossing Guards program (46.40 FTEs) was moved from the Police Department to the Public Works Department (highways and streets).

Source: City of Riverside, Finance Division 109

Table 23 City of Riverside Operating Indicators by Function Last Ten Fiscal Years FunctlonlProgram 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Police Arrests 10,047 10,541 11,951 11,280 10,093 9,827 9,367 10,150 8,690 8,118 Fire Number of calls answered 24,115 24,886 25,876 26,505 26,696 27,458 27,429 26,397 26,484 27,322 Inspections N/A 14,229 16,306 17,028 19,261 7,261 10,812 7,638 7,234 6,505 Public works:

Street resurfacing (miles) 104.04 67.39 62.37 102.45 51.26 73.40 26.27 18.90 20.00 21.25 Parks and recreation Number of recreation classes 14,619 14,787 15,135 15,195 16,272 19,079 22,146 21,884 27,762 37,303 Number of facility rentals 26,533 26,854 27,014 27,074 27,483 32,980 35,076 36,822 34,565 42,638 Water Number of accounts 60,059 60,625 61,668 62,492 62,985 63,431 63,494 64,062 64,231 64,349 Annual consumption (ccf) 30,682,171 29,283,851 30,596,320 27,875,253 28,865,030 32,110,208 30,583,266 29,721,236 26,687,271 25,902,439 Electrc Number of accounts 97,793 99,018 100,766 103,463 104,294 105,226 106,015 106,385 106,335 106,855 Annual consumption (kwh) 2,257 2,154 2,322 2,432 2,359 2,462 2,526 2,282 2,089 2,016 Sewer:

New connections 5,267 5,825 7,034 9,621 16,717 15,423 16,412 18,765 16,971 17,746 Average daily sewage treatment 34.75 33.15 35.24 38.07 35.91 32.50 32.10 33.00 33.29 30.06 (millions of gallons)

Inspections were not tracked prior to 2003 2 Amounts expressed in millions N/A - not available Source: City of Riverside, various departments 110

Table 24 City of Riverside Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year 2002 2003 2004 2005 (1) 2006 2007(2) 2008 2009 2010 2011 Function Public Safety Police Stations 2 2 2 2 3 3 3 3 3 3 9 7 11 7 5 4 4 5 4 4 Substations Helicopters 4 4 4 4 4 4 4 4 4 4 Fire Stations 13 13 13 13 13 14 14 14 14 14 Active apparatus 26 30 30 30 29 30 30 30 30 26 Reserve apparatus 5 6 5 5 6 6 6 7 7 9 1 1 1 1 1 1 1 1 1 1 Training facilities Highways and streets Streets (miles) 816.34 819.00 829.00 836.00 845.35 852.04 864.68 866.89 867.96 868.39 Streetlights 28,058 28,246 28,401 28,581 28,847 29,028 29,312 29,675 29,757 29,868 Traffic signals 320 320 322 322 353 358 363 365 362 362 Culture and recreation Parks acreage 2,665.00 2,534.00 2,500.00 2,534.00 2,534.00 2,773.00 2,773.00 2,773.00 2,773.00 2,811.00 Community centers 10 10 10 11 11 11 11 11 11 10 Playgrounds 35 30 26 26 27 38 38 41 41 41 Swimming pools 9 6 6 7 6 7 7 7 7 7 Softball & baseball diamonds 36 34 34 35 33 44 44 44 44 49 Library branches 5 7 5 5 6 6 6 7 7 8 Museum exhibit-fixed 1 6 11 8 7 13 8 6 5 8 Museum exhibit-special 4 1 2 5 2 2 2 Water Fire hydrants 6,715 6,763 6,763 6,926 7,127 7,187 7,381 7,523 7,593 7,632 Sewer Sanitary sewers (miles) 735 745 755 765 775 785 794 794 820 823 Electric Miles of overhead distribution system 539.1 593.3 539.0 531.0 527.0 528.0 523.5 522.0 519.0 517.0 Miles of underground system 575.8 538.2 608.0 622.0 663.0 704.0 741.6 769.0 782.0 791.0 Source: City of Riverside, various departments (1) During the 2004/05 fiscal year, four police substations closed.

(2) Museum Fixed Exhibits - In 2007, the Riverside Municipal Museum remodeled a number of the spaces within the museum allowing the museum the opportunity to debut new exhibitions and to display more permanent collections in addition to partnering with others on exhibits that were available that year.

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C i InT i CityArt Vf &Innovatio