ML15033A179

San Onofre Units 2 & 3, Submittal of Annual Corporate Financial Reports for Fiscal Year Ending June 30, 2014

ML15033A179
Person / Time
Site:	San Onofre
Issue date:	01/28/2015
From:	Brabec R C Southern California Edison Co
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
Download: ML15033A179 (277)

Text

.SOUTHERN CALIFORNIA EDISONAn EDISON INTERNATIONAL*

CompanyRichard C. BrabecPrincipal

Manager, Nuclear Regulatory Affairsand Emergency PlanningJanuary 28, 201510 CFR 50.71U. S. Nuclear Regulatory Commission ATTN: Document Control DeskWashington, D. C. 20555-0001

Subject:

Docket Nos. 50-361 and 50-362Annual Corporate Financial ReportsSan Onofre Nuclear Generating Station (SONGS) Units 2 and 3

Dear Sir or Madam:

In accordance with the requirements of 10 CFR Part 50, Section 50.71(b),

enclosed are copiesof the annual financial reports for the licensees of the San Onofre Nuclear Generation Station,Units 2 and 3, who do not submit a Form 10-Q with the Securities and Exchange Commission ora Form 1 with the Federal Energy Regulatory Commission:

the City of Riverside, California (forthe fiscal year ending June 30, 2014); and the City of Anaheim, California (for the fiscal yearending June 30, 2014). Each report includes the appropriate certified financial statement required by Section 50.71(b).

There are no new commitments or required actions resulting from this letter.If you have any questions or require additional information, please contact Ms. Andrea Sterdisat (949) 368-9985.

Enclosure cc: M. L. Dapas, Regional Administrator, NRC Region IVT. Wengert, NRC Project Manager, SONGS Units 2 and 3G. G. Warnick, NRC Senior Resident Inspector, San Onofre Units 2 and 3P.O. Box 128San Clemente, CA 92672(949) 368-7418 PAX 87418Fax: (949) 368-7575John.Brabec@sce.com

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Enclosure Annual Financial Statements for Fiscal Year 2014City of AnaheimandCity of Riverside

Anaheim, California

Anaheim, California

Anaheim, California 1111 IuItoutory Section CITY OF ANAHEIMComprehensive Annual Financial ReportTable of ContentsJune 30, 2014PageINTRODUCTORY SECTIONLetter of Transmittal 1GFOA Certificate of Achievement for Excellence in Financial Reporting 5Organization Chart 7Administrative Personnel 8FINANCIAL SECTIONIndependent Auditors' Report 9Management's Discussion and Analysis (Unaudited) 11Basic Financial Statements Government-wide Financial Statements Statement of Net Position 23Statement of Activities 25Fund Financial Statements Balance Sheet -Governmental Funds 27Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 28Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit)

-Governmental Funds 29Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 30Statement of Revenues, Expenditures and Changes in Fund Balances

-Budget and Budgetary Basis Actual -General Fund 31Statement of Revenues, Expenditures and Changes in Fund Balances

-Budget and Budgetary Basis Actual -Housing Authority 32Statement of Revenues, Expenditures and Changes in Fund Balances

-Budget and Actual -Transportation Improvement Projects 33Statement of Net Position

-Proprietary Funds 34Statement of Revenues, Expenses and Changes in Net Position

-Proprietary Funds 36Statement of Cash Flows -Proprietary Funds 37Statement of Fiduciary Net Position (Deficit)

-Fiduciary Funds 39Statement of Changes in Fiduciary Net Position (Deficit)

-Fiduciary Funds 41Notes to the Financial Statements 43Summary of Pension Obligation Funding Progress 77Combining Individual Fund Statements and Schedules Governmental FundsCombining Balance Sheet -Nonmajor Governmental Funds by Fund Type 79Combining Statement of Revenues, Expenditures and Changes in Fund Balances

-Nonmajor Governmental Funds by Fund Type 80Combining Balance Sheet -Nonmajor Special Revenue Funds 81Combining Statement of Revenues, Expenditures and Changes in Fund Balances

-Nonmajor Special Revenue Funds 82Schedule of Revenues, Expenditures and Changes in Fund Balances

-Budget and Actual -All Nonmajor Special Revenue Funds 83(continued)

CITY OF ANAHEIMComprehensive Annual Financial ReportTable of ContentsJune 30, 2014 (continued)

PageCombining Balance Sheet -Nonmajor Debt Service Funds 87Combining Statement of Revenues, Expenditures and Changes in Fund Balances

-Nonmajor Debt Service Funds 88Schedule of Revenues, Expenditures and Changes in Fund Balances

-Budget and Actual -All Debt Service Funds 89Combining Balance Sheet -Nonmajor Capital Projects Funds 91Combining Statement of Revenues, Expenditures and Changes in Fund Balances

-Nonmajor Capital Projects Funds 92Schedule of Revenues, Expenditures and Changes in Fund Balances

-Budget and Budgetary Basis Actual -All Capital Projects Funds 93Internal Service FundsCombining Statement of Net Position

-Internal Service Funds 97Combining Statement of Revenues, Expenses and Changes in Net Position

-Internal Service Funds 98Combining Statement of Cash Flows -Internal Service Funds 99Fiduciary FundsStatement of Changes in Fiduciary Assets and Liabilities

-Agency Fund -Mello-Roos 101STATISTICAL SECTION (Unaudited)

Net Position by Component

-Last Ten Fiscal Years 104Changes in Net Position

-Last Ten Fiscal Years 105Governmental Activities Tax Revenues by Source -Last Ten Fiscal Years 107Fund Balances of Governmental Funds -Last Ten Fiscal Years 108Changes in Fund Balances of Governmental Funds -Last Ten Fiscal Years 109General Government Tax Revenues by Source -Last Ten Fiscal Years 110Assessed Value and Estimated Actual Value of Taxable Property

-Last Ten Fiscal Years 111Properly Tax Rates -Direct and Overlapping Governments

-Last Ten Fiscal Years 112Principal Property Tax Payers -Current Year and Nine Years Ago 113Properly Tax Levies and Collections

-Last Ten Fiscal Years 114Ratios of Outstanding Debt by Type -Last Ten Fiscal Years 115Ratios of Net General Bonded Debt Outstanding

-Last Ten Fiscal Years 116Direct and Overlapping Governmental Activities Debt -as of June 30, 2014 117Legal Debt Margin -Last Ten Fiscal Years 119Pledged-Revenue Coverage

-Last Ten Fiscal Years 120Demographic and Economic Statistics

-Last Ten Fiscal Years 122Principal Employers

-Current Year and Nine Years Ago 123Full-time Equivalent City Government Employees by Function/Program

-Last Ten Fiscal Years 125Operating Indicators by Function

-Last Ten Fiscal Years 126Capital Assets Statistics by Function

-Last Ten Fiscal Years 128City of Anaheim Map 130 City of Anaheim, California Finance Department December 10, 2014To the Honorable Mayor and City CouncilCity of AnaheimAnaheim, California In accordance with the Charter of the City of Anaheim (City), we are submitting theComprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30,2014. Responsibility for both the accuracy of the data and the completeness andfairness of the presentation, including all disclosures, rests with the City. We believe thedata, as presented, is accurate in all material aspects; that it is presented in a mannerdesigned to fairly set forth the financial position and results of operations of the City, asmeasured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain maximum understanding of the City's financial activities have been included.

The City Charter requires an annual audit of the financial statements of the City by anindependent certified public accountant.

Accordingly, this year's audit was completed by KPMG LLP. In addition to meeting the requirements set forth in the City Charter, theaudit was also designed to meet the requirements of the Single Audit Act Amendments of 1996 and related OMB Circular A-1 33. The auditors' report on the basic financial statements is included in the financial section of this report. The auditors' reports relatedspecifically to the single audit are presented as a separate document.

Management's discussion and analysis (MD&A) immediately follows the independent auditors' report and provides a narrative introduction,

overview, and analysis of thebasic financial statements.

MD&A complements this letter of transmittal and should beread in conjunction with it.ECONOMIC CONDmON AND OUTLOOKThe City is located in northwestern Orange County, about 28 miles southeast ofdowntown Los Angeles and 90 miles north of San Diego. The City lies on a coastalplain, which is bordered by the Pacific Ocean to the west and the Santa Ana Mountains to the east. The City is the oldest and most populous city in Orange County. Anaheimis home to the Disneyland Resort, the Anaheim Convention Center, and two majorleague professional sports teams-the Los Angeles Angels of Anaheim AmericanLeague Baseball team that utilizes the Angel Stadium of Anaheim, and the AnaheimDucks National Hockey League team that utilizes the Honda Center.Anaheim and Orange County are home to a wide spectrum of industries-more than8,000 manufacturing plants are located in the county, most notably defense andaerospace, biomedical, electronics, machinery, and computer product manufacturers.

The City has over 21,000 active business

licenses, of which 16,000 are businesses operating within the City's boundaries.

The unemployment rate in Anaheim for June 2014 was 6.7%, which is above thenotional average (6.3%) but below the state average (7.3%).The City continues the successes and achievements realized in the current year, andrekindles efforts to grow service levels that were impacted during the recession.

TheCity's "Big Three" revenue sources, transient occupancy tax, property tax, and sales anduse tax, sustained steady growth this year with a modest surplus projected.

As the Citymoves into fiscal year 2014/15, we are optimistic about continued growth but remainattentive to the economic climate and mindful of managing our enhanced serviceswithin the limits of our five-year plan.MAJOR INmTATIVES City management, under the direction of the Mayor and City Council, identifies priorities that will determine the path of the City's future. Initiatives are reevaluated regularly, and new ones added, to ensure that they are consistent with the priorities ofour policy body and the community.

Through a commitment to position the City ofAnaheim to better fulfill its mission of delivering outstanding municipal services that areresponsive to our entire community, the City of Anaheim is continuing its tradition ofinnovation, ingenuity, and opportunity by focusing on community needs, buildingneighborhood connections, and governing for results that strengthen communities.

TheCity's dedication to improvement and modernization has created an environment whereresidents and businesses are free to choose how best to enjoy all that Anaheim has tooffer.I CITY OF ANAHEIMENSURING A SAFE COMMUNITY:

Anaheim is a proud, multi-cultural community withdiverse public safety needs. One of our fundamental tenets is ensuring we remain a safeand prosperous community for families and individuals.

Budget for the fiscal year2014/15 provides for continued support of the many resources to strengthen community policing and community outreach programs.

A focus for the City isengaging our youth through a variety of pioneering police programs, including JuniorCadets, Anaheim Police Explorers, Gang Reduction and Intervention Partnership (GRIP)and a new Public Safety Career Pathway for junior high school students focused oncharacter building.

We continue our investment in additional police officers to further our commitment ofensuring Anaheim remains one of the safest communities of its size. The fiscal year2014/15 budget supports the strategic allocation of resources, particularly policeofficers who patrol neighborhoods, suppress gangs, solve crimes and workcollaboratively with stakeholders on crime prevention strategies.

To support the fundamentals of community

policing, the budget includes continued support for the Chiefs Neighborhood Advisory Council established this year, whichserves as a collaborative partnership with Anaheim residents and the Anaheim PoliceDepartment to discuss neighborhood safety concerns and crime prevention techniques.

Through the partnerships with our community, the Anaheim Police Department cancontinue to train police officers on complex socio-economic neighborhood public safetyconcerns, implement a Psychological Evaluation Response Team to comprehensively respond to calls for service and employ robust crime prevention strategies.

In the area of fire and emergency

services, Anaheim Fire & Rescue reached amomentous milestone this year becoming the 13th accredited agency in California, and196th nationwide, by the Commission on Fire Accreditation International.

Following arigorous

process, this accreditation demonstrates Anaheim Fire & Rescue's commitment to continuous organizational improvement and exceptional fire and emergency servicesto the residents and visitors of Anaheim.As part of Anaheim Fire & Rescue's Strategic Plan, efforts to replace and repair agingequipment continue.

During the upcoming fiscal year, replacement of another fireengine is planned to ensure the department's delivery of high quality service to ourcommunity members is upheld.For fiscal year 2014/15, the City also proceeds with the Quality Rental Housingprogram, approved by City Council this year, with the goal of identifying and abatingsubstandard rental housing conditions.

Code Enforcement Officers will conduct routine,periodic surveys of rental housing units, in order to help ensure safe homes andresidences for our community.

COMMUNITY INFRASTRUCTURE:

The fiscal year 2014/15 adopted budget illustrates our commitment to increasing park space, improving aging resources and creating newopportunities for neighbors to engage in healthy living through outdoor recreation atour radiant parks and community centers.Over the past 24 months, the City has embarked on an innovative community partnership with KABOOM! to deliver a high level of service to our residents.

Throughthis partnership, five playgrounds at John Marshall Park, Edison Park, Stoddard Park,Schweitzer Park and Modjeska Park have been built by hundreds of local residents, neighbors and volunteers, resulting in a renewed sense of neighborhood pride. Thesepartnerships will continue to take shape in fiscal year 2014/15.This coming fiscal year will also celebrate the opening of more than a dozen newcommunity resources in our thriving neighborhoods from east to west and north tosouth. The opening of the Miraloma Park and Family Resource Center is scheduled forthe begin of year 2015. Visitors to the park will be able to enjoy a perimeter loop trail,skate plaza, picnic facilities and an outdoor classroom area. The park design wascompleted with input and collaboration from community members.

From the selection of building colors to the amenities at the center, the park is being designed based onthe feedback from the neighborhood.

In close proximity to Paul Revere Elementary, construction is scheduled to be completed by December 2014 at Paul Revere Park, located near Guinida Lane. The new park willfeature amenities for all ages, including a children's playground area, gazebo withpicnic tables, exercise equipment and a volleyball court. A mural featured at the parkentrance was also designed by artwork from local youth.A new amenity to the City will be the addition of two dog parks, one at La Palma Parkand the second next to the Olive Hills Tennis Courts. These parks dedicate space forresidents' dogs in need of a place to exercise and socialize in a secure environment.

Recognizing the fabric of our community is comprised of our growing youth, this yearnew programs were brought forth to help our youth flourish in their educational endeavors.

A new mobile after school recreation

program, Fun on Wheels, wasimplemented, providing

fitness, art and homework help to more than 9,000 youththroughout our multifaceted neighborhoods.

In addition, library service hours wereextended at several branches to allow for more students to visit the library and utilizethe ever important resources.

The positive impact of these programs are apparent andsomething that the City will continue in fiscal year 2014/15.Parks, open space and safe neighborhoods make Anaheim a great place for childrenand young adults to connect with one another and develop lasting friendships.

Therefore, it is imperative that Anaheim parks and community resources remain a vitalpart of our overall community.

2 CITY OF ANAHEIMOUTREACH TO OUR COMMUNITY:

During fiscal year 2013/14, the City introduced a new Anaheim e-newsletter to provide community updates on a monthly basis. TheCommunity Services Department also launched a new bilingual publication, YourCommunity/Tu Comunidad, to better serve our residents.

A new online resource toolwas instituted, called My Community Resource Map, to help residents and visitors locatenearby services and resources from the convenience of a mobile device.In fiscal year 2013/14, the City successfully launched its partnership with Open Gov(see https://anaheim.opengov.com),

an online analysis tool that allows the public toview our current and historical budget data, review trends through visual graphs, anddrill down to different levels of budget detail. This project is furthering the City's goal ofproviding transparent public service operations and data that is logical, meaningful anduseful to the community.

OpenGov can be used by the public as a tool to review andanalyze the City's fiscal year 2014/15 budget.In the coming fiscal year, we will look to enhance Anaheim magazine, which is mailedto every Anaheim residence and business, by offering bilingual features that speak toour Citywide programs and resources.

The City will also embark on improving perhapsour most powerful communication mechanism, www.anaheim.net, with a completeredesign.

MAINTAINING A BEAUTIFUL CITY: Anaheim enters fiscal year 2014/15 well-positioned to maintain the City's extensive network of roadways, sidewalks andinfrastructure that allows residents and visitors to move seamlessly and efficiently through our City. In the coming year, the Public Works Department plans to improveCity roadways by slurry sealing four million square feet of pavement, or the equivalent of 185 neighborhood blocks. Widening projects on Brookhurst Street and KatellaAvenue also will be completed, resulting in improved vehicle mobility on those twomajor thoroughfares.

In fiscal year 2014/15, Anaheim Public Utilities continues with its innovative Underground Conversion program.

To date, more than 113 electrical circuit miles ofaging overhead poles and wires have been replaced with underground systems thatimprove reliability and increase neighborhood aesthetics.

Anaheim Public Utilities works in conjunction with the Public Works Department to accelerate undergrounding

programs, when possible, as part of street construction/reconstruction efforts tominimize the impact on the surrounding community.

To ensure our beautifully tree-lined streets remain healthy and attractive, the City willundergo a robust pruning plan in the coming year, pruning approximately 20,000trees. Residents and visitors will also benefit from 200 new trees that will be plantedthroughout the City this year.As the City embraces green technology, the Anaheim Public Utilities Solar Energyprogram was enhanced this year to encourage the maximum number of participants and improve services for our utility customers.

Anaheim Public Utilities' largest customerservice enhancement effort will be the launch of the new Customer Information System(CIS) that went live in June 2014. The deployment will update the existing system thathas been in place for almost two decades.

The new, robust CIS will enhance customerfunctionality, as well as allow Customer Service Representatives the ability to providecustomers with real time consumption and billing information.

The new CIS deployment will also increase customer billing option flexibility, allowing customers to remain on thecurrent, bi-monthly billing cycle, or move to a monthly schedule.

ENCOURAGING BUSINESS GROWTH: The Business Assistance Program wasintroduced in fiscal year 2013/14 and will continue to evolve in the coming fiscal year.This program offers personalized assistance for businesses submitting plans for tenantimprovements, expansions, or construction of new structures, assigning a single pointof contact to answer questions, monitor the progress of projects, and linkcommunications between City staff and clients.

To date, more than 200 customers haveparticipated and found it easier to open businesses in Anaheim, and/or expand orevolve their current business as quickly as possible.

PREMIERE DESTINATION:

The Anaheim Resort is an iconic area in Anaheim thatattracts more than 22 million visitors annually and contributes significant revenue to ourGeneral Fund, which in turn allows us to reinvest in our neighborhoods, public safetyand aging infrastructure.

Additionally, the improvements in Downtown Anaheim makeus well poised to attract new shoppers by offering unique boutiques and one-of-a-kind delectable restaurants.

Perhaps the most exciting milestone this coming year will be the completion of theAnaheim Regional Transportation Intermodal Center (ARTIC).

The construction of thisawe-inspiring facility will be completed in late 2014, giving residents and visitors accessto numerous forms of transportation that will provide convenient options for individuals wishing to experience Anaheim and its surrounding communities.

As the largest on the west coast, the Anaheim Convention Center hosts majorconventions on an annual basis that directly benefit the City's General Fund. To ensureAnaheim stays competitive among other convention

centers, the venue will breakground on its seventh expansion in fiscal year 2014/15, adding 200,000 square-feet of leasable space that can be used as exhibit,

ballroom, or meeting rooms, andincreasing the Anaheim Convention Center's available exhibit square footage to morethan 1 million square-feet.

The expansion will allow the City to accommodate conventions that were previously too large for our venue, thus further contributing to theCity's positive financial outlook.3 CITY OF ANAHEIMFINANCIAL INFORMATION Management of the City is responsible for establishing and maintaining internal controldesigned to ensure that the assets of the government are protected from loss, theft, ormisuse, and to ensure that adequate accounting data are compiled to allow for thepreparation of financial statements in conformity with U.S. generally acceptedaccounting principles.

Internal control is designed to provide reasonable, but notabsolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to bederived; and (2) the valuation of costs and benefits requires estimates and judgments by management.

This report consists of management's representations concerning the finances of the City.As a result, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. Management asserts that, to the bestof their knowledge and belief, this financial report is complete and reliable in allmaterial respects.

BUDGETARY CONTROLS:

The City maintains budgetary

controls, the objective of whichis to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council.

Activities of the General Fund, special revenuefunds, debt service funds, capital projects funds, and all the proprietary funds areincluded in the annual appropriated budget. The level of budgetary control (that is, thelevel at which expenditures cannot legally exceed the appropriated amount) isestablished at the departmental level. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control.Encumbrances generally are re-appropriated as part of the following year's budget.RELEVANT FINANCIAL POLICIES:

Over the years, through sound fiscal management, the City has positioned itself well to weather economic

downtums, create a positiveatmosphere for economic development, and allow flexibility in addressing budgetary challenges.

As of June 30, 2014, the City's General Fund has a spendable, unassigned fund balance of $30.4 million, which represents 12% of total expenditures.

Traditionally, the policy has been to maintain General Fund reserves at a minimum of7 to 10% of expenditures.

Further, the City has a long-standing practice of recognizing and reserving for knownand anticipated liabilities.

The City fully funds its compensated absences and selfinsurance liabilities.

Additionally, the City has established an irrevocable trust for otherpost-employment benefits (also known as retiree medical) and continues to make theannual required contribution (ARC) to ensure this future obligation is fully funded.LONG-TERM FINANCIAL PLANNING:

On June 17, 2014, the City Council adoptedthe fiscal year 2015 budget. Additionally, as a companion to approving the budgetplan, a five-year Capital Improvement Plan was presented to the City Council.

The five-year plan links anticipated expenditures for infrastructure development with community needs and desires, and provides a citywide perspective of recommended projects andproposed funding sources.

The Capital Improvement Plan was finalized in June 2014,and totaled $765.2 million for the five-year fiscal period ending June 30, 2019. Thefive-year Capital Improvement Plan has been submitted and annually

updated, in itspresent form, since 1982, for effective long-range planning purposes.

It is CityManagement's belief that these two plans give City Council members an expandedopportunity to set policy and provide direction for implementation, resulting in improvedmanagement efficiency and improved financial results.AWARDGOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES ANDCANADA (GFOA) CERTIFICATE OF ACHIEVEMENT AWARD: The GFOA awarded aCertificate of Achievement for Excellence in Financial Reporting to the City of Anaheim,Califomia, for its comprehensive annual financial report for the fiscal year ended June30, 2013. This was the 38th consecutive year that the City has achieved this prestigious award (fiscal years ended June 30, 1976 through 2013). In order to be awarded theCertificate of Achievement, a government must publish an easily readable andefficiently organized comprehensive annual financial report. This report must satisfyboth U.S. generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe ourcurrent comprehensive annual financial report continues to conform to the Certificate ofAchievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate.

ACKNOWLEDGMENTS The preparation of this report on a timely basis is a team effort involving manydedicated people across the entire organization.

I would like to extend a special thanksto the talented finance professionals throughout the City, led by Peggy Au, Financial Accounting Manager.

Appreciation is also expressed to Mayor Tom Tait, Mayor ProTemGail Eastman, and Interim Assistant City Manager Kristine Ridge for their significant contributions as members of the Audit Committee.

In closing, without the leadership andsupport of the City Council, preparation and results of this report would not have beenpossible.

Its leadership has made possible the implementation of these important andinnovative concepts in fiscal management by the City.Respectfully submitted, Paul S. EmeryInterim City ManagerDeborah A. MorenoFinance Director 4

CITY OF ANAHEIMGovernment Finance Officers Association Certificate ofAchievement for Excellence in Financial Reporting Presented toCity of AnaheimCalifornia The Government Finance Officers Association of the UnitedStates and Canada (GFOA) awarded a Certificate ofAchievement for Excellence in Financial Reporting to the Cityof Anaheim, California for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2013. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation ofstate and local government financial reports.In order to be awarded a Certificate of Achievement, agovernmental unit must publish an easily readable andefficiently organized Comprehensive Annual Financial Report,whose contents conform to program standards.

Such reportsmust satisfy both generally accepted accounting principles andapplicable legal requirements.

A Certificate of Achievement is valid for a period of one yearonly. We believe our current report continues to conform toCertificate of Achievement program requirements, and we aresubmitting it to GFOA.For its Comprehensive AnnualFinancial Reportfor the Fiscal Year EndedJune 30, 2013Executive Director/CEO 5

(This page left blank intentionally) 6 CITY OF ANAHEIMCtznofAnaei IEectedPolcyMaker CondI Ap. ted OfficersApponted Boards mid Cwnsissioro I7 CITY OF ANAHEIMAdministrative Personnel June 30, 2014Interim City ManagerInterim Assistant City ManagerDeputy City ManagerChief of PoliceCity AttorneyCity ClerkCity Treasurer Community Development DirectorCommunity Services DirectorConvention, Sports & Entertainment Executive DirectorFinance DirectorFire ChiefInterim Human Resources DirectorPlanning DirectorPublic Utilities General ManagerPublic Works DirectorPaul S. EmeryKristine A. RidgeGreg GarciaRaul QuezadaMichael R.W. HoustonLinda N. AndalHenry W. SternJohn E. Woodhead IVTerry D. LoweThomas MortonDeborah A. MorenoRandy R. BruegmanChristopher K. ChaseSheri Vander DussenDukku LeeNatalie Meeks 8 Financial Section_ý KPMG LLPSuite 70020 PacificaIrvine, CA 92618-3391 Independent Auditors' ReportThe Honorable Mayor and City CouncilCity of Anaheim, California:

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business type activities, each major fund, and the aggregate remaining fundinformation of the City of Anaheim, California (the City), as of and for the year endedJune 30, 2014, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; thisincludes the design, implementation, and maintenance of internal control relevant to thepreparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error.Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on ouraudit. 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 theaudit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.

As audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements.

The procedures selected depend on theauditors'

judgment, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the entity's internal control.

Accordingly, we express no suchopinion.

An audit also includes evaluating the appropriateness of accounting policesuse and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinions.

OpinionsIn our opinion, the basic financial statements referred to above present fairly, in allmaterial

respects, the respective financial position of the governmental activities, thebusiness type activities, each major fund, and the aggregate remaining fundinformation of the City of Anaheim, California, as of June 30, 2014, and the respective changes in financial

position, and where applicable, cash flows thereof and therespective budgetary comparison for the General and Housing Authority, andTransportation Improvements Projects Funds for the year then ended, in accordance with U.S. generally accepted accounting principles.

Other MattersRequired Supplementary Information U.S. generally accepted accounting principles require that the managements discussion and analysis on pages 11 through 22 and the schedules of funding progress on page77 be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,

economic, or historical context.

We have applied certain limited procedures to therequires supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information forconsistency with managements responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express anopinion or provide any assurance.

9 Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements.

Theaccompanying introductory

section, combining individual fund statements andschedules, and the statistical section as listed in the table of contents are presented forpurposes of additional analysis and are not a required part of the basic financial statements.

The combining individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements.

Such information hasbeen subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used toprepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America.

In our opinion, the combining individual fundfinancial statements and schedules are fairly stated in all material respects in relation tothe basic financial statements as a whole.The introductory and statistical sections have not been subjected to the auditingprocedures applied in the audit of the basic financial statements, and accordingly, wedo not express an opinion or provide any assurance on them.Other Reporting Required by Government Auditing Standards In accordance with Governmental Auditing Standards, we have also issued our reportdated December 10, 2014 on our consideration of the City's internal control overfinancial reporting and on our tests of its compliance with certain provisions of laws,regulations, contracts, and grant agreements and other matters.

The purpose of thatreport 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 internalcontrol over financial reporting or on compliance.

That report is an integral part of anaudit performed in accordance with Government Auditing Standards in considering theCity's internal control over financial reporting and compliance.

M LLCPIrvine, Califomia December 10, 2014KPMG LUP, h Dolwor Iloild lioility yorloehip, thre U.S. mme~be firr of KPMG Intornofionof Cooporoion (NKPMG Intoroton&J),

a Sowi, wntly. 110 Management's Discussion and Analysis CITY OF ANAHEIMManagement's Discussion and Analysis(Unaudited)

As management of the City of Anaheim (City), we offer readers of the City's basicfinancial statements this narrative overview and analysis of the financial activities of theCity as of and for the fiscal year ended June 30, 2014. We encourage readers toconsider the information presented here in conjunction with additional information thatwe have furnished in our letter of transmittal, which can be found in the introductory section of this report, and the City's basic financial statements in the financial section ofthis report. All amounts, unless otherwise indicated, are expressed in thousands ofdollars.OVERVIEW OF THE BASIC FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City's basicfinancial statements.

The City's basic financial statements are comprised of threecomponents:

1) government-wide financial statements,

2) fund financial statements, and3) notes to financial statements.

This report also contains other supplementary information in addition to the basic financial statements themselves.

COMPONENTS OFTHE ANNUAL FINANCIAL REPORT---------------

-Govemment-wide financial statements.

The government-wide financial statements are comprised of the Statement of Net Position and the Statement ofActivities.

These two statements are designed to provide readers with a broad overviewof the City's finances utilizing the full accrual method of accounting, in a manner similarto a private-sector business.

Under the full accrual method of accounting, transactions are reported as soon as the underlying event giving rise to the change occurs,regardless of the timing of related cash flows. Thus, assets, liabilities, revenues andexpenses are reported in these statements for some items that will only result in cashflows in future fiscal periods (e.g. uncollected revenues and accrued but unpaid interestexpense).

The Statement of Net Position presents information on all of the City's assets, deferredoutflows of resources, liabilities and deferred inflows of resources, including capitalassets and long-term liabilities, with the difference reported as net position.

Over time,increases or decreases in net position may serve as a useful indicator of whether thefinancial position of the City as a whole is improving or deteriorating.

The Statement of Activities presents information showing how the City's net positionchanged during the most recent fiscal year. Functional activities are highlighted in thisstatement, whereby direct and indirect functional costs are shown net of relatedprogram revenue.

This statement shows the extent to which the various functions dependon general taxes and non-program revenues for support.Management's Discussion andAnalysis~..0AThe government-wide financial statements distinguish functions of the City that areprincipally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion oftheir costs through user fees and charges (business-type activities).

The governmental activities of the City include general government, Police, Fire, Community Development,

Planning, Public Works, Community

Services, Public Utilities (street lighting),

Convention, Sports and Entertainment (Visitor and Convention Bureau and the HondaCenter),

and interest on related long-term debt. The business-type activities of the Cityinclude the electric, water and sanitation utilities, golf courses, and convention, sportsand entertainment venues (Anaheim Convention Center, Angel Stadium of Anaheim,and The City National Grove of Anaheim) operations.

Notes to theFinancial Statements The government-wide financial statements include not only the City itself, but also theAnaheim Housing Authority, Community Center Authority, Anaheim PublicImprovement Corporation, and Anaheim Public Financing Authority.

Although theseentities are legally separate, they function for all practical purposes as a part of the City,and therefore have been included as blended component units as an integral port ofthe primary government.

Summary 4 WDetail11 CITY OF ANAHEIMThe government-wide financial statements can be found on pages 23-25 of this report.Fund financial statements.

The fund financial statements focus on currentavailable resources and are organized and operated on the basis of funds, each ofwhich is defined as a fiscal and accounting entity with a self-balancing set of accounts, established for the purpose of carrying on specific activities or attaining certainobjectives in accordance with special regulations, restrictions or limitations.

All of thefunds of the City can be divided into three categories:

governmental funds, proprietary funds, and fiduciary funds.Governmental funds. Governmental funds are used to account for essentially thesame functions reported as governmental activities in the government-wide financial statements.

However, unlike the government-wide financial statements, thegovernmental funds financial statements utilize the modified accrual basis ofaccounting, which focuses on near-term inflow and outflow of spendable resources, aswell as on balances of spendable resources available at the end of the fiscal year. Suchinformation may be useful in evaluating a government's near-term financial requirements.

Because the focus of the governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for thegovernmental funds with similar information presented for governmental activities in thegovernment-wide financial statements.

By doing so, readers may better understand thelong-term impact of the government's near-term financing decisions.

Both thegovernmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate thiscomparison between governmental funds and governmental activities.

The City maintains 19 individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and in the governmental fundsStatement of Revenues, Expenditures and Changes in Fund Balances for the GeneralFund, the Housing Authority Special Revenue Fund and the Transportation Improvement Projects Capital Project Fund, which are considered to be major funds. Data for theremaining 16 governmental funds are combined into a single, aggregated presentation.

Individual fund data for each of these nonmajor governmental funds isprovided in the form of supplementary combining statements on pages 79-82, 87-88,and 91-92 of this report.The City adopts an annually appropriated budget for all governmental and proprietary funds. Budgetary comparison statements for the General Fund and the major specialrevenue fund (Housing Authority) are required to be presented, a budgetary schedulefor the Transportation Improvement Projects major capital project fund is also includedfor additional information; these schedules are included in the basic financial statements on pages 31-33 of this report. Additionally, budgetary schedules for the othergovernmental funds have been provided to demonstrate compliance with the budgetand can be found as part of other supplementary schedules on pages 83-86, 89-90,and 93-95 of this report.The governmental funds financial statements can be found on pages 27-30 of thisreport.Proprietary funds. The City maintains two different types of proprietary funds.Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements.

The City uses its enterprise fundsto account for its electric, water and sanitation utilities, golf courses, and convention, sports and entertainment venues operations.

Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's variousfunctions.

The City uses internal service funds to account for its general benefits andinsurance, motorized equipment, information

services, and municipal facilities maintenance functions.

Because these services predominantly benefit governmental rather than business-type functions, they have been included with governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary funds financial statements provide separate information for all of the enterprise funds, which are considered to bemajor funds of the City. Conversely, all of the internal service funds are combined intoa single, aggregated presentation in the proprietary funds financial statements.

Individual fund data for the intemal service funds is provided in the form of combining statements elsewhere in this report.The proprietary funds financial statements can be found on pages 34-38 of this report.Fiduciary funds. Fiduciary funds are used to account for resources held for thebenefit of parties outside the government.

Fiduciary funds are not reflected in thegovernment-wide financial statements because the resources of those funds are notavailable to support the City's own programs.

The City maintains three different types of fiduciary funds. The Investment Trust Fund isused to account for the external portion of the City's investment pool; the Private-Purpose Trust Fund is used to account for the assets and liabilities held in trust for the Successor Agency to the former Redevelopment Agency (Successor Agency);

the Agency Fund isused to account for monies collected and disbursed in a custodial capacity for the Mello-Roos districts in the City.12 CITY OF ANAHEIMThe fiduciary fund financial statements can be found on page 39-41 of this report.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 andfund financial statements.

The notes to the financial statements can be found on pages43-75 of this report.Other supplementary information.

In addition to the basic financial statements and accompanying notes, this report also presents combining individual fundstatements referred to earlier in connection with nonmajor governmental funds andinternal service funds. Also included are the budgetary comparison Schedules ofRevenues, Expenditures and Changes in Fund Balances for all nonmajor specialrevenue funds, all debt service funds, and all capital projects funds. These statements and schedules can be found on pages79-100 of this report.FINANCIAL HIGHUGHTS (Amounts in thousands)

• The Citys total assets and deferred outflows of resources exceeded its liabilities anddeferred inflows of resources at the end of the current fiscal year by $2,231,246.

Of this amount, $108,173 represents unrestricted net position, which may be usedto meet the City's ongoing obligations to citizens and creditors.

• The City's governmental activities represent

$1,234,925 (55%) and the business-type activities account for $996,321 (45%) of the City's total net position.

" The Citys net position increased as a result of the current fiscal year's operations.

The net position of the City's governmental activities increased

$113,106 (10%);business-type activities net position increased

$16,648 (2%)." At the close of the current fiscal year, the City's governmental funds reported acombined fund balance of $254,598, an increase of $5,306 in comparison withthe prior fiscal year. Approximately 5% of this amount ($11,389) is available forspending at the City's discretion (unassigned fund balance).

" At the end of the current fiscal year, unrestricted fund balance (total of committed, assigned and unassigned fund balance) for the General Fund was $34,467 or 14%of total General Fund expenditures.

Unassigned fund balance was $30,394 or 12%of total General Fund expenditures.

" The City's total capital assets increased by $140,757 (5%). Capital assets in theCity's governmental activities increased by $101,698 (7%) and business-type activities capital assets increased by $39,059 (2%) during the current fiscal year." The Citys total long-term liabilities decreased by $100,410 (5%) during the currentfiscal year; of this amount, long-term liabilities in the City's governmental activities decreased by $4,856 (1%), and business-type activities decreased by $95,554(9%).13 CITY OF ANAHEIMGOVERNMENT-WIDE FINANCIAL ANALYSISNET POSITIONJUNE 30, 2014 AND 2013Current and other assetsCapital assets, netTotal assetsDeferred outflows of resources Total assets and deferred outflows of resources Other liabilities Long-term liabilities Total liabilities Deferred Inflows of resources Total liabilities and deferred inflows of resources Net position:

Net investment in capital assetsRestricted Unrestricted Total net positionGovernmental Activities 2014 2013$ 540,366 $ 522,7081,494,225 1,392,527 2,034,591 1,915,235 2,177 2,3772,036,768 1,917,612 66,703 55,797735,140 739,996801,843 795,793801,843 795,793Business-type Activities 2014 2013$ 563,614 $ 633,3281,614,417 1,575,358 2,178,031 2,208,686 4,600 5,9322,182,631 2,214,618 90,516 62,3061,000,488 1,098,642 1,091,004 1,160,948 95,306 73,9971,186,310 1,234,945 TotalGovernment 2014 2013$1,103,980

$1,156,036 3,108,642 2,967,885 4,212,622 4,123,921 6,777 8,3094,219,399 4,132,230 157,219 118,1031,735,628 1,838,638 1,892,847 1,956,741 95,306 73,9971,988,153 2,030,738 1,016,259 205,99812,668$1,234,925 894,625196,85330,341$1,121,819 823,50577,31195,505$ 996,321787,45971,131121,083$ 979,6731,839,764 283,309108,173$2,231,246 1,682,084 267,984151,424$2,101,492 At the end of fiscal year 2014, the City's net position totaled $2,231,246.

The largestportion of the City's net position

$1,839,764 (82%) reflects its investment in capitalassets (e.g. land, buildings, utility plant, machinery, equipment, and infrastructure),

netof any related outstanding debt that was used to acquire those assets. The City usesthese assets to provide services to citizens; consequently, these assets are not available for future spending.

Although the City's investment in capital assets is reported net ofrelated debt, it should be noted that the resources needed to repay this debt must beprovided from other sources, since the capital assets themselves cannot be used toliquidate these liabilities.

An additional portion of the City's net position

$283,309 (13%) represents resources that are subject to extemal.

restrictions on how they may be used. The increase inrestricted net position of $15,325 is primarily due to unspent restricted resources of$6,809 from the gain on sale of housing land held for resale and $4,902 restricted forclaims and judgments.

The remaining balance of $108,173 (5%) is unrestricted net position that may be usedto meet the City's ongoing obligations to citizens and creditors.

The Citys totalunrestricted net position decreased by $43,251 primarily due to more unrestricted resources were invested in capital assets that includes the acquisition of land, vehicles, the constructions of a compressed natural gas facility, the Anaheim Convention Centerexpansion and Electric Utility facilities.

14 CITY OF ANAHEIMCHANGE IN NET POSITIONYEAR ENDED JUNE 30, 2014 AND 2013Governmental Business-type TotalActivities Activities Government 2014 2013 2014 2013 2014 2013REVENUESProgram revenues:

Charges for services

$ 73,675 $ 64,138 $586,591

$604,388

$ 660,266 $ 668,526Operating grants and contributions 114,584 112,507 452 952 115,036 113,459Capital grants and contributions 110,295 71,472 8,441 6,698 118,736 78,170General revenues:

Taxes:Property taxes 66,282 64,311 66,282 64,311Sales and use taxes 67,505 65,445 67,505 65,445Transient occupancy taxes 110,134 102,936 110,134 102,936Motor vehicle license fees 331 331Other taxes 7,780 7,756 7,780 7,756Unrestricted investment earnings 2,930 1,094 6,986 3,323 9,916 4,417Other 49 1,857 ___ ___ 49 1,857Total revenues 553,234 491,847 602,470 615,361 1,155,704 1,107,208 EXPENSESProgram activities:

Governmental activities:

General government 15,790 13,275 15,790 13,275Police 127,037 124,556 127,037 124,556Fire 59,510 58,508 59,510 58,508Community Development 80,043 82,769 80,043 82,769Planning 17,030 16,917 17,030 16,917Public Works 60,262 44,740 60,262 44,740Community Services 34,130 28,925 34,130 28,925Public Utilities 2,514 2,405 2,514 2,405Convention, Sports and Entertainment 15,586 13,935 15,586 13,935Interest an long-term debt 35,514 35,880 35,514 35,880Business-type activities:

Electric Utility 411,246 417,008 411,246 417,008Water Utility 62,996 57,056 62,996 57,056Sanitation Utility 53,508 52,813 53,508 52,813Golf Courses 4,399 4,473 4,399 4,473Convention, Sports and Entertainment Venues _____ _____46,385 45,001 46,385 45,001Total expenses 447,416 421,910 578,534 576,351 1,025,950 998,261Excess before transfers 105,818 69,937 23,936 39,010 129,754 108,947Transfers in (out) 7,288 12,824 (7,288) (12,824)

____ _____Increase in net position 113,106 82,761 16,648 26,186 129,754 108,947Effect of implementation GASB Statement No. 65 (1,300) (6,337) (7,637)Net position at beginning of year 1,121,819 1,040,358 979,673 959,824 2,101,492 2,000,182 Net position at end of year $1,234,925

$1,121,819

$996,321

$979,67-3

$2,231,246

$2,101,492 15 CITY OF ANAHEIMREVENUES BY SOURCE -GOVERNMENTAL ACTIVITIES Other taxes1%Unrestricted investment earnings1%0th<1%er,Charges for services13%Transient occupancy taxes _pn 120%Operating grants andWl contributions

-21%Sales and use tax12%Property taxes-- Capital grants and12% contributions 20%" Taxes increased

$10,922 (5%) mainly due to the increase of $7,198 (7%) intransient occupancy taxes (TOT). With a revitalized economy and Disney'sexpansion of the California Adventure, tourism has shown a dramatic recoveryfrom recession lows in fiscal year 2010. Sales and use tax increased

$2,060 (3%),most notably with stronger performance in construction-related sales and a generalimprovement across most business sectors.

Finally, property taxes increased

$1,971(3%)." Charges for services increased

$9,537 (15%) primarily due to increases in buildingpermits and fees of $1,342 due to increased activities in construction and therelated inspections, increases in residual receipts of $1,108 from housing projectsand increases in gain of $6,809 from the sale of housing land held for resale." Operating grants increased

$2,077 (2%) mainly due to increases of $3,030 in gastax distributions from the State of California,

$4,243 in first-time homebuyer assistance loan BEGIN and HOME grants. The increases are partially offset bydecreases of $2,034 in Urban Area Security Initiative (UASI) grant reimbursements due to the nature and timing of projects,

$1,476 in Narcotic Asset Forfeitures as aresult of money and property seizures in drug-related incidents and a $1,553 (2%)decrease in U.S. Department of Housing and Urban Development (HUD) Section 8rental assistance.

" Capital grants and contributions increased by $38,823 (54%) primarily due togrant reimbursements for the Anaheim Regional Transportation Intermodal Center(ARTIC) as the project construction was in full swing during the entire fiscal year." Unrestricted investment earnings increased by $1,836 (168%) due to reversal of aninvestment portfolio unrealized investment loss from the prior fiscal year." Other revenues decreased by $1,808 (97%) primarily due to one-time property taxadministration fee refund of $1,916 from the County of Orange in the prior fiscalyear.Governmental activities net transfers in decreased

$5,536 (43%) mainly due to a one-time transfer out of $4,864 of restricted resources related to sewer construction to theSanitation

Utility, and $600 related to the Water Transfer settlement to the Water Utility.There were no other significant or unusual changes.Governmental activities.

Governmental activities increased the City's net positionby $113,106.

Key elements of this increase are as follows:The most significant revenues of the governmental activities are general taxes (45%),which include transient occupancy taxes (20%), properly taxes (12%), sales and usetaxes (1 2%), and other taxes (1%). Program revenues are 54% of the total revenues ofthe governmental activities, which include operating grants and contributions (21%),capital grants and contributions (20%), and charges for services (13%); unrestricted investment earnings is 1% of the total revenues.

Public safety (Police and Fire) expenses are the most significant (42%) of allgovernmental activities

expenses, followed by Community Development (18%), PublicWorks (13%), Community Services (8%), interest on long-term debt (8%), and variousother programs (11%). Included in these amounts is depreciation

expense, which is 6%of the total expenses for governmental activities.

Governmental activities revenues showed improvement in all revenue categories.

Revenues increased

$61,387 (12%) as compared to the prior fiscal year due to thefollowing:

16 CITY OF ANAHEIMEXPENSES AND PROGRAM REVENUES

-GOVERNMENTAL ACTIVITIES REVENUES BY SOURCE -BUSINESS-TYPE ACTIVITIES Capital grants andcontributions 2%nts andDnsUnrestricted investment earnings1%Operating grancontributio

<1%R Program revenues u ExpensesGovernmental activities expenses increased

$25,506 (6%) as compared to prior fiscalyear due to the following:

" The increase in Public Safety expenses of $3,483 (2%) is primarily due to serviceenhancements in public safety and emergency response services.

Of this amount,salary and benefits costs increased approximately

$3,325 which includes additionof 8 new positions, new firefighters and paramedic training.

• The increase in Public Works expenses of $15,522 is due to approximately

$1,740of infrastructure maintenance,

$1,841 of one-time refund of prior years' receipts, and $11,566 of capital asset retirements.

Upon completion of the Gene Autry Wayconstruction, the Gene Autry Way bridge and certain infrastructure assets ($8,968)were retired from the City's capital assets as they will be maintained by anotheragency; and the loss on retirement of capital assets ($2,598).

• Community Services expenses increased

$5,205. The increase is mainly due to theCity's on-going service enhancements to neighborhoods that includes additional community center and libraries hours and park tree maintenance.

Of this amount$1,234 was attributable to salary and benefit increases and, $2,684 a one-timerefund on prior years receipts.

• The increase in Convention, Sports and Entertainment Venues expenses of $1,651is mainly due to increase in depreciation expense of $940.* The increases in govemment activities expenses were partially offset by the decreasein Community Development expenses of $2,726 mainly due to decrease in Section8 rental assistance of $3,592 resulting from program attrition of 236 leasing unitsmonthly.Charges for services97%Business-type activities.

Business-type activities increased the City's net positionby $16,648.

Key elements of this change are as follows:Charges for services of $586,591 decreased by $17,797 (3%). The decrease incharges for services was primarily due to a decrease from the Electric Utility of $25,907(6%) offset by an increase in the Water Utility of $5,161 (8%) and Convention, Sportsand Entertainment Venues of $2,428 (8%)." The decrease of $25,907 in the Electric Utility charges for services is partly due toa $12,395 (4%) decrease in retail sales revenues.

This decrease is attributable todecreased sales volumes resulting from cooler weather and the Electric Utility's continued investment in conservation and efficiency measures.

Wholesales revenues increased by $16,052 (61%) mainly due to a 65% increase in wholesale sales volumes, resulting from competitive rates in the wholesale market and moresurplus energy available from the increased renewable resources purchased andreduced retail sales in the current fiscal year. Surplus natural gas sales decreased by $8,020 (88%) due to less natural gas available for resale in the spot market,and more purchased gas used for the Magnolia power plant resulting in an 96%increase in its power production.

Transmission revenues decreased by $6,942(17%) due to lower transmission demand and rates set by the California Independent System Operator (CAISO).

Finally, the Rate Stabilization Account(RSA) revenues are recognized to meet debt service coverage ratios to maintainbond ratings and decreased by $14,500 (36%) due to decreased purchase powercosts and reduced debt service payments in the current fiscal year. Information relating to the RSA can be found in note 1 of the notes to the financial statement.

" The increase of $5,161 in Water Utility charges for services is mainly due to a$5,037 (8%) increase in water sales as a result of the 1.3% increase in customerdemand and a rate increase of $0.165 per hundred cubic feet effective June 1,2013, in response to increases in wholesale water supply and treatment costs.17 CITY OF ANAHEIMThe increase of $2,428 (8%) in Convention, Sports and Entertainment Venuescharges for services is mainly attributable to an increase of $1,453 in facility rentaland parking revenues due to increased consumer show events; and an increase of$843 in concession fees primarily due to increased concert ticket and special eventrevenues

($485) from the City National Grove of Anaheim, an increase intechnology services revenues

($522) with greater corporate convention

business, and offset by a decrease in food and beverage revenues

($164) from theConvention Center.Transfers out of $7,288 decreased by $5,536 (43%) as discussed in the government-wide financial analysis of governmental activities.

EXPENSES AND PROGRAM REVENUES

-BUSINESS-TYPE ACTIVITIES

$500$450$350S$250$200$1505100water as a result of increases in customer demand and increased commodity costscharged by the Water Utility's two sources of water supply. The increase of $2,585in operations, maintenance and administration costs is mainly due to less overheadattributable to capital assets as several major projects were completed during thefiscal year.FINANCIAL ANALYSIS OF THE CITY'S FUNDSGovernmental funds. The focus of the Citys governmental funds is to provideinformation on near-term

inflows, outflows, and balances of spendable resources.

Suchinformation is useful in assessing the City's financing requirements.

In particular, unassigned fund balance may serve as a useful measure of a government's netresources available for spending at the end of the fiscal year.At the end of the current fiscal year, the City's governmental funds reported total endingfund balances of $254,598, an increase of $5,306 in comparison with the prior fiscalyear. Of the total fund balance of $254,598, restricted fund balance totaled $218,533(86%) and indicates the use of resources are constrained by external

parties, resourceproviders, constitutions or enabling legislations.

Unassigned fund balance totaled$11,389 (4%) and is available for spending at the City's discretion.

The remaining fundbalance is $24,676 (10%), of which $5,648 is not in spendable form, and $19,028that was assigned for particular purposes.

Governmental revenues totaled $547,578 while expenditures were $552,482.

The General Fund is the general operating fund of the City. At June 30, 2014, theGeneral Fund reported a total ending fund balance of $43,015 and consisted of thefollowing:

• $2,099 was nonspendable for inventory, prepaid and other assets and a long-term Interfund receivable

• $4,902 was restricted for claims and judgments

• $1,547 was restricted for grant purposes* $4,073 was assigned for encumbrances and subsequent year one-time budgetedservice enhancements

• $30,394 was unassigned General Fund total revenues increased

$14,395 (5%) as compared to the prior fiscalyear primarily attributable to the following:

• Total taxes increased by $14,904 (6%) due to the improvement in the overalleconomy.

Taxes are the largest revenue sources of the General Fund and they$50Water Utility Sanitation Golf Courses Convention, Sports &Entertainment Venues-- --yuProgram revenues E ExpensesTotal expenses of $578,534 increased

$2,183 (less than 1%). The Water Utilityincreased expenses by $5,940 offset by decrease of $5,762 in the Electric Utility.

Therewere no other programs with significant changes during the year.* The decrease in the Electric Utility expenses is primarily due to a decrease in powercosts of $4,829. The Electric Utility applied a combination of strategies to procurelower power costs from renewable resources to comply with Renewable Portfolio Standards (RPS) requirements, long-term commitments with conventional powersupplies and internal power generation.

• The increase in Water Utility expenses of $5,940 is primarily due to an increase of$2,577 in the costs of purchased water and the treatment and the pumping of18 CITY OF ANAHEIMaccounted for $251,292 or 86% of the total General Fund revenues.

During fiscalyear 2014, transient occupancy taxes (TOT) increased

$7,198 (7%), property taxesincreased by $1,984 (3%), sales and use taxes increased

$5,788 (9%) and othertaxes decreased by $66 (1%)" Licenses, fees, and permits increased

$797 (4%) due to increased construction activities within the City" Use of money and property increased

$858 (34%) due to the reversal of anunrealized investment loss in the prior fiscal year* Other revenues decreased by $2,118 (77%) due to a one-time property taxadministration fee refund ($1,916) from the County of Orange in the prior fiscalyear.General Fund expenditures increased by $13,474 (6%) primarily due to increases inthe Police department of $4,342 (4%), Fire Department of $1,523 (3%), City Attorneyof $1,694 (27%), Community Services of $2,504 (10%), Public Works of $1,491(11%), and capital outlay of $721 (1127%).

Increases in capital outlay were due toacquisitions of fire equipment and structural improvement for the Anaheim Youth Center.The other most significant factors of the increases for these departments are discussed in the government-wide financial analysis of the governmental-activities.

The Housing Authority Fund revenues increased by $6,624 (8%) primarily due to anincrease in the gain on the sale of housing land held for resale of $6,809, an increasein residual receipts of $1,409 and offset by a decrease in HUD funding for Section 8rental assistance of $1,553. Housing Authority expenditures increased by $3,313 (4%)due to land acquisitions for housing projects of $4,488, and $1,794 principal andinterest payments for the two housing loans and offset by $3,592 decrease in Section8 rental assistance as discussed in the government-wide financial analysis of thegovernmental-activities.

The Transportation Improvement Projects fund increased revenues by $40,969 (87%)grant reimbursements and increased expenditures by $52,546 (131%) primarily due tothe ARTIC project that was in full swing of construction during the entire fiscal year.Total nonmajor govemmental funds revenues decreased by $10,625 (12%) primarily due to a decrease in license, fees and permits of $1,759 for one-time developer feesreceived in the prior fiscal year, and a decrease of $8,921 in intergovernmental revenues mainly due to the timing of construction grant reimbursements for the GeneAutry Way and Katella Avenue projects completed in the prior fiscal year.Total nonmajor governmental funds other financing sources decreased by $29,189(39%) primarily due to $31,500 in one-time loan proceeds for the acquisition of theARTIC land in the prior fiscal year. Transfers in increased by $8,629, due to the $4,450increase in Lease Payment Measurement Revenues (LPMR) set-aside for the Resort debtservice (see note 9 for more information regarding LPMR) and a $3,794 transfer infrom the General Fund far a neighborhood improvement land acquisition.

Transfers outincreased

$7,668 primarily due to a $4,864 transfer to Sanitation Utility Fund for sewerconstruction from developer impact fees.Total nonmajor governmental funds expenditures decreased by $1 1,429 (8%) primarily due to decrease in capital outlay of $19,949 (33%), which was mainly attributable tothe ARTIC land acquisition of $31,150 in the prior fiscal year. Partially offseting thisdecrease was $39,991 of new construction projects that include the Brookhurst Streetwidening

project, Tustin/La Palma Street improvement, and the Miraloma Parkdevelopment.

Proprietary funds. The City's proprietary funds provide the same type ofinformation found in the government-wide financial statements, but in more detail.The Electric Utility fund net position increased

$1,91 4(1%) in the current fiscal year. Themost significant factors of the change in fund net position are discussed in thegovernment-wide financial analysis of business-type activities.

The Water Utility fund net position increased

$4,447 (2%) in the current fiscal year. Themost significant factors of the change in fund net position are discussed in thegovernment-wide financial analysis of business-type activities.

The Sanitation Utility fund net position increased

$8,330 (7%) in the current fiscal year.This increase is primarily due to a transfer in of $4,864 for sewer capital project fromdeveloper impact fees. There were no other significant or unusual changes.The Gelf Courses fund net position increased

$29 (less than 1%) in the current fiscalyear. There were no significant or unusual changes.The Convention, Sports and Entertainment Venues fund net position increased

$2,694(less than 1%) in the current fiscal year. The most significant factors of the change infund net position are discussed in the govemment-wide analysis of business-type activities.

GENERAL FUND BUDGETARY HIGHUGHTS During the year, the original budget was amended to increase appropriations by$2,849 (1%). The increase in appropriations was primarily the result of the carryover of prior year appropriations anT amendments amounting to $2,797 and thereallocation of appropriations from other funds of $52. These amendments were to befunded from savings in other programs of the General Fund during the year.General Fund revenues of $294,379 were greater than budgeted revenues of$287,708 by $6,671 (2%), primarily due to stronger than anticipated performance oftransient occupancy taxes, sales taxes and other various revenue sources as theeconomy continued to improve.General Fund expenditures were less than budgeted.

Of the total appropriations of$257,549, approximately 2%, or $5,921, went unspent.

This was primarily due tolabor savings as a result of employee turnover and the time between an employeeleaving andthe recruitment of a new employee.

19 CITY OF ANAHEIMCAPITAL ASSETS AND DEBT ADMINISTRATION CAPITAL ASSETS(net of accumulated depreciation)

JUNE 30, 2014 AND 2013Governmental Activities 2014 2013$ 658,253 $ 648,420204,680 138,749169,464 160,157LandConstruction in ProgressBuildings, structures and improvements Utili Machinery and equipment Infrastructure TotalBusiness-type Activities 2014 2013$ 58,410 $ 58,41085,649 84,936396,643 401,4301,064,914 1,021,584 8,801 8,998TotalGovernment 2014 2013$ 716,663 $ 706,830290,329 223,685566,107 561,5871,064,914 1,021,584 40,116 38,138430,513 416,06131,315430,513$1,494,225 29,140416,061$1,392,527 Capital assets. The City's investment in capital assets for its governmental andbusiness-type activities at June 30, 2014 amounted to $3,108,642 (net of accumulated depreciation).

This investment in capital assets included land, construction in progress, buildings, structures and improvements, utility plant, machinery and equipment, andinfrastructure.

The total increase over the prior fiscal year was 5% ($140,757),

of whichgovernmental activities increased 7% ($101,698) and business-type activities increased 2% ($39,059).

The increase of capital assets in governmental activities was primarily due to capitalasset additions of $148,444 offset by current year depreciation expense of $32,587,capital asset retirements of $12,587 and transfer to business-type activities of $1,572.Major capital asset projects during the current fiscal year include the following:

" Additions of $123,527 for construction work in progress which includesconstruction of the Anaheim Regional Transportation Intermodal Center (ARTIC),

theAnaheim Fixed Guideway

project, Gene Autry Way, Brookhurst Streetimprovement, Tustin Avenue improvement

, Uncoln Avenue widening, MiralomaPark development and various other public infrastructure construction;

• Land acquisitions totaled $8,323 of which $2,090 was for street widening,

$3,062for housing projects and $3,171 for neighborhood improvements;

" Acquisitions of various vehicles and equipment totaling

$8,498; and* Completion of $56,718 of construction work in progress that includes the GeneAutry Way ($29,861),

Sunkist Street improvement

($1,854),

Euclid Street widening($1,407),

right-of-way acquisitions

($4,133),

Schweitzer and Anaheim Cove Parkdevelopments

($2,086),

and various other projects

($17,377).

The increase in business-type activities is primarily due to increases in the following:

• The Electric Utility increase of $27,638 (3%) was mainly due to additions of$66,811 to construction work in progress for the replacement of aging overheadelectrical lines with state-of-art underground projects on Lincoln Avenue, West$1,614,417

$1,575,358

$3,108,642

$2,967,885 Street and Westmont Street; the installation of a photovoltaic system (solar panels)at the Convention Center, replacement of aging circuit breakers, and improvements at substations.

The Electric Utility also completed

$46,624 of construction work inprogress that includes 2.6 miles of underground conversion on Brookhurst Streetand Douglass Road, replacement of 116 high-voltage transformers, 48 high-voltage switches, six 220kV circuit breakers at Lewis Substation, about 50,000 feetof degraded direct buried cable, and replacement of a new customer information system and other projects.

The increase was partially offset by the current yearadditions to accumulated depreciation of $41,770.The Water Utility increase of $9,502 (3%) was primarily due to additions of$17,937 to construction work in progress for ongoing expansion andrefurbishment of water transmission and distribution infrastructure, pumping plant,and source of water supply. The Water Utility completed

$44,314 of construction work in progress that includes the Water Sustainability Campus, the HiddenCanyon Pump Station Expansion, and the Linda Vista Pump Station, the Linda VistaReservoir and distribution system and other projects.

This increase was partially offset by the current year additions to accumulated depreciation of $10,534." The Sanitation Utility increase of $2,999 (3%) includes addition of $3,898 ofconstruction work in progress for sanitary sewer improvements, and $1,121 inacquisitions of sweepers and vehicles.

The Sanitation Utility also completed

$7,543of sewer improvements on Lincoln, La Palma and the Phase III sanitary improvement in Central Anaheim.

This increase was partially offset by current year additions toaccumulated depreciation of $2,445." The Convention, Sports and Entertainment Venues decrease of $628 (less than 1 %)was primarily due to construction work in progress additions of $10,667 for theconstruction of the Anaheim Convention Center expansion offset by current yearadditions to accumulated depreciation of $13,497.Additional information on the City's capital assets can be found in note 6 of the notesto the financial statements, on pages 56 of this report.20 CITY OF ANAHEIMLONG-TERM UABILITIES JUNE 30,2014 AND 2013General obligation bondsRevenue bondsCertificates of participation Capital lease obligations Notes and loans payableSelf-insurance Compensated absencesDecommissioning provision TotalGovernmental Activities 2014 2013$ 1,995 $ 2,605612,762 613,4818,880 10,0201,325 1,36950,757 54,87740,827 39,42218,594 18,222$735,140

$739,996Business-type Activities 2014 2013$ 780,553 $ 863,98738,000 38,000TotalGovernment 2014 2013$ 1,995 $ 2,6051,393,315 1,477,468 46,880 48,0201,325 1,36999,028 117,59940,827 39,42218,594 18,222133,664 131,333$1,735,628

$1,836,038 48,27162,722133,664 131,333$1,000,488

$1,096,042 Long-term liabilities.

The City's outstanding long-term liabilities, including bonds,certificates of participation, capital leases, notes and loans payable, self-insurance, compensated

absences, and the provision for decommissioning costs totaled$1,735,628 at June 30, 2014. Of this total, $735,140 (42%) was in governmental activities and $1,000,488 (58%) was in business-type activities.

The City's governmental activities outstanding long-term liabilities decreased

$4,856(1%) during the current fiscal year. The decrease is primarily due to principal paymentsof $25,341, and general insurance and compensate absences liabilities payments of$28,241.

Partially offset by these decreases were current year additions of revenuebond accretion of $16,150, capitalized leases and loans of $2,427, and generalliability and compensated absence liabilities of $30,018.The City's business-type activities outstanding long-term liabilities decreased

$95,554(9%). The decrease is primarily due to principal payments of $96,206, which includes$60,205 in full retirement of the 2002-B Electric Revenue Bonds.Additional information on the City's long-term liabilities can be found in notes 7 and 9of the notes to the financial statements, on pages 57-64 of this report.ECONOMIC FACTORSThere remains a focus on public pensions and their sustainability; manyassumptions are used to estimate the ultimate liability of pensions and thecontributions that will be required to meet those obligations.

One of the mostsignificant factors used in determining the liability and the funding requirements is the rate of return that investments will yield prior to making payments, knownas the discount rate. The City's pension plans currently utilize a discount rate of7.5%, which is used in determining the unfunded pension liability and fundingrequirements.

If it is determined in the future that an even lesser rate of return ismore appropriate, there will be a significant increase in the unfunded liability and the contributions required to meet those obligations.

For example, if it wasdetermined in the future that a more appropriate rate of return was 6.5%, thenit is estimated that the City's unfunded liability would increase by 47.0% to $826million and the City's total annual contribution would increase by approximately

$27 million or 47.5%. However, in the future, if it was determined that a moreappropriate rate of return was 8.5%, then it is estimated that the City's unfundedliability would decrease by 39.0% to $340 million and the Citys total annualcontribution would decrease by approximately

$21 million or 38.0%. The Cityspension plan has averaged an 8.3% rate of return over the last 20 years.The Governmental Accounting Standards Board also has issued new standards related to the accounting and reporting for pensions that are required to beimplemented for the fiscal year beginning July 1, 2014. The City is currently evaluating the potential impacts to the financial statements from implementation of these new standards.

Additional information about the City's retirement planscan be found in note 11 of the notes to the financial statements on pages 67-70of this report, as well as multi-year trend information as part of the requiredsupplementary information on page 77." Recently, the State of California enacted pension legislation that went into effectin January 2013 and applies mainly to new public employees.

Some of themajor changes include mandatory cost sharing by employees, reducing theoverall benefit level (e.g. percentage of pay), increasing the retirement age, andplacing a cap on the salary used to determine retirement benefits.

The impactsto the City for these changes for future employees have yet to be determined.

21 CITY OF ANAHEIM* For the 2015 fiscal year, the City appropriated

$280,049 in estimated available REQUESTS FOR INFORMATION resources of $308,944 for General Fund spending.

This leaves approximately This financial report is designed to provide a general overview of the City's finances for$28,895 in estimated available

reserves, which is 10% of General Fund Thos witancinterest in th overnm ent's finances fthappropriations.

The City's long-standing policy is to maintain General Fund all those with an interest in the government's finances.

Questions concerning any of thereserves of at least 7% to 10% of annual appropriations, information provided in this report or requests for additional information should beaddressed to the Office of the Finance Director, City of Anaheim, 200 South Anaheim* The City annually reviews all of its fees as part of the budget adoption process.

Boulevard, Suite 643, Anaheim, California, 92805.Developer, construction, and other fees applicable to residents and development doing business in the City are adjusted in June of each year, generally by theaverage of the Consumer Price Index (CPI). CPI for 12 months was 1% in January2014. This is consistent with the City's policy of recovering costs without placingan undue financial burden on existing tax and rate payers.* California Senate Bill 1X 2 signed into law in April 2011 mandated that allCalifornia utilities are required to reach 25% renewable power in their powerportfolios by 2016, and 33% by 2020. The higher renewable power costs willincrease future power supply costs. The Electric Utility has a number of strategies to mitigate the potential cost impacts.22

-HBasic Financial Statements CITY OF ANAHEIMStatement of Net PositionJune 30, 2014 (In thousands)

ASSETSCash and cash equivalents Investments Accounts receivable, netAccrued interest receivable Internal

balances, netDue from other governments Notes receivable, netInventories Land held for resale, netPrepaid and other assetsRestricted cash and cash equivalents Restricted investments Unamortized prepaid bond insurance Bond payment receivable Pipeline receivable Net other ost-emploment benefits (OPEB) assetDue from Successor AgencyCapital assets, net:Nondepreciable Depreciable Total assetsDEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding bondsTotal deferred outflows of resources UABIUTIES Accounts payableWages payableDue to other governments Interest payableLine of credit payableArbitrage rebate liability DepositsUnearned revenuesLong-termn liabilities:

Due within one yearDue in more than one yearTotal liabilities DEFERRED INFLOWS OF RESOURCES Regulatory creditsTotal deferred inflows of resources NET POSmONNet investment in capital assetsRestricted for:Debt serviceCapital projectsCommunity development

Streets, roads and transportation improvement projectsOther purposesUnrestricted Total net positionGovernmental Activities

$ 55,997159,77823,66355117,49462,30777,7901,06610,8954,12440,98949,6371,50911,15223,414862,933631,2922,034,591 2,1772,17743,2404,5233237,2297,4563,93247,260687,880801,8431,016,259 1,03248,829101,13339,18015,82412,668$1,234,925 The accompanying notes are an integral part of these financial statements.

Business-type Activities

$ 34,76195,72956,5451,527(17,494)12,54694,71151,420228,1561,1884,50520144,0591,470,358 2,178,031 4,6004,60062,0041,4549,8819,1003437,48924539,934960,5541,091,004 95,30695,306823,50516,77748,51512,01995,505$ 996,321Total$ 90,758255,50780,2082,07862,30777,79013,61210,89598,83592,409277,7932,6974,5052011,15223,4141,006,992 2,101,650 4,212,622 6,7776,777105,2445,97732317,1109,10034314,9454,17787,1941,648,434 1,892,847 95,30695,3061,839,764 17,80997,344101,13339,18027,843108,173$2,231,246 23 (This page left blank intentionally) 24 CITY OF ANAHEIMStatement of Activities Year Ended June 30, 2014 (In thousands)

Net (Expense)

Revenue andChances in Net PositionProaram RevenuesIndirectExpenseExpenses Allocation Operating Charges for Grants andServices Contributions CapitalGrants andContributions Functions/Proarams Governmental activities:

General government PoliceFireCommunity Development PlanningPublic WorksCommunity ServicesPublic Utilities Convention, Sports and Entertainment Interest on long-term debtTotal governmental activities Business-type activities:

Electric UtilityWater UtilitySanitation UtilityGolf CoursesConvention, Sports and Entertainment VenuesTotal business-type activities Total government Governmental Business-type Activities Activities Total$ 27,408123,44858,66979,73216,30760,02233,6672,51415,34235,514452,623408,63662,17253,1274,27045,122573,327$1,025,950

$(11,618)

$ 1,7793,589 9,927841 10,166311 17,305723 7,746240 13,037463 3,479244 10,236(5,207) 73,675$ 61511,3601,16381,8521,45516,9671,172114,584$ (13,396)(105,750)

$ 955 (47,226)19,114(7,829)99,624 69,3664,322 (25,157)(2,514)5,394 44(35,514)110,295 (148,862) 2,6108243811291,2635,207$426,05165,94657,8434,66732,084586,591$660,2664590317452$115,0363,3773,531681,4658,441$i 18,736$ 18,1826,5264,493268(12,519)16,950(148,862) 16,950$ (13,396)(105,750)

(47,226)19,114(7,829)69,366(25,157)(2,514)44(35,514)(148,862) 18,1826,5264,493268(12,519)16,950(131,912) 66,28267,505110,1347,7809,91649261,666129,7542,101,492

$2,231,246 General revenues:

Taxes:Property taxesSales and use taxesTransient occupancy taxesOther taxesUnrestricted investment earningsOtherTransfers Total general revenues and transfers Change in net positionNet position at einning of yearNet position at end of year66,28267,505110,1347,7802,930497,288261,968113,1061,121,819

$1,234,925 6,986(7,288)(302)16,648979,673$996,321The accompanying notes are an integral part of these financial statements.

25 (This page left blank intentionally) 26 CITY OF ANAHEIMBalance SheetGovernmental FundsJune 30, 2014 (in thousands)

HousinaTransportation Improvement ASSETS General Authoori

'projects Cash and cash equivalents

$ 8,708 $ 10,557Investments 24,846 30,121Accounts receivable, net 12,547 15 $ 2Accrued interest receivable 74 93Notes receivable, net 49,905Due from other funds 3,331 883Due from other governments 17,405 159 22,489Inventories 247Land held for resale, net 10,895Prepaid and other assets 239 7Restricted cash and cash equivalents 2,763Restricted investments Due from Successor Agency 1,767 8,176Total assets $69,164 $113,574

$ 22,491UABIUTIES Accounts payable $ 5,138 $ 716 $ 19,542Wages payable 3,098 78 20Deposits 4,832 1,440Due to other funds 924 6,254Due to other governments 323Unearned revenue 1,945 94Total liabilities 15,937 2,651 25,816DEFERRED INFLOWS OF RESOURCES Unavailable revenues 8,445 37 5,039Unavailable resources-long-term notes receivable 49,905Unavailable resources

-due from Successor Agency 1,767 8,176Total deferred inflows of resources 10,212 58,118 5,039FUND BALANCES (Deficit):

Nonspndable:

Interfund receivable 1,613Inventory 247Prepaid and other assets 239 7Restri&ted:

Anaheim Resort maintenance and improvement Capital projectsClaims and judgments 4,902Debt serviceDevelopment impact projectsGrant purposes 1,547Homebuyer assistance proramsLow and moderate income housing 38,160Rental assistance 2,974Streets, roads and transportation improvement projectsAssigned:

Capital projectsHousing projects 11,664Other purposes 4,073Unassigne 30,394 -(8,364)Total fund balances (deficit) 43,015 52,805 (8,364)Total liabilities, deferred inflows of resources, and fund balances

$69,164 $113,574

$ 22,491The accompanying notes are an integral part of these financial statements.

NonmaijrGovernmental Funds$ 18,70953,3851,26421827,85914,92522,2543,54238,22649,63713,471$243,490$ 11,6723121,1849,84123,00912,00927,85913,47153,3393,5428,4912,68573,50046,1445,4913,14331,4963,27219(10,641)167,142$243,490TotalGovernmental Funds$ 37,974108,35213,82838577,76419,13962,30724710,8953,78840,98949,63723,414$448,719$ 37,0683,5087,45617,0193232,03967,41325,53077,76423,414126,7081,6132473,7888,4912,6854,90273,50046,1447,0383,14338,1602,97431,4963,27211,6644,09211,389254,598$448,71927 CITY OF ANAHEIMReconciliation of the Governmental Funds Balance Sheetto the Statement of Net PositionJune 30, 2014 (In thousands)

Total fund balances

-governmental funds $ 254,598,Amounts reported for governmental activities in the Statement of Net Positionare different because:Capital assets used in the operation of governmental funds are not current financial resources and, therefore, are not reported in the funds. These assets consist of:Land $ 658,253Construction in progress 204,455Buildings, structures and improvements 284,930Machinery and equipment 52,761Infrastructure 798,420Accumulated depreciation (522,997)

Total capital assets, net 1,475,822 Other long-term assets are not available to pay for current period expenditures and,therefore, are reported as deferred inflows of resources in the funds. 126,708Unamortized prepaid bond insurance

($1,509) and deferred charge on refunding bonds($2,177) are not current financial resources, and, therefore, are not reported in the funds. 3,686Internal service funds are used by management to charge the costs of certainactivities, such as insurance, employee

benefits, and fleet services, to individual funds. The assets and liabilities of the internal service funds are included ingovernmental activities in the Statement of Net Position.

56,134Compensated

absences, not otherwise included in the internal service funds, are notdue and payable in the current period and, therefore, are not reported in the funds. (400)Long-term liabilities of govemmental funds, including bonds ($614,757),

certificates ofparticipation

($8,880),

notes and loans payable ($50,757),

and accrued interest payable($7,229) are not due and payable in the current period and, therefore, are not reportedin the funds. (681,623)

Net position of governmental activities

$1,234,925 The accompanying notes are an integral part of these financial statements.

28 CITY OF ANAHEIMStatement of Revenues, Expenditures and Changes in Fund Balances (Deficit)

Governmental FundsYear Ended June 30, 2014 (In thousands)

Transportation Nonmajar TotalHousinc Improvement Governmental Governmental General Authorifq Projects Funds FundsRevenues:

Property taxes $65,565 $ 717 $ 66,282Sales and use taxes 68,581 68,581Transient occupancy taxes 110,134 110,134Other taxes 7,012 7,012Licenses, fees and permits 18,738 $ 57 2,558 21,353Intergovernmental revenues 2,693 70,904 $ 87,942 54,216 215,755Charges for services 14,491 12 18,066 32,569Fines, forfeits and penalties 2,656 2,656Use of money and property 3,372 11,032 2,277 16,681Other 622 3,822 2,111 6,555Total revenues 293,864 85,827 87,942 79,945 547,578Expenditures:

Current:City Council 548 548City Administration 3,377 3,377City Attorney 8,036 119 8,155City Clerk 1,073 1,073Human Resources 1,432 1,432Finance 4,202 52 4,254City Treasurer 2,231 2,231Poaice 112,767 8,195 120,962Fire 56,596 933 57,529Community Development 1,254 73,407 8,997 83,658Planning 14,784 1,302 16,086Public Works 15,016 1,234 13,487 29,737Community Services 26,234 4,368 30,602Public Utilities 2,510 2,510Convention, Sports and Entertainment 783 9,931 10,714Capital outlay 785 4,543 91,278 39,991 136,597Detservice:

Principal retirement 1,741 22,479 24,220Interest charges 53 18,744 18,797Total expenditures 251,628 79,744 92,512 128,598 552,482Excess (deficiency) of revenues over (under) expenditures 42,236 6,083 (4,570) (48,653)

(4,904)Other financing sources (uses):Tronsfers in 28,7027 53,479 84,813Transfers out (66,812)

(9,141) (75,953)Issuance of loan payable 1,350 1,350Total other financing sources (uses) (38,105) 2,627 45,688 10,210Net change in fund balances 4,131 8,710 (4,570) (2,965) 5,306Fund balances (deficit) at beginning of year 38,884 44,095 (3,794) 170,107 249,292Fund balances (deficit) at end of year $ 43,015 $ 52,805 $ (8,364) $167,142

$254,598The accompanying notes are an integral part of these financial statements.

29 CITY OF ANAHEIMReconciliation of the Statement of Revenues, Expenditures and Changes inFund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2014 (In thousands)

Net change in fund balances

-total governmental funds $ 5,306Amounts reported for governmental activities in the Statement of Activities are different because:Governmental funds report capital outlay as expenditures.

However, in the Statement of Activities the costs of those assetsis allocated over their estimated useful lives and reported as depreciation expense.

This is the amount by which capital outlay($136,597) exceeded depreciation

($28,380) in the current period. 108,217Transfers of capital assets between governmental funds and proprietary funds do not require the use of financial resources andare not reported as transfers in the funds. (1,572)The net effect of other miscellaneous transactions involving capital assets (i.e., sales, trade-in, retirements and contributions) is todecrease net position.

(5,616)Revenues in the governmental funds provide current financial resources but are not reported as revenues in the Statement ofActivities as they have previously been accrued.

(1,754)Proceeds from long-term debt provide current financial resources to governmental funds, but the issuance of debt increases long-term liabilities in the Statement of Net Position.

(1,350)Payments of principal on long-term debt use current financial resources in the governmental funds but the repayment reduceslong-term liabilities in the Statement of Net Position.

24,220Certain expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, arenot reported as expenditures in governmental funds. (12,704)Internal service funds are used by management to charge the costs of certain activities, such as insurance, employee

benefits, and fleet services, to individual Funds. The net expense of the internal service funds is reported with governmental activities.

(1,641)Change in net position of governmental activities

$113,106The accompanying notes are an integral part of these financial statements.

30 CITY OF ANAHEIMStatement of Revenues, Expenditures and Changes in Fund BalancesBudget and Budgetary Basis Actual -General FundYear Ended June 30, 2014 (In thousands)

Original FinalBudgeted Budgeted Actual Variance withAmounts Amounts Amounts Final BudgetRevenues:

Property taxes $ 63,228 $ 66,102 $ 65,565 $ (537)Sales and use taxes 65,546 65,546 68,581 3,035Transient occupancy taxes 105,894 105,894 110,134 4,240Other taxes 6,900 6,900 7,012 112Licenses, fees and permits 17,558 17,558 18,738 1,180Intergovernmental revenues 2,270 2,486 2,693 207Charges for services 14,932 14,777 14,491 (286)Fines, forfeits and penalties 3,555 3,555 2,656 (899)Use of money and property 2,630 2,615 3,887 1,272Other 2,261 2,275 622 (1,653)Total revenues 284,774 287,708 294,379 6,671Expenditures:

City Council 617 617 548 (69)City Administration 4,061 4,061 3,377 (684)City Attorney 6,220 8,045 8,036 (9)City Clerk 1,152 1,154 1,073 (81)Human Resources 1,400 1,432 1,432Finance 4,530 4,535 4,202 (333)City Treasurer 2,363 2,363 2,231 (132)Police 112,753 112,818 112,818Fire 57,758 58,305 57,045 (1,260)Community Development 2,110 2,266 1,254 (1,012)Planning 16,060 16,062 14,790 (1,272)Public Works 15,188 15,227 15,019 (208)Community Services 27,059 27,235 26,510 (725)Public Utilities 2,546 2,546 2,510 (36)Convention, Sports and Entertainment 883 883 783 (100)Total expenditures 254,700 257,549 251,628 (5,921)Excess of revenues over expenditures 30,074 30,159 42,751 12,592Other financing sources (uses):Transfers in 29,235 29,235 29,310 75Transfers out (60,227)

(60,827)

(66,812)

(5,985)Total other financing uses (30,992)

(31,592)

(37,502)

(5,910)Net change in fhnd balance (918) (1,433) 5,249 6,682Fund balance at beginning of year 38,884 38,884 38,884Fund balance at end of year $ 37,966 $ 37,451 44,133 $ 6,682Adjustment to reconcile to GAAP:Receipt of interfund receivable (515Receipt of interfund loan (6031Ending fund balance -GAAP basis $ 43,015The accompanying notes are an integral part of these financial statements.

31 CITY OF ANAHEIMStatement of Revenues, Expenditures and Changes in Fund BalancesBudget and Budgetary Basis Actual -Housing Authority Year Ended June 30, 2014 (In thousands)

Original FinalBudgeted Budgeted Actual Variance withAmounts Amounts Amounts Final BudgetRevenues:

Licenses, fees and permits $ 38 $ 38 $ 57 $ 19Intergovernmental revenues 73,063 73,063 70,904 (2,159)Charges for services 12 12Use of money and property 9,564 9,564 17,525 7,961Other 1,068 3,8222Total revenues 83,733 83,733 92,320 8,587Expenditures:

Community Development 80,442 84,651 80,161 (4,490)Total expenditures 80,442 84,651 80,161 (4,490)Excess (deficiency) of revenues over (under) expenditures 3,291 (918) 12,159 13,077Other financing sources (uses):Transfers in 2,627 2,627Transfers out (1,286) (1,286) (603) 683Total other financing sources (1,286) (1,286) 2,024 3,310Net change in fund balance 2,005 (2,204) 14,183 16,387Fund balance at beginning of year 44,095 44,095 44,095Fund balance at'end of year $46,100 $41,891 58,278 $16,387Adjustments to reconcile to GAAP:Proceeds on sale of land held for resale (6,493)Purchase of land for resale 417Disbursement of interfund loan 603Ending fund balance -GAAP basis $52,805The accompanying notes are an integral part of these financial statements.

32 CITY OF ANAHEIMStatement of Revenues, Expenditures and Changes in Fund Balances (Deficit)

Budget and Actual -Transportation Improvement ProjectsYear Ended June 30, 2014 (In thousands)

FinalBudgeted Actual Variance withAmounts Amounts Final BudgetRevenues:

Intergovernmental revenues

$141,356

$87,942 $(53,414)

Total revenues 141,356 87,942 (53,414)Expenditures:

Planning 21 21Public Works 126,705 92,491 (34,214)Total expenditures 126,726 92,512 (34,214)Excess (deficiency) of revenues over (under) expenditures 14,630 (4,570) (19,200)Net change in fund balance 14,630 (4,570) (19,200)Fund balance (deficit) at beginning of year (3,794) (3,794)Fund balance (deficit) at end of year $ 10,836 $ (8,364) $(19,200)

The accompanying notes are an integral part of these financial statements.

33 CITY OF ANAHEIMStatement of Net PositionProprietary FundsJune 30, 2014 (In thousands)

Business-type Activities

-Enterprise FundsElectric Water Sanitation Utility Utility UtilityConvention Sorts andGolf Entertainment Courses VenuesGovernmental Activities

-InternalTotal Service FundsASSETSCurrent assets:Cash and cash equivalents Investments Restricted cash and cash equivalents Restricted investments Accounts receivable, netAccrued interest receivable Note receivable Interfund receivable Inventories Bond payment receivable Prepaid and other assetsTotal current assetsNoncurrent assets:Restricted cash and cash equivalents, less current portionRestricted investments, less current portionUnamortized prepaid bond insurance Bond payment receivable, less current portionPipeline receivable Accounts receivable, less current portionInterfund receivable, less current portionPrepaid and other assetsNet other post-employment benefits (OPEB) assetCapital assets:LandBuildin s, structures and improvements Utility plantMachinery and equipment Construction in progressTotal Capital assetsLess accumulated depreciation Capital assets, netTotal noncurrent assetsTotal assetsDEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding bondsTotal deferred outflows of resources

$ 10,00628,5496,98816,17941,2051,051$ 5,80716,5661,3991,5997,42088$ 12,92833,4381,2696,506126$ 1905421212$ 5,83016,6342111,29326022,1802226,43211,968576$ 34,76195,7299,86717,77856,5451,52712,5462,18032,6A7263,58041,553210,3781,1882,3252031,A10 1,215147,356 34,67054,267 85522,846192,7571,1032,0937,501113,806842,80810,1202,325$ 18,02351,4266,285166261081933677,0913,5503111,1527,83758,08822566,150(47,747)18,40333,136110,2272062,06462,06435,6711,223,497 55,0011,314,169 (459,092) 855,0771,133,847 1,281,203 2,339429,23016,162447,731(128,721) 319,010328,625363,295316 1,949105,377 16,6895,8883,535115,116(13,880)101,236115,126169,3931,11319,751(11,049)8,7028,7029,55718,135514,69825,72110,951569,505(239,113) 330,392345,645372,07758,410636,7641,652,727 32,72285,6492,466,272 (851,855) 1,614,417 1,931,945 2,195,525 2,756 1182,756 118(continued) 1,726 4,6001,726 4,60034 CITY OF ANAHEIMStatement of Net PositionProprietary FundsJune 30, 2014 (In thousands)

(continued)

Business-type Activities

-Enterprise FundsElectric Water Sanitation utility utility utilityConvention S orts andGolf Entrtainment Courses VenuesGovernmental Activities

-InternalTotal Service FundsUABIUTIES Current liabilities (payable from current assets):Accounts payableWages payableInterest payableCompensated absencesLong-term obligations Line of credit payableUnearned revenuesDepositsInterfund payableTotal current liabilities (payable from current assets)Current liabilities (payable from restricted assets):Accounts payableWages payableInterest payableArbitrage rebate liability Long-term obligations Total current liabilities (payable from restricted assets)Total current liabilities Noncurrent liabilities:

Interfund

payable, less current portionLong-term obligations, less current portionProvision for decommissioning costsTotal noncurrent liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Regulatory creditsTotal deferred inflows of resources NET POSITIONNet investment in capital assetsRestricted for:Debt serviceCapital projectsOther purposesUnrestricted Total net positionAdjustment to reflect the consolidation of intNet position of business-type activities

$ 36,093 $ 15,759 $ 3,266 $ 296 $ 3,006650 212 91 7 36754711,4393,84652,0283,5661257,22333711,91623,16775,195634,097133,664767,761842,9565579,10080925,8801,04961,9432,99828,87889,78789,787118,6656234,5371828513981,2695,80643,55243,55249,358354885413,6812452,20820,054$ 58,4201,32754725,6779,1002457,489548103,3533,584127211 9,33434314,257211 27,645854 20,265 130,998$ 6,1721,01513,4478,6791,89331,20631,20638,22038,22069,4261,61359,4541,613 59,4542,467 79,7191,613826,890133,664962,1671,093,165 89,098 6,20889,098 6,208255,497 225,520 60,177 8,70295,30695,306273,60912,263 1,308 39816,001 3,028 15,60012,01956,125 8,684 43,860$ 351,905 $238,540

$120,035rnal service fund activities related to enterprise funds.2,80813,886(1,612) 3,7817,090 $294,084823,50516,77748,51512,019110,8381,011,654 (15,333)$ 996,32117,07823,723$ 40,801The accompanying notes are an integral part of these financial statements.

35 CITY OF ANAHEIMStatement of Revenues, Expenses and Changes in Net PositionProprietary FundsYear Ended June 30, 2014 (In thousands)

Business-type Activities

-Enterprise FundsOperatin' revenues:

Soles o6f light and powerTransmission revenuesSales of waterSolid waste collection feesWastewater feesStreet cleaning feesGreen fees and cart rentalsFacilities rentalConcession feesCharges for servicesOtherTotal operating revenuesOFerotinq expenses:

ost oe purchased powerFuel and generation of powerCost of purchased waterTreatment and pumping of waterMaintenance, operations and administration Insurance premiums and claimsCompensated absences and other benefitsDepreciation and amortization Total operating expensesOperating income (loss)Nonoperating income (expenses):

Intergovernmental revenuesInvestment incomeDebt service recoveryInterest expenseGain (loss) from disposal of capital assetsTotal nonoperating expensesIncome (loss) before contributions and transfers Capital contributions Transfers inTransfers outChange in net positionNet position at beginning of yearNet position at end of yearElectricUtility$386,89734,912Water Sanitation Utility UtilityConvention Sports andGolf Entrtainment Courses Venues$ 65,182$ 41,04111,8693,209$4,3281604,242 764 1,724 179426,051 65,946 57,843 4,667275,01323,64328,7698,43343,079 11,94241,770383,50542,5464,731(27,340)(22,609)19,9374,362297(22,682)1,914349,991$351,90510,53459,6786,26845988(3,167)(2,134)4,1343,531600(3,818)4,447234,093$238,54049,3642,44551,8096,03490570(1,620)(960)5,0745354,864(2,143)8,330111,705$120,0353,8165544,3702975(23)(18)279(250)297,061$7,090$ 24,6895,8681,52732,08427,71913,49741,216(9,132)692317(4,840)(200)(4,031)(13,163)1,58514,2722,694291,390$294,084Total$386,89734,91265,18241,04111,8693,2094,32824,6896,0288,436586,591275,01323,64328,7698,433135,92068,800540,57846,0131356,986317(36,990)(200)(29,752)16,26110,01320,033(28,893)17,414(766)$ 16,648Governmental Activities

-InternalService Funds$165,353123165,47637,8629,903116,7054,207168,677(3,201)574(85)305794(2,407)(2,407)43,208$ 40,801Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.Change in net position of business-type activities The accompanying notes are an integral part of these financial statements.

36 CITY OF ANAHEIMStatement of Cash FlowsProprietary FundsYear Ended June 30, 2014 (In thousands)

Business-type Activities

-Enterprise FundsConvention Sports and'Electric Water Sanitation Golf Entertainment Utility Utility Utility Courses VenuesTotalGovernmental Activities

-InternalService FundsCash flows from operating activities:

Receipts from customers and usersReceipts from interfund services providedPayments to suppliers Payments for salaries, wages and other benefitsPayments for interfund services usedPayments for insurance premiums and claimsOther receiptsNet cash provided by (used for) operating activities Cash flows from noncapital financing activities:

Proceeds from short-term borrowings from line of creditPayments on short-term borrowings from line of creditReceipt of interfund balancesTransfrs~c inTransfers outOperating grant receiptsNet cash provided by (used for) noncapital financing activities Cash flows from capital and related financing activities:

Proceeds from sale of capital assetsCapital contributions Capital purchases Proceeds from short-term borrowings from line of creditDebt Issuance costsPrincipal payments on long-term debtInterest paymentsDebt service recoveryPayment of interfund balances of capita purposesTransfers in for capital purposesTransfers out for capita purposesNet cash used for capital and related financing activities Cash flows from investing activities:

Purchase of investment securities Proceeds from sale and maturity of investment securities Interest receivedCollection of note receivable Net cash provided by (used for) investing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the yearCash and cash equivalents at end of the year$ 446,9262,030(309,304)

(37,615)(8,030)$ 65,840341(26,204)(13,441)(4,503)$ 56,94756(40,818)(6,553)(3,357)$ 4,327 $ 32,966 $ 607,006336 2,763 $164,988(3,170) (5,298) (384,794)

(22,052)(503) (17,415)

(75,527)

(132,672)

(199) (2,793) (18,882)

(3,490)(10,506)1,668 223791 7,460 132,234 (3,509)1,66894,007 22,033 7,9437,400(10,000)(22,682)(25,282)600(3,521)45(2,876)7,400(10,000)14,272 14,872(28,596)13614,272 (16,188)(2,143)91(2,052)68(4,596)(250)(250)3,138 2,485(66,491)

(17,919)9,100(80,195)

(1,876) (920)(30,542)

(4,556) (2,078)5,691(103) (11,343)

(100,452) 9,100(487) (487)(13,215)

(96,206)(33) (4,073) (41,282)2,357 2,357(515) (515)5,161(32)(651) (26,761)

(216,665) 125125305(3,799)(1,121)(85)(4,700)(15,025)15,5655281,068(7,016)25,039$ 18,023297(173,793)

(50,336)76,7614,742(31,167)(73,901)113,741$ 39,8404,864(32)(12,798)

(2,662)(12,846)6,22393464(5,625)7348,565$ 9,299(continued)

(19,024)10,121493(8,410)(5,181)33,184$ 28,003(140)164428(82)272$ 190(3,267)5,0356572,425(2,604)11,453$ 8,849(85,613)98,3046,8306419,585(81,034)167,215$ 86,18137 CITY OF ANAHEIMStatement of Cash FlowsProprietary FundsYear Ended June 30, 2014 (In thousands)

(continued)

Business-type Activities

-Enterprise FundsConvention, Sports andElectric Water Sanitation Golf Entertainment Utility Utility Utility Courses VenuesGovernmental Activities

-InternalTotal Service Funds$ 46,013 $ (3,201)Reconciliation of operating income (loss) to net cashprovided by (used for) operating activities:

Operating income (loss)Adjustment to reconcile operating income (loss)to net cash provided by (used for) operating activities:

Depreciation and amortization Increase in provision for decommissioning costsChanges in assets, liabilities and deferred inflows of resources:

Accounts receivable Inventories Prepaids and other assetsNote receivable Accounts payableWages payableUnearned revenuesCompensated

absences, (OPEB) and self-insurance liability DepositsRegulatory creditsTotal adjustments Net cash provided by (used for) operating activities Schedule of noncash investing, capital and noncapitol financing activities:

Capital assets financed through capital leasesCapital contributions Increase in fair value of investments Reconciliation of cash and cash equivalents:

Cash and cash equivalents Restricted cash and cash equivalents, current portionRestricted cash and cash equivalents, noncurrent portionTotal cash and cash equivalents

$ 42,546 $ 6,268 $ 6,034 S 297$ (9,132)41,7702,3312,015(2,285)(27,005)13,495250(245)21,13551,461$ 94,00710,534226(61)5,002295917415,765$ 22,0332,445805(1,366)2231,909$ 7,943$ 46762$ 12,9281,26913,806$ 28,003554 13,497(4)2541(2)68,8002,3313,072(2,258)(27,068)19,2203502(56) 2,145692494$ 79162616,592$ 7,460$ 1,58515$ 1,224 $ 1,046156 4146321,30986,221$132,234$ 4,322275$ 34,7619,86741,553$ 86,1814,207(3,240)(70)47815(1,409)(1,929)1031,537(308)$ (3,509)$ 1,07759$ 18,023$ 18,023$ 1$ 10,0066,98822,846$ 39,840$ 5,8071,3992,093$ 9,299$ 190 $ 5,8302112,808$ 190 $ 8,849The accompanying notes are on integral part of these financial statements.

38 CITY OF ANAHEIMStatement of Fiduciary Net Position (Deficit)

Fiduciary FundsJune 30, 2014 (In thousands)

Successor AgencyInvestment Trust Private Purpose AgencyFunds Trust Fund FundASSETSRestricted cash and cash equivalents

$ 472 $ 33,388 $3,934Restricted investments 1,348 5,501 3,256Accrued interest receivable 7 11Accounts receivable, net 120 35Notes receivable, net 1,780Prepaid and other assets 994Unamortized prepaid bond insurance 2,355Land held for resale, net 17,408Capital assets, netNondepreciable 15,568Depreciable 60,967Total assets 1,827 138,092 $7,225DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding bonds 1,394Total deferred outflows of resources 1,394UABIUTIES Accounts payable 3,569Wages payable 14Interest payable 6,337Due to State of California 6,129Deposits 205Unearned revenues 6Due to City of Anaheim 1,767Due to bond holders $7,225Long-term liabilities:

Due within one year 5,005Due in more than one year 232,106Total liabilities 255,138 $7,225NET POSITION (Deficit)

Held in trust for pool participants 1,827Held in trust for other purposes (deficit)

(115,652)

Total net position (deficit)

$1,827 $ (115,652)

The accompanying notes are an integral part of these financial statements.

39 (This page left blIank intentionally) 40 CITY OF ANAHEIMStatement of Changes in Fiduciary Net Position (Deficit)

Fiduciary FundsYear Ended June 30, 2014 (In thousands)

Investment TrustFundsADDITIONS Property taxesContributions to pooled investments Interest and investment incomeRental incomeOtherTotal additions DEDUCTIONS Distribution from pool investments Salaries and administration Program expensesInterest expenseDepreciation Total deductions

$6,7-71256,7965,640Successor AgencyPrivate PurposeTrust Fund$ 16,5924642,23015219,4382,3567,29912,8631,69524,213(4,775)(110,877)

$ (115,652)

Change in net positionNet position (deficit) held in trust at beginning of yearNet position (deficit) held in trust at end of year5,6401,156671$1,827The accompanying notes are an integral part of these financial statements.

41 (This page left blank intentionally) 42 CITY OF ANAHEIMNotes to Financial Statements (Amounts in thousands)

NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The financial reporting entityAs defined by U. S. generally accepted accounting principles (GAAP) that areestablished by the Governmental Accounting Standards Board (GASB), the financial reporting entity consists of the primary government, as well as its component units,which are legally separate organizations for which the elected officials of the primarygovernment are financially accountable.

Financial accountability is defined as 1)appointment of a voting majority of the component unit's board, and either a) the abilityto impose will by the primary government, or b) the possibility that the component unitwill provide a financial benefit to or impose a financial burden on the primarygovernment; and 2) the component unit is fiscally dependent on and there is a potential for the component unit to provide specific financial benefit to or impose financial burdenon the primary government regardless of whether the component unit has a) aseparately elected government board, b) a governing board appointed by a higherlevel of government, or c) a jointly appointed board.The accompanying financial statements present the City of Anaheim (City), the primarygovernment, and its component units. The financial data of the component units areincluded in the City's reporting entity because of the significance of their operational orfinancial relationships with the City.The component units described below are each legally separate from the City, but areso intertwined with the City that they are, in substance, the same as the City. They arereported as part of and accountable to the City and blended into the government-wide and fund financial statements.

Anaheim Housing Authority (Housing Authority) is a separate entity primarily fundedby the U.S. Department of Housing and Urban Development to administer fundsreceived under the Federal Housing Assistance Payments program.

City Councilmembers, in separate

session, serve as the governing board of the Housing Authority, and all accounting and administrative functions are performed by the City. The financial activity of the Housing Authority has been blended into the City's Comprehensive Annual Financial Report (CAFR) in the govemment-wide governmental activities and inthe fund financial statements as the Housing Authority Special Revenue Fund.Community Center Authority (CCA) a joint powers authority, was created primarily tofinance the initial construction of the Anaheim Convention Center. A five-member boardappointed by the City Council governs the CCA. The City has entered into anoncancelable long-term lease with the CCA, which provides for lease payments inamounts sufficient to meet the annual debt service requirements on the certificates ofparticipation issued by the CCA to finance the construction of the facility.

The lease is afinancing arrangement, which transfers the ownership of the facility to the City at theend of the lease term, and the sole activity of the CCA is to provide financing for theCity. As such, the financial data for the CCA has been blended into the City's CAFR inthe govermment-wide business-type activities and in the fund financial statements withthe City's Convention, Sports and Entertainment Venues Fund, as all activity related tothe Anaheim Convention Center is accounted for in this enterprise fund. The capitallease has been eliminated in the financial statements.

For a copy of the CCA's separatefinancial statements, contact the Finance Director of the City.Anaheim Public Improvement Corporation (APIC) a non-profit corporation, wascreated primarily to finance several construction projects in the City. City Councilmembers, in separate

session, serve as the governing board of APIC. The City hasentered into noncancelable long-term leases with APIC, which provide for leasepayments in amounts sufficient to meet the annual debt service requirements on thecertificates of participation issued by APIC to finance these construction projects.

Theleases are financing arrangements, which transfer ownership of the constructed assetsto the City at the end of the lease terms. The financial data of APIC has been blendedinto various governmental and business-type activities and funds of the City asapplicable, and the capital leases have been eliminated.

Anaheim Public Financing Authority (Authority),

a joint powers authority, wasestablished as a vehicle to reduce local borrowing costs and promote greater use ofexisting and new financial instruments and mechanisms.

City Council members, inseparate

session, serve as the gaveming board of the Authority.

Financial activity of theAuthority has been blended into the City's CAFR into-various governmental andbusiness-type activities and funds of the City as applicable.

The City is a participant in four joint ventures and jointly-owned properties (see note12), which are not considered part of the financial reporting entity, as the City does nothave significant equity interests in the joint ventures and jointly-owned properties.

Basic financial statements In accordance with GASB Statement No. 34 -Basic Financial Statements andManagements Discussion and Analysis for State and Local Governments, the basicfinancial statements include both govemment-wide and fund financial statements.

The govermment-wide financial statements (Statement of Net Position and Statement ofActivities) report on the City and its component units as a whole, excluding fiduciary activities.

Governmental activities, which normally are supported by taxes and43 CITY OF ANAHEIMintergovernmental

revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

All activities, bothgovernmental and business-type, are reported in the government-wide financial statements using the economic resources measurement focus and the accrual basis ofaccounting, which includes long-term assets and receivables as well as long-term debtand obligations.

The government-wide financial statements focus more on thesustainability of the City as an entity and the change in aggregate financial positionresulting from the activities of the fiscal period.Generally, the effect of interfund activity has been removed from the government-wide financial statements, except for interfund services provided and used. Net interfund activity and balances between governmental activities and business-type activities areshown as internal

balances, net, in the government-wide financial statements.

The"doubling up" effect of internal service fund activity has been eliminated from thegovernment-wide financial statements with the expenses shown in the various functions and programs on the Statement of Activities.

Further, certain eliminations are also made to transfers of resources between funds inthe fund financial statements so that only the net amount of the transfers are shown inthe governmental activities and business-type activities columns.The government-wide Statement of Net Position reports all financial and capitalresources of the City (excluding fiduciary funds). It is displayed in a format of assets anddeferred outflows of resources less liabilities and deferred inflows of resources equal netposition, with the assets and liabilities shown in order of their relative liquidity.

Netpositions are required to be displayed in three components:

1) net investment in capitalassets 2) restricted, and 3) unrestricted.

Investment in capital assets represents capitalassets net of accumulated depreciation which is reduced by outstanding balances ofany bonds, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted net position is those withconstraints placed on their use by either: 1 ) creditors (such as through debt covenants),

grantors, contributors, or laws or regulations of other governments, or 2) law throughconstitutional provisions or enabling legislation.

All net positions not otherwise classified as restricted, are shown as unrestricted.

Generally, the City would first apply restricted resources when an expense is incurred for purposes for which both restricted andunrestricted net positions are available.

The government-wide Statement of Activities demonstrates the degree to which bothdirect and indirect expenses of the various functions and programs of the City are offsetby program revenues.

Direct expenses are those that are clearly identifiable with aspecific function or program.

Indirect expenses for administrative overhead areallocated among the functions and programs using a full cost allocation approach andare presented separately to enhance comparability of direct expenses betweengovernments that allocate direct expenses and those that do not. Interest on generallong-term debt is not allocated to the various functions.

Program revenues include:

1)charges to customers or users who purchase, use or directly benefit from goods, servicesor privileges provided by a particular function or program and 2) grants andcontributions that are restricted to meeting the operational or capital requirements of aparticular function or program.

Taxes, unrestricted investment income and otherrevenues not identifiable with particular functions or programs are included as generalrevenues.

The general revenues support the net costs of the functions and programs notcovered by program revenues.

Also, part of the basic financial statements are fund financial statements forgovernmental funds, proprietary funds and fiduciary funds, even though the latter areexcluded from the government-wide financial statements.

The focus of the fund financial statements is on major funds, as defined by GASB Statement No. 34. Although thisreporting model sets forth minimum criteria for determination of major funds (apercentage of assets, deferred outflows of resources, liabilities, deferred inflows ofresources,

revenues, or expenditures/expenses of fund category and of thegovernmental and enterprise funds combined),

it also gives governments the option ofdisplaying other funds as major funds. Other nonmajor funds, as well as the internalservice funds, are combined in a single column on the fund financial statements.

The City reports the following major governmental funds:The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for inanother fund.The Housing Authority Special Revenue Fund accounts for the providing of housingassistance to low and moderate-income families in the Anaheim area. Financing isprovided primarily from Federal Section 8, U.S. Department of Housing and UrbanDevelopment (HUD) receipts.

Transportation Improvement Projects Capital Project Fund accounts fortransportation improvement projects in the City, primarily in support of the AnaheimRegional Transportation Intermodal Center (ARTIC),

which is a transportation gateway and mixed-use activity center funded by grants from Orange CountyTransportation Authority (OCTA). Financing is provided by Federal, State and localagencies.

The City reports the following major enterprise funds:The Electric Utility Fund accounts for the operation of the City's electric

utility, a self-supporting

activity, which renders services on a user charge basis to residents andbusinesses located in Anaheim.The Water Utility Fund accounts for the operation of the City's water utility, a self-CITY OF ANAHEIMsupporting

activity, which renders services on a user charge basis to residents andbusinesses located in Anaheim.The Sanitation Utility Fund accounts for the operation of the City's solid waste andsanitation

program, a self-supporting

activity, which provides for the collection anddisposal of solid waste, street sweeping, and sanitary sewer cleaning on a usercharge basis to residents and businesses located in Anaheim.The Golf Courses Fund accounts for the operation of the Anaheim Municipal

("DadMiller")

Golf Course and the Anaheim Hills Golf Course, a self-supporting activitythat renders services on a user charge basis.The Convention, Sports and Entertainment Venues Fund accounts for the operations of the Anaheim Convention Center, Angel Stadium of Anaheim, and The CityNational Grove of Anaheim.

See note 13 for further discussions of the AngelStadium of Anaheim and The City National Grove of Anaheim.The internal service funds, which provide services to the other funds of the City, arepresented in a single column in the proprietary funds financial statements.

Because theprincipal users of the internal service funds are the City's governmental activities, theassets and liabilities of the internal service funds are consolidated into the governmental activities column of the government-wide Statement of Net Position.

The costs of theinternal service fund services are spread to the appropriate function or program on thegovernment-wide Statement of Activities and the revenues and expenses within theinternal service funds are eliminated from the government-wide financial statements toavoid any doubling effect of these revenues and expenses.

The City operates fourinternal service funds:The General Benefits and Insurance Fund is used to account for employeecompensated

absences, retirement and health benefits, and self-insurance programs.

The Motorized Equipment Fund is used to account for motorized equipment used byCity departments.

The Information and Communication Services Fund is used to account for dataprocessing and telecommunication services provided to City departments.

The Municipal Facilities Maintenance Fund is used to account for office maintenance services and equipment used by City departments.

Fiduciary Funds account for assets held by the City in a trustee or agency capacity onbehalf of others and, therefore, are not available to support City programs.

TheFiduciary Funds are not included in the government-wide financial statements as theyare not an asset of the City. The City reports the following fiduciary funds:The Investment Trust Fund is used to account for the external portion of the City'sinvestment pool, which commingles resources of legally separate entitiesadministered by the City in an investment portfolio for the benefit of all participants.

The entities include three Joint Powers Authorities (JPA) governed by local boards.The City separately maintains these entities' money in three individual funds; thesefunds represent the assets, primarily cash and investment, and the related netposition held in trust by the City to disburse these monies on demand.The Private Purpose Trust Fund is used to account for resources legally held in trustfor use by the Successor Agency to the Former Anaheim Redevelopment Agency(Successor Agency).

The Former Anaheim Redevelopment Agency, a formercomponent unit of the City, dissolved on February 1, 2012 under the State ofCalifornia Assembly Bill 1 X26.The Agency Fund is used to account for the monies collected and paid on behalf ofthe Mello-Roos Districts located in the City.Measurement focus and basis of accounting The governmental funds financial statements are prepared on a current financial resources measurement focus and modified accrual basis of accounting.

To conform tothe modified accrual basis of accounting, certain modifications must be made to theaccrual method. These modifications are outlined below:" Revenue is recorded when it becomes both measurable and available (received within 60 days after year-end).

Revenue considered susceptible to accrualincludes:

property taxes, sales and use taxes, transient occupancy taxes,licenses, fees and permits, intergovernmental revenues (including motor vehiclelicense fees), charges for services, fines, forfeits and penalties, and interest.

" Expenditures are recorded when the related fund liability is incurred.

Principal and interest on general long-term debt are recorded as fund liabilities when dueor when amounts have been accumulated in the debt service fund for paymentsto be made early in the following year." Disbursements for the purchase of capitol assets providing future benefits areconsidered expenditures.

Bond proceeds are reported as other financing source.With this measurement focus, operating statements present increases (revenues andother financing sources) and decreases (expenditures and other financing uses) in netcurrent assets. This is the traditional basis of accounting for governmental funds andalso is the manner in which these funds are normally budgeted.

This presentation isdeemed most appropriate to: 1) demonstrate legal and covenant compliance, 2)demonstrate the sources and uses of liquid resources, and 3) demonstrate how the City'sactual revenues and expenditures conform to the annual budget. Since thegovernmental funds financial statements are presented on a different basis than the45 CITY OF ANAHEIMgovernmental activities column of the government-wide financial statements, areconciliation is provided immediately following each fund statement.

Thesereconciliations briefly explain the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements.

The proprietary funds financial statements are prepared on the same basis (economic resources measurement focus and accrual basis of accounting) as the government-wide financial statements.

Therefore, most lines for the total enterprise funds on theproprietary funds financial statements will directly reconcile to the business-type activities column on the government-wide financial statements.

Because the enterprise funds are combined into a single business-type activities column on the government-wide financial statements, certain interfund activities between these funds are eliminated in the consolidation for the government-wide financial statements, but are included inthe fund columns in the proprietary funds financial statements.

The net costs of theinternal service funds are also partially allocated to the business-type activities columnon the government-wide financial statements.

A reconciliation of the total enterprise funds on the fund financial statements to the business-type activities column on thegovernment-wide financial statements is provided on the face of the fund financial statements.

Enterprise funds account for operations where the intent of the City is that the costs ofproviding goods or services to the general public on a continuing basis be financed orrecovered primarily through user charges and fees. Under GASB Statement No. 34,enterprise funds are also required for any activity whose principal revenue sources meetany of the following criteria:

1) any activity that has issued debt backed solely by thefees and charges ofthe activity,

2) the cost of providing services for an activity, including capital costs such as depreciation or debt service, must legally be recovered throughfees and charges, or it is the policy of the City to establish activity fees or charges torecover the cost of providing

services, including capital costs.On the proprietary funds financial statements, operating revenues are those that flowdirectly from the operations of the activity, i.e. charges to customers or users whopurchase or use the goods or services of that activity.

Operating expenses are those thatare incurred to provide those goods or services.

Non-operating revenues and expensesare items such as investment income and interest expense that are not a result of thedirect operations of the activity.

The Electric and Water Utility funds follow the uniform system of accounts prescribed bythe Federal Energy Regulatory Commission (Electric Utility) and the California PublicUtilities Commission (Water Utility).

The utilities are not subject to the regulations of thesecommissions The reporting focus for the investment trust fund and the private-purpose trust fund isupon net position and changes in net position and employs accounting principles similar to proprietary funds. The agency fund has no measurement focus but utilizes theaccrual basis of accounting for reporting its assets and liabilities.

Cash and investments The City pools available cash from all funds for the purpose of increasing incomethrough investment activities.

Investments in U.S. Treasury obligations and agencysecurities and medium term corporate notes are carried at fair value based on quotedmarket prices. Participating guaranteed investment contracts and flexible repurchase agreements are carried at fair value. Money market mutual funds are carried at fairvalue based on the fund's share price. The City's investment in the State of California Local Agency Investment Fund (LAIF) is carried at fair value based on the value of eachparticipating dollar as provided by LAIF LAIF is authorized by California Government Code (Government Code) Section 16429 under the oversight of the Treasurer of theState of California.

Commercial paper, participating guaranteed investment contracts and negotiable certificates of deposit are carried at amortized cost (whichapproximates fair value). Interest income, which includes changes in fair value, oninvestments is allocated to all funds on the basis of daily cash and investment balances.

See note 3 for further discussion.

For purposes of the basic financial statements, the City considers cash equivalents to behighly liquid short-term investments that are readily convertible to known amounts ofcash and mature within three months of the date they are acquired.

Cash and cashequivalents are included in the City's cash and investments pool and in accounts heldby fiscal agents.Notes receivable In the government-wide financial statements, notes receivable of $77,790 includesaccrued interest receivable of $14,981, ranging from 3% to 10% interest per annum,and is net of allowances of $14,365 for uncollectible accounts at June 30, 2014.Allowances for uncollectible accounts were estimated based on certain assumptions; therefore, actual results could differ from the estimates.

In the governmental funds financial statements, due to the extended period of time overwhich notes receivable are to be collected and the contingent nature of certain sourcesof repayment, the City has recorded deferred inflows of resources equal to theoutstanding principal and accrued interest balance of the notes receivable.

Inventories Inventories are stated at average cost. Inventories in the General Fund are recorded asexpenditures when used and are reported under the consumption method ofaccounting.

Prepaid and other assetsCertain payments to vendors such as insurance

premiums, prepaid rents, and depositsfor real property acquisitions reflect costs applicable to future periods and are recordedas prepaid and other assets in both government-wide and fund financial statements.

These costs will be recognized in the period when services are received or when the Cityreceives title to the real property.

46 CITY OF ANAHEIMLand held for resaleThe Housing Authority has recorded parcels of land held for resale in their financial records.

The properties held for resale are for the primary purpose of developing lowand moderate income housing and are recorded at the lower of cost or estimated netrealizable value. At June 30, 2014, land held for resale with an original cost of$23,680 was recorded net of the allowance for decline in value of $12,785 and totaled$10,895, with this amount offset by a restriction of fund balance for low and moderateincome housing in the Housing Authority major governmental fund financial statement.

Restricted assetsCertain proceeds of the City's bonds, as well as certain resources set aside for theirrepayment, are classified as restricted on the Statement of Net Position, or BalanceSheet, because they are maintained in separate bank accounts and their use is limitedby applicable debt covenants.

Additionally, resources set aside by the Electric Utility forfuture decommissioning of its former ownership share of the San Onofre NuclearGenerating

Station, Units 2 and 3 (SONGS) and the San Juan Generating

Station, Unit4, are classified as restricted on bath the government-wide Statement of Net Position andproprietary funds Statement of Net Position.

Capital assetsUnder GASB Statement No. 34, all capital assets, whether owned by governmental activities or business-type activities are recorded and depreciated in the government-wide financial statements.

No long-term capital assets or depreciation are shown in thegovernmental funds financial statements.

Capital assets, including public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City), are defined as assetswith an initial, individual cost of more than $5 ($50 for infrastructure) and an estimated useful life of greater than one year. Capital assets are recorded at cost or estimated historical cost if purchased or constructed.

Donated capital assets are recorded at theestimated fair value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the capitalasset or materially extend capital assets lives are not capitalized.

Major improvements are capitalized and depreciated over the remaining useful lives of the related capitalassets.Major outlays for capital assets and improvements are capitalized as the projects areconstructed.

Interest incurred during the construction phase of projects is reflected in thecapitalized value of the asset constructed for proprietary funds. For the year ended June30, 2014, business-type activities capitalized net interest costs of $3,655 in thegovernment-wide and fund financial statements.

Total interest expense incurred by thebusiness-type activities (and the enterprise funds on the proprietary funds statements) before capitalization was $40,645.Capital assets are depreciated using the straight-line method over the following estimated useful lives:Buildings, structures and improvements Utility plantMachinery and equipment Infrastructure 5 to 85 years5 to 75 years2 to 40 years25 to 75 yearsThe net book value of capital assets retired or disposed of, related salvage valueproceeds and the costs of removal are recorded in accumulated depreciation in theElectric Utility and Water Utility Funds. In all other cases, these amounts are recordedas gains or losses on disposal of capital assets.Capital assets transferred between funds are transferred at their net book value (costless accumulated depreciation),

as of the date of the transfer.

Debt issuance costsDebt issuance costs, with the exception of prepaid insurance costs, are recognized asoutflow of resources (expense/expenditure) in the period when the debt is issued.Prepaid insurance costs are capitalized and amortized over the lives of the related debtissues on a basis that approximates the effective-interest method.Bond refunding costsBond refunding costs are deferred and amortized over the life of the new bond or overthe life of the old bond, whichever is shorter, on a basis that approximates the effective-interest method. These costs are shown as a deferred outflow of resources on theStatement of Net Position.

Accretion Accretion is an adjustment of the difference between the price of a bond or certificate of participation (COP) issued at an original discount and the par value of the bond orCOP The accreted value is recognized as it accrues by fiscal year.Deferred outflows of resources Deferred outflows of resources represent consumption of net position that applies to afuture period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. In the Statement of Net Position, the City reported$2,177 in the governmental activities and $4,600 in the business-type activities ofdeferred charges on refunding bonds in this category.

A deferred charge on refunding bonds results from the difference in the carrying value of debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refundedor refunding debt.47 CITY OF ANAHEIMDeferred inflows of resources Deferred inflows of resources represent acquisitions of fund balance or net position thatapplies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City reported the following in this category:

1 ) Unavailable revenues (which include revenues, notes and long term receivables) measured under the modified accrual basis of accounting reported ingovernmental funds. These amounts are deferred and will be recognized as aninflow of resources in the period that the amounts become available.

2) Regulatory credits accumulated from collections of the Electric and Water Utilitycustomers reported in business-type activities.

These amounts provide recoveryin current period for costs to be incurred in future periods.

(Refer to discussion of Regulatory Credits that follows).

Deferred inflows of resources that are included in the fund financial statements andgovernment-wide statements at June 30, 2014 are as follows:unexpected long-term loss of a generating

facility, unplanned limits on the ability totransmit energy to the City, or major disasters.

The RSA funded by PCA and EMAcollections is billed to customers through standard rates.As of July 1, 2013, PCA rates were $0.0150 per kWh for all domestic retail customers, excluding residential lifeline customers, and $0.0100 per kWh for all commercial, industrial and municipal customers and large time of use (TOU) customers.

At June 30,2014, the deferred inflows of resources recorded for regulatory credits related to PCAtotaled $45,602 for the Electric Utility.

During fiscal year 2014 $16,825 wasrecognized as RSA revenues to mitigate the impact of energy costs and operation costs.As of July 1, 2013, the EMA rate was $0.0150 per kWh for all domestic customers and$0.0100 per kWh for all other customers; including TOU customers.

At June 30, 2014,the deferred inflows of resources recorded for regulatory credits related to EMA totaled$43,496.

During fiscal year 2014, $9,675 was recognized as RSA revenues tomitigate the impact of environmental mitigation costs.The Water Utility's rates, rules and regulations provide for a water regulatory creditaccount to reflect variations in the cost of water to the Water Utility and provide morestable retail water rates to the customers of the City's Water Utility.

This rate stabilization account (RSA) provides increased flexibility by allowing the Water Utility to maintainfinancial performance indicators and goals specified in bond covenants.

The accountis funded through expense reimbursements such as water supply cost refunds receivedfrom the Metropolitan Water District and Orange County Water District and othermiscellaneous credits and revenue.

At June 30, 2014 the deferred inflows of resources recorded for regulatory credits totaled $6,208 for the Water Utility.

During fiscal year2014, no PCA revenue was recognized for the Water Utility.Govermental Funds:TaxesGrantsOdher revenuesNotes and long term receivable Business-type activities:

Regulatory creditsGeneral HousingFund Authority

$ 8,20647 $ 371921,767 58,081$10,212 $58,118Transportation Improvement ProjectsNonmajorGovernmental Funds$ 5,039 $12,00941,330$ 5,039 $53,339ElectricUtility$89,098WaterUtility$ 6,208Compensated absencesRegulatory CreditsThe Electric Utility's Rates, Rules, and Regulations provide for the Rate Stabilization Account (RSA), which contains two components:

the Power Cost Adjustment (PCA) thatwas adopted by City Council on April 1, 2001, and the Environmental Mitigation Adjustment (EMA) that was adopted by the City Council on January 13, 2009. ThePCA has mitigated variations in the power supply or fuel costs. The EMA will allow therecovery of environmental mitigation costs, such as greenhouse gas emissions costs, themarginal cost differential between renewable power and traditional fossil-fuel-based power. The RSA provides the City with operational and billing flexibility to mitigatematerial fluctuations in the cost of energy, loss of revenues, or unplanned costs including Compensated

absences, vacation and sick pay, for all City employees are generally paid by the General Benefits and Insurance Fund, an internal service fund. The GeneralBenefits and Insurance Fund is reimbursed through payroll charges to all other fundsbased on estimates of benefits to be earned and used during the fiscal year. It is thepolicy of the City to pay all accumulated vacation pay when an employee retires orterminates.

Accumulated sick pay in excess of 175 hours0.00203 days <br />0.0486 hours <br />2.893519e-4 weeks <br />6.65875e-5 months <br /> per employee is paid toemployees at their then current rate of pay in January each year or upon termination from the City. Employees are paid for all accumulated sick pay when they retire fromthe City. Vested vacation and sick pay benefits are accrued when incurred in theGeneral Benefits and Insurance Fund and at June 30, 2014, totaled $18,194 and isincluded in long-term liabilities in the Statement of Net Position.

Also included in long-term liabilities in the Statement of Net Position at June 30, 2014, is compensatory timeliability of $400.48 CITY OF ANAHEIMChanges in the City's compensated absences liability in fiscal year 2014 were asfollows:Compensated absences liability at beginning of year $18,222Estimated compensated absences benefits earned 21,327Compensated absences used (20,955)Compensated absences liability at end of year $18,59AProvision for decommissioning costsFederal regulations require the Electric Utility to provide for the future decommissioning costs of its former ownership share of San Onofre Nuclear Generating Station(SONGS).

The Electric Utility has established a provision for decommissioning costs ofSONGS and restoration of the beachfront at San Onofre, California where it is located.A separate irrevocable trust account has been established for amounts funded and theseamounts are classified as restricted assets in the accompanying statement of netposition.

At June 30, 2014, the provision for decommissioning costs totaled $129,264.

For the year ended June 30, 2014, the Electric Utility has recorded decommissioning costs incurred for SONG in the amount of $1,891, which is included in the fuel andgeneration component in operating expenses.

On June 7, 2013, Southem California Edison (SCE) announced the permanent retirement of SONGS plant. The Electric Utility will continue to fund the reserve until a newdecommissioning study is approved by the Nuclear Regulatory Commission (NRC). TheElectric Utility currently has $129,264 in an irrevocable trust for the decommissioning costs.The Electric Utility has a 10.04% ownership interest of the San Juan Generating Station,Unit 4 (SJ). The Electric Utility is providing for the future demolition and reclamation costs of its ownership share of SJ. As of June 30, 2014, the Electric Utility has recordeda provision for decommissioning costs for SJ of $4,400 of which $580 was inirrevocable trust and $3,820 in the City's restricted cash account.

The amount wasreported as restricted assets in the accompanying statement of net position.

For the yearended June 30, 2014, the Electric Utility has recorded decommissioning costs incurredfor SJ of $440 in operating expenses.

Based on the cost projections, the Electric Utilityhas estimated

$440 in costs per year until 2027 to fund this obligation.

Pension planFull-time City employees are members of the State of California Public Employees' Retirement System (PERS). The Citys policy is to fund all pension costs accrued; suchcosts to be funded are determined annually as of July 1 by the System's actuary.

Seenote 11 for further discussion.

Net position restricted by enabling legislation The govemment-wide Statement of Net Position reports $205,998 of governmental activities restricted net position, of which $41,592 is restricted by enabling legislation.

Fund balancesIn the fund financial statements, governmental funds report the following classifications:

" Nonspendable fund balance includes amounts that cannot be spent becausethey are either (a) not in spendable form or (b) legally or contractually requiredto be maintained intact. The "not in spendable form" criterion includes items thatare not expected to be converted to cash, for example, inventories, prepaid orlong term loans and notes receivable

" Restricted fund balance includes amounts when constraints placed on the use ofthe resources are either imposed by external resource providers, constitutional provisions or enabling legislation.

• Committed fund balance includes amounts that can be used only for the specificpurposes pursuant to constraints imposed by formal action of the Citys highestlevel of the decision-making authority.

The City Council is the highest level ofdecision-making authority that can, by adoption of an ordinance prior to the endof the fiscal year, commit fund balance.

Once adopted, the limitation imposedby the ordinance remains in place until a similar action by the City Council toremove or revise the limitation.

" Assigned fund balance includes amounts that the City intends to use for specificpurposes but do not meet the criteria to be classified as restricted or committed.

The City Council has by Resolution authorized the City Manager or his designeeto establish, modify or rescind an assigned fund balance.* Unassigned fund balance accounts for the residual balance of the City's GeneralFund and includes all spendable amounts not contained in other classifications.

In other governmental funds, the unassigned classification reports a deficitbalance resulting from overspending for specific purposes for which amountshad been restricted, committed or assigned.

Generally, the City would first apply restricted resources when expenditures incurred forwhich both restricted and unrestricted resources are available.

Further, when thecomponents of unrestricted fund balance can be used for the some purpose, committed fund balance is applied first, followed by assigned fund balance.

Unassigned fundbalance is applied last.49 CITY OF ANAHEIMIn all governmental funds, encumbered amounts have been restricted or assigned forspecific purposes for which resources have already been allocated.

At June 30, 2014,encumbrances totaled $1,073, $12 and $7,891 in the General Fund, HousingAuthority Special Revenue Fund, and other nonmajor governmental funds, respectively.

The accumulated deficit fund balance at June 30, 2014 for the Transportation Improvement Projects major Capital Project Fund of $8,364 and for Streets Construction in nonmajor Capital Project Fund of $7,100 will be eliminated in future years by thereceipt of reimbursements for grant expenditures.

Budgetary principles The City is required by its charter to adopt an annual budget on or before June 30 forthe ensuing fiscal year. The General, special revenue, debt service, and capital projectsgovernmental fund types and proprietary fund types have legally adopted budgetsapproved by City Council.

The level of budgetary control (that is, the level at whichexpenditures cannot legally exceed the appropriated amount) is established at thedepartment level. From the effective date of the budget, the amounts stated herein asproposed expenditures/expenses become appropriations to the various Citydepartments.

Throughout the fiscal year the budget was amended to add supplemental appropriations.

All amendments to the budget which change the total appropriation amount for any department require City Council approval and all increases inappropriations in operating expenditures must be accompanied by an increase inrevenue sources of a like amount to maintain a balanced budget. The City Manager hasthe authority to change individual budget line items within a department as long as thetotal department's appropriation amount is not changed.The City utilizes an encumbrance system as a management control technique to assistin controlling expenditures.

All appropriations lapse at the end of the fiscal year, exceptfor capital projects which are carried forward until such time as the project is completed or terminated and for encumbered balances that are re-appropriated in the next year.GASB Statement No. 34 allows that budgetary comparison statements for the GeneralFund and major special revenue funds be presented in the basic financial statements rather than as Required Supplementary Information.

These statements must displayoriginal budget, amended budget and actual results.Budgeted revenue amounts represent the original budget modified by City Councilauthorized adjustments during the year, which were contingent upon new or additional revenue sources.

Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the year. Budgets are generally prepared in conformity with GAAP using the modified accrual basis of accounting, withthe exception of capital leases, or other similar instruments, and land held for resale,which are budgeted on a cash basis.Property taxesProperty taxes attach as an enforceable lien on property as of January 1. Taxes arelevied on July 1 and are payable in two installments due on November 1 and February1 and become delinquent after December 10 and April 10. The County of Orange,California (County) bills and collects the property taxes and remits them to the City ininstallments during the year. City property tax revenues are recognized when levied inthe governmental funds to the extent that they result in current receivables collectable within 60 days after year-end.

See note 9 for discussion of pledged property taxrevenues.

The County is permitted by State law (Proposition

13) to levy taxes at 1% of full marketvalue (at time of purchase) and can increase the property tax rate no more than 2% peryear from the full market value at the time of purchase.

The City receives a share of thisbasic levy proportionate to what it received in the 1976 and 1978 periods.Entitlements, shared revenues and grantsEntitlements and shared revenues are recorded at the time of receipt or earlier if thesusceptible to accrual criteria are met. Expenditure-driven grants are recognized in thefund Financial statements as revenue when the qualifying expenditures have beenincurred, all eligibility requirements have been met, and reimbursement is receivedwithin the availability period.Revenue recognition for Electric

Utility, Water Utility, and Sanitation Utility FundsRevenue is recorded in the period in which services are provided.

Residential andsmaller commercial customers are billed bimonthly and all other customers monthly.

AtJune 30, 2014 unbilled but earned service charges recorded in accounts receivable forthe Electric

Utility, Water Utility, and Sanitation Utility Funds amounted to $22,479,$5,096, and $3,939, respectively.

See note 9 for discussion of pledged revenues.

Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assetsand liabilities and disclosures of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. As such, actual results could differ from those estimates.

NOTE 2 -NEW ACCOUNTING PRONOUCEMENTS:

On July 1, 2013, the city adopted the following new accounting pronouncements issuedby the GASB:50 CITY OF ANAHEIM" GASB Statement No. 66, Technical Corrections

-2012: an Amendment ofGASB Statement No. 10 and No. 62. The requirements of this Statement areeffective for financial statements for periods beginning after December 15,2012.* GASB Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees.

This Statement establishes accounting and financial reporting standards for situations where a state or local government, as aguarantor, agrees to indemnify a third-party obligation holder under specified conditions (i.e., nonexchange financial guarantees).

The issuer of theguaranteed obligation can be a legally separate entity or individual, including a blended or discretely presented component unit. Guidance is provided forsituations where a state or local government extends or receives a nonexchange financial guarantee.

The requirements of this Statement are effective forfinancial statements for reporting periods beginning after June 15, 2013.Implementation of these pronouncements had no material effect on amounts reportedin the City's financial statements for the fiscal year ended June 30, 2014.The City is currently reviewing its accounting practices to determine the potential impactson the financial statements for the following GASB Statements:

• GASB Statement No. 68, Accounting and Financial Reporting for Pension; anamendment of GASB Statement No. 27. This Statement replaces therequirements of Statement No. 27 and No. 50 related to pension plans that areadministered through trusts or equivalent arrangements.

The requirements ofStatements No. 27 and No. 50 remain applicable for pensions that are notadministered as trusts or equivalent arrangements.

The requirements of thisStatement are effective for financial statements for fiscal years beginning afterJune 15, 2014.* GASB Statement No. 69, Government Combinations and Disposals ofGovernment Operations.

This Statement establishes accounting and financial reporting standards for mergers, acquisitions, and transfers of operations (i.e.,government combinations).

The Statement also provides guidance on how todetermine the gain or loss on a disposal of government operations.

ThisStatement applies to all state and local governmental entities.

The requirements of this Statement should be applied prospectively and are effective forgovernment combinations and disposals of government operations occurring infinancial reporting periods beginning after December 15, 2013.* GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, an amendment of GASB Statement No. 68. ThisStatement should be applied simultaneously with GASB Statement No. 68.NOTE 3 -DEPOSITS AND INVESTMENTS:

The City maintains a cash and investment pool, which includes the cash balances of allfunds, and is invested by the City Treasurer to enhance interest earnings.

The pooledinterest earned, net of administrative fees, is reallocated to each fund based on theirrespective average daily cash balances.

The City's pooled investment fund has been reviewed by Standard and Poor'sCorporation (S&P) and received a credit rating of AAf/S1 in August 2013.The City's investment policy further limits the permitted investments in Government CodeSections 53600 et al, 16429.1 and 53684 to the following:

obligations of the UnitedStates government, federal agencies, and government sponsored enterprises; medium-term corporate notes; certificates of deposit; bankers' acceptances; commercial paper;LAJF; repurchase agreements; reverse repurchase agreements; and money marketmutual funds.Deposits and investments are comprised of the following at June 30, 2014:Governmental activities:

General FundHousing Authority Nonmajor governmental fundsInternal service fundsTotal governmental activities Business-type acvities:

Electric UtilityWater UtilitySanitation UtilityGolf CoursesConvention, Sports andEntertainment VenuesTotal business-type activities Government-wide totalsFiduciary fundsCash andCashEquivalents

$ 8,70810,55718,70918,02355,99710,0065,80712,9281905,83790,758Investments

$ 24,84630,12153,38551,42628,54916,56633,438542Restricted Cash andCashEquivalents

$ 2,76338,22640 98929,8343,49215,075Restricted Investments Total$ 49,63749,637$ 33,55443,441159,95769440306,40208,936 277,3259,100 34,96561,44173216,634 3,01995,729 51,420255,507 92,40937794$255_507

$130_20310,120228,156277,79310105$287_89835,603716,46747,89$764_366Total cash and investments

$90_758Deposits and investments are comprised of the following at June 30, 2014:DepositsInvestments Total deposits and investments

$ 6,191758,175At June 30, 2014, deposits of $6,191 with a corresponding bank balance of $16,090were maintained in various federally regulated financial institutions.

The difference of51 CITY OF ANAHEIM$9,899 represents deposits in transit, outstanding checks, and other reconciling items.Deposits with bank balances of $758 are insured by the Federal Depository Insurance Corporation.

For deposits with bank balances totaling

$15,332 California state statutesrequire federally regulated financial institutions to secure a city's deposits by pledgingcollateral consisting of either government securities with a value of 110% of a city's totaldeposits or by pledging first trust deed mortgage notes having a value of 150% of acity's total deposits.

The collateral is required by regulation to be held by thecounterparty's agent in the name of the City.Investments The City Treasurer prepares an investment policy statement

annually, which is presented to the Budget, Investment and Technology Commission for review and the City Councilfor approval.

The approved investment policy Statement is submitted to the California Debt and Investment Advisory Committee in accordance with Government Code.The policy provides the basis for the management of a prudent, conservative investment program.

Public funds are invested for the maximum security of principal and to meetdaily cash flow needs while providing a return. All investments are made in accordance with the Government Code and, in general, the City Treasurer's policy is more restrictive than Government Code.Investments authorized by the Government Code and the City'sinvestment policyThe following table identifies the investment types that are authorized for the City by itsinvestment policy which is more restrictive than Government Code. The table alsoidentifies certain provisions of the City's investment policy that address interest rate risk,credit risk, and concentration of credit risk. This table does not address investments ofdebt proceeds held by bond trustees that are governed by the provisions of debtagreements of the City, rather than the general provisions of the Government Code orthe City's investment policy. Minimum*Excluding amounts held by bond trustees that are not subject to Government Coderestrictions The City's pooled investments comply with the requirements of the investment policy.GAAP requires disclosure of certain investments in any one issuer that exceeds fivepercent concentration of the total investments.

At June 30, 2014, the following investments represent five percent or more of the City's total pooled investments:

FairIssuer Investment Type Value %Federal National Mortgage Association U.S. agency securities

$101,816 24%LAIF LAIF 61,290 14%Federal Home Loan Bank U.S. agency securities 44,701 10%Federal Home Loan Mortgage Corporation U.S. agency securities 38,443 9%Federal Farm Credit Bank U.S. agency securities 34,142 8%Investments authorized by debt agreements Investment of debt proceeds held by bond trustees is governed by provisions of the debtagreements, rather than the general provisions of the Government Code or the Citysinvestment policy. The table below identifies the investment types that are authorized forinvestments held by bond trustees.

The table also identifies certain provisions of thesedebt agreements that address interest rate risk, credit risk, and concentration of creditrisk.MaximumAuthorized Investment Type MaturityU.S. Treasury obligations NoneU.S. agency securities NoneGuaranteed investment contracts NoneCollateralized investment contracts NoneFlexible repurchase agreements NoneMoney market mutual funds NoneLAIF NoneCity of Anaheim Treasurer's investment portfolio NonePceNoneNoneNoneNoneNoneNoneNoneNoneInvestment in One IssuerNoneNoneNoneNoneNoneNoneNoneNoneAuthorized Investment TvyeU.S. Treasury obligations U.S. agency securities Bankers' acceptances Commercial paperNegotiable certificates of depositRepurchase agreements Reverse repurchase agreements Medium-term corporate notesMoney market mutual fundsLAIFTime certificates of deposit (TCD)MaximumMaximum Percentage Maturity of Portfolio*

5 years 100%5 years 100%180 days 40%270 days 25%360 days 25%1 Year 30%90 days 20%5 years 30%N/A 20%$50 millionN/A per account1 year 20%MaximumInvestment in OneIssuer100%40%5%5%5%NoneNone5%10%$50 millionper account5%Ratin9(S&P/Moody's/Fitch)NoneNoneNoneA-I/P-I/F-1 NoneNoneNoneANoneNoneNoneIssuerFederal National Mortgage Association Morgan StanleyFederal Home Loan BankLAIFDreyfus Treas 521Federal Home Loan Mortgage Corporation Federal Farm Credit BankU.S. Bank Money MarketBank of AmericaAt June 30, 2014, the following investments represent five percent or more of the City'stotal investments controlled by band trustees:

Investment TypeU.S. agency securities Flexible repurchase agreement U.S. agency securities LAIFMoney market Mutual FundU.S. agency securities U.S. agency securities U.S. Bank Money MarketInvestment guarantee contractFairValue$61,68242,00031,71231,23024,47117,71217,05917,03716,64519%13%10%9%7%5%5%5%5%52 CITY OF ANAHEIMAll guaranteed investment contracts have downgrade language that requires collateral should credit ratings drop below certain levels.Custodial credit riskCustodial credit risk for investments is the risk that the City will not be able to recoverthe value of investment securities that are in the possession of an outside party. Allsecurities owned by the City with the exception of LAIF and money market mutual fundsare deposited in trust for safekeeping with a custodial bank different from the City'sprimary bank. Securities are not held in broker accounts.

Funds held by LAIF andmoney market mutual funds are held in the City's name.Custodial credit risk for investments held by bond trustees is the risk that the City will notbe able to recover the value of investment securities that are in the possession of anoutside party. All securities held by bond trustees are in the name of the bond issue intrust for safekeeping with the bond trustee, which is different from the City's primarybank.Interest rate riskInterest rate risk is the risk that changes in interest rates will adversely affect the fair valueof an investment.

The City Treasurer mitigates this risk by investing in longer-term securities only with funds that are not needed for current cash flow purposes andholding these securities to maturity.

The City Treasurer uses the segmented timedistribution method to identify and manage interest rate risk. In accordance with the Cityinvestment policy, the City Treasurer monitors the segmented time distribution of itsinvestment portfolio and analysis of cash flow demand.Investments held by bond trustees are typically long-term securities which are notadversely affected by interest rate changes.

Guaranteed investment contracts forconstruction funds are usually limited to three years or less. Information about thesensitivity of the fair values of the City's investments (including investments held by bondtrustees) to market interest rate fluctuations is provided by the following table that showsthe distribution of the City's investments by maturity at June 30, 2014:CreditRating(S&P/Investments M~L4Investments controlled by City Treasurer:

U.S. agency securities AA+/AaaMedium-term corporate notes AAA/AaaMedium-term corporate notes AA+/AoaMedium-term corporate notes AA+/A1Medium-term corporate notes AA/AalMedium-term corporate notes AA/Aa2Medium-term corporate notes AA-/Aa3Medium-term corporate notes A+/A1Medium-term corporate notes A+/A2Medium-term corporate notes A/A3Medium-term corporate notes A-/A3Medium-term corporate notes A-/BaalCommercial paper A-i/P-1Money market mutual funds AAA/AaaLAIF UnrotedTotal investments controned by City Treasurer Investments controlled by bond trustees:

U.S. agency securities AA+/AaaGuaranteed investment contracts UnratedCollateralized investment contracts UnratedFlexible repurchase agreements UnrotedMoney market mutual funds AAA/AaaLAN UnratedTotal investments controled by bond trusteesTotal investments FairValue6/30/2014

$219,10225,6815,00915,38811,2903,0023,0173,0106,00311,1277,0185,21143,3796,52261,290426,049128,16534,6994,88061,06672,08631,23012MonthsorLess13 25 37 Moreta ta ta Than24 36 60 60Months Months Months Months$ 33,245 $ 17,75618,4735,049 5,0642,0123,0023,017S 44,934 $123,1675,005 2,2035,0095,2756,254 3,0243,0104,9911,0126,1065,0217,0185,21143,3796,52261,20 ___156,603 66,574 66, 136,3958,308 27,14310,1351,21110,70372,08631,2309,446 83,2684,022$20,5423,66950,363332,126 122,327 3,489 9,446 87,290 7A,574$758_175

$278_930

$105_063 S 75_923 $223685$

74574NOTE 4 -ACCOUNTS RECEIVABLE, DUE FROM OTHER GOVERNMENTS, DUE FROM THE SUCCESSOR AGENCY, INTERFUND RECEIVABLE ANDPAYABLE BALANCES, AND CERTAIN INTERFUND TRANSACTIONS:

Accounts receivable Accounts receivable for the City's governmental and business-type activities, including the applicable allowance for uncollectible accounts at June 30, 2014, are as follows:53 CITY OF ANAHEIMLess:Accounts Allowance forReceivable Uncollectibles TotalGovernmental activities:

General FundHousing Authority Transportation Improvement ProjectsNonmajor governmental fundsInternal service fundsTotal governmental activities Business-type activities:

Electric UtilityWater UtilitySanitation UtilityGolf CoursesConvention, Sports and Entertainment VenuesTotal business-type activities Total accounts receivable

$16,37310821,2649,83527,58241,8227,5086,69512157,A71$85_053$(3,826)

$12,547(93) 1521,2649,835(3,919 23,663(617)(88)(189)(32)(926)$(A,845)41,2057,4206,506121$80,208Due from other governments Due from other governments for the City's governmental activities at June 30, 2014, areas follows:" On April 1, 2003 the City and the former Anaheim Redevelopment Agencyentered into a Cooperation Agreement whereby the City will assist theRedevelopment Agency with the development of Westgate utilizing

$10,000 offunds from the HUD Section 108 loan program.

The amount is due to the Cityby annual installment through June 2024. At June 30, 2014, the amount dueto the City is $7,450." On June 1, 2010, the City and the former Anaheim Redevelopment Agencyentered into a Cooperation Agreement whereby the City will assist theRedevelopment Agency with the rehabilitation of the historic Packing House siteutilizing

$7,000 of funds from the HUD Section 108 $15,000 loan proceeds.

The amount is due to the City by annual installment through June 2031. At June30, 2014, the amount due to the City is $6,021." In fiscal years 2010 and 2011, the former Anaheim Redevelopment Agencypaid a total of $19,163 to the State of California Supplement Educational Revenue Augmentation Fund (SERAF).

Of this amount, $8,500 was paid withfunds borrowed from Housing Set-Aside property tax increment.

At June 30,2014, the amount due to the City is $8,176." On February 5, 2013, the City and the Successor Agency entered into aCooperation Agreement whereby the City will assist the Successor Agency withloaning the proceeds of one-time allocation of the $1,563 from the low-andmoderate income housing fund for various Successor Agency projects.

At June30, 2014, the amount due to the City is $884." On May 14, 2013, the City and the Successor Agency entered into aCooperation Agreement whereby the City will assist the Successor Agency byproviding a loan up to $1,500 for making homebuyer loans. At June 30,2014, the amount due to the City is $883.Interfund receivable and payable balancesNet internal balances between governmental activities and business-type activities of$17,494 are included in the government-wide financial statements at June 30, 2014.Interfund receivables and poyables that are included in the fund financial statements atJune 30, 2014, are as follows:TaxesGovernmental activities:

General Fund $16,737Housing Authority Transportation Improvement ProjectsNonmajor governmental fundsTotal due fromother governments

$16_737Grants$ 38815922,48922,254OtherTotal$280 $17,40515922,48922,254$280$62,307Revenues are reported net of estimated uncollectible amounts.

Total estimated uncollectible amounts related to revenues of the current period are as follows:General FundElectric UtilityWater UtilitySanitation Total$ 79978694281$1,960Due from the Successor AgencyThe amount due from the Successor Agency at June 30, 2014 is $23,414.

Due to theextended period of time over which the receivables are to be collected, the City hasrecorded deferred inflows of resources equal to the amount due.54 CITY OF ANAHEIMInterfund Receivable Interfund PayableGovernmental fundsGeneral FundTransportation Improvement ProjectsNonmajor governmental fundsEnterprise Fund:Golf CoursesTotalNonmajor InternalGeneral Housing Governmental ServiceFund Authority Funds Funds TotalTransfer of capital assets with net book value totaled $1,572 from thegovernmental activities to Business-type activities:

street light installations toElectric Utility ($985), sewer improvements to Sanitation Utility ($467) and landdevelopment to Convention, Sports and Entertainment Venues ($120). Theseamounts were accounted for as capital contributions in the respective enterprise fund financial statements.

$883$ 41 $ 924$ 6,2548,6716,254 The following interfund transfers are reflected in the fund financial statements at June30, 2014:$1,1702,161$ý33319,841Transfer In:$833 $14,925 $ 41 $19180Certain interfund balances at June 30, 2014 are generally short-term loans to relievetemporary cash deficits in various funds. The following interfund balance is expected tobe repaidin more than one year:General FundOf the total interfund receivable in the General Fund, $2,161 is due from the GolfCourses Fund. On September 24, 2002, the City Council approved a loan up to$6,400 froin the General Fund to the Golf Courses Fund for construction of theAnaheim Hills Golf Clubhouse.

The loan is payable in annual amounts of not lessthan $548 beginning in July 2005 until July 2023 and bears interest at the City'sinvestment yield as of June 30th of each year.Certain interfund transactions The net transfers of $7,288 from the business-type activities to the governmental activities on the government-wide Statement of Activities are primarily comprised ofoperational subsidies from business-type activities to the General Fundand are offsetby debt service subsidies to the Convention, Sports and Entertainment Venues Fund.The City made the following new recurring and one-time transfers during fiscal yearended June 30, 2014:" Transfer of $4,864 of restricted resources related to sewer construction andimprovement activities from the Storm Drain Construction nonmajorgovernmental fund to the Sanitation Utility enterprise fund where the City's sewerconstruction activities are accounted for. This amount is reported in the restricted net position for capital projects in the Sanitation Utility Fund.* Transfer of $600 from the General Fund to the Water Utility enterprise fundpursuant to a Water Transfer settlement.

See note 14 for additional information regarding the Water Transfer settlement.

" Transfer of $3,794 of unrestricted resources from the General Fund to the OtherCapital Projects nonmajor governmental fund for the neighborhood improvement land acquisition.

NonmajorGeneral Housing Governmental Transfer Out. Fund Authority FundsGeneral Fund $51,940Enterprise FundsConvention, Sports andElectric Water Sanitation Entertainment Utility utility utility Venues Total$600 $14,272 $66,812Nonmajorgovernmental funds $ 111Elecric Utility 22,682Water Utility 3,521Sanitation Utility 2,143Golf Courses 250Total $28,707$2,627$2,6271,539 $4,864 9,14122,682$297 3,8182,143250$53,479 $297 $600 $4,864 $14,272 $104,846NOTE 5 -BOND PAYMENT RECEIVABLE:

On August 3, 1995, the Los Angeles Rams Football

Company, currently the St. LouisRams (Rams), exercised its right to terminate its lease under the Fourth Amendment tothe Exhibition Agreement between the Rams and the City (Rams Agreement).

Under theRams Agreement, the Rams became obligated to repay the City for the debt service onthe 1979 Anaheim (California)

Stadium Inc. Lease Revenue Bonds in the principal amount of $28,110, which obligation is supported by an irrevocable standby letter ofcredit with Dresdner Bank AG, will be repaid by August 15, 2015. The 1979 Anaheim(Califomia)

Stadium Inc. Lease Revenue Bonds were subsequently

refunded, and are nolonger outstanding, by a portion of the Convention, Sports and Entertainment VenuesFund 1993 Refunding Projects Certificates of Participation.

In December 2008, the1993 Refunding Projects Certificates of Participation were refunded and replaced bythe 2008 Lease Revenue Refunding Bonds. At June 30, 2014, the remaining principal payment obligation by the Rams on the debt service is $4,505. During fiscal year2014, the Rams reimbursed the City $2,357 (representing

$2,040 for principal and$317 for interest) for the current portion of their debt service obligation.

The Cityaccounted for the termination of the lease by recording a bond payment receivable from the Rams and a contribution to the Convention, Sports and Entertainment VenuesEnterprise Fund in the amount of the debt obligation assumed by the Rams under theRams Agreement.

55 CITY OF ANAHEIMNOTE 6 -CAPITAL ASSETS:Capital asset activities for the year ended June 30, 2014, were as follows:Depreciation expense was charged to functions/programs of the City during fiscal year2014 as follows:Governmental activities:

Nondepreciable assets:LandConstruction in progressTotalDepreciable assets:Buildings, structures and improvements Machinery and equipment Infrastructure TotalTotal assetsLess accumulated depreciation for:Buildings, structures and improvements Machinery and equipment Infrastructure Total accumulated depreciation Total governmental activities capital assets, netBusiness-type activities:

Nandepreciable assets:LandConstruction in progressTotalDepreciable assets:Buildings, structures and improvements Utility plantMachinery and equipment TotalTotal assetsLess accumulated depreciation for:Buildings, structures and improvements Utility plantMachinery and equipment Total accumulated depreciation Total business-type activities capital assets, netBeginning Transfer EndingBalance Additions In (Out) Deletions Balance$ 648,420 $ 8,323 $ 4,133 $ (2,623) $ 658,253138,749 123,527 (56,7181 (878 204,680787169 131,850 (52,5851 (3,501) 862,933274,589 6,743 11,665 (230) 292,767106,950 8,498 381 (4,980) 110,849767155 1,353 38,967 (9,055) 798,4201,148694 16,594 51,013 (14,265 1,202,036 1,93,863 148,444 (1,572) (17,766) 2,064,969 (114,4321 (9,096) 225 (123,303)

(77,810)

(6,594) 4,870 (79,534)(351,094)

(16,8 84 (367,(543,3361 (32,5871

___ 5,179 (570,744)

$1 392 527 $115_857

$(11572)

$112 587) $1 494 225$ 58,410 $ 58,41084936 $ 99,313 $(98,5551

$ (45 85,649143,346 99,313 (98,555)

(4) 144,059627,445 1,585 8,203 (469) 636,7641,564,944 3,710 91,924 (7,851) 1,652,727 31,3A7 1,924 (549) 32,7222 7,219 100,127 (8,869 2,322,213 2,367,082 106,532 1,572 (8,914) 2,466,272 (226,0151 (14,387) 281 (240,121)

(543,360)

(52,304) 7,851 (587,813)

(22,3491 (2,109) 537 (23,921)(791,72,1 (68,8007

$1,52 8,669 (851,8551

$1 _57,358 $ 7_3 $ 1,572 L_?L25 $1,614,417 Governmental activities:

General government PoliceFireCommunity Development PlanningPublic WorksCommunity ServicesConvention, Sports and Entertainment Capital assets held by the City's internal service fundsare charged to the various functions based on theirusage of the assetsTotal depreciation expense-governmental activities Business-type activities:

Electric UtilityWater UtilitySanitation UtilityGolf CoursesConvention, Sports and Entertainment VenuesTotal depreciation expense-business-type activities

$ 2641,62852431811017,7792,8864,8714,207$32,587$41,77010,5342,44555413,497$68,800Capital leasesIncluded in the capital assets amounts listed above are the following capitalized leasedassets:Machinery and .equipment Less accumulated amortization Capitalized leased assets, netGovernmental Activities

$ 2,999(1,395)$_I,64Fiduciary FundSuccessor AgencyCapital asset activities for the year ended June 30, 2014 are as follows:56 CITY OF ANAHEIMNondepreciable assets:Land.Construction in progressTotalDepreciable assets:Buildings, Structures and improvements Machinery and equipment TotalTotal assetsLess accumulated depreciation for:Buildings, Structures and improvements Machinery and equipment Total accumulated depreciation Total capital assets, netBeginingBalance$15,56816,97132,53947,07426547,33979,878(2,117)(128)(2,245)$77,633Additions Deletions

$ 1,701 $(18,672) 1,701 (18,672)17,56817,56819,269(1,635)(60)(1,695)$17,574(18,672)$(18,672)

Ending At June 30, 2014, the City was fully funded for self-funded retention for workers'Balance compensation and general liability claim exposures (with retention levels of $750 peroccurrence for workers' compensation claims and $1,000 per occurrence for general$15,568 liability claims).

Above these retained levels, the City's potential liability is coveredthrough various commercial insurance and intergovemmental risk pooling programs15,568 (collectively, "Insurance").

Settled claims have not exceeded total Insurance in any of thepast three years, nor does management believe that there are any pending claims that64,642 will exceed total Insurance coverage.

26564,907 The unpaid claims liability included in the General Benefits and Insurance Fund is based80,475 on the results of actuarial studies and includes amounts for claims incurred-but-not-

reported, known-claim development, and allocated loss adjustment expenses.

Claimsliabilities are calculated using a discount rate of 3% and consider the effects of inflation, (3,752) multi-year loss development trends, and other economic and social factors.

It is the City's(188) practice to obtain full actuarial studies annually for its retained levels for general liability (3,940) and workers' compensation coverages.

"Premiums" are charged by the General$76,535 Benefits and Insurance Fund using various allocation methods that include actual costs,trends in claims experience, exposure bases, and number of participants.

Operating leasesHousing Authority At June 30, 2014, the Housing Authority earned revenues as the lessor of land, carriedat cost of $67,202 in the government-wide financial statements, under ten operating ground leases. These leases to developers are noncancelable.

Terms of the leases rangefrom 55 years to 65 years with lease expiration dates from 2057 to 2076. The totalbase rent to be collected over the terms of the leases are $73,270 with simple interestaccruing on unpaid portions at a rate ranging from 1% to 6%. Minimum leasepayments are calculated

annually, based on residual

receipts, as defined in the leaseagreements.

At June 30, 2014, the Housing Authority has recorded notes receivable due from developers related to these transactions of $12,487 and is net of allowances of $4,051 for uncollected accounts in the government-wide financial statements.

In thegovernmental fund financial statements, this amount is included in the $49,905 notesreceivable balance of the Housing Authority.

NOTE 7 -SELF INSURANCE:

The General Benefits and Insurance Fund, an internal service fund, is used to accountfor self-funded workers' compensation related benefits, self-funded general liability claims, commercial insurance purchases, and altemative risk financing vehicles; as wellas benefit-related costs such as employee compensated

absences, retirement, andhealth benefits.

Revenues of the General Benefits and Insurance Fund are derived fromcost-allocation charges to City departments using estimates of anticipated risk-transfer costs, new losses, payments on existing claims, and reserve development on knownclaims for the Insurance portion of the Fund; as well as anticipated benefits earned andinsurance costs for benefits coverage for the General Benefits portion of the Fund. Inaddition, the Fund receives interest income from reserves.

Changes in claims liability of the General Benefits and Insurance Fund and that relatesto the governmental funds and reported in the governmental activities in thelovernment-wide Statement of Net Position in fiscal years 2014 and 2013 were asllows:Claims liability at beginning of yearCurrent year claims and changes in estimates Claims paymentsClaims liability at end of year2014$39,4228,691(7,286)2013$39,3437,064(6,985)Above the retained limit of $750 per occurrence for workers' compensation losses, theCity purchases excess coverage, utilizing both commercial insurance and anintergovernmental risk pooling program (CSAC-EIA),

to statutory limits.Above the retained limit of $1,000 per occurrence for liability losses, the Citymaintains excess coverage for all City operations to $150,000 per occurrence, excluding helicopter operations for which the City purchases

$50,000, per occurrence, of commercial aviation liability insurance (on a first-dollar basis). The first layer ofexcess liability loss coverage is procured through the Authority for California CitiesExcess Liability (ACCEL),

a joint powers insurance authority, formed in 1986, poolingcatastrophic

general, automobile, personal injury, and public officials errors andomissions liability losses among twelve Califomia cities, through both risk-sharing andcommercial insurance joint-purchase arrangements.

The City, therefore, continues tomaintain some limited excess liability risk sharing exposure, above $1,000 peroccurrence, directly with ACCEL. This pooled coverage has exposure (i) from the run-out periods from prior years in which commercial excess insurance was not obtained, and (ii) from an ACCEL retained layer for fiscal year 2014 of $4,000 in excess of$1,000. Each ACCEL member's share of pooled losses is based on a retrospectively-rated risk-sharing formula which includes, but is not limited to, exposure and lossexperience factors.57 CITY OF ANAHEIMIn order to provide funds to pay claims, ACCEL collects an annual deposit from eachmember. The deposits are credited with investment income at the rate earned onACCEL's investments.

At June 30, 2014, ACCEL's cash and investments totaled$52,751, of which $6,983 consists of deposits and interest on deposits provided by theCity. The City has no specific equity interest in ACCEL. Deposits provided to ACCEL bythe City are expensed when paid by the General Benefits and Insurance Fund.ACCEL is responsible for deciding the risks it will underwrite, the monitoring, andhandling of large claims, and arranging excess risk-financing programs.

ACCEL doesnot have any cdebt outstanding.

For a copy of ACCEL's separate financial statements, contact the Finance Director of the City.Note 8 -SHORT-TERM BORROWING On March 1, 2013, the Public Utility Department entered into a Revolving CreditAgreement with Wells Fargo Bank, National Association for a note amount not toexceed $100,000, of which $86,000 is made available for the Electric Utility and$14,000 for the Water Utility.

The note has a three year term at variable interest ratebased on the LIBOR Daily Index Rate and a spread. The annual commitment fee is0. 175% of the total note amount of $100,000.

During fiscal year 2014, the Electric Utility made one draw from the taxable notetotaling

$7,400 and repaid $10,000 for financing the Cap-and Trade program.For the Water Utility, the purpose of this agreement is to provide temporary financing for the costs of acquisition and construction of additions to and improvements of theUtility's water system which qualify for reimbursement under the City Council's Resolution No. 2012-111 "Official Intent to Reimburse Certain Water Utility FundExpenditures from the Proceeds of Bonds or Other Obligations".

During fiscal year2014, the Water Utility made three draws totaling

$9,100 for such qualiying capitalexpenditures.

The $9,100 balance is expected to be paid in full during fiscal year 2015with the issuance of new bond financing.

Beginning Additions/

Reductions/

Balance Proceeds PaymentsEnding WithinBalance One YearGovernmental activities:

Bonds payable:General obligation City lease revenueAccretion Unamortized bondpremium/discount, netTotalCOPs:City COPsTotalCapitalized lease obligations:

Internal Service FundsTotalNotes and loans payable:cityHousing Authority TotalClaims liabilities (note 7)Compensated absences (note 1)Governmental activities totalBusiness-type activities:

Bonds payable:Electric UtilityWater UtilitySanitation UtilityConvention, Sports andEntertainment VenuesUnamortized bondpremium/discount, netTotalCOPs:Convention, Sports andEntertainment VenuesTotalNotes and loans payable:Electric UtilityWater UtilityConvention, Sports andEntertainment VenuesTotalDecommissioning provision Business-type activities totalGovernmental-wide total$ 2,605453,226162,517(2,262)616,08610,02010,0201,3691,36953,1361,74154 87739,42218,222739,996678,68084,79044,41537,83118,271863,98738,O38OO44,0008,44210,28062,722131,3331,096,042

$1,836038

$ 16101 $ 1,995 $ 635(17,0001 436,226 18,989$16,150 178,667131 (2,131)16,150 (17,479) 614,757 19624111,401 8,880 12251,077 (1,121) 1,325 6281,077 (1,121) 1,325 6281,350 (3,729) 50,757 4,285-(1,741) _1350 (5,470) 50,757 4,2858,691 (7,286) 40,827 805121,32 120,955) 18,594 134448,595 (53,451) 735,140 47,260(71,795) 606,885(920) 83,870(920) 43,495(8,120) 29,711(1,679) 16,592(83,434) 780,553Electric UtilityWater UtilityBegining EndingBalance Additions Payments Balance$ 2,600 $ 7,400 $(10,000) 9,100 $ 9,100$ 2,600 $16,500 $(10,000)

$ 9,10038,038,000(8,400) 35,600(956) 7,486(5,095) 5,185(14,451) 48,271(97,885) 1,000,488

$51,336)

$1,735,628 12,1559609554,99619,0663,5035,11,2009835,185$ 87_ 194NOTE 9 -LONG-TERM UABIUTIES:

The following is a summary of changes in long-term liabilities reported in thegovernment-wide financial statements for the year ended June 30, 2014.2,3312,331$ 5092658 CITY OF ANAHEIMGOVERNMENTAL ACTIVITIES:

BONDS PAYABLEAt June 30, 2014, bonds payable consisted of the following:

Range ofDate Final Interest RatesIssued Maturity at Issue DateAuthorized Out-and standingIssued 6/30/14City1993 General Obligation Refunding Bonds1997 Anaheim LeaseRevenue BondsAccretion 2007 Anaheim LeaseRevenue Refunding Bonds2008 Anaheim LeaseRevenue Refunding BondsTotalUnamortized bond refunding costs/premium/discounts, netTotal government activities bbonds are paid from lease payment measurement revenues (LPMR) defined as amountsequal to: 1) 3% of the 15% transient occupancy taxes (TOT) (i.e. 20% of the totaltransient occupancy taxes) for all hotel properties in the City, excluding Disneyproperties, and 2) 100% of the incremental OT, sales, and proper tax revenues fromall Disney properties over the 1995 base, adjusted each year by the CPI change, witha minimum 2% increase annually.

The City is not required to pay any additional sumsshould the LPMR fall short of the amount required to pay debt service on the bonds. TheWalt Disney Com any provided a guarantee to the bond insurer to enable the issuer toobtain municipal bond insurance.

LPMR began on January 1, 2001, with the first payment made to the trustee on July 7,2001, f6r the LPMR generated during the period January through June 2001.Subsequent to that date, LPMR is collectýd and remitted to the trustee monthly.

Duringthe fiscal year ended June 30, 2014, $44,454 was remitted to the trustee.Debt service requirements to maturity for the 1997 Anaheim Lease Revenue Bonds andthe 2007 Anaheim Lease Revenue Refunding Bonds to be paid by the Anaheim ResortImprovements Debt Service Fund from future LPMR are as ollows:11/01/93 10/01/16 4.0%-7.0%

$ 10,055 $ 1,9952/01/97 3/01/37 4.5%-6.0%

6/13/07 3/01/37 3.25%-5.5%

12/10/08 8/01/19 3.0%-5.0%

510,427 187,953178,667256,320 245,2505,084 3,023616,888(2.131)$614,757Bonds Payable -CityGeneral obligation refunding bondsThe 1993 General Obligation Refunding Bonds were issued to finance storm drainimprovements and are payable from the levy of ad valorem taxes. Total principal andinterest remaining on the bonds is $2,117, payable through October 2016. During thefiscal year endecdJune 30, 2014, total principal and interest paid was $702.Debt service requirements to maturity for the 1993 General Obligation Refunding Bonds to be paid by the General Obligation Bonds Debt Service Fund from futureproperty tax revenues are as follows:Fiscal Year Ending 6/30201520162017201820192020-2024 2025-2029 2030-2034 2035-2037 TotalUnamortized bond discountTotal bondsPrincipal

$ 18,51020,63022,90011,66712,03169,02783,614100,173433,203(2,157)$943ýA6Interest$ 15,89414,75113,47926,33227,086145,848164,787185,901137,39731,468$731,468Total$ 34,40435,38136,37937,99939,117214,875248,401286,074232,0411,164,671 (2,157)Included in interest is $178,667 related to accretion on capital appreciation bonds.Lease revenue refunding bonds -CityDebt service requirements to maturity for the City's lease revenue bonds to be paid fromunrestricted revenues of the Municipal Facilities Debt Service Fund are as follows:Fiscal Year Ending 6/30201520162017TotalPrincipal

$ 635660700$ 1 995Interest$ 674114$122Total$ 702701714$2 117Lease payment measurement revenuesIn February 1997, the Anaheim Public Financing Authority sold $510,427 of leaserevenue bonds to construct public improvements in The Anaheim Resort. In June 2007,the Authority sold $256,320 of lease revenue bonds to defease $248,335 of the 1997lease revenue bonds. The bonds are special obligations of the Authority payable solelyfrom lease payments to be made by the City to the Authority for the use and occupancy of the leased premises.

Debt service requirements to maturity for these lease revenueFiscal Year Ending 6/30201520162017201820192020TotalUnamortized bond premiumTotal bondsPrincipal

$ 4795064635015195553,02326$3,049Interest Total$ 131 $ 610111 61789 55266 56741 56014 569452 3,47526$ 452 $350159 CITY OF ANAHEIMCERTIFICATES OF PARTICIPATION At June 30, 2014, certificates of participation consisted of the following:

NOTES AND LOANS PAYABLEAt June 30, 2014, notes and loans payable are as follows:Range ofDate Final Interest RatesIssued Maturity at Issue DateAuthorized andIssuedOut-standing6/30/14Notes and Loans Payable -CityHUD Section 108 auaranteed loans payableCity1993 Arena Land Refinancing 11/01/93 11/01/19 5.9%-7.50%

21,210 $8,880Total governmental activities COPs $8,880Certificates of Participation Payable -CityCertificates of participation debt service payments are to be paid from unrestricted revenues of the Certificates of Participation Debt Service Fund. COP debt servicerequirements to maturity are as follows:In May 2003, the City entered into an agreement with HUD, making available

$10,000to provide financial assistance related to the development of Westgate on a formerlandfill site located at the northeast corner of Beach Boulevard and Lincoln Avenue. Theloan is payable from sales tax revenue generated by Westgate, from the Community Development Block Grant yearly entitlement, and from receipts of the Successor Agencyreceivable.

The outstanding balance at June 30, 2014 was $7,401. The loan bearsinterest ranging from 1.74% to 5.97% and is payable over 20 years beginning onFebruary 1, 2005, until August 1, 2023. Loan debt service requirements to maturityare as follows:Fiscal Year Ending 6/30201520162017201820192020Total COPsPrincipal

$ 1,2251,3151,4151,5301,6351, 0Interest$ 53745536627016857$1,85Total$ 1,7621,7701,7811,8001,8031,817Fiscal Year Ending 6/30201520162017201820192020-2024 Total notes and loansPrincipal

$ 5175616706857304,238Interest$ 402374342305266620$2 30Total$ 9199351,0129909964,858$ý971 0CAPITAL LEASE OBUGATIONS The City has a long-term noncancelable agreement with HP Financial Services tofinance the acquisition of the City's server, desktop, and portable computer equipment.

The agreement qualifies as a capital lease for accounting purposes as defined underthe Financial Accounting Standards Board (FASB) Statement No. 13, Accounting forLeases, and therefore has been recorded at the present value of future minimum leasepayments at the date of inception of the lease. Future minimum lease payments to bemade from unrestricted revenues of the Information Services Internal Service Fund underthe capital lease are as follows:In March 2010, the City entered into an agreement with HUD, making available

$15,000 to fund the acquisitions of the Anaheim Family Justice Center and MiralomaPark site, construction of the Thornton Brady storm drain and the rehabilitation of thehistoric Packing House site. The loan is payable from the Community Development BlockGrant yearly entitlement and from the receipts of the Successor Agency receivable.

Theoutstanding balance of the loan at June 30, 2014, was $12,830.

The loan bearsinterest ranging from 1.74% to 3.97% and is payable over 20 years beginning onFebruary 1, 2011 through August 1, 2030. Loan debt service requirements to maturityare as follows:Fiscal Year Ending 6/302015201620172018TotalLess amount representing

interest, variablePresent value of future minimum lease payments$ 666496201411,404(791Fiscal Year Ending 6/30201520162017201820192020-2024 2025-2029 2030-2031 Total notes and loansPrincipal

$ 6256406556706903,7804,5001,270$12,830Interest$ 4624494334153941,5947754O$4 562Total$ 1,0871,0891,0881,0851,0845,3745,2751,310ý$17,39260 CITY OF ANAHEIMHelicopter loan payableIn January 2009, the City entered into an agreement with Government CapitalCorporation to finance the acquisition of a police helicopter.

The amount of the loantotaled $1,799 and bears interest at 5.391% per annum for a term of 12 years. OnJanuary 29, 2009, Government Capital Corporation assigned this agreement to Bankof America which subsequently assigned it to Western Alliance Equipment Finance onMarch 21, 2012. Principal and interest payments of $206 are due annually beginning on December 16, 2009, until December 16, 2020. The outstanding balance at June30, 2014 was $1,176. Loan debt service requirements to maturity are as follows:Lincoln Avenue construction loan payableIn March 2013, the City entered into a cooperative agreement with the County ofOrange (County) for the funding and construction of Lincoln Avenue. The projectincludes widening of Lincoln Avenue from Rio Vista Street to Riverbend

Parkway, andconstruction of the Lincoln Avenue Bridge over the Santa Ana River. Construction costsof the Lincoln Avenue widening within the City boundary is estimated to be $2,250which will be payable to the County in seven installments starting on July 1, 2013 andon July 1 of each subsequent year at no interest cost. At June 30, 2014, construction of the project within the City boundary is estimated to be 60% completed or $1,350;the City paid $500 on July 1, 2013 with an outstanding loan balance of $850 towardthis amount.BUSINESS-TYPE ACTIVITIES:

Fiscal Year Ending 6/30201520162017201820192020-2021 Total notes and loansPrincialE

$ 143150159167176381Interest$ 635647393033$268Total$ 206206206206206414$1,444BONDS PAYABLERange ofDate Final Interest RatesIssued Maturity at Issue DateAnaheim Regional Transportation Intermodal Center (ARTIC) Land Acquisition LoanpWaableIn July 2012, the City entered into an agreement with the Orange CountyTransportation Authority (OCTA) for the Purchase and Sale of a 13.58 acres realproperty located at 1750 South Douglass Road in Anaheim.

The purchase price for thesite is $32,500.

The City paid $1,000 at the close of escrow and the remaining

$31,500 will be payable to OCTA over 13 years and bears 2% simple interest perannum. Annual principal payments are due on or before July 10th each yearcommencing 2012. The payment of accrued interest is deferred until equal paymentsof $1,883 are due and payable on or before July 10, 2024 and July 10, 2025. Theloan is payable with Measure M2 Local Fair Share funds. OCTA will retain paymentsfrom Anaheim's "Local Fair Share" funds allocated by OCTA under Measure M2 eachyear until the final payment is made on July 10, 2025. The City may elect to providealternative funding from other City funds for transportation related purposes, such asgas tax funds. At June 30, 2014, the outstanding balance of the ARTIC loan was$28,500.

Loan debt service requirements to maturity are as follows:Electric Utility1999 Revenue Bonds 9/01/99 10/01/27 3.0%-5.0%

2003 Revenue Bonds 4/01/03 10/01/22 3.0%-5.0%

2004 Revenue Bonds 6/01/04 10/01/34 2.5%-5.25%

2007 Revenue Bonds 2/01/07 10/01/37 4.0%-5.0%

2009 Revenue Bonds 3/10/09 10/01/39 3.0%-5.25%

2011 Revenue Bonds 5/11/11 10/01/36 3.0%-5.375%

2012 Revenue Bonds 9/19/12 10/01/31 3.125%-5.0%

TotalUnamortized bond premiums/discount, netTotal Electric UtilityAuthorized andIssued$ 45,00060,415131,265206,03570,00090,39092,13012,10548,58034,525Out-standing6/30/14$ 29,93025,680108,440194,96565,35090,39092,130606,88514,967621,8521,14548,32034,40583,87037484,244Water Utility2004 Revenue Bonds2008 Revenue Bonds2010 Revenue BondsTotal5/01/04 10/01/16 4.0%-4.5%

7/09/08 10/01/38 4.0%-5.0%

10/28/10 10/01/40 2.0%-4.75%

Unamortized bond premiums/discount, netTotal Water UtilityFiscal Year Ending 6/30201520162017201820192020-2024 2025Total notes and loansPrincipal

$ 2,5003,0003,0003,5003,50013,000Interest Total$2,5003,0003,0003,5003,500$1,883 14,8831883S $32266Sanitation Utility2007 Revenue BondsUnamortized bond premiumTotal Sanitation Convention, Sports andEntertainment Venues2002 Revenue Bonds2008 Anaheim Lease RevenueRefunding BondsTotal5/23/07 2/01/39 3.9%-5.0%

7/02/02 8/01/23 3.0%-5.5%

12/10/08 8/01/19 3.0%-5.0%

47,710 43,4951,01244 50726,260 1,29045,847 28,42129,71123929,950$910ý262

$780,553Unamortized bond premiums/discount, netTotal Convention, Sports and Entertainment VenuesTotal business-type activities bonds61 CITY OF ANAHEIMBonds Payable -Electric UtilityThe City's Electric Utility has pledged future electric

revenues, net of certain costs, torepay a total of $991,312 outstanding long-term obligations, principal and interest.

Proceeds from bonds provided financing for various capital improvements, primarily distribution assets. The Electric Utility's bonds are payable solely from electric customernet revenues and are payable through 2040. At June 30, 2014, the annual principal and interest payments on the bonds were 46.7% of net revenues.

Principal and interestpaid for the current fiscal year and total net revenues were $41,629 (excludes

$60,205of the 2002 Revenue Bonds early retirement) and $89,047 respectively.

Bond debt service requirements to maturity for the Electric Utility to be paid fromrevenues are as follows:Fiscal Year Ending 6/30201520162017201820192020-2024 2025-2029 2030-2034 2035-2039 2040-2041 TotalUnamortized bondpremium/discounts, netTotal bondsPrincipal

$ 9601,0001,0451,0901,1359,55015,19518,97523,83511,08583,870374$ý84,244Interest$ 4,1784,1354,0924,0494,00519,07816,08311,8216,36063674,437Total$ 5,1385,1355,1375,1395,14028,62831,27830,79630,19511,721158,307374$74,437 $158,681Fiscal Year Ending 6/30201520162017201820192020-2024 2025-2028 2029-2034 2034-2039 2040TotalUnamortized bondpremium/discounts, netTotal bondsPrincipal

$ 12,15512,69015,11515,81016,570117,380152,630160,41099,6954,430606,88514,96$621,852Interest$ 28,63228,07827,43826,73525,978113,84380,32942,53610,742116384,427Total$ 40,78740,76842,55342,54542,548231,223232,959202,946110,437991,312Bonds Payable -Sanitation UtilityThe City's Sanitation Utility has pledged future sanitation system net revenues to pay atotal of $74,930 for revenue bonds issued in May 2007. Proceeds from the bondsprovided financing for capital improvements to the sanitation sewer collection system.The bonds are payable solely from system net revenues and are payable throughFebruary 2039. At June 30, 2014, total principal and interest payments on the bondswere less than 43.0% of net revenues.

Total principal and interest paid and total systemnet revenues for the current fiscal year were $2,999 and $6,978 respectively.

Bond debt service requirements to maturity for the Sanitation Utility to be paid fromrevenues are as follows:14,967$38427 $100,7Bonds Payable -Water UtilityThe City's Water Utility has pledged future revenues from the sale of water, net of certaincosts, to repay a total of $158,307 for outstanding long-term obligations, principal andinterest.

Proceeds from bonds provided financing for various capital improvements, primarily distribution assets. The bonds are payable solely from water net revenues andare payable through 2041. At June 30, 2014, the annual principal and interestpayments on the bonds were less than 28.8% of net revenues.

Principal and interestpaid for current fiscal year and total net revenues were $5,137 and $17,835respectively.

Bond debt service requirements to maturity for the Water Utility to be paid fromrevenues are as follows:Fiscal Year Ending 6/30201520162017201820192020-2024 2025-2029 2030-2034 2035-2039 TotalUnamortized bond premiumTotal bondsPrincipal

$ 9551,0051,0451,0951,1456,5658,25510,36543,495$44,507Interest$ 2,0421,9941,9541,9021,8538,4196,7264,62631,435Total$ 2,9972,9992,9992,9972,99814,98414,98114,99114,98474,9301,012$75,42Bonds Payable -Convention, Sports and Entertainment VenuesBond debt service requirements to maturity for the Convention, Sports andEntertainment Venues to be paid from revenues are as follows:62 CITY OF ANAHEIMFiscal Year Ending 6/30201520162017201820192020-2024 TotalUnamortized bondpremium/discounts, netTotal bondsPrincipal

$ 4,9964,4244,6624,8795,1505,6O29,711239$29,9OInterest$ 1,2801,091887653408Total$ 6,2765,5155,5495,5325,558Note Payable -Water UtilityAt June 30, 2014, note payable is as follows:State of California Revolving Fund note payable4,488 34,199 In June 2001, the Water Utility executed a note payable to the State of California Revolving Fund at a rate of 2.8% in the amount of $18,063.

There are semi-annual 239 payments of principal and interest in the amount of $592 through July 31, 2021. The$ 8 $,438 outstanding balance on this note at June 30, 2014, totaled $7,486.Note debt service requirements to maturity for the Water Utility are as follows:CERTIFICATES OF PARTICIPATION Range of Authorized Out-Date Final Interest Rates and standingIssued Maturity at Issue Date Issued 6/30/14Convention, Sports and Entertainment Venues1992 Convention CenterFinancing Project 1/01/92 8/01/23 3.9%-6.4%

$ 92,777 $38,000Total Convention, Sports and Entertainment Venues $38,000Certificates of Participation Payable -Convention, Sports andEntertainment VenuesCertificates of participation debt service requirements to maturity for the Convention, Sports and Entertainment Venues Fund to be paid from unrestricted revenues are asfollows:Fiscal Year Ending 6/30201520162017201820192020-2022 Total notes and loansPrincipal

$ 9821,0101,0391,0681,098$ 7,486Interest$ 2021751461178780$ 807Total$ 1,1841,1851,1851,1851,185$ 8,293Note Payable -Convention, Sports and Entertainment VenuesWells Farao Bank lease revenue noteIn December 2010, the City executed a lease revenue note with Wells Fargo Bank,National Association to provide financing for the capital improvements of the AnaheimConvention Center Grand Plaza. Principal amount of the note is $20,000 and bears a1.85% interest per annum. The note is payable monthly, commencing in January 2011and matures in December 2014.Note debt service requirements to maturity to be paid from the unrestricted revenues ofthe Convention, Sports and Entertainment Venues Fund are as follows:Fiscal Year Ending 6/30201520162017201820192020-2024 Total COPsPrincipal

$ 3,5004,5004,8005,1005,400$38,00Interest$ 2,3451,8951,6011,2889571,047Total$ 5,8456,3956,4016,3886,35715,747$47,133Fiscal Year Ending 6/302015Total notePrincipal

$ 5,185$ 5,185Interest$ 48$ 48TotalT5,233$ 5,233NOTES AND LOANS PAYABLEARBITRAGE Note Payable -Electric UtilityOn July 13, 2013, the Electric Utility used $44,000 from the proceeds of the Revolving Credit Agreement with Wells Fargo Bank, National Association (see note 8) to retire theoutstanding principal balance of $60,205 of the 2002-B Electric Revenue Bonds.During fiscal year 2014, the Electric Utility repaid $8,400 of the tax-exempt note. AtJune 30, 2014 the outstanding balance of long-term portion of the note was $35,600.The Tax Reform Act of 1986 (Act) substantially revised the treatment to be afforded toearnings on the proceeds of tax-exempt debt, and now requires the City to calculate and remit rebatable arbitrage earnings to the Internal Revenue Service.

Certain of theCity's debt and interest earned on the proceeds thereof are subject to the requirements of the Act. The City has accrued a liability for estimated rebatable arbitrage earningsand has set aside such earnings as restricted cash. At June 30, 2014, the arbitrage rebate liability for governmental and business-type activities was zero and $343respectively.

63 CITY OF ANAHEIMCOMPUANCE WITH DEBT COVENANTS Date Final Amount Outstanding Issued Maturity Issued 6/30/14There are various limitations and restrictions contained in the City's bond and certificates of participation indentures.

The City believes they are in compliance with all significant limitations and restrictions.

DEBT ISSUANCES City -Debt IssuanceIn March 2013, the City entered into a cooperative agreement with the County ofOrange (County) for the financing and construction of Lincoln Avenue. The agreement allows the City to finance the construction with no interest costs payable to the Countyin seven annual installments starting from July 1, 2013 and on July 1 of eachsubsequent year. The construction costs within the City boundary is $2,250. At June30, 2014, the construction is estimated to be 60% completed.

The City paid $500 onJuly 1, 2013 with an outstanding balance of $850.DEBT RETIREMENTS Housing Authority

-Debt retirement In September and December 2013, the Housing Authority repaid the total principal balances and accrued interests of the two loans with the California Housing FinanceAgency (CHFA). Total principal and interest paid was $1,794.Electric Utility -Debt Retirement On July 13, 2013, the Electric Utility used $44,000 from the proceeds of the Revolving Credit Agreement with Wells Fargo Bank, National Association, together with fundsfrom the 2002-B Electric Revenue Bonds reserve and debt service cash balances of$10,030 and with funds of $7,053 from the City, to retire the outstanding principal balance of $60,205 and interest balance of $878 on the 2002-B Electric RevenueBonds.1993 Anaheim MemorialHospital Association 2003 Anaheim ArenaFinancing ProjectTotal10/15/93 05/15/20

$46,690$16,74012/11/03 06/01/23A2,600 29,500$89,290 $46,240Anaheim Housing Authority The Anaheim Housing Authority has entered into conduit debt financings on behalf ofvarious developers to assist with the acquisition, construction, equipping, rehabilitation and refinancing of multifamily residential rental projects within the City of Anaheim.

Inaccordance with the bond documents, neither the City nor the Housing Authority has anobligation for debt service payments and therefore, the debt is not reflected in theaccompanying basic financial statements.

Housing Authority revenue bonds related toconduit financings outstanding at June 30, 2014, were as follows:1985 West Anaheim Royale1992 Heritage Village1998 Sage Park Project2000 Cobblestone Apartments 2000 Park Vista Apartments 2000 Seawinds Apartments 2001 Solara Court Apartments 2008 Be6 Age Manor Apartments 2009 Lincoln Anaheim Apartments Phase B2012 Anton Monaco Apartments 2012 Crossings at Cherry OrchardApartments Tranche A2012 Crossings at Cherry OrchardApartments Tranche B2013 Paseo Village Apartments TotalDateIssued12/01/8507/15/0311/01/9807/20/0007/24/0007/20/001110110402/01/08FinalMaturity12/01/3507/15/3311/01/2803/15/3307/01/3307/15/3312/01/3402/01/44AmountIssued$ 4,6648,4855,5003,98027,1807,0008,20022,350Outstanding 6/30/14$ 9695,4855,5003,58027,1806,3005,40020,8238,62128,4169,3652,985$$13759405/15/09 04/15/39 23,21712/14/12 01/01/46 35,46008/23/12 12/01/449,36508/23/12 12/01/29 2,98502/28/13 09/01/45 19,750$178,136CONDUIT FINANCINGS cityThe City has entered into two conduit financings on behalf of a community care providerfacility and one faciacilitate the management agreement for the Honda Center (formerly the Arrowhead Pond) of Anaheim.

In accordance with applicable agreements, the Cityhas no obligation for debt service payments and therefore, the debt is not reflected inthe accompanying basic financial statements.

Bonds payable and certificates ofFrticipation related to conduit financings outstanding at June 30, 2014, were as,allows:FIDUCIARY FUNDSSuccessor AgencyThe following is a summary of changes in long-term liabilities for the year ended June30, 2014:64 CITY OF ANAHEIMBonds payablepremium/(discount),

netNotes and loans payableDue to City of AnaheimPollution remediation liability Beginning Blance$207,7803,0287,13322,4532,211$242,605Additions/

Reductions/

Proceeds Paets$(2,075)(253)(319)(806)$ 5 12,046)$ 5 $15,499)Ending WithinBalance One Year$205,705

$2,4302,7756,814 35821,647 2,047170 170$237111 $5,005Fiscal Year Ending 6/30201520162017201820192020-2024 2025-2029 2030-2031 Total bondsPrincipal

$ 2252302402502651,5502,0801,045$ 5,885Interest$ 3543463373263141,341806112$ 3,936Total$ 5795765775765792,8912,8861,157Bonds Payable2007 Tax Allocation Refunding BondsThe Successor Agency will repay a total of $321,098, principal and interest, for theoutstanding 2007 tax allocation bonds issued in December 2007 from the semi-annual Redevelopment Property Tax Trust Fund (RPITF) revenue allocations.

Proceeds from thebonds provided financing for public improvements related to the merged project areas,for the supply of low-and moderate-income housing within the City, to repay certainRedevelopment Agency loan obligations and to advance refund the 1992, 1997 and2000 bonds. The bonds bear interest at rates ranging from 4.25% to 6.50% and arepayable through February 2031. During the fiscal year ended June 30, 2014, totalprincipal and interest paid was $12,626.Debt service requirements to maturity for 2007 Tax Allocation bonds are as follows:Notes and Loans PayableSavi Ranch Associates note payableIn July 1989, the former Redevelopment Agency executed a note with Savi RanchAssociates, a California general partnership.

The amount of the note totaled $2,707and bears interest at 9.5% per annum. The note is payable from net property taxincrement as defined in the Redevelopment Agency note. If there is insufficient RPTTFrevenue to pay for principal and interest at the termination of the River Valley projectarea plan in November 2031, the note ceases to be an obligation of the Successor Agency. For the fiscal year ended June 30, 2014, total interest paid was $269.Contractual obligations As part of the Redevelopment Agency's economic development program to attract andretain businesses in the City, the former Redevelopment Agency has entered into variouscontractual obligations to reimburse tenant improvement costs to be paid from propertytax increment revenues (thereafter RPITF). At June 30, 2014, the outstanding balanceof these obligations totaled $120.Fiscal Year Ending 6/30201520162017201820192020-2024 2025-2029 2030-2031 TotalUnamortized bondpremium/discounts, netTotal bondsPrincipal

$ 2,2053,2805,5657,9558,34048,92580,730199,820Interest$ 10,65910,53210,35010,0539,66240,94025,599Total$ 12,86413,81215,91518,00818,00289,865106,3292010 Recovery.

Zone Economic Development BondsThe Successor A ency will repay a total of $9,821, principal Recovery Zone ?Ionomics Development Bonds issued in Octoannual RPTTF revenue allocations.

Proceeds from the bondspublic improvements related to the merged project areas. Thrates ranging from 1.44% to 6.22% and are payable throughthe fiscal year ended June 30, 2014, total principal and interDebt service requirements to maturity for 2010 Recovery Zoneas follows:J,483J A6,30 In December 1992, the former Redevelopment Agency has entered into an agreement 121,278 321,098 with California State Teachers Retirement System (CALSTRS),

to share in the2,775 development costs of the Plaza Redevelopment Project.

In March 2004, CALSTRS$121,278

$323,873 assigned the agreement to the new owners, Pan Pacific Retail Properties, Inc. (PPRP). InOctober 2006, Kimco Realty Corporation (KRC) acquired PPRP including theassumption of the assigned plaza project agreement.

The KRC participation note bears7% simple interest rate, and has a maximum term of 25 years. The Successor Agency'sand interest, outstanding obligation to repay the note is entirely contingent on the revenues generated by theber 2010 from the semi- project.

The note will be forgiven at the end of the term whether or not the entire amountprovided financing for has been repaid. At June 30, 2014, the outstanding balance of the participation notehe bonds bear interest at was $3,987..-ewasry$3,987.nn t'ebruary20u3i.

Duringest paid was $576.Development bonds areDebt service requirements to maturity for the Successor Agency notes payable andcontractual commitments to be paid from future RPTrF revenues are as follows:65 CITY OF ANAHEIMFiscal Year Ending 6/30201520162017201820192020-2024 2025-2029 2030-2032 Total notes and loansPrincipal

$ 3583984424905411,8782,7O$ 6,14Interest$ 5505355164954701,8351,9781,132Total$ 9089339589851,0113,7131,9783,839Due to the City of AnaheimThe Successor Agency will repay a total of $9,710 outstanding long-term obligations, principal and interest, from the semi-annual RPTTF revenue allocations for the $10,000Cooperation Agreement dated April 1, 2003, between the former Redevelopment Agency and the City, whereby the City assisted the former Agency with the development of the Anaheim Westgate Center (Westgate project) utilizing

$10,000 of funds from theHUD Section 108 loan. This Cooperation Agreement obligation (HUD Section 108loan) bears interest ranging from 1.74% to 5.97% and is payable semi-annually through August 2023. At June 30, 2014, outstanding principal due to the City for theWestgate project obligation was $7,450. Principal and interest paid for the currentfiscal year were $905.The Successor Agency will repay a total of $8,108 outstanding long-term obligations, principal and interest, from the semi-annual RPTIF revenue allocations for the $7,000Cooperation Agreement dated June 2010 between the former Redevelopment Agencyand the City, whereby the City assisted the former Redevelopment Agency with therehabilitation of the historic Packing House site utilizing proceeds from the HUD Section108 loan. This Cooperation Agreement obligation (HUD 108 Section loan) bearsinterest ranging from 1.68% to 3.98% and is payable over 20 years beginning onFebruary 1,2011 through August 1,2030. As of June 2014, the outstanding principal due to the City for the Packing House site project obligation was $6,021. Principal andinterest paid for the current fiscal year were $547.The former Redevelopment Agency paid a total of $19,163 to the State of California Supplemental Education Revenue Augmentation Fund (SERAF) in fiscal years 2010 and2011. Of this amount, $8,500 was borrowed from the housing fund. The Successor Agency will repay this amount from future RPTrF revenue allocations.

At June 30,2014, the outstanding balance was $8,176.Westgate Pollution Remediation Obligation In June 2003, the former Redevelopment Agency acquired property located at 2951West Lincoln Avenue as part of a redevelopment project named the Westgate project.Approximately 11 acres of the property were formerly known as the Sparks and RainsLandfills.

The County of Orange was the operator of these landfills until 1960. InNovember 2008, the County paid the Redevelopment Agency $5,176 in settlement ofclaims related to the pollution remediation for the Westgate project site prior to thedevelopment of a shopping center. The total costs of the pollution remediation workamounted to $12,420 based on actual contract received for the project.

At June 30,2014, the outstanding pollution remediation obligation for the Westgate was $170.Mello-Roos Community Facilities Districts The City issued special tax bonds to finance construction in various Community Facilities Districts.

These bonds were authorized pursuant to the Mello-Roos Community Facilities Act of 1982. The bonds are payable from a special assessment tax and are non-recourse bonds secured by the properties.

Neither the faith and credit nor the taxingpower of the City, the State of California or any political subdivision of either of theforegoing is pledged to the payment of the bonds. The bonds are not general or specialobligations of the City, nor do they contain any credit enhancements that secondarily pledge existing or future resources of the City, accordingly they are not reflected in theaccompanying basic financial statements.

The City is acting as agent only for theproperty owners in collecting the special assessments and forwarding the collections tothe fiscal agent. This activity is recorded in an agency fund in the basic financial statements.

At June 30, 2014, the City has the following outstanding Mello-Roos special tax bonds:In June 1989, the City issued $26,620 in special tax bonds to finance a portion of thecost of acquisition and construction of facilities in East Anaheim Hills. In April 1995,$15,389 of the 1989 bonds was advance refunded through the Anaheim PublicFinancing Authority and in June 2004, $11,160 of the 1995 bonds was refundedthrough the Authority.

In December 1999, $7,720 of the 1989 bonds was refunded bythe City. At June 30, 2014, the 2004 Anaheim Public Financing Authority bondsoutstanding amounted to $1,360, and the 1999 Mello-Roos bonds outstanding amounted to $785.In February 2007, the City issued $9,060 in special tax bonds to finance a portion ofthe cost of acquisition and construction of facilities in the Platinum Triangle of Anaheim.At June 30, 2014, the 2007 Mello-Roos bonds outstanding amounted to $8,070.In August 2010, the City issued $28,630 in special tax bonds, Series 2010 to financea portion of the cost of acquisition and construction of facilities in the Platinum Triangleof Anaheim, Community Facility District 08-1 and to fund a reserve fund for the Series2010 Bonds. At June 30, 2014, the 2010 Mello-Roos bonds outstanding amounted to$27,025.NOTE 10- SEGMENT INFORMATION:

The Sanitation Utility Fund issued revenue bonds to finance sewer system expansion andimprovements.

The Sanitation Utility Fund accounts for three activities:

solid wastecollection, wastewater, and street cleaning.

However, investors in the revenue bonds rely66 CITY OF ANAHEIMsolely on revenue generated through wastewater activities for repayment.

Summaryfinancial information for wastewater activities is presented below:Condensed Statement of Net PositionAssets:Cash and cash equivalents Investments Other current assetsRestricted cash and cash equivalents Capital assets, netTotal assetsLiabilities:

Current liabilities Current liabilities payable from restricted assetsNoncurrent liabilities Total liabilities

$ 8,17419,8731,45615,07597,22914A1,8077661,26943,552 56,16939815,60024,053$ 96 ,220Condensed Statement of Cash FlowsNet cash provided by (used for):Operating activities Noncapital financing activities Capital and related financing activities Investing activities Net decreaseBeginning cash and cash equivalents Ending cash and cash equivalents Reconciliation of cash and cash equivalents Cash and cash equivalents Restricted cash and cash equivalents Total cash and cash equivalents

$ 5,506(484)(1,641)(7,402)(4,021)27,270$ 23,,249$ 8,17415,075$ 23,,249NOTE 11 -RETIREMENT PLANS:Net Position:

Net investment in capital assetsRestricted for debt servicesRestricted for capital projectsUnrestricted Total net PositionCondensed Statement of Revenues, Expenses and Changes in NetPositionWastewater fees (pledged against bonds)Other revenuesDepreciation and amortization Other operating expensesTotal operating incomeNonoperating income (expenses)

Interest incomeInterest expenseCapital contribution Transfers inTransfers outTotal nonoperating expenseChange in net positionNet assets at beginning of yearNet assets at end of year$ 11,869425(1,973)(5,594)4,727278(1,620)5354,864(484)3,5738,30087,920$ 96,220Retirement SystemThe City contributes to the California Public Employees' Retirement System (PERS), anagent multiple-employer public employee defined benefit pension plan. PERS providesretirement and disability

benefits, annual cost-of-living adjustments, and death benefitsto plan members and beneficiaries.

PERS acts as a common investment andadministrative agent for participating public entities within the State of California.

Benefit provisions and all other requirements are established by State statute and Cityordinance.

A copy of PERS' annual financial report may be obtained@www.calpers.ca.gov.

Funding PolicyParticipants and City are required to contribute at actuarially determined rates appliedto the annual covered payroll respective of the employee groups. The City pays acertain percentage of the Participant contribution.

The following table summarizes therequired contribution rates by employee and employer effective for fiscal year 2014.The contribution requirements of plan members and the City are established and maybe amended by PERS.67 CITY OF ANAHEIMEmployAnaheim Hire CIPERSEmployee Group Doe Membership EMiscellaneous Employees ee Rate Employer RateTotalCity Ln y Ciy _atFiscal YearEnding6/30/126/30/136/30/14AAnnualPension Cost (APC)$57,56058,21359,747Percentage ofAPC Contributed 100%100%100%Net PensionObligation

$0$0$0Management Before 1/10/2012 After 1/10/2012 butbefore 1/1/2013On or After 1/1/2013Onor After 1/1/2013AMEA General Before 1/1/2013AMEA Clerical On or After 1/1/2013On or After 1/1/2013' I.B.E.W.

Before 1/1/2013Confidential On or After 1/1/2013On or After 1/1/2013APA Traninees Before 1/1/2013On or After 1/1/2013On or After 1/1/2013Safety Employees Fire Management Before 1/1/2013AFA On or After t/1/2013On or After 1/1/2013On or After 1/1/2013Police Management Before 1/1/2013APMA On or After 1/1/2013On or After 1/1/2013APA Before 1/1/2013' On or After 1/1/20131 On or After 1/1/2013ClassicClassicClassicNewClassicClassicNewClassicClossicNewClassicClassicNew1.000%8.000%8.000%6.750%1.000%1.000%1.000%1.000%1.000%6.750%8.000%8.000%6.750%7.000%0.000%0.000%0.000%7.000%7.000%7.000%7.000%7.000%0.000%0.000%0.000%0.000%2.968% 19.063% 30.031%0.000%0.000%0.000%2.968%2.968%2.968%2.968%2.968%0.000%0.000%0.000%0.000%22.031% 30.031%22.031% 30.031%22.031% 28.781%19.063% 30.031%19.063% 30.031%19.063% 30.031%19.063% 30.031%19.063% 30.031%22.031% 28.781%22.031% 30.031%22.031% 30.031%22.031% 28.781%Funded Status and Funding ProgressActuarial valuation of an ongoing plan involves estimates of the value of reportedamounts and assumptions about the probability of occurrence of events far into thefuture. Amounts determined regarding the funded status of the plan and the annualrequired contributions of the employer are subject to continual revision as actual resultsare compared with the past expectations and new estimates are made about the future.The table below displays the funding progress of the three plans and is based upon themost recent actuarial valuation data as of June 30, 2013:ClassicClassicClassicNewClassicClassicNewClassicClassicNew9.000%9.000%9.000%11.250%0.000%0.000%12.750%0.000%0.000%12.750%0.000%0.000%0.000%0.000%9.000%9.000%0.000%9.000%9.000%0.000%0.000%0.000%0.000%0.000%0.000%0.000%0.000%0.000%0.000%0.000%33.364% 42.364%33.364% 42.364%33.364% 42.364%33.364% 44.614%32.884% 32.884%32.884% 32.884%32.884% 45.634%32.884% 41.884%32.884% 41.884%32.884% 45.634%PlanMiscellaneous Police SafetyFire SafetyTotal(A)Actuarial Value ofAssets(AVA)$786,278435,595257,573$ 1,479,446 (8) (C)UnfundedUabilityAccrued lULlUability (B)-(A)$1,101,160

$314,882586,151 150,556352,186 94,613$2,039,497

$560,051(D) (E) (F)UL asOFunded Ratios Annual % ofAVA Market Coered Payroll(A)/(B) Value Payroll (C)I/(E)71.4% 71.4% S107,587 292.7%74.3% 74.3% 41,946 358.9%73.1% 73.1% 21,464 440.8%72.5% 72.5% $170,997 327.5%'Definition of a 'New' PERS member' A new hire who is brought in CalPERS membership for the first time on or after January 1, 2013, andwho has no prior membership in any California public retirement system.* A new hire who is brought into CalPERS membership for the first time on or after January 1, 2013,and who is not eligible for reciprocity with another California public retirement system.A member who first established CAoPERS membership prior to January 1, 2013, and who is rehired bya different CalPERS employer after a break in service of greater than six months.'Valid until MOU expiration on 1/3/14 at which time the New CaIPERS member employee rate will go to 6.75%'APA employees with Classic CaIPERS membership will contribute 8% by the end of fiscal 2013/2014 Annual Pension CostFor fiscal year 2014, the City's annual pension cost of $59,747 for PERS was equal tothe Cit/ys required and actual contributions.

The required contribution was determined as a part of the June 30, 2011 actuarial valuations.

The City's annual pension cost, the percentage of annual pension cost contributed to theplans, and the net pension obligation for the fiscal years ended June 30, 2012, 2013and 2014 are as follows:The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information, which shows whether the actuarial value of plan assets is increasing or decreasing overtime relative to the actuarial accrued liability for benefits.

Effective for periods beginning after June 15, 2014 implementation of GASB Statement No. 68 Accounting and Financial Reporting for Pensions-an amendment of GASBStatement No. 27will be required.

This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, and deferred inflows ofresources, and expense/expenditures.

This Statement identifies the methods andassumptions that should be used to project benefit payments, discount projected benefitpayments to their actuarial present value, and attribute that present value to periods ofemployee service.

This Statement will require the City to recognize a liability equal tothe net pension liability.

Under this new reporting requirement, the City would recordthe unfunded liability

($560,051) at June 30, 2013, as shown above, as adjusted bythe requirements of this Statement, as a liability on the Statement of Net Position.

Thenecessary data is not currently available, as such, the exact impact to the Citys financial statements in conforming to this Statement has yet to be determined.

68 CITY OF ANAHEIMActuarial Methods and Assumptions In the June 30, 2013, actuarial valuations, the entry age normal cost method was used.The actuarial assumptions included:

(a) 7.50% investment rate of retum (net ofadministrative expenses),

(b) projected annual salary increases from 3.30% to 14.20%that vary by Age, Service and type of employment, and (c) 2% per year cost-of-living adjustments.

Both (a) and (b) included an inflation component of 2.75%. Market valueis tCe asset valuation asset method. The PERS unfunded actuarial accrued liability isbeing amortized as a level percentage of projected payroll on a closed basis as follows:1) all new gains or losses are amortized over a fixed 30-year period with a 5 yearrampup atthe beginning and 5 year ramp down at the end of the amortization period;2) all changes in liabilities due to plan amendments (other than Golden Handshakes),

changes in actuarial assumptions, or changes in actuarial methodology are amortized separately over a 20-year period with a 5-year ramp up at the beginning and 5 yearramp down at the end of the amortization period, 3) changes in unfunded liabilities due to Golden Handshake will be amortized over a period of 5 years.Other Post-employment BenefitsIn addition to the pension benefits described above, the City provides other post-employment benefits (OPEB) as a single-employer defined benefit healthcare plan. TheOPEB provides

medical, dental and life insurance benefits to eligible retirees (hiredprior to January 1, 1996, Anaheim Police Association employees hired prior to July 6,2001, and Anaheim Fire Association employees hired prior to November 9, 2001) inaccordance with City Personnel Resolutions and various Memoranda of Understanding.

Eligible employees hired after the dates above have access to the City's medical anddental plans but do not receive a defined benefit.

There are no separately issuedfinancial statements for the OPEB.Funding PolicyThe contribution requirements of plan members and the City are established inaccordance with City Personnel Resolutions and various Memoranda of Understanding.

The retired plan members receiving benefits make varying contributions toward the costof these benefits depending on the retiree's Medicare eligibility, year of hire, age andemployee group. Retiree contributions for the fiscal year ended June 30, 2014, were2.80% of total payroll.In June 2008, the City joined the California Employer's Retiree Benefit Trust Program(CERBT) to pre-fund OPEB liabilities.

The CERBT is an agent multiple-employer planconsisting of an aggregation of single-employer plans, with pooled administrative andinvestment functions that are administered by PERS. A copy of the aggregated CERBTannual financial report may be obtained

@www.calpers.ca.gov.

The City contributes an amount not less than the annual required contribution (ARC) ofthe employer.

The ARC is an amount actuarially determined in accordance with theparameters of GASB Statement No. 45. The ARC represents a level of funding that, ifpaid on an ongoing basis, is projected to cover normal costs each year and amortizeany unfunded actuarial liabilities over a period not to exceed thirty years. The ARC ratefor the fiscal year ended June 30, 2014, was 5.62% of total payroll.Annual OPEB Cost and Net OPEB AssetThe City's annual OPEB cost, amount actually contributed to the plan, and changes inthe City's net OPEB asset for the fiscal year ended June 30, 2014, are as follows:ARCInterest on net OPEB assetAdjustment to ARCAnnual OPEB cost$10,145(838)703$1o0010$10,145(10,010)135$11 152Contributions madeAnnual OPEB costChange in OPEB assetNet OPEB asset -beginning of yearNet OPEB asset -end of yearThe City's annual OPEB cost, the percentage of annual OPEB cost contributed to theplan, and the net OPEB asset for the fiscal year ended June 30, 2014 are as follows:Fiscal YearEnding6/30/ 126/30/136/30/14AnnualOPEB Cost$ 9,5308,57410,010Percentage of AnnualOPEB Cost Contributed 101.40%114.60%101.30%OPEBAsset$ 9,76511,01711,152Funded Status and Funding ProgressActuarial valuation of an ongoing plan involves estimates of the value of reportedamounts and assumptions about the probability of occurrence of events far into thefuture. Amounts determined regarding the funded status of the plan and the annualrequired contributions of the employer are subject to continual revision as actual resultsare compared with the past expectations and new estimates are made about the future.The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, will present multi-year trend information in subsequent years, that will show whether the actuarial value of plan assets isincreasing or decreasing over time relative to the actuarial accrued liability for benefits.

69 CITY OF ANAHEIMThe table below displays the funding progress of the plan and is based upon the mostrecent actuarial valuation data:Public entities in Orange County may receive hazardous materials response servicesfrom the Hazmat by executing an agreement and paying a fair share contribution.

Audited financial information for the joint powers authority as of and for the yearended June 30, 2014, was as follows:Actuarial Valuation Date07/01/13JA)Actuarial Value ofAssets(AVA)$74,013(B) (C)UnfundedLiability Accrued (UL)Liability (B)-(A)$237,202

$163,189(D) (E) (F)UL as aFunded Ratios Annual % ofAVA Covered Payroll(A)/(B) Payroll (C)/(E)31.2% $155,317 105.1%Total assetsTotal liabilities Members' equityTotal revenuesTotal expensesChange in net position$163100631025943Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the typesof benefits provided at the time of each valuation and the historical pattern of sharingof benefits costs between the City and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in the actuarial accrued liability and the actuarial value of assets,consistent with the long-term perspective of the calculations.

In the July 1, 2013, actuarial valuation, the entry age normal actuarial cost method wasused. The actuarial assumption included a 7.61% investment rate of return, an annualhealthcare cost trend rate ranging from 7.25 % -8.00% initially and declining to 5.00%by 2023, payroll growth rate of 3.25% per year, and an inflation factor of 3.00%. TheOPEB unfunded actuarial accrued liability is being amortized as a level percentage ofpayroll over a closed 30-year period. The remaining amortization period as of July 1,2013, is 23 years.NOTE 12 -JOINT VENTURES AND JOINTLY-OWNED PROPERTIES:

Authority for Orange County -City Hazardous Materials Emergency ResponseThe City participates in joint powers authority (JPA), the Authority for Orange County-City Hazardous Materials Emergency Response (Hazmat),

for the purposes ofresponding to, assessing the nature of, and stabilizing any emergency created by therelease or threatened release of hazardous materials.

The following entities are members of Hazmat: City of Anaheim and City of Huntington Beach (provider agencies).

Members of the Board of Directors (Hazmat Board) consistof one voting Board member and an alternate appointed by the governing body fromthe provider agencies.

Under the Fifth Amendment to the JPA agreement, threerepresentatives from the subscribing agencies are also voting Board Members.

Thefollowing cities were subscribing agencies:

Brea, Costa Mesa, Fountain Valley,Fullerton, Garden Grove, Newport Beach and Orange.Hazmat does not have any debt outstanding at June 30, 2014.The City has no significant equity interest in Hazmat, and accordingly neither assets norliabilities of Hazmat have been recorded in the City's basic financial statements.

For acopy of Hazmat's separate financial statements, contact the Finance Director of the City.Metro Cities Fire Authority The City participates in a joint powers authority, Metro Cities Fire Authority (FireAuthority),

for the purpose of providing a central communication network and recordkeeping system to support fire suppression, emergency medical assistance, rescueservice, and related services provided by the members of the Fire Authority.

The following entities are members of the Fire Authority:

City of Anaheim, City of Brea,City of Fountain Valley, City of Fullerton, City of Garden Grove, City of Huntington Beach, City of Newport Beach, and the City of Orange. Members of the Board ofDirectors (the "Board")

consist of one voting Board member and an alternate appointed by their governing body.Public entities in Orange County may receive services from the Fire Authority byexecuting an agreement and paying a fair share contribution.

Audited financial information for the Fire Authority as of and for the year ended June 30, 2014, was asfollows:Total assetsTotal liabilities Members' equityTotal revenuesTotal expensesChange in net position$2,4115261,8855,2505,2311970 CITY OF ANAHEIMThe City has no significant equity interest in the Fire Authority, and accordingly neitherassets nor liabilities of the Fire Authority have been recorded in the City's basic financial statements.

For a copy of the Fire Authority's separate financial statements, contact theFinance Director of the City.North Net Training Authority The City participates in a joint powers authority, North Net Training Authority (Authority),

for the purpose of providing a joint use of a consolidated Training Centerand record keeping system for fire training services.

The following entities are members of the North Net Training Authority:

City ofAnaheim, City of Garden Grove and City of Orange. Members of the Board ofDirectors (the "Board")

consist of one voting Board member and an alternate appointed by their governing body.Public entities in Orange County may receive training services from the Authority byexecuting a "subscription agreement" and by paying the annual fee and other costs.Audited financial information for the Authority as of and for the year ended June 30,2014, was as follows:As a former participant in SONGS, the Electric Utility is subject to assessment ofretrospective insurance premiums in the event of a nuclear incident at SONGS or anyother licensed reactor in the U.S.NOTE 13 -COMMITMENTS AND CONTINGENCIES:

Intermountain Power AgencyThe Electric Utility has entered into a power purchase contract with the Intermountain Power Agency (IPA) for delivery of electric power. The share of IPA power is equal to13.225% of the generation output of IPA's two recently uprated coal-fueled generating units located in Delta, Utah (Unit 1 and 2 net output is 900 mega watts each). The Cityis obligated for the following percentage of electrical facilities at IPA:Generation:

Intermountain Power ProjectEntitlement 13.225%Expiratio 2027Total assetsTotal liabilities Members' equityTotal revenuesTotal expensesChange in net position$1,573301,543294388(94)The contract constitutes an obligation of the Electric Utility to make payments fromrevenues and requires payment of certain minimum charges.

These minimum chargesinclude debt service requirements on the financial obligations used to construct theplant. These requirements are considered a cost of purchased power.Southern California Public Power Authority The Electric Utility is a member of the Southern Califomia Public Power Authority (SCPPA),

a joint powers agency. SCPPA provides for the financing and construction ofelectric generating and transmission projects for participation by some or all of itsmembers.

To the extent the Electric Utility participates in projects developed by SCPPA,it is obligated for its proportional share of the cost of the project.

The City is obligated for the following percentage of electrical facilities owned by SCPPA:Jointly-owned utility plantsThe City's Electric Utility owns a 10.04% ownership interest in the coal-fired San JuanGenerating

Station, Unit 4 (SJ), located near Waterflow, New Mexico. The otherparticipants in SJ and their respective ownership include:

Public Service of New Mexico,45.48%; City of Farmington, New Mexico, 8.48%; County of Los Alamos, New Mexico,7.20%; and M-S-R Public Power Agency, 28.80%. There are no separate financial statements for this venture, as each participant's interest in the utility plant is included intheir respective financial statements.

The City's cumulative share of construction costsincluded in the utility plant at June 30, 2014, amounted to $84,616.The City sold its 3.16% ownership interest of SONGS to SCE on December 29, 2006.Accordingly, the Electric Utility ceased recording all related operating

expenses, exceptmarine mitigation costs and spent fuel storage charges, as of December 29, 2006.Based on the SONGS settlement agreement, the Electric Utility is responsible for theCity's share of marine mitigation costs up to $2,300, and SCE is responsible for costsbetween $2,300 and $7,300. The Electric Utility is responsible for spent fuel storagecharges until the federal government takes possession.

Entitlement Transmission:

Southern Transmission System (STS)Mead-Adelanto Project (MAP)Mead-Phoenix Project (MPP)Generation:

Hoover Dam Uprating (Hoover)Magnolia Generating Station (Magnolia)

Canyon Power Project (Canyon)Natural Gas Reserve Projects (Natural Gas):SCPPA Natural Gas Project -Pinedale, WyomingSCPPA Natural Gas Project -Barnett, Texas17.6%13.5%24.2%42.6%38.0%100.0%35.7%45.5%Expiration 2027203020302018203720402033203371 CITY OF ANAHEIMTake or pay commitments As part of the take or pay commitments with IPA and SCPPA, the Electric Utility hasagreed to pay its share of current and long-term obligations.

Payment for theseobligations will be made from the operating revenues received during the year that thepayment is due. A long-term obligation has not been recorded on the accompanying basic financial statements as these commitments do not represent an obligation of theElectric Utility until the year the power is available to be delivered to the Electric Utility.The following schedule details the amount of debt service that is due and payable bythe Electric Utility for each project and the final maturity date.offset GHG emissions associated with generating electricity.

CARB will provide a freeallocation of GHG allowance to each electric utility to mitigate retail rate impacts.

Thisfree allocation of GHG allowance is expected to be sufficient to meet Electric Utility's GHG compliance obligations for retail sales. During fiscal year 2014, an unusedportion of retail allowance was sold for $5,740 to reduce renewable energy costs forretail customers.

The compliance obligation for the wholesale sales requires allowance to be obtained through the auction or in the secondary market quarterly.

At June 30,2014, the value of prepaid Cap and Trade allowance is $21,124, and the value of Capand Trade obligation is $13,506.Operating LeasesIn January 2005, the City entered into a long-term noncancelable ground lease withCity of Fullerton, for an approximately 1.56 acre site at the Fullerton Municipal Airportfor the operation of the Anaheim Police Department Heliport.

The term of the lease is40 years with two 10-year extensions commencing from January 2005 and endingDecember 2044. The base rent is adjusted every five years by ten percent (10%). TheCity constructed a building of approximately 30,000 square feet that includes offices,aircraft maintenance and storage facilities and other infrastructure supporting suchfacilities on the leased premise.

Future minimum lease payments to be made fromunrestricted revenues of the General Fund are as follows:FiscalYearEnding 6/30201520162017201820192020-2024 2025-2029 2030-2034 2035-2039 2040-2041 TotalNaturalIPA STS MAP MPP Hoover MAugnolia Gas Canyon Total$ 37,201 $ 11,732 $ 2,799 $ 1,507 $ 869 $ 6,315 $ 5,729 $ 6,385$ 72,53730,101 14,579 3,016 1,611 957 8,548 7,091 12,769 78,67227,584 14,322 2,994 1,606 957 8,550 6,831 19,504 82,34824,741 14,108 2,971 1,596 957 6,658 6,081 19,505 72,61729,555 13,955 2,946 1,580 6,659 5,457 19,505 79,65788,334 70,723 5,108 2,735 33,454 21,385 97,504 319,24325,456 37,796 14,560 97,517 175,32939,054 8,274 97,513 144,84142,318 97,514 139,83239,009 39009$237-516

$164875 $19834 $10635 $3740 $189352 $ 758 $6725 1208085In addition to debt service, the City's entitlement requires the payment for fuel costs,operations and maintenance (O&M), administration and general IA&G) and othermiscellaneous costs associated with the generation and transmission facilities discussed above. These costs do not have a similar structured payment schedule as debt service;however, prior experience indicates that annual costs are qenerally consistent from yearto year. The fiscal'year 2014 expenses for fuel, O&M, A,&G and other costs at theseprojects were as follows:NaturalFiscal Year IPA STS MAP MPP Hoover Magnolia Gas Canyon Total2014 $49,586 $6,034 $321 $355 $449 $22,424 $1,134 $6,545 $86,848Cap-and-Trade ProgramCalifornia Senate Bill (AB) 32 requires that Utilities in California reduce theirgreenhouse gas (GHG) emissions to 1990 levels by the year 2020. It directed theCalifornia Air Resources Board (CARB) to develop regulations of GHG that becameeffective January 2012. Emission compliance obligations under the Cap-and-Trade regulation began in January 2013.The Cap-and-Trade program (Program) was implemented beginning January 1, 2013.This Program requires Electric Utilities to have GHG allowances on an annual basis toFiscal Year Ending June 30201520162017201820192020-2024 2025-2029 2030-2034 2035-2039 2040-2044 2045Total minimum future rentalsThe Honda Center$ 575959595932335539143047348$ý2313On January 26, 1999, the City entered into a series of lease transactions for the HondaCenter. Under these transactions, the City leased the Honda Center to a third partytrustee acting for the benefit of an equity investor for a term of approximately 39.2years. The trustee sublet the facility back to the City for 20 years, which was shorterthan the then remaining term of the management agreement between the third-party manager at that time (Manager) and the City in consideration of an advance rentalpayment for the entire lease term. At the end of the sublease, the City has a purchaseoption to purchase the trustee's rights under the lease for a fixed amount. The advance72 CITY OF ANAHEIMrent payments to the City were deposited into a trust fund and invested.

The cashscheduled to be available from this trust fund is sufficient to pay the City's rent paymentsfor the term of the sublease and to exercise the City's purchase option at the end of thesublease.

The excess of the amount of the advance rent payment made by the trusteeto the City over the deposit to the trust funds, after the payment of transaction expensesand payment to the Manager for agreeing to pledge its interest as Manager under themanagement agreement then in effect and agreeing to undertake certain additional obligations to the transaction, was approximately

$4,000. This amount was recognized by the City as unearned revenue and is being amortized over the sublease term. TheCity has secured its obligations to the other parties to these lease transactions by apledge of its respective interest in revenues from the facility, subordinate (with certainexceptions) to any interests of the debt holders of the facility.

The City's obligations under these lease transactions are considered to be defeased in substance, andtherefore the related liabilities as well as the trust assets have been excluded from theCity's financial statements.

The City's and AAM's respective rights under the FMA aresubject in certain respects to the effect of the 1999 lease transaction.

Effective December 16, 2003, the City and Anaheim Arena Management LLC (AAM)entered into a Facility Management Agreement (FMA) whereby AAM has the exclusive right and license to manage, maintain and operate all aspects of the Honda Center inaccordance with the FMA through June 30, 2023, with an option to extend the termfor an additional period not to exceed 10 years. Annual distributions to the City, AAMand the County of Orange are required for their respective share of adjusted netrevenues, as defined in the FMA. In the event that cash on hand is insufficient to payoperating

expenses, debt service, distributions to the City, the County of Orange, orother amounts payable, AAM shall make or cause an affiliate or third-party lendinginstitution to make loans for such purposes, as defined in the FMA. Such funds will berepaid from gross revenues or adjusted net revenues, if any, as defined in and inaccordance with disbursement priorities established in the FMA. At June 30, 2014, theoutstanding conduit debt on the Honda Center totaled $29,500.

The debt is non-recourse, payable from revenues generated by the facility.

Neither the faith and creditnor the taxing power of the City is pledged to the payment of the debt. The debt is nota general or special obligation of the City, nor does it contain any credit enhancements that secondarily pledge existing or future resources of the City (other than revenuesgenerated by the facility),

and accordingly it is not reflected in the accompanying basicfinancial statements.

Angel Stadium of AnaheimOn May 14, 1996, the City and the California Angels, LP (Team), which was thenmanaged by Disney Sports Enterprises, Inc. (subsequently known as Anaheim Sports,Inc.), entered into an agreement to provide far the operation and refurbishment of theStadium.

Pursuant to the agreement, the Team assumed responsibility for the operation of the Stadium on October 1, 1996. The agreement runs for 33 years (subject to alimited Team option to cancel at 20 years and the Team's right to extend the term). InSeptember 2013, the agreement was modified extending the Team's right to terminate the agreement by three years to October 16, 2019. Concurrent with amending thetermination right, the City and the Team entered into two Memorandums ofUnderstanding providing a nonbinding framework for negotiations relating to anextension of the Team's tenancy at the stadium and for the potential development of thesurrounding stadium area.Under the terms of the agreement, the Team assumed full responsibility for all Stadiumoperations and maintenance, including capital maintenance.

The Team books allStadium and parking lot events (except for ten annual City events),

pays all expenses, and retains all revenue (subject to the City's rights to share in certain net revenues) except that the City credits the Team up to $500 per year adjusted annually for CPI asa capital reserve contribution, calculated on the basis of property taxes. The City'sparticipation in net revenues includes amounts received by the Team above certainthresholds including paid admissions

($2.00 per paid admission in excess of 2.6million admissions per year), net income from nongame events (in excess of $2,000per year adjusted annually for CPI), and parking lot net income (25% in excess of$4,000 per year adjusted annually for CPI). Additionally, as indicated above, the Cityretained the right to book and retain all revenue from ten parking lot events per year.Major League Baseball consented to the transfer of the Team in fiscal year 2003 tointerests controlled by Arte Moreno. No changes in the terms of the agreement with theTeam were made in connection with that transfer.

The Agreement also provided that the City had the right to develop approximately 42acres of the parking lot development site. In 1998 a land sale of $1,000 for a 1.25acre site was approved for the construction of a 1,100-seat theatre called "Tinseltown Studios" (now known as "City National Grove of Anaheim").

In November 2002, theCity purchased the facility and the land for $6,700 from its then owner, SMG.Concurrent with the purchase, the City granted to Nederlander-Grove LLC(Nederlander) a license to operate the facility for three years with the right to extendanother five years. In May 2009, the management agreement was amendedextending the term to December 31, 2015 with the right to extend another five yearperiod. Additionally, under the amended management agreement, effective January1, 2009, Nedertander no longer receives a management fee of $150 and the City'sshare in the annual net profits and losses from operations increased from 50% to 60%.Nedertander is responsible for 100% of losses in excess of $400, thereby limiting theCity's share of net losses to a maximum of $240 in any given year. The City may electto terminate the agreement prior to expiration of the term under certain conditions, andpay the unamortized balance of capital assets purchased during the term toNedertander.

Concurrent with the amendment to the management agreement, theparking license fee agreement was amended, wherein the parking license fees fromNederlander were reduced to $176 and is subject to adjustment annually based on CPIincreases.

Nederlander paid the City $191 for the year ended June 30, 2014, forparking and common area maintenance.

73 CITY OF ANAHEIMMuzeoIn October 2007, the City and the former Redevelopment Agency entered into aproperty operating agreement with the Muzeo Foundation to operate and provideprogramming for the Muzeo, the downtown museum. The property operating agreement is for a term of 30 years and provides for a line of credit for the first 3 yearsfrom the City to the Muzeo Foundation in an amount not to exceed $1,000 or 95% ofpledges at an annual interest rate of 5%. The property operating agreement wasamended on August 1, 2010, to extend the maturity date to June 30, 2015. It alsoamended the aggregate amount of the line of credit to $500 during fiscal year 2011and $200 during each fiscal year thereafter with amounts being converted to grantsupon achieving fund raising thresholds.

At June 30, 2014, there was no amount dueto the City.Litigation A number of claims and suits are pending against the City for alleged damages topersons and/or property and for other alleged liabilities arising out of matters usuallyincident to the operation of a city such as Anaheim.

Although the aggregate amountasserted for such lawsuits and claims is significant, in the opinion of City management, the City has strong defenses against such claims, and thus the ultimate loss, if any,relating to these claims and suits not covered by insurance or reflected in the financial statements, will not materially affect the financial position of the City.GrantsAmounts received or receivable from grant agencies are subject to audit andadjustment by grantor agencies.

Any disallowed claims, including amounts alreadycollected, may constitute a liability of the applicable funds. The amount, if any, ofexpenditures that may be disallowed by the grantor cannot be determined at this time,although the City expects such amounts, if any, to be immaterial.

Construction and other significant commitments At June 30, 2014, the City had the following commitments with respect to unfinished capital projects, disposition and development agreements, reimbursement agreements and cooperation agreements:

Capital ProjectsAnaheim Regional Transportation Intermodal CenterAvon Dakota Neighborhood Revitalization Housing ProjectBrookhurst Street/Katella Avenue-Ball Road Improvement Compressed Natural Gas FacilityConvention Center Expansion Betterment VIIElectrical Equipment Acquisitions Katella Avenue at Lewis Street/Street College Improvement Katella Avenue Improvement at Interstate 5Miraloma Park and Community CenterPaul Revere ParkSmart Grid ProjectTransformers Acquisitions Tustin Avenue/La Palma Widening and Intersection Improvement Underground District No. 57 Brookhrust Street Phase IUnderground District No. 6 West StreetVehicle Acquisitions Velare Street Light Improvement Well No 58 Improvement Remaining Construction Commitment

$25,9973422,226626154,2942,1114,0642,8281,5666138551,6543,1183,0664,4174,1545241,432ExpectedCompletion Date20142015201420142017201420142015201420142014201520142015201520142014201474 CITY OF ANAHEIMNOTE 14 -SUBSEQUENT EVENTS:On December 9, 2014, the Anaheim City Council certified the official results of theCalifornia General Election held on November 4, 2014. Measure N, Anaheim LocalOn October 8, 2014 the Electric Utility issued 2014-A Revenue Refunding Bonds in a Services

Measure, which among other things, was to ratify and amend subdivision (e)principal amount of $109,350 at a premium of $19,921 to refund the outstanding of Charter Section 1221 to clarify the City of Anaheim's (City) authority to transfer upbalances of $23,490 on the 2003-A Revenue Bonds and $105,485 on the 2004-A to 4% of the "operating revenue" earned by the Water and Electric Utilities to the City'sRevenue Bonds. The true interest cost is 1.89% maturing serially from April 1, 2015 to General Fund instead of the "gross revenue" was not approved by a majority of votersOctober 1, 2025. Annual debt service requirements, beginning April 1, 2015 range so it did not pass.from $3,279 to $15,223 at rates ranging from 2.0% to 5.0%. This 2014-A Refunding Bonds will reduce the Electric Utility's total debt service payments by $44,999 at the net The Measure N election results coupled with settled litigation require the Water Utility topresent value of $32,405.

cease making the up to 4% transfer to the City's General Fund and the City to reimburse the Water Utility $3 million plus the transferred funds held by the City for fiscal yearsOn November 14, 2014, the City issued 2014 Series A and B Lease Revenue Bonds in ending June 30, 2013 and 2014, in equal installments of no less than $600 beginning a principal amount of $258,925 and at a premium of $21,266.

Proceeds from the January 1, 2014 and by June 30th of each fiscal end for approximately nine years orBonds are allocated as follows:

1) $247,206 to finance an Anaheim Convention Center sooner depending upon when the funds have been fully reimbursed.

Expansion and other capital projects of the City; to fund a debt service reserve fund; toy costs of issuance; and to pay capitalized interest;

2) $32,985, along with $16,624frm previous debt service reserve funds ($8,364),

debt service funds ($3,072),

andfrom City ($5,188),

to refund the outstanding principal balances of the 1992Convention Center Financing Project COP ($34,500),

the 1993 Arena LandRefinancing COP ($7,655),

the 2002 Revenue Bonds ($490) and the 2010 RevenueNote ($5,185);

and to fund debt service reserve fund ($974). The true interest cost ofthe 2014 Bonds is 4.36% maturing serially from May 1, 2016 to May 1, 2046. Debtservice requirement begins May 1, 2015 with an average annual debt service of$16,430 and interest rates ranging from 0.4% to 5%. The refunding bonds will reducethe City's debt service payments by $5,910 with a net present value of $2,847.75 (This page left blank intentionally) 76 CITY OF ANAHEIMSummary of Pension Obligation Funding Progress(In thousands)

Employee Retirement System -Schedule of Funding ProgressValue of AssetsUnfunded Liability Funded RatiosJune 30, 2013Actuarial Valuation DateMiscellaneous Police SafetyFire SafetyTotalJune 30, 2012Actuarial Valuation DateMiscellaneous Police SafetyFire SafetyTotalJune 30, 2011Actuarial Valuation DateMiscellaneous Police SafetyFire SafetyTotalActuarial Value ofAssets (AVA)$ 786,278435,595257,573$1,479,446 Market'"Valule ofAssets (MVA)$ 786,278435,595257,573$1,479,446 AccruedLiability

$1,101,160 586,151352,186$2,039,497 AVA$314,882150,55694,613$560,051MVA$314,882150,55694,613$560,051AVA71.4%74.3%73.1%72.5%MVA71.4%74.3%73.1%72.5%Value of AssetsActuarial MarketValue of Valule ofAssets (AVA) Assets (MVA)$ 854,296 $ 712,497473,233 395,053283,211 236,155$1,610,740

$1,343,705 Value of AssetsUnfunded Liability Funded RatiosAccruedLiability

$1,045,037 565,214345,725$1,955,976 AVA$190,74191,98162,514$345,236MVA$332,540170,161109,570$612,271AVA81.7%83.7%81.9%82.3%MVA68.2%69.9%68.3%68.7%AnnualCoveredPayroll$107,58741,94621,464$170,997AnnualCoveredPayroll$105,54443,20522,967$171,716AnnualCoveredPayroll$110,23444,56723,681$178,482AnnualCoveredPayroll$155,317169,331177,229UL asa %ofPayroll292.7%358.9%440.8%327. 5%UL asa % ofPayroll180.7%212.9%272.2%201.1%UL asa % ofPayroll164.4%213.3%258.9%189.1%UL asa % ofPayroll105.1%78.8%83.5%Unfunded Liability Funded RatiosActuarial Value ofAssets (AVA)$ 823,258453,318274,471$1,551,047 MarketValule ofAssets (MVA)$ 729,624404,096243,889$1,377,609 AccruedLiability

$1,004,444 548,400335,781$1,888,625 AVA$181,18695,08261,310$337,578MVA$274,820144,30491,892$511,016AVA82.0%82.7%81.7%82.1%MVA72.6%73.7%72.6%72.9%Other Post-employmet Benefits

-Schedule of Funding ProgressActuarial Valuation DateJuly 1, 2013July 1, 2011July 1,2010Actuarial Value ofAssets (AVA)$ 74,01367,74763,920AccruedLiability

$ 237,202201,108211,914UnfundedLiability-AVA$163,189133,361147,994FundedRatios-AVA31.2%33.7%30.2%Beginning with the June 30, 2013 valuation Actuarial Value of Assets equals Market Value of Assets per CaIPERS Direct Rate Smoothing Policy.See accompanying independent auditors' report.77 (This page left blank intentionally) 78 Nonmajor Governmental Funds Nonmajor Governmental FundsSPECIAL REVENUE FUNDS are used to account for revenues derived from specific taxes or other earmarked revenue sources (other than for major capital projects) that are restricted by lawor administrative action to expenditures for specified purposes.

GAS TAX AND ROADS FUND -Established to account for the construction and maintenance of the road network system of the City. Financing is provided primarily by the City's share of Fed-eral, State, and local gasoline taxes. Federal, State, and local regulations require that these gasoline taxes be used to improve and maintain

streets, and includes programs intended to improvethe air quality of the region.WORKFORCE DEVELOPMENT FUND -Established to account for the City's involvement in Federal, State, and local programs to create jobs and provide the unemployed citizens in the Ana-heim area with job training opportunities.

COMMUNITY DEVELOPMENT BLOCK GRANT FUND -Established to account for financing of the development of viable urban communities through the provision of decent housing, suitableliving environments and economic opportunity, principally for persons of low and moderate income. Financing is provided by the Federal Housing and Urban Development (HUD) grants.GRANTS FUND -Established to account for various grants requiring segregated fund accounting.

Financing is provided by Federal, State, and local agencies.

ANAHEIM RESORT MAINTENANCE DISTRICT FUND -Established to account for the levy and collection of special assessments to pay the cost of annual maintenance and improvements within the district against those parcels that specifically benefit from the enhanced maintenance and improvements.

ANAHEIM TOURISM IMPROVEMENT DISTRICT FUND -Established to account for the collection of a special assessment supporting marketing, promotion and transit project costs in supportof the City's tourism and convention industry.

NARCOTIC ASSET FORFEITURE FUND -Established to account for funds received from Federal and State agencies that are derived from monies and property seized by the Police Department in drug related incidents.

These funds are used to supplement existing resources of the City's law enforcement activities.

DEBT SERVICE FUNDS are used to account for the accumulation of resources and the payment of principal and interest on general debt of the City and related entities.

GENERAL OBLIGATION BONDS FUND -Established to accumulate resources for the payment of principal and interest on general obligation bonds of the City. Debt service is financed by prop-erty tax revenues.

MUNICIPAL FACILITIES FUND -Established to accumulate resources for payment of the principal and interest on the certificates of participation for the Parking Facility

Project, Police Facilities

Projects, Arena Land Acquisition, and other various acquisitions and capital improvements.

ANAHEIM RESORT IMPROVEMENTS FUND -Established to accumulate resources for payment of the principal and interest on the lease revenue bonds for the Anaheim Resort improvements.

CAPITAL PROJECTS FUNDS are used to account for resources used for the acquisition and construction of capital assets by the City, except for those financed by proprietary funds.STREET CONSTRUCTION:

Established to account for transportation improvement construction in the City's right-of-way.

Financing is provided primarily by Federal, State and local grants, andMeasure M2 allocations by the County of Orange.DEVELOPMENT IMPACT PROJECTS FUND -Established to account for infrastructure improvements, primarily in the Platinum Triangle area, which provide development opportunities for highdensity, mixed use, office, restaurant, and residential projects.

Financing is provided primarily by development impact fees.COMMUNITY SERVICES FACILITIES

-Established to account for the development of new parksites, playgrounds and library facilities.

Federal and State grant programs, in conjunction with feescharged to residential and commercial developers, provide financing.

Much of this revenue is used to support the capital construction of parks and other recreational facilities throughout the City.STORM DRAIN CONSTRUCTION FUND -Established to account for the City's storm drain construction.

Financing is provided by drainage assessment fees charged to residential and commer-cial developers.

OTHER CAPITAL IMPROVEMENTS FUND -Established to account for miscellaneous capital projects as determined by the City Council.

Currently, financing is provided by fees fromdevelopers for infrastructure improvements, HUD108 loans and subsidies from the General Fund.MELLO-ROOS PROJECTS

-Established to account for road, sewer and water improvements in the community facility districts.

Financing is provided by the sale of special tax bonds that aresecured by and payable from the proceeds of an annual special assessment on the property within the district.

CITY OF ANAHEIMCombining Balance SheetNonma jar Governmental Funds by Fund TypeJune 30, 2014 (In thousands)

Combining Balance SheetNonmajor Governmental Funds by Fund TypeJune 30, 2014 (In thousands)

ASSETSCash and cash equivalents Investments Accounts receivable, netAccrued interest receivable Notes receivable, netDue from other fundsDue from other governments Prepaid and other assetsRestricted cash and cash equivalents Restricted investments Due from Successor AgencyTotal assetsUABIUTIES Accounts payableWages payableDepositsDue to other fundsTotal liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenuesUnavailable resources-long-term notes receivable Unavailable resources

-due from Successor AgencyTotal deferred inflows of resources FUND BALANCESNonspendable:

Prepaid and other assetsRestricted:

Anaheim Resort maintenance and improvement Capital projectsDebt serviceDevelopment impact projectsGrant purposesHomebuyer assistance programStreets, roads and transportation improvement projectsAssigned:

Ca ital projectsOther purposesUnassigned Total fund balancesTotal liabilities, deferred inflows of resources, and fund balancesSeeNonmaijrSpecialRevenueFunds$ 9,32626,6071,2239927,8599,6718,0746,021$ 88,880$ 4,5882811705,0391,21827,8596,02135,098NonmajorDebtServiceFunds$ 18853924523,11849,637$73,511$ 1111NonmajorCapitalProjectsFunds$ 9,19526,23941955,25414,1753,54215,1087,450$ 81,099$ 7,073311,1849,67117,95910,7917,45018,241TotalNonmalorGovernmental Funds$ 18,70953,3851,26421827,85914,92522,2543,54238,22649,63713,471$243,490$ 11,6723121,1849,84123,00912,00927,85913,47153,3393,5428,4912,68573,50046,1445,4913,14331,4963,27219(10,641)167,142$243,4903,5428,4915,4913,14331,4961031973,5002,68546,1443,169(10,641)44,899$ 81,09948,743$ 88,880accompanied Independent auditors' report73,500$73,51179 CITY OF ANAHEIMCombining Statement of Revenues, Expenditures and Changes in Fund BalancesNonmajor Governmental Funds by Fund TypeYear Ended June 30, 2014 (In thousands)

Nonmajor Nonmajor TotalSpecial Nonmajor Capital NonmajorRevenue Debt Service Projects Governmental Funds Funds Funds FundsRevenues:

Properly taxes $ 717 $ 717Licenses, fees and permits $ 65 $ 2,493 2,558Intergovernmental revenues 39,742 5 14,469 54,216Charges for services 18,031 35 18,066Use oi money and property 1,137 136 1,004 2,277Other 1,583 528 2,111Total revenues 60,558 858 18,529 79,945Expenditures:

Current:City Attorney 119 119Finance 19 33 52Police 8,195 8,195Fire 933 933Community Development 8,997 8,997Planning 1,302 1,302Public Works 10,884 1 2,602 13,487Community Services 791 3,577 4,368Convention, Sports and Entertainment 9,931 9,931Capital outlay 7,582 32,409 39,991Debt service:Principal retirement 2,793 18,750 936 22,479Interest charges 542 17,775 427 18,744Total expenditures 52,088 36,559 39,951 128,598Excess (deficiency) of revenues over (under) expenditures 8,470 (35,701)

(21,422)

(48,653)Other financing sources (uses):Transfers in 1,031 47,576 4,872 53,479Transfers out (2,394) (6,747) (9,141)Issuance of loan payable 1,350 1,350)Total other financing sources (13) 47,576 (1,875) 45,688Net change in fund balances 8,457 11,875 (23,297)

(2,965)Fund balances at beginning of year 40,286 61,625 68,196 170,107Fund balances at end of year $ 48,743 $ 73,500 $44,899 $167,142See accompanied Independent auditors' report80 CITY OF ANAHEIMCombining Balance SheetNonmajor Special Revenue FundsJune 30, 2014 (In thousands)

ASSETSCash and cash equivalents Investments Accounts receivable, netAccrued interest receivable Notes receivable, netDue from other fundsDue from other governments Due from Successor AgencyTotal assetsUABILITIES Accounts payableWages payableDue to other fundsTotal liabilities Gas TaxandRoads$ 3,4329,7921.359,6712,009$24,940$ 66836704Workforce Development Community Development Block G;rantAnaheimResortMaintenance Grants DistrictAnaheimTourismImprovement DistrictNarcoticAssetForfeiture Total$ 74 $ 456 $2,292211 1,300 6,539612 235,874 21,985$634$634$41926170615570$12,7504,857$28,6104$8,864$1,968 $1,104 $ 9,3265,615 3,150 26,6071,216 1,22318 11 9927,8599,6718,0746,021$8,817 $4,265 $88,880$1,556 $ 70 $ 4,5881 141 2811701,557 211 5,0391,21827,8596,02135,098$ 296 $ 1,213 $ 36635 35 7331 1,248 373DEFERRED INFLOWS OF RESOURCES Unavailable revenuesUnavailable resources-long-term notes receivable Unavailable resources

-due from Successor AgencyTotal deferred inflows of resources 15,87411,8961,21721,98523,202FUND BALANCESRestricted:

Anaheim Resort maintenance and improvement Grant purposesHomebuyer assistance programStreets, roads and transportation improvement projects 24,236Assigned:

Debt serviceCapital projectsOther purposesTotal fund balances 24,236Total liabilities, deferred inflows of resources, and fund balances

$24,9408,4915239143,1438,4914,054 5,4913,14331,4967,2601919$634103523 4,160 8,491$12,750 $28,610 $8,864103197,260 4,054 48,743$8,817 $4,265 $88,880See accompanied Independent auditors' report81 CITY OF ANAHEIMCombining Statement of Revenues, Expenditures and Changes in Fund BalancesNonmajor Special Revenue FundsYear Ended June 30, 2014 (In thousands)

Revenues:

Licenses, fees and permitsIntergovernmental revenuesCharges for servicesUse of money and propertyOtherTotal revenuesGas TaxandRoads$ 3616,628169185917,027Workforce Development

$3,7723,772Community Development Block Grant$4,1333269965,455AnaheimResortMaintenance Grants District$ 2911,83811245512,434AnaheimTourismImprovement District$13,3755113,426NarcoticAssetForfeiture Total$4,48777114,575$ 3,3713861123,869$ 6539,74218,0311,1371,58360,558Expenditures:

Current:City AttorneyFinancePoliceFireCommunity Development PlanningPublic WorksCommunity ServicesConvention, Sports and Entertainment Capital outlayDebt service:Principal retirement Interest chargesTotal expenditures Excess (deficiency) of revenuesover (under) expenditures Other financing sources (uses):Transfers inTransfers outIssuance of loan payableTotal other financing sources (uses)Net change in fund balancesFund balances at beginning of yearFund balances at end of year119195,0499333,8983,7661,3331,302788119193,146 8,1959338,9971,30210,8847919,931193 7,5825,9314,6134,861923383 2,1011,04211,5865,4417591,3502,1097,55016,686$24,2363,76666154715,01144411,984 4,86145072(2,283)(286)9,9312921,00011,3342,092(111)(111)1,981136713,5462,79354252,088200323 8,4701,031(2,394)1,350(13)_(2,211) 200613$ 1944479$ 523(1,761)5,921Q(86)8,577$ 8,_A913233,7319ALQ58,45740,286$48,743See accompanied independent auditors' report82 CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Actual -All Nonmajor Special Revenue FundsYear Ended June 30, 2014 (In thousands)

Gas Tax and RoadsFinal VarianceBudgeted Actual with FinalAmounts Amounts BudgetWorkforce Development Final VarianceBudgeted Actual with FinalAmounts Amounts BudgetRevenues:

Licenses, fees and permitsIntergovernmental revenuesCharges for servicesUseot money and propertyOtherTotal revenuesExpenditures:

City AttorneyFinancePoliceFireCommunity Development PlanningPublic WorksCommunity ServicesConvention, Sports and Entertainment Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses):Transfers inTransfers outIssuance of loan payableTotal other financing sources (uses)Net change in fund balancesFund balances at beginning of yearFund balances at end of year$ 4014,965203815,216$ 3616,628169185917,027$ (4)1,663(34)18511.,811$ 3,1453,145$3,7723,7723,766$ 627627(895)(895)4,66127,98611,586 (16,400)27,986 11,586 (16,400)(12,770)

,4 1 18,2114,661(1,516)3,76666666(12,704)16,686$ 3,9827591,3502,1097,55016,686$2A,2361,3502,04320,254$ 20,254693(1,516)13$(1,503)613$ 191,522$1,522(continued) 83 CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Actual -All Nonmajor Special Revenue FundsYear Ended June 30, 2014 (In thousands)

(continued)

Community Development Block GrantFinal VarianceBudgeted Actual with FinalAmounts Amounts BudgetGrantsRevenues:

Licenses, fees and permitsIntergovernmental revenuesCharges for servicesUse ol money and propertyOtherTotal revenuesExpenditures:

City AttorneyFinancePoliceFireCommunity Development PlanningPublic WorksCommunity ServicesConvention, Sports and Entertainment Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses):Transfers inTransfers outIssuance of loan payableTotal other financing sources (uses)Net change in fund balancesFund balances at beginning of yearFund balances at end of year$ 4,459 $ 4,1332795435,2811206,0411,4719248,556(3,275)79$(3,196)3269965,4551192,8021,3027885,01144444479$ 523$ (326)47453174(1)(3,239)(169)(136)(3,545)3,719$ 3,719FinalBudgetedAmounts$ 3015,9514516,026ActualAmounts$ 2911,83811245512,434Variancewith FinalBudget$ (1)(4,113)67455(3,592)8,2312,0828,40513518,853(2,827)(2,827)5,921$ 3,0946,9251,1583,898311,98445072(2,283)(2,211)(1,761)5,921$ 4,160(1,306)(924)(4,507)(132)(6,869)3,27772(2,283)(2,211)1,066$ 1,066(continued) 84 CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Actual -All Nonmajor Special Revenue FundsYear Ended June 30, 2014 (In thousands)

(continued)

Revenues:

Licenses, fees and permitsIntergovernmental revenuesCharges for servicesUse ol money and propertyOtherTotal revenuesExpenditures:

City AttorneyFinancePoliceFireCommunity Development PlanningPublic WorksCommunity ServicesConvention, Sports and Entertainment Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses):Transfers inTransfers outIssuance of loan payableTotal other financing sources (uses)Net change in fund balancesFund balances at beginning of yearFund balances at end of yearAnaheim Resort Maintenance DistrictFinal VarianceBudgeted Actual with FinalAmounts Amounts Budget$ 4,463 $ 4,487 $ 2467 77 104 11 74,534 4,575 41Anaheim Tourism Improvement DistrictFinal VarianceBudgeted Actual with FinalAmounts Amounts Budget$12,775 $13,37537 5112,812 13,426$ 6001461419196,5814,861(1,720)6,581 A,861 (1,720)(2,047) (286) 1,12112,5059,93112,666146(128)(128)185,279$ 5,2971901,1949,93111,334(111)(111)1,9817,279$ 7,260(21)(1,311)(1,332)1,94617171,963$ 1,963200200(1,847)$ 6,730200200(86)$ 8,4911,761$ 1,761(continued) 85 CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Actual -All Nonmajor Special Revenue FundsYear Ended June 30, 2014 (In thousands)

(continued)

Narcotic Asset Forfeiture Final VarianceBudgeted Actual with FinalAmounts Amounts BudgetRevenues:

Licenses, fees and permitsIntergovernmental revenues

$2,722 $3,371 $ 649Charges for servicesUseol money and property 402 386 (16)Other 112 112Total revenues 3,124 3,869 745Expenditures:

City AttorneyFinancePolice 4,015 3,546 (469)FireCommunity Development PlanningPublic WorksCommunity ServicesConvention, Sports and Entertainment Total expenditures 3,546 (469)Excess (deficiency) of revenues over (under) expenditures (891) 323 1,214Other financing sources (uses):Transfers inTransfers outIssuance of loan payableTotal other financing sources (uses)Net change in fund balances (deficits)

(891) 323 1,214Fund balances (deficits) at beginning of year 3,731 3,731Fund balances at end of year $ 2,840 $ 4,054 $1,214See accompanied Independent auditors' report86 CITY OF ANAHEIMCombining Balance SheetNonmajor Debt Service FundsJune 30, 2014 (In thousands)

GeneralObligation Municipal Anaheim ResortBonds Facilities Improvements TotalASSETSCash and cash equivalents

$ 186 $ 2 $ 188Investments 532 7 539Accrued interest receivable 2 22 24Due from other governments 5 5Restricted cash and cash equivalents 65 $23,053 23,118Restricted investments 2,266 A7,371 A9,637Total assets $ 725 $ 2,362 $70424 $73,511UABIUTIES AND FUND BALANCESLiabilities:

Accounts payable $ 5 $ 6 $ 11Total liabilities 5 6 11Fund balances:

Restricted for debt service $ 725 $ 2,357 $70,418 $73,500Total fund balances 725 2,35 70,418 73,500Total liabilities and fund balances

$ 725 $2,362 $70,A24 $73,511See accompanied Independent auditors' report87 CITY OF ANAHEIMCombining Statement of Revenues, Expenditures and Changes in Fund BalancesNonmajor Debt Service FundsYear Ended June 30, 2014 (In thousands)

GeneralObligation Municipal Anaheim ResortBonds Facilities Improvements TotalRevenues:

Property taxes $ 717 $ 717Intergovernmental revenues 5 5Use of money and property 3 $ 131 $ 2 136Total revenues 725 131 2 858Expenditures:

Current:Finance 33 33Public Works 1 1Debt service:Principal retirement 610 1,600 16,540 18,750Interest charges 92 766 16,917 17,775Total expenditures 703 2,366 33,490 36,559Excess (deficiency) of revenues over (under) expenditures 22 (2,235) (33,488)

(35,701)Other financing sources:Transfers in 2_238 45,338 47,576Total other financing sources 2,238 45,338 47,576Net change in fund balances 22 3 11,850 11,875Fund balances at beginning of year 703 2,35A 58,568 61,625Fund balances at end of year $ 725 $_2,357 $70,418 $ 73.500See accompanied Independent auditors' report 88 CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Actual -All Debt Service FundsYear Ended June 30, 2014 (In thousands)

General Obligation BondsFinal VarianceBudgeted Actual with FinalAmounts Amounts BudgetRevenues:

Property taxesIntergovernmental revenuesUse of money and propertyTotal revenuesExpenditures:

FinancePublic WorksConvention, Sports and Entertainment Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources:Transfers inTransfers outTotal other financing sourcesNet change in fund balancesFund balances at beginning of yearFund balances at end of yearMunicipal Facilities Final VarianceBudgeted Actual with FinalAmounts Amounts Budget$ 124 $ 131 $ 7124 131 7$7118672570370322$7175372570370322$ 6(3)(3)1,7556112,366(2,242)2,2421,7556112,366(2,235)2,2387(4)(4)3$ 322703$725223703$725$2,354 2,354$ 2,354 $ 2,357(continued) 89 CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Actual -All Debt Service FundsYear Ended June 30, 2014 (In thousands)

(continued)

Anaheim Resort Improvements Final VarianceBudgeted Actual with FinalAmounts Amounts BudgetRevenues:

Property taxesIntergovernmental revenuesUse of money and property

$ 2 $ 2 $Total revenues 2 2Expenditures:

Finance 33,537 33,490 (47)Public WorksConvention, Sports and Entertainment Total expenditures 33,537 33,490 (47)Excess (deficiency) of revenues over (under) expenditures (33,535)

(33,488) 47Other financing sources:Transfers in 43,245 45,338 2,093Transfers outTotal other financing sources 43,245 4 2,093Net change in fund balances 9,710 11,850 2,140Fund balances at beginning of year 58,568 58,568Fund balances at end of year 68,278 $70,418 $ 2J140See accompanied Independent auditors' report90 CITY OF ANAHEIMCombining Balance SheetNonma jar Capital Projects FundsJune 30, 201 4 (In thousands)

StreetsConstruction ASSETSCash and cash equivalents Investments Accounts receivable, netAccrued interest receivable Due from other fundsDue from other governments Prepaid and other assetsRestricted cash and cash equivalents Due from the Successor AgencyTotal assetsDevelopment ImpactProjects$ 5,04914,40849Community ServicesFacilities

$1,4834,2314117StormDrainConstruction

$ 8502,4269Other Capital Mello-Roos Improvements Projects$ 98 $ 1,715279 4,895205,254Total$ 9,19526,23941955,25414,1753,54215,1087,450$12,7033,541UABIUTIES Accounts payableWages payableDepositsDue to other fundsTotal liabilities 1,4721$ 48914901227,A50$13,20314,986$21,616$ 2,8651712,553$ 1,81271,819$ 3911,1841,575$ 208 $ 1,308 $ 7,0731 5 311,184209 1,313 17,95910,7917,450 7,4507,450 18,241DEFERRED INFLOWS OF RESOURCES Unavailable revenuesUnavailable resources-due from Successor AgencyTotal deferred inflows of resources FUND BALANCESNonspendable:

Prepaid and other assetsRestrited:

Capital projectsDevelopment impact projectsAssigned:

Capital projectsUnassigned Total fund balances (deficit)

Total liabilities, deferred inflowsof resources, and fund balances (deficit) 10,79110,7913,54112,6853,5422,68520,303 46,14417,687(10,641)(7,100)6,4443106,755$7,2451,7102,859 3,169(10,641)4 20,303 44,899$13,203 $21,61 $81,099See accompanied Independent auditors' report91 CITY OF ANAHEIMCombining Statement of Revenues, Expenditures and Changes in Fund BalancesNonmajor Capital Projects FundsYear Ended June 30, 2014 (In thousands)

Development Community StormStreets Impact Services Drain Other Capital Mello-Roos Construction Projects Facilities Construction Improvements Projects TotalRevenues:

Licenses, fees and permits $ 1,580 $ 911 $ 2 $ 2,493Intergovernmental revenues

$11,162 1,585 1,722 14,469Charges for services 35 35Use at money and property 175 222 26 $ 501 $ 80 1,004Other 2 478 48 528Total revenues 11,199 40 2,855 28 979 128 18,529Expenditures:

Current:Public Works 817 45 90 1,641 9 2,602Community Services 435 431 2,711 3,577Capital outlay 16,599 4,859 2,489 65 3,841 4,556 32,409Debt service:Principal retirement 458 478 936Interest charges 427 427Total expenditures 17,416 5,797 2,920 155 9,098 A,565 39,951Deficiency of revenues under expenditures (6,217) (2,457) (65) (127) (8,119) (4,437) (21,422)Other financing sources (uses):Transfers in 328 500 4,044 4,872Transfers out (1,211) (4,864) (344) (328) (6,747)Total other financing sources (uses) (883) 500 (4,864) 3,700 (328) (1,875)Net change in fund balances (7,100) (1,957) (65) (4,991) (4,419) (4,765) (23,297)Fund balances at beginning of year 19,644 6,820 6,710 9,963 25,068 68,196Fund balances (deficit) at end of year $(7,100)

$_17,687

$6,755 $1,710 $5544 $20,303 $44899See accompanied Independent auditors' report92 CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Budgetary Basis Actual -All Capital Projects FundsYear Ended June 30, 2014 (In thousands)

Revenues:

Licenses, fees and permitsIntergovernmental revenuesCharges for servicesUse oI money and propertyOtherTotal revenuesExpenditures:

Community Development Public WorksCommunity ServicesTotal expenditures Deficiency of revenues under expenditures Other financing sources (uses):Transfers inTransfers outTotal other financing sourcesNet change in fund balancesFund balances at beginning of yearFund balances at end of yearAdjustments to reconcile to GAAP:Land acquisition expenditure from prepaid and other assetsEnding fund balances

-GAAP basisStreets Construction Final VarianceBudgeted Actual with FinalAmounts Amounts Budget$53,399 $11,162 $(42,237) 100 35 (65)2 253,499 11,199 (42,300)Development Impact ProjectsFinal VarianceBudgeted Actual with FinalAmounts Amounts Budget$ 9,325 $ 1,5801,585100 1759,425 3,34053,10316,706(36,397)53,103 16,706 (36,397)6,068,5,69111,759(2,334)5,1036945,797(2,457)$(7,745)1,585075(6,085)(965)(4,997)(5,962)(123)500500377$ 377396(5,507)328_ (1,211)________(883)

(5,903)328(1,211)(883)(6,786)500500396(6,390)(2,334)(1,957)$ 396$ (6,390) $ (6,786)19,644 19.644$17,310 $17,687(710)$ (7,100)(continued) 93 CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Budgetary Basis Actual -All Capital Projects FundsYear Ended June 30, 2014 (In thousands)

(continued)

Community Services Facilities Final VarianceBudgeted Actual with FinalAmounts Amounts Budget$ 911 $ 911$ 5,049 1,722 (3,327)Storm Drain Construction Final VarianceBudgeted Actual with FinalAmounts Amounts Budget$ 2 $ 2Revenues:

Licenses, fees and permitsIntergovernmental revenuesCharges for servicesUse of money and propertyOtherTotal revenuesExpenditures:

Community Development Public WorksCommunity ServicesTotal expenditures Deficiency of revenues under expenditures Other financing sources (uses):Transfers inTransfers outTotal other financing sources (uses)Net change in fund balances865,1354,3024,3028332222,8552,920(65)136(2,280)(1,382)(1,382)(898)26 $ 262 28155155(153)155155(127)2626(4,864)(4,864)(4,838)$(4,838)833(65)(898)$ (898)(4,864)(4,864)(153) (4,991)6,754 6,701$ 6,548 $ 1,710Fund balances at beginning of yearFund balances at end of year6,820 6,820$ 7,653 $ 6,75594(continued)

CITY OF ANAHEIMSchedule of Revenues, Expenditures and Changes in Fund BalancesBudget and Budgetary Basis Actual -All Capital Projects FundsYear Ended June 30, 2014 (In thousands)

(continued)

Other Capital Improvements Final VarianceBudgeted Actual with FinalAmounts Amounts BudgcetMello-Roos ProjectsFinal VarianceBudgeted Actual with FinalAmounts Amounts BudaetRevenues:

Licenses, fees and permitsIntergovernmental revenuesCharges for servicesUse o money and property

$ 427 $ 501 $ 74 $ $ 80 $ 80Other 478 478 48 48Total revenues 905 979 74 128 128Expenditures:

Community Development 905 905Public Works 2,500 2,318 (182) 25,392 4,565 (20,827)Community Services 5 875 5,875Total expenditures 9,280 9,098 (182) 25,392 4,565 (20,827)Deficiency of revenues under expenditures (8,375) (8,119) 256 (25,392)

(4,437) 20,955Other financing sources (uses):Transfers in 250 4,044 3,794Transfers out (344) (344) (328) (328)Total other financing sources (uses) 250 3,700 3,450 (328) (328)Net change in fund balances (8,125) (4,419) 3,706 (25,392)

(4,765) 20,627Fund balances at beginning of year 9,963 9.963 25,068 25,068Fund balances at end of year $ 1,838 $ 5,544 $ 3,706 $ (324) $20,303 $20,627See accompanied Independent auditors' report95 (This page left blank intentionally) 96

" .Internol Service Funds Internal Service FundsINTERNAL SERVICE FUNDS are used to account for the financing of centralized services to City departments on a cost-reimbursement basis (including depreciation).

GENERAL BENEFITS AND INSURANCE FUND -Established to account for employee compensated

absences, retirement and health benefits, and self-insurance programs.

MOTORIZED EQUIPMENT FUND -Established to account for motorized equipment used by City departments.

INFORMATION AND COMMUNICATION SERVICES FUND -Established to account for data processing and communication services to City departments.

MUNICIPAL FACILITIES MAINTENANCE

-Established to account for City building maintenance services and equipment used by City departments.

CITY OF ANAHEIMCombining Statement of Net PositionInternal Service FundsJune 30, 2014 (In thousands)

General Information Benefits and Municipal and -Motorized Communication Facilities Insurance Equipment Services Maintenance TotalASSETSCurrent assets:Cash and cash equivalents

$13,606 $ 1,881 $ 1,476 $1,060 $18,023Investments 38,821 5,367 4,213 3,025 51,426Accounts receivable, net 6,283 2 6,285Accrued interest receivable 134 17 6 9 166Note receivable 26 26Interfund receivable 10 10Inventories 819 819Prepaid and other assets 336 336Total current assets 59,216 8,086 5,695 4,094 77,091Noncurrent assets:Accounts receivable, less current portion 3,550 3,550Interfund receivable less current portion 31 31Net other post-emproyment benefits (OPEB) asset 11,152 11,152Capital assets:Buildings, structures and improvements 3,230 4,607 7,837Machinery and Equipment 81 35,932 19,760 2,315 58,088Construction in progress 225 225Less accumulat dpreciation (81) (28,550)

(14,102)

(5,014) (47,747)Capital assets, net 10,837 5,658 1,908 18,403Total noncurrent assets 14,733 10,837 5,658 1,908 33,136Total assets 73,949 18,923 11,353 6,002 110,227UABIUTIES Current liabilities:

Accounts payable 2,014 606 3,171 381 6,172Wages payable 905 54 11 45 1,015Compensated absences 13,447 13,447Self-insurance liability 8,051 8,051Long-term debt 628 628Unearned revenues 1,893 1,893Total current liabilities 26,310 660 3,810 426 31,206Noncurrent liabilities:

Compensated

absences, less current portion 4,747 4,747Self-insurance liability, less current portion 32,776 32,776Long-term debt, less current portion 697 697Total noncurrent liabilities 37,523 697 38,220Total liabilities 63,833 660 4,507 426 69,426NET POSITIONNet investment in capital assets 10,837 4,333 1,908 17,078Unrestricted 10,116 7,426 2,513 3,668 23,723Total net position

$10,116 $18,263 $ 6,846 $5,576 $40,801See accompanied Independent auditors' report97 CITY OF ANAHEIMCombining Statement of Revenues, Expenses and Changes in Net PositionInternal Service FundsYear Ended June 30, 2014 (In thousands)

General Information Benefits and Municipal and Motorized Communication Facilities Insurance Equipment Services Maintenance TotalOperating revenues:

Charges for services

$130,363

$11,487 $14,136 $9,367 $165,353Other 57 7 59 123Total operating revenues 130,420 11,494 14,136 9,426 165,476Operating expenses:

Salaries and wages 3,652 3,642 692 3,118 11,104Maintenance and operations 2,384 5,110 13,089 6,175 26,758Insurance premiums and claims 9,903 9,903Compensated absences and other benefits 116,705 116,705Depreciation 1,936 2,050 221 4,207Total operating expenses 132,644 10,688 15,831 9,514 168,677Operating income (loss) (2,224) 806 (1,695) (88) (3,201)Nonoperating income (expenses):

Investment income 454 59 28 33 574Interest expense (85) (85)Gain from disposal of capital assets 305 305Total nonoperating income 454 364 (57) 33 794Loss (1,770) 1,170 (1,752) (55) (2,407)Change in net position (1,770) 1,170 (1,752) (55) (2,407)Net position at beginning of year 11,886 17,093 8,598 5,631 43,208Net position at end of year $ 10,116 $18,263 $ 6,846 $5,576 $ 40,801See accompanied Independent auditors' report98 CITY OF ANAHEIMCombining Statement of Cash FlowsInternal Service FundsYear Ended June 30, 2014 (in thousands)

Cash flows from operating activities:

Receipts from interfund services providedPayments to suppliers Payments for salaries and wages to employees Payments for interfund services usedPayments for insurance premiums and claimsPayments for compensated absences and other benefitsOther receiptsNet cash provided by (used for) operating activities Cash flows from noncapital financing activities:

Receipt of interfund balancesNet cash provided by noncapital financing activities Cash flows from capital and related financing activities:

Proceeds from sale of capital assetsCapital purchases Principalpayments on long-term debtInterest paymentsNet cash used for capital and related financing activities Cash flows from investing activities:

Purchase of investment securities Proceeds from sale and maturity of investment securities Interest receivedNet cash provided by (used for) investing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the yearCash and cash equivalents at end of the yearGeneralBenefitsandInsurance

$129,998(798)(5,773)(1,503)(10,506)(119,471) 102(7,951)Information andMotorized Communication Equipment ServicesMunicipal Facilities Maintenance Total$11,487(4,279)(3,627)(373)293,237$14,136(10,817)(687)(971)1,661$9,367 $164,988(6,158) (22,052)(3,114) (13,201)(643) (3,490)(10,506)(119,471) 92 223(456) (3,509)125125305(9) (3,799)(1,121)(85)(9) (4,700)21 10421 104305(1,672) (2,118)(1,121)_(85)(1,367) (3,324)(10,128)11,7504242,046(5,884)19,490$ 13,606(3,460)1,62544(1,791)1831,698$ 1,881(546)1,27528757(906)2,382$ 1,476(891)9153256(409)1,469$1,060(15,025)15,5655281,068(7,016)25,039$18,023(continued) 99 CITY OF ANAHEIMCombining Statement of Cash FlowsInternal Service FundsYear Ended June 30, 2014 (In thousands)

(continued)

GeneralBenefitsandInsurance Motorized Equipment Information and Municipal Communication Facilities Services Maintenance TotalReconciliation of operating income (loss) to net cashprovided by (used for) operating activities:

Operating income (loss)Adjustments to reconcile operating income (loss)to net cash provided by (used for) operating activities:

Depreciation Changes in assets and liabilities:

Accounts receivable Inventories Note receivable Prepaid and other assetsAccounts payableWages payableUnearned revenuesCompensated absencesSelf-insurance liability Other post retirement employment benefits (OPEB) assetsTotal adjustments Net cash provided by (used for) operating activities

$ (2,224) $ 806 $ (1,695)$ (88) $ (3,201)1,9362,0502214,207(3,295)15(278)(1,856)(1,953)1032671,405(135)(5,727)$ (7,951)22(70)756(228)152,431$ 3,2371,3015(633 (3,240)(70)1547826) (1,409)4 (1,929)1032671,405(135)368) (308)156) $ (3,509)3,356$ 1,661$ 1,0773$ (4Schedule of noncash financing and investing activities:

Capital assets financed through capital leasesIncrease in fair value of investments

$ 41 $ 11$ 1,07759$4ASee accompanied Independent auditors' report100 Fiduciary Funds CITY OF ANAHEIMStatement of Changes in Fiduciary Assets and Liabilities Agency Fund -Mello-Roos Year Ended June 30, 2014 (In thousands)

Beginning EndingBalance Additions Deductions BalanceASSETSRestricted cash and cash equivalents

$5,046 $3,892 $(5,004)

$3,934Restricted investments 3,256 3,256Due from other governments 57 3,801 (3,823) 35Total assets $8,359 $7,693 $(8,827)

$7,225UABIIrT1ES Due to bond holders $8,359 $3,870 $(5,004)

$7,225See accompanied Independent auditors' report101 (This page left blank intentionally) 102 11--ýStatistical Section Statistical SectionThe Statistical Section is included to provide detailed data on the physical,

economic, social and political characteristics of the reporting government.

It is intended to provide theuser with a broader and more complete understanding of the government and its financial affairs than is possible from the basic financial statements and supplementary information included inthe Financial Section.

CITY OF ANAHEIMSTATISTICAL INFORMATION (Unaudited)

The Statistical Section is included to provide financial statement users with additional historical perspective,

context, and detail for them to use in evaluating the information contained withinthe financial statements, notes to the financial statements, and required supplementary information with the goal of providing the user a better understanding of the City's economic condition.

Contents PgeFinancial trendsThese schedules contain information to help the reader understand how the City's financial performance and well-being have changed over time.Net Position by Component

-Last Ten Fiscal Years 104Changes in Net Position

-Last Ten Fiscal Years 105Governmental Activities Tax Revenues by Source -Last Ten Fiscal Years 107Fund Balances of Governmental Funds -Last Ten Fiscal Years 108Changes in Fund Balances of Governmental Funds -Last Ten Fiscal Years 109Revenue capacityThese schedules contain information to help the reader assess the City's most significant local revenue sources.General Government Tax Revenues by Source -Last Ten Fiscal Years 110Assessed Value and Estimated Actual Value of Taxable Property

-Last Ten Fiscal Years 111Property Tax Rates -Direct and Overlapping Governments

-Last Ten Fiscal Years 112Principal Property Tax Payers -Current Year and Nine Years Ago 113Property Tax Levies and Collections

-Last Ten Fiscal Years 114Debt capacityThese schedules contain information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issueadditional debt in the future.Ratios of Outstanding Debt by Type -Last Ten Fiscal Years 115Ratios of Net Genera Bonded Debt Outstanding

-Last Ten Fiscal Years 116Direct and Overlapping Government Activities Debt -As of June 30. 2014 117Legal Debt Margin information

-Last Ten Fiscal Years 119Pledged-Revenue Coverage

-Last Ten Fiscal Years 120Demographic and economic information These sciedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.Demographic and Economic Statistics

-Last Ten Fiscal Years 122Principal Employers

-Current and Nine Years Ago 123Operating information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services theCity provides and the activities it performs.

Full-time Equivalent City Government Emloyees by Function/Program

-Last Ten Fiscal Years 125Operating ndicators by Function

-Last en iscal ears 126Capital Assets Statistics by Function

-Last Ten Fiscal Years 128City of Anaheim Map 130Sources:

Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.103 CITY OF ANAHEIMNet Position by Component Last Ten Fiscal Years (In thousands)

(Accrual basis of accounting)

Fiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Governmental Activities Net investment in capital assets $1,016,259

$ 894,625 $ 831,430 $ 832,951 $ 794,164 $ 751,910 $ 731,726 $ 665,828 $ 668,628 $ 613,300Restricted 205,998 196,853 190,868 182,011 150,750 154,306 87,566 69,949 99,443 87,505Unrestricted 12,668 30,341 16,760 (124,422)

(121,283)

(92,773)

(70,621)

(12,765)

(40,946)

(35,652)Total Governmental Activities 1,234,925 1,121,819 1,039,058 890,540 823,631 813,443 748,671 723,012 727,125 665,153Business-type Activities Net investment in capital assets 823,505 787,459 780,093 779,224 756,020 747,379 746,450 701,088 656,377 693,240Restricted 77,311 71,131 61,235 54,626 49,325 45,493 47,406 38,572 36,008 28,855Unrestricted 95,505 121,083 112,159 115,445 130,812 145,269 165,196 203,967 215,685 229,051Total Business-type Activities 996,321 979,673 953,487 949,295 936,157 938,141 959,052 943,627 908,070 951,146Total Government Net investment in capital assets 1,839,764 1,682,084 1,611,523 1,612,175 1,550,184 1,499,289 1,478,176 1,366,916 1,325,005 1,306,540 Restricted 283,309 267,984 252,103 236,637 200,075 199,799 134,972 108,521 135,451 116,360Unrestricted 108,173 151,424 128,919 (8,977) 9,529 52,496 94,575 191,202 174,739 193,399Total Government

$2,231,246

$2,101,492

$1,992,545

$1,839,835

$1,759,788

$1,751,584

$1,707,723

$1,666,639

$1,635,195

$1,616,299 Note: Certain reclassifications have been made to prior year data to conform to the current presentation Source: Finance Department, City of AnaheimSee accompanied Independent auditors' report104 CITY OF ANAHEIMChanges in Net PositionLast Ten Fiscal Years (In thousands)

(Accrual 6asis of accounting)

Program RevenuesGovernmental activities:

Charges for servicesGeneral government PoliceFireCommunity Development PlanningPublic WorksCommunity ServicesConvention, Sports and Entertainment Total charges for servicesOperating grants and contributions Capital grants and contributions Governmental activities program revenuesBusiness-type activities:

Charges for servicesElectric utilityWater UtilitySanitation UtilityGolf CoursesConvention, Sports and Entertainment Total charges for servicesOperating grants and contributions Capital grants and contributions Business-type activities program revenuesTotal government program revenuesExpensesGovernmental activities:

General government PoliceFireCommunity Development PlanningPublic WorksCommunity ServicesPublic Utilities Convention, Sports and Entertainment Interest on long-term debtGovernmental Activities ExpensesFiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005$ 1,779 $ 1,670 $ 1,872 $ 1,872 $ 1,708 $ 1,890 $ 2,088 $ 1,238 $ 1,385 $ 1,4429,927 9,859 10,122 10,435 10,127 10,089 10,235 9,715 10,477 9,84010,166 9,912 9,431 9,518 9,369 9,122 9,850 9,070 8,942 7,90917,305 9,151 7,281 8,143 7,306 5,459 6,212 6,713 6,122 4,6677,746 6,404 5,327 6,263 6,453 7,724 9,084 10,778 9,031 6,99413,037 14,012 11,401 9,837 7,619 7,421 8,619 8,234 11,196 6,5443,479 3,556 3,386 4,024 4,561 4,833 4,855 4,043 18,421 4,98510,236 9,574 9,142 4,356 202 200 218 200 200 20073,675 64,138 57,962 54,448 47,345 46,738 51,161 49,991 65,774 42,581114,584 112,507 108,620 124,358 121,731 110,200 100,393 98,699 88,076 78,846110,295 71,472 44,184 70,800 31,828 66,347 30,361 42,997 28,804 20,906298,554 248,117 210,766 248,886 200,904 223,285 181,915 191,687 182,654 142,333426,051 451,958 397,931 381,496 377,387 365,526 351,160 310,074 322,845 284,74065,94.6 60,785 57,748 55,598 56,368 50,807 49,125 49,600 46,926 43,42757,843 57,230 56,630 56,359 56,023 55,424 54,017 53,215 49,397 46,4804,667 4,759 4,802 4,711 5,168 5,634 5,947 6,022 5,736 5,39432,084 29,656 29,389 27,981 30,797 26,987 31,197 32,308 27,357 27,41258,51 04,388 -546,500 526,145 525,743 50,7 -491,446 451,219 452,261 407,453452 952 1,101 746 1,990 965 1,194 1,160 2,556 2,4738,441 6,698 8,954 12,667 5,622 6,620 12,332 4,808 5,749 11,513595,484 62038 556,555 539,558 533,355 511,963 504,972 457,187 460,566 421,439894,038 860,155 767,321 788,444 73-4,259 735,248 686,887 648,874 64-3,220

-563,77215,790 13,275 11,617 10,911 10,917 12,144 12,610 10,951 7,394 8,943127,037 124,556 117,840 119,504 125,121 121,162 122,883 115,714 98,484 91,71359,510 58,508 58,027 56,393 58,229 57,768 56,434 50,727 50,957 46,59680,043 82,769 95,683 105,937 117,621 109,523 105,651 93,089 87,814 83,18317,030 16,917 15,648 15,627 16,822 17,057 17,199 16,107 14,493 13,20660,262 44,740 41,228 44,109 39,017 47,226 43,680 44,473 42,029 39,46334,130 28,925 28,282 30,958 35,372 37,704 39,033 36,827 31,712 28,3142,514 2,405 2,315 2,218 1,952 1,515 2,128 1,800 1,704 1,55715,586 13,935 13,584 13,633 9,931 10,069 10,781 10,539 8,652 7,70335,514 35,880 42,824 47,985 47,610 47,779 45,502 51,639 46,430 47,105447,416 42_1,91 0 42-7,048 447,275 462,592 461,947 455,901 431,866 389,669 367,783(continued) 0105 CITY OF ANAHEIMChanges in Net PositionLast Ten Fiscal Years (In thousands)

(Accrual basis of accounting)

(continued)

Fiscal YearExpensesBusiness-type activities:

Electric UtilityWater UtilitySanitation Golf CoursesConvention, Sports and Entertainment VenuesBusiness-type activities expenseTotal government expensesNet (Expense)/Revenue Governmental activities Business-type activities Total government, net (expense) revenueGeneral Revenues and Other Changes in NGovernmental activities:

Taxes:Property taxesProperty tax increments Sales tax and use taxTransient occupancy taxesMotor vehicle license feesOther taxesUnrestricted investment earningsOtherGain from disposal of capital assetsTransfers Extraordinary gainGovernmental activities Business-type activities:

Unrestricted investment earningsOtherTransfers Business-type activities Total government 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005411,246 417,008 386,358 372,129 375,173 359,320 353,204 339,928 365,432 274,42362,996 57,056 58,319 56,608 55,478 49,309 49,219 51,638 47,187 41,46953,508 52,813 55,939 49,845 50,521 52,702 49,693 49,338 47,163 45,4674,399 4,473 4,114 4,256 4,436 4,495 4,810 4,365 4,433 4,06246,385 45,001 45,278 44,662 45,954 45,487 48,292 46,610 47,833 47,220578,534 576,351 550,008 527,500 531,562 511,313 505,218 491,879 512,048 412,6411,025,950 998,261 977,056 974,775 994,154 973,260 961,119 923,745 901,717 780,424(148,862)

(173,793)

(216,282)

(198,389)

(261,688)

(238,662)

(273,986)

(240,179)

(207,015)

(225,450) 16,950 35,687 6,547 12,058 1,793 650 (246) (34,692)

(51,482) 8,798(131,912)

(138,106)

(209,735)

(186,331)

(259,895)

(238,012)

(274,232)

(274,871)

(258,497)

(216,652) let Position66,282 64,311 58,896 59,053 59,689 60,806 59,592 57,937 49,415 43,63628,678 47,040 47,731 47,115 45,719 40,710 37,341 34,98467,505 65,445 59,654 54,711 51,214 56,035 62,510 64,878 66,972 60,803110,134 102,936 90,376 82,605 77,139 80,055 87,183 83,914 75,979 67,141331 1,783 1,026 1,180 1,532 1,866 2,595 2,1137,780 7,756 7,272 7,288 7,288 8,041 9,529 10,337 10,817 10,1752,930 1,094 3,598 3,667 7,012 8,667 15,337 17,597 12,346 8,07149 1,857 873 614 1,175 394 2,670 1,701 5,078 1,4997,288 12,824 12,571 8,537 19,602 41,141 15,573 (42,874) 8,444 12,400102,882261,968 256,554 364,800 265,298 271,876 303,434 299,645 236,066 268,987 240,8226,986 3,323 10,216 9,617 15,825 19,580 31,244 27,375 16,850 16,592418(7,288) (12,824)

(12,571)

(8,537) (19,602)

(41,141)

(15,573) 42,874 (8,444) (12,400)(302) (9,501) (2,355) 1,080 (3,777) (21,561) 15,671 70,249 8,406 4,610261,666 247,053 362,445 266,378 268,099 281,873 315,316 306,315 277,393 245,432Change in Net PositionGovernmental activities 113,106 82,761 148,518 66,909 10,188 64,772 25,659 (4,113) 61,972 15,372Business-type activities 16,648 26,186 4,192 13,138 (1,984) (20,911) 15,425 35,557 (43,076) 13,408Total government change in net position

$129,754

$108,947

$152,710

$ 80,047" $ 8,204 $ 43,861 $ 41,084 $ 31,444 $ 18,896 $ 28,780Note: Certain reclassifications hove been made to prior fiscal years' data to conform to the current presentation.

Source: Finance Department, City of AnaheimSee accomponied Independent auditors' report106 CITY OF ANAHEIMGovernmental Activities Tax Revenues By SourceLast Ten Fiscal Years (In thousands)

(Accrual basis of accounting)

AmountsMotorProperty Sales Transient VehicleFiscal Property1ax and Use Occupancy License OtherYear Taxes Increments Taxes Taxes Fees' Taxes Total2014 $66,282 $67,505 $110,134

$ 7,780 $251,7012013 64,311 65,445 102,936 $ 331 7,756 240,7792012 58,896 $ 28,6782 59,654 90,376 3 7,272 244,8762011 59,053 47,040 54,711 82,605 1,783 7,288 252,4802010 59,689 47,731 51,214 77,139 1,026 7,288 244,0872009 60,806 47,115 56,035 80,055 1,180 8,041 253,2322008 59,592 45,719 62,510 87,183 1,532 9,529 266,0652007 57,937 40,710 64,878 83,914 1,866 10,337 259,6422006 49,415 37,341 66,972 75,979 2,595 10,817 243,1192005 43,636 34,984 60,803 67,141 2,113 10,175 218,852' The decrease in motor vehicle license fees starting from fiscal year 2005 is due to the shifting of revenue from motor vehicle license fees category to the property tax category.

Thiswas part of the State of California 2004 Budget Act.2 The decrease in property tax increments from fiscal year 2012 was due to the dissolution of Redevelopment Agency on February 1, 2012.' Motor Vehicle License Fees allocation was eliminated per the fiscal year 2012 State Budget.Note: Certain reclassifications have been made to prior fiscal years' data to conform to the current presentation.

Source: Finance Department, City of AnaheimSee accompanied Independent auditors' report107 CITY OF ANAHEIMFund Balances of Governmental FundsLast Ten Fiscal Years (In thousands)

(Modified accrual basis of accounting)

Fiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005General FyndNonspendable Restricted Committed AssignedUnassigned Reserv4dUnreserved

-designated Unreserved

-undesignated Total General FundHousing Authority FundNonspendable Restricted AssignedUnassiged ReservýUnreserved

-undesignated Total Housing Authority FundTransportation Improvement ProjectsReservedRestricted Unassigned Nonmajor Governmental FundsNonspendable Restriced AssignedUnassigned ReservedUnreserved

-designated, reported in:Special revenue fundsDebt service fundsCapital projects fundsUnreserved

-undesignated, reported in:Special revenue fundsCapital projects fundsTotal nonmajor governmental fundsTotal governmental funds'$ 2,099 $ 2,5316,449 1,7667884,073 4,47930,394 29,32043,015 38,8847 3841,134 32,23411,664 11,823$ 3,08298232022,636$ 3,62658214122,13927,020 26,4884229,935 7,77811,237 9,922$ 4,09229,49033,5821,37311,60312,9763,734$ 4,53047,72952,2591,8305,6697,49911,403$ 5,00137,34742,3488306,4747,304$ 8,52547,40955,9341627,9358,097$ 9,70144,97854,6793,9323,932$ 9,89239,17949,0715,6825,68252,805 44,095 41,172 17,742(8,364)(8,364)3,542170,9503,291(10,641)106(3,900)(3,794)4,619164,7648,055(7,331)1,190(11,991)(10,801)1157,7437,400(20,457)3,613(17,387)(13,774)631238,0617,761(16,906)3,734 11,403126,5797,34915631,89914,350(3,376)176,957$227,249131,3577,2114,43341,5445,342(7,037)182,850$254,011138,4026,8091,65632,8094,199(15,551)168,324$217,976120,8852,4152,27638,4304,183(25,687)142,502$206,533110,289 76,5689,102 14,9741,137 1,45745,495 36,49714,902 25,955(22,787)

(4,735)158,138 150,716$216,749

$205,469167,142 170,107 144,687 229,547$254,598

$249,292

$202,078

$260,003' The City implemented Governmental Accounting Standards Board Statement No. 54 (GASB 54) for the Fiscal Year Ended June 30, 2011.Fund balance classifications prior to the implementation of GASB 54 are not available Source: Finance Department, City of AnaheimSee accompanied Independent auditors' report108 CITY OF ANAHEIMChanges in Fund Balances of Governmental FundsLast Ten Fiscal Years (in thousands)

(Modified accrual basis of accounting)

RevenuesProperty taxesProperty tax increments Sales and use taxesTransient occupancy taxesOther taxesLicenses, fees and permitsIntergovernmental revenuesCharges for servicesFines, orfeits and penalties Use of money and propertyOtherTotal revenuesFiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005$ 66,282 $ 64,311 $ 58,896 $ 59,053 $ 59,689 $ 60,806 $ 59,592 $ 57,937 $ 49,415 $ 43,63628,678 47,040 47,731 47,115 45,719 40,710 37,341 34,98468,581 62,793 58,589 55,034 48,210 56,493 64,296 65,695 64,993 59,000110,134 102,936 90,376 82,605 77,139 80,055 87,183 83,914 75,979 67,1417,012 7078 6401 6486 6,303 6451 6753 7531 7862 754221,353 22,305 17,067 18,772 21,580 21,062 24,705 37,991 40,625 18,749215,755 186,018 143,348 150,394 141,418 158,729 135,072 112,593 104,705 102,42332,569 30,883 29,672 24,408 18,351 51 7,874 17,730 16,799 16,216 15,4592,656 2,907 3515 3,304 3,255 3,409 3,767 3,689 3,464 345416,681 8,058 7,1657 10,159 10,236 9,293 16,923 18,208 13,223 9,1446,555 8,926 6 617 43,645 4,009 10,137 3,755 7,601 18,164 6,143547,578 496,215 450,816 500,900 437,921 471,424 465,495 452,668 431,987 367,675Expenditures Tneral government 21,070 18,270 16,502 16,055 15,822 16,953 16,325 15,354 13,667 12,276Police 120,962 117,702 112,656 114,678 115,379 112,057 115,195 109,467 94,602 86,529Fire 57,529 56,127 55,886 55,802 55,713 55,966 54,685 48,201 48,383 44,182Community Development 83,658 86,282 95,352 110,138 126,590 112,406 104,991 94,789 89,098 83,384Plannin 16,086 15,785 14,408 14,560 15,173 15,489 15,949 14,762 13,907 12,313Public Works 29,737 25,387 22,861 27,087 19,957 29,321 25,810 26,820 24,646 22,248Community Services 30602 25268 24,618 27,813 31,311 33,572 35,203 32788 28753 25,724Public Utilities 2:510 2:398 2,313 2,220 1939 1:507 2:120 1,791 1,704 1,557Convention Sports and Entertainment 10,714 10,002 9,725 9,917 6,369 6699 7,390 7,399 6,131 5,140Capital outday 136,597 98,601 55,505 70,918 62,422 52,229 60,906 76,161 77,738 41,301Deb service:Principal 24,220 18,948 16,294 12,219 12,777 16,085 27,472 18,065 19,032 10,134Intqrest charges 18,797 19,808 26,927 33,032 33,509 34,830 28,324 41,187 39,037 38,681Debt issuance costs 227 70 5,182 4,017Total expenditures 552,482 494,578 453,047 494,666 496,961 487,184 499,552 490,801 456,698 383,469Revenues over (under) expenditures (4,904) 1,637 (2,231) 6,234 (59,040)

(15,760)

(34,057)

(38,133)

(24,711)

(15,794)Other financing Sources (Uses)Transfers in 84,813 73,470 131,093 99,571 83,498 121,987 299,410 101,249 95,535 99,166Transfers out (75,953)

(59,393)

(119,552)

(86,621)

(59,970)

(76,304)

(288,985) 91,028) (84,325)

(88,277)Issuance of refu~ndlina[

bonds 5,084 201,680 M5,134Payments to refunded bond escrow agent (5,683) (171,222)

(255,325)

Premium on long-term debt 94 4641Discount on long-term debt (199)Issuance of long-term debt 1,350 31,500 13,570 8,000 2,769 175 18,238 22,583 7,289Capital leases 1,649 2,198Claims settlement proceeds 750 3,848Special items 1,250Extraordinary loss (67,235)Total other financing sources 10,210 45,577 (55,694) 26,520 32,278 51,795 45,500 27,917 35,991 19,428Net change in fund balances

$ 5,306 $ 47,214 $ (57,925)

$ 32,754 $(26,762)

$ 36,035 $ 11,443 $(10,216)

$ 11,280 $ 3,634Debt service as a percentage of non-capital expenditures 10.34% 9.79% 10.87% 10.68% 10.65% 11.71% 12.72% 14.29% 15.32% 14.270/Source: Finance Department, City of AnaheimSee accompanied Independent auditors' report109 CITY OF ANAHEIMGeneral Government Tax Revenues By SourceLast Ten Fiscal Years (In thousands)

(Modified accrual basis of accounting)

SecuredFiscal PropertyYear Taxes2014 $33,976Property TaxesUnsecured Supplemental Property PropertyTaxes TaxesAmounts in DollarsProperty Tax Increments Secured Unsecured Surplemental Property Sales Transient Property Property Property Taxes and Use Occupancy Residual Taxes Taxes Taxes in-lieu of VLFP Taxes TaxesOtherTaxes20132012201120102009200820072006200533,11431,77031,84832,26732,49631,07329,91926,53724,820$ 1,2431,1941,2891,3001,3411,3511,3431,3841,1711,1738062073733857121,3261,5511,8871,8242,834$21,576'36,82438,80937,71034,77229,09027,06725,380$ 6,884'8,8598,2217,9869,1058,5917,9547,802$ 21821,3577011,4191,8423,0292,320.1,80226,36325,63025,53225,69626,24725,85025,08319,82015,819$ 832 $2,873$27,358 $68,581 $110,134

$7,01262,79358,58955,03448,21056,49364,29665,69564,99359,000102,93690,37682,60577,13980,05587,18383,91475,97967,1417,0786,4016,4866,3036,4516,7537,5317,8627,542Total$252,009237,118242,940250,218239,072250,920263,543255,787235,590212,303Collection of property taxes in-lieu of VLF starting in fiscal year 2005 is due to the shifting of revenue from motor vehicle license fees category to the property tax category.

This was part of the State of California 2004 Budget Act.2 Decrease in property tax increments revenues in fiscal year 2012 was due to dissolution of the Redevelopment Agency on February 1, 2012. Property tax increments werereceived up to January 31, 2012.Note: Certain reclassifications have been made to prior fiscal years' data to conform to the current presentation.

Source: Finance Department, City of AnaheimSee accompanied Independent auditors' report110 CITY OF ANAHEIMAssessed Value and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years (In thousands)

(Modified Accrual Basis of Accounting)

Fiscal Year2014 2013 2012 2011 2010City of AnaheimSecured property

$30,548,214

$29,608,967

$28,808,849

$28,600,152

$28,775,989 Unsecured property 1,266,403 1,265,519 1,232,825 1,278,062 1,283,263 Total City of Anaheim 31,814,617 30,874,486 30,041,674 29,878,214 30,059,252 Dissolved Anaheim Redevelopment AgencySecured property 3,916,169 4,338,935 3,977,843 3,751,227 3,762,168 Unsecured property 654,982 683,237 656,505 743,403 762,903Total Anaheim Redevelopment Agency 4,571,151 5,022,172 4,634,348 4,494,630 4,525,071 Total Taxable Assessed Value $36,385,768

$35,896,658

$34,676,022

$34,372,844

$34,584,323 Total Direct Tax Rate 0.11062%

0.11078%

0.11075%

0.11075%

0.11031%Fiscal Year2009 2008 2007 2006 2005City of AnaheimSecured property

$29,329,062

$28,473,221

$26,507,229

$24,081,039

$22,288,504 Unsecured property 1,226,209 1,198,812 2,442,959 1,117,310 1,162,358 Total City of Anaheim 30,555,271 29,672,033 28,950,188 25,198,349 23,450,862 Anaheim Redevelopment AgencySecured property 3,644,931 3,360,645 2,838,528 2,574,542 2,332,303 Unsecured property 789,618 818,255 813,249 734,299 748,144Total Anaheim Redevelopment Agency 4,434,549 4,178,900 3,651,777 3,308,841 3,080,447 Total Taxable Assessed Value $34,989,820

$33,850,933

$32,601,965

$28,507,190

$26,531,309 Total Direct Tax Rate 0.11024%

0.11041%

0.11041%

0.11083%

0.11117%Note: 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 theproperty 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 isonly reassessed 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 datashown 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.Source: Auditor-Controller, California Municipal Statistics, Inc, County of Orange, HdL Coren & ConeSee accompanied Independent auditors' report111 CITY OF ANAHEIMProperty Tax RatesDirect and Overlapping Governments Last Ten Fiscal Years (Rate per $100 assessed value)Fiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005City Direct Ratel"City Basic Rated" 0.10851 0.10851 0.10851 0.10851 0.10816 0.10816 0.10816Anaheim General Obligation Bond Fund 0.00211 0.00227 0.00224 0.00224 0.00215 0.00208 0.002250.11062 0.11078 0.11075 0.11075 0.11031 0.11024 0.11041Overlapping Rates:Anaheim Elementary General Fund 0.29873 0.29873 0.29873 0.29873 0.29778 0.29778 0.29778Anaheim High General Fund 0.19043 0.19043 0.19043 0.19043 0.18982 0.18982 0.18982Educational Revenue Augmentation Fund 0.15592 0.15592 0.15592 0.15592 0.15543 0.15543 0.15543North Orange Co. Community 0.07755 0.07755 0.07755 0.07755 0.07730 0.07730 0.07730College General FundOrange County Cemetery District 0.00057 0.00057 0.00057 0.00057 0.00057 0.00057 0.00057Orange County Department Of Education 0.01579 0.01579 0.01579 0.01579 0.01574 0.01574 0.01574Orange County Flood Control District General 0.02197 0.02197 0.02197 0.02197 0.02190 0.02190 0.02190Orange County General Fund 0.06849 0.06849 0.06849 0.06849 0.06827 0.06827 0.06827Orange County Harbors Beaches & Parks CSA 0.01698 0.01698 0.01698 0.01698 0.01693 0.01693 0.01693Orange County Sanitation District

1. 2 Operating 0.03227 0.03227 0.03227 0.03227 0.03469 0.03469 0.03469Orange County Transportation Authority 0.00312 0.00312 0.00312 0.00312 0.00311 0.00311 0.00311Orange County Vector Control 0.00124 0.00124 0.00124 0.00124 0.00124 0.00124 0.00124Orange County Water District 0.00831 0.00831 0.00831 0.00831 0.00893 0.00893 0.00893Orange County Water District Water Reserve 0.00012 0.00012 0.00012 0.00012 0.00013 0.00013 0.00013Anaheim Elementary School Districts 0.05848 0.05382 0.05371 0.03363 0.03193 0.02248 0.03544Anaheim High School Districts 0.02620 0.02858 0.02678 0.02745 0.02617 0.02363 0.02516North Orange County Community College 0.01704 0.01902 0.01742 0.01758 0.01662 0.01493 0.01502Water District Rate 0.00350 0.00350 0.00370 0.00370 0.00430 0.00430 0.00450Total Direct and Overlapping Rates 1.10733 1.10719 1.10385 1.08460 1.08117 1.06742 1.082370.10816 0.10816 0.108160.00225 0.00267 0.003010.11041 0.11083 0.111170.29778 0.29778 0.297780.18982 0.18982 0.189820.15543 0.15543 0.155430.07730 0.07730 0.077300.00057 0.00057 0.000570.01574 0.01574 0.015740.02190 0.02190 0.021900.06827 0.06827 0.068270.01693 0.01693 0.016930.03469 0.03469 0.034690.00311 0.00311 0.003110.00124 0.00124 0.001240.00893 0.00893 0.008930.00013 0.00013 0.000130.02240 0.02811 0.026410.02355 0.02444 0.027700.01444 0.00520 0.005800.00470 0.01666 0.014411.06734 1.07708 1.07733"' Excludes rates associated with mello-roos districts.

(2) In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1% fixed amount. This 1% is shared by all taxing agencies for which the subject propertyresides.

In 1986, the State Constitution was amended to allow rates over the 1% base rate for voter approved general obligation debt. Valuations of real property are frozen at thevalue of the property in 1975, with an allowable adjustment up to 2% per year for inflation.

However, property is assessed to its current value when a change of ownership occurs.New construction, including tenant improvements, is assessed at its current value.Source: Auditor-Controller, Orange CountySee accompanied Independent auditors' report112 CITY OF ANAHEIMPrincipal Property Tax PayersCurrent Year and Nine Years Ago (In thousands)

Fiscal YearTax PayerWalt Disney World CompanyHHC HA Investment II Inc.Irvine Company LLCPPC Anaheim Apartments Angeli LLCMary Susan SaSamia TrustEssex Anavia LPOTRReef America REIT II Corp.Avalon Anaheim Stadium LPAllstate LiFe Insurance CompanyPan Pacific RetailBoeing North AmericaJoan MTR SchlundLennar Platinum TriangleFairfield

Resorts, Inc.2014Percentage of Total TaxableAssessed AssessedRank Value Value1 13.53% $4,662,929 2 0.57% 195,6453 0.32% 110,5944 0.27% 94,3415 0.26% 88,5426 0.25% 86,8697 0.23% 80,3188 0.22% 76,1879 0.21% 73,90910 0.21% 73,5572005Percentage of Total TaxableAssessed AssessedRank Value Value1 12.87% $3,169,133 6 0.30%73,773930.27% 66,7630.44% 108,4312 0.45%4 0.36%5 0.34%7 0.29%8 0.29%10 0.24%111,28287,51882,68372,41470,50159,102Total16.08% $5,542,891 15.85% $3,901,600 Source: Finance Department, City of Anaheim, California Municipal Statistics, Inc.See accompanied independent auditors' report113 CITY OF ANAHEIMProperty Tax Levies and Collections Last Ten Fiscal Years (In thousands)

Collected within the Total Collected within the TotalFiscal Year of the Levy Collections to Date Fiscal Year of the Levy Collections to DateCollections Collections Total in Total Tax inFiscal Taxes Percentage Subsequent Percentage Increments Percentage Subsequent Percentage Year Levy Amount' of Levy Years Amount of Levy _Levy Amount2 of Levy Years Amount of Levy2014 $36,293 $35,558 97.97% $ 133 $35,691 98.34%2013 34,813 34,116 98.00% 384 34,500 99.10%2012 33,598 32,560 96.91% 512 33,072 98.43% $49,004 $28,3272 57.81% $28,327 57.81%2011 33,512 32,517 97.03% 558 33,075 98.70% 49,294 45,906 93.13% $ 282 46,188 93.70%2010 33,627 32,490 96.62% 796 33,286 98.99% 49,119 46,584 94.84% 524 47,108 95.91%2009 34,579 33,068 95.63% 1,231 34,299 99.19% 48,432 46,057 95.10% 622 46,679 96.38%2008 34,283 32,798 95.67% 1,237 34,035 99.28% 46,785 44,793 95.74% 552 45,345 96.92%2007 33,897 32,324 95.36% 789 33,113 97.69% 42,472 39,807 93.73% 549 40,356 95.02%2006 30,123 29,187 96.89% 446 29,633 98.37% 38,278 36,692 95.86% 669 37,361 97.60%2005 28,106 27,452 97.67% 341 27,793 98.89% 35,284 33,819 95.85% 321 34,140 96.76%Excludes property taxes in-lieu of vehicle license fees.2 Decrease in property tax collection is due to the dissolution of the Redevelopment Agency on February 1, 2012. Property tax increments were received upto January 31, 2012.Note: Certain reclassifications have been made to prior fiscal years' data to conform to the current presentation.

Source: Auditor-Controller, County of OrangeSee accompanied Independent auditors' report114 CITY OF ANAHEIMRatios of Outstanding Debt by TypeLast Ten Fiscal Years (In thousands, except per capita amount)Fiscal Year2014 2013 2012 2011 2010Governmental Activities Bonds $ 614,757 $ 616,086 $ 616,444 $ 821,587 $ 810,504Certificates of participation 8,880 10,020 11,085 12,070 12,990Notes and loans 50,757 54,877 25,546 34,566 29,094Capital leases 1,325 1,369 1,694 2,341 2,605Total governmental activities 675,719 682,352 654,769 870,564 855,193Business-Type Activities Bonds 780,553 863,987 889,581 908,683 805,925Certificates of participation 38,000 38,000 38,000 38,000 38,000Notes and loans 48,271 62,722 24,652 30,519 11,379Capital leasesTotal business-type activities 866,824 964,709 952,233 977,202 855,304Total Government

$1,542,543

$1,647,061

$1,607,002

$1,847,766

$1,710,497 Percentage of Personal Income 18.88% 19.74% 20.95% 24.57% 23.32%Per Capita $ 4,429 $ 4,758 $ 4,674 $ 5,418 $ 5,088Fiscal Year2009 2008 2007 2006 2005Governmental Activities Bonds $ 805,068 $ 793,343 $ 740,107 $ 740,959 $ 739,775Certificates of participation 13,840 23,333 26,788 30,066 33,174Notes and loans 24,621 27,538 57,614 43,342 28,669Capital leases 1,235 2,353 2,484 2,220 1,523Total governmental activities 844,764 846,567 826,993 816,587 803,141Business-Type Activities Bonds 829,707 689,791 706,126 513,874 528,130Certificates of participation 38,000 88,185 96,475 125,087 132,952Notes and loans 12,299 13,189 14,081 14,976 15,842Capital leases 267 275 180Total business-type activities 880,006 791,165 816,949 654,212 677,104Total Government

$1,724,770

$1,637,732

$1,643,942

$1,470,799

$1,480,245 Percentage of Personal Income 23.96% 21.93% 22.17% 20.01% 21.48%Per Capita $ 5,193 $ 4,953 $ 4,985 $ 4,465 $ 4,466Note: Per capita amounts are estimates.

Certain reclassifications have been made to prior year data to conform to current presentation.

Sources:

California State Department of Finance and Finance Department, City of AnaheimUS Census Yearly American Community SurveySee accompanied Independent auditors' report115 CITY OF ANAHEIMRatios of Net General Bonded Debt Outstanding Last Ten Fiscal Years (In thousands, except per capita amount)BondsGeneral Obligation Lease Revenue'Tax Allocation Less amounts available in debt service fundTotal net obligation bonds outstanding Percentage of Assessed Value of PropertyPer capita2014$ 1,995612,762614,75773,500$541,2571.49%$ 1,5542013$ 2,605613,481616,08661,625$554,4611.54%$ 1,602Fiscal Year2012$ 3,185616,444619,62953,398$566,2311.63%$ 1,6472011$ 3,735609,683208,169821,58767,363$754,2242.19%$ 2,2122010$ 4,255605,252200,997810,50469,043$741,4612.14%$ 2,205Fiscal Year2009 2008 2007Bonds2006 2005General Obligation Lease RevenueTax Allocation Less amounts available in debt service fundTotal net obligation bonds outstanding Percentage of Assessed Value of PropertyPer capita$ 4,750600,064200,254805,06863,560$741,5082.12%$ 2,233$ 5,220588,692199,431793,34357,995$735,3482.17%$ 2,224$ 5,700582,272152,135740,10739,075$701,0322.15%$ 2,126$ 6,170575,125159,664740,95939,232$701,7272.46%$ 2,130$ 6,625569,016164,134739,77530,812$708,9632.67%$ 2,139Lease revenue total includes accretion payable.Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.

Certain reclassifications have been made to prior year data to conform to the current presentation.

Source: Finance Department, City of AnaheimSee accompanied Independent auditors' report116 CITY OF ANAHEIMDirect and Overlapping Governmental Activities DebtAs of June 30, 2014 (In thousands) 2013-14 Assessed Valuation DIRECT TAX AND ASSESSMENT DEBT:City of AnaheimDIRECT GENERAL FUND DEBT:City of Anaheim General Fund Obligations TOTAL GROSS DIRECT DEBTLess: City of Anaheim Public Financing Authority (100% self-supporting)

City of Anaheim various revenue funds (100% self-supporting)

TOTAL NET DIRECT DEBTOVERLAPPING TAX AND ASSESSMENT DEBT:Metropolitan Water DistrictNorth Orange Joint Community College DistrictRancha Santiago Community College DistrictAnaheim Union High School DistrictFullerton Joint Union High School DistrictGarden Grove Unified School DistrictPlacentia

-Yorba Unda Unified School DistrictAnaheim School DistrictMagnolia School DistrictOther School Districts City of Anaheim Community Facilities Districts Orange Unified School District Community Facilities Districts TOTAL OVERLAPPING TAX AND ASSESSMENT DEBTOVERLAPPING GENERAL FUND DEBT:Orange County General Fund Obligations Orange County Pension Obligations Orange County Board of Education Certificates of Participation Municipal Water District of Orange County Certificate of Participation North Orange County Regional Occupation Program Certificates of Participation Orange Unified School District Certificates of Participation Orange Unified School District Benefit Obligations Placentia-Yorba Linda Unified School District Certificates of Participation Anaheim Union High School District Certificates of Participation Fullerton Joint Union High School District Certificates of Participation Fullerton School District Certificates of Participation TOTAL GROSS OVERLAPPING GENERAL FUND OBUGATION DEBTOVERLAPPING TAX INCREMENT DEBT (Successor Agency):City of Anaheim Tax Allfcation BondsOrange County Neighborhood Project Tax Allocation BondsTOTAL OVERLAPPING TAX INCREMENT DEBTTOTAL GROSS OVERLAPPING DEBTTOTAL NET OVERLAPPING DEBTGROSS COMBINED TOTAL DEBTNET COMBINED TOTAL DEBT$36,385,768 Total Debt6/30/2014

$ 132,275201,239285,430100,32450,238244,995257,071151,62117,67899,83337,3007,6001,585,604 145,47632,19515,5007,77510,69033,19286,665107,23636,17822,2256,160503,292% Applicable(1) 1.663%28.23812.69568.2950.2550.59619.66699.22167.688Various100.0004.098-100.000 8.224%8.2248.2240.00129.09526.16026.16019.66668.2950.2550.173100.0000.084Outstanding

$F 1,995673,724675,719612,76252,08210,875City's Shareof Debt6/30/2014

$ 2,20056,82636,23568,5161281,46050,556150,44011,96621,94037,3001,529439,09611,9642,6481,2753,1058,68322,67221,08924,708571196,212205,70513205,718741,026741,0261,416,745 (2)$ 751,901205,70515,285117(continued)

CITY OF ANAHEIMDirect and Overlapping Governmental Activities DebtAs of June 30, 2014 (in thousands)

(continued)

(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city.(2) Excludes tax and revenue anticipation notes, enterprise

revenue, mortgage

revenue, and tax allocation bonds and non-bonded capital lease obligations.

Ratios to 2013-14 Assessed Valuation:

Direct Debt ($1,995) 0.01%Total Direct and Overlapping Tax and Assessment Debt 1.21%Ratios to Adjusted Assessed Valuation:

Gross Combined Direct Debt ($675,719) 1.86%Net Combined Direct Debt ($10,875) 0.03%Gross Combined Total Debt 3.89%Net Combined Total Debt 2.07%Ratios to Redevelopment Increment Valuation

($4,571,151)

Total Overlapping Tax Increment Debt 4.50%Source: California Municipal Statistics, Inc.Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debtof those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the government's ability to issueand 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 isa resident, and therefore responsible for repaying the debt, of each overlapping government.

See accompanied Independent auditors' report118 CITY OF ANAHEIMLegal Debt MarginLast Ten Fiscal Years (in thousands)

Debt limitTotal net debt applicable to limitLegal debt marginTotal net debt applicable to the limit as a percentage of debt limitLegal Debt MarginAssessed valueDebt limit (15% of total assessed value)2014$ 4,582,232 (1,995)$ 4,580,237 0.04%2013$ 4,441,345 (2,605)$ 4,438,740 0.06%Fiscal Year2012$ 4,321,327 (3,185)$ 4,318,142 0.07%2011$ 4,290,023 (3,735)$ 4,286,288 0.09%2010$ 4,316,398 (4,255)$ 4,312,143 0.10%$30,548,214

$29,608,967

$28,808,849

$28,600,152

$28,775,989 4,582,232 4,441,345 Debt limitTotal net debt applicable to limitLegal debt marginTotal net debt applicable to the limit as a percentage of debt limitLegal Debt MarginAssessed valueDebt limit (15% of total assessed value)2009$ 4,399,359 (4,750)$ 4,394,609 0.11%2008$ 4,270,983 (5,220)$ 4,265,763 0.12%4,321,327 Fiscal Year2007$ 3,976,084 (5,700)$ 3,970,384 0.14%4,290,023 2006$ 3,612,156 (6,170)$ 3,605,986 0.17%2005$ 3,343,276 (6,625)$ 3,336,651 0.20%4,316,398

$29,329,062

$28,473,221

$26,507,227

$24,081,039

$22,288,504 4,399,359 4,270,983 3,976,084 3,612,156 3,343,276 Note:Under State Finance Law, the City's outstanding general obligation debt should not exceed 15 percent of total assessed property value. By law, the general obligation debt subjectto the limitation may be offset by amounts set aside for repaying general obligation bonds.Source: Finance Department, City of AnaheimSee accompanied Independent auditors' report119 CITY OF ANAHEIMPledged-Revenue CoverageLast Ten Fiscal Years (In thousands)

Redevelopment

-Tax Allocation Revenue Bonds2FiscalYear20112010200920082007200620052004TaxIncrement Revenue$45,94046,65246,10145,71940,71037,34134,98431,650LessOperating Expenses'

$ 8,84821,4095,3004,7222,7295,1965,3613,321NetAvailable Revenue$37,09225,24340,80140,99737,98132,14529,62328,329Debt ServicePrincipal

$ 556,0003,9832,9773,0144,620Interest$10,86210,76610,7666,27513,41711,72711,7009,996Total$10,91710,76610,76612,27517,40014,70414,71414,616Coverage3.39762.34473.78983.33992.18282.18612.01331.9382Operating expenses consist of SERAF contributions and pass through agreements.

2 The Redevelopment Agency dissolved on February 1, 2012.Electric Utility Revenue BondsFiscalYear2014201320122011201020092008200720062005ElectricRevenue$430,782453,949407,787391,218390,364378,916373,842330,421336,091297,443LessOperating Expenses3$347,290349,835314,231309,274309,112300,269299,534265,340268,274218,562NetAvailable Revenue$ 83,492104,11493,55681,94481,25278,64774,30865,08165,81778,881Debt ServicePrincipal

$11,59018,99518,17517,82515,99515,37014,69013,76513,14515,875Interest$30,03933,33534,10430,82531,78828,79829,45024,42425,13224,780Total$41,62952,33052,27948,65047,78344,16844,14038,18938,27740,655Coverage2.00561.98961.78961.68441.70041.78061.68351.70421.77171.9403Operating expenses excludes amortization and depreciation.

Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.

Source: Finance Department, City of Anaheim(continued) 120 CITY OF ANAHEIMPledged-Revenue CoverageLast Ten Fiscal Years (In thousands)

(continued)

Water Utility Revenue BondsLess NetFiscal Water Operating Available Debt ServiceYear Revenue Expenses4 Revenue Principal Interest Total Coverage2014 $66,979 $50,046 $16,933 $ 920 $4,217 $5,137 3.29632013 61,849 44,838 17,011 950 4,255 5,205 3.26822012 59,330 44,615 14,715 915 4,292 5,207 2.82602011 56,935 45,293 11,642 880 3,275 4,155 2.80192010 57,787 45,231 12,556 1,490 2,544 4,034 3.11252009 53,039 40,123 12,916 1,435 1,967 3,402 3.79662008 51,052 41,190 9,862 1,375 325 1,700 5.80122007 51,595 43,203 8,392 1,325 379 1,704 4.92492006 47,904 39,110 8,794 1,870 450 2,320 3.79052005 44,484 33,312 11,172 1,340 485 1,825 6.1216Operating expenses excludes amortization and depreciation.

Sanitation Revenue BondsLess Net Debt ServiceFiscal Wastewater Operating Available Year Revenue' Expenses6 Revenue Principal Interest Total Coverage2014 $12,572 $5,594 $6,978 $920 $2,079 $2,999 2.32682013 12,106 5,477 6,629 880 2,118 2,998 2.21112012 11,933 4,832 7,101 835 2,161 2,996 2.37022011 11,813 4,030 7,783 805 2,193 2,998 2.59612010 11,773 5,452 6,321 775 2,224 2,999 2.10772009 10,913 5,176 5,737 2,224 2,224 2.57962008 10,299 5,167 5,132 1,532 1,532 3.34992007 10,113 6,734 3,379' Amounts based on the notes to the basic financial statement, segment reporting.

' Operating expenses excludes amortization and depreciation.

Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.

Source: Finance Department, City of AnaheimSee accompanied Independent auditors' report121 CITY OF ANAHEIMDemographic and Economic Statistics Last Ten Fiscal YearsFiscalYear2014201320122011201020092008200720062005Population"'3 348,305346,161343,793341,034336,208332,120330,659329,780329,373331,458PersonalIncome(thousands of dollars)$8,647,769 8,344,211 7,669,678 7,519,459 7,333,705 7,198,701 7,467,272 7,416,752 7,351,605 6,892,338 PerCapitaPersonalIncome$24,828*1 24,10522,30922,04921,81321,67522,58322,49022;32020,794MedianAge")32.432.432.432.432.432.432.432.432.432.4Education Level inYears ofSchooling 12.212.212.212.212.212.212.212.212.212.2SchoolEnrollment 64,52864,46367,76067,88468,33168,89068,66369,29670,79371,314OrangeCountyUnemployment Rate6.20%6.10%7.90%9.20%9.50%9.30%5.30%3.90%3.70%3.90%"I Population and Median Age were updated to reflect Census 2010 counts.121 Per capita income for FY 2014 is estimated.

Data not readily available.

Sources:

California State Department of FinanceAnaheim City Superintendent of SchoolsState of California, Employment Development Department State Department of Commerce and LaborState Department of Education US Census Yearly American Community SurveySee accompanied Independent auditors' report122 CITY OF ANAHEIMPrincipal Employers Current Year and Nine Years AgoFiscal Year20142005EmployerDisneyland ResortKaiser Foundation HopitalHilton AnaheimAnaheim Regional Medical CenterMiller's Precision GrindingL-3 Communications Angels BaseballTime WarnerAnaheim Marriott HotelG4S Secure Solutions, IncWest Anaheim Medical CenterBoeing North AmericaAlstyle ApparelArrowhead Pond of AnaheimLong Beach MortgageAnaheim Sports, IncAdvantage Sales and Marketing Aramark at Angels StadiumDDI CorpFirst American Real EstateSpecialty Restaurant CropTotalRank123456788910Employees 23,4026,0701,5721,3001,2001,0701,050900900800750Percentage of TotalCityEmployment 14.6%3.8%1.0%0.8%0.8%0.7%0.7%0.6%0.6%0.5%0.5%Rank1364Employees 22,6501,5009001,185Percenta eof TotalCityEmployment 14.4%1.0%0.6%0.8%0.4%2.2%1.0%0.6%0.5%O.4%0.4%0.4%0.4%O.4%8 7002 3,5003 1,5005 1,0007 8008 7008 7008 7008 7008 70039,014 24.4%37,235 23.7%Note: Statistics prior for Fiscal Year 2004 is not readily available.

Source: Inside Prospects DatabaseSee accompanied Independent auditors' report123 (This page left blank intentionally) 124 CITY OF ANAHEIMFull-time Equivalent City Government Employees by Function/Program Last Ten Fiscal YearsFiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Function/Program City Council 7 7 7 7 7 7 7 7 7 7City Administration 20 20 21 21 24 24 24 22 19 18City Attorney 31 30 30 30 35 35 35 35 32 32City Clerk 7 7 6 6 7 7 7 7 7 7Human Resources 37 38 36 36 40 40 40 40 38 37Finance 32 32 34 35 40 41 42 42 42 42City Treasurer 12 12 12 12 12 12 12 12 12 12Police 549 536 530 554 610 610 604 591 582 570Fire 262 262 275 277 289 289 290 290 288 285Community Development 68 78 102 105 106 109 108 114 120 119Planning 71 69 73 75 93 94 97 96 95 96Public Works 236 234 235 252 252 252 252 249 247 245Community Services 87 87 115 123 180 183 184 183 183 179Public Utilities 353 352 355 377 377 377 367 354 337 335Convention, Sports and Entertainment 84 83 91 91 91 91 88 88 86 86Total 1,856 1,847 1,922 2,001 2,163 2,171 2,157 2,130 2,095 2,070Source: City of AnaheimSee accompanied Independent auditors' report125 CITY OF ANAHEIMOperating Indicators by FunctionLast Ten Fiscal YearsFiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Function/Program Police Department Number of calls for service 186,042 186,461 189,751 195,587 185,934 191,037 196,241 203,832 173,669 173,669Number of 911 calls received 145,813 182,856 179,313 165,698 140,529 129,998 125,174 134,938 103,586 92,710Number of Part I Crimes per 100,000 population 2,883 3,326 3,057 2,886 2,857 2,764 2,899 3,042 3,042 3,250Number of Arrest 11,846 11,617 11,494 13,345 17,650 15,951 16,212 14,135Number of Field Reports processed by Records Bureau 38,362 39,066 33,050 35,807 35,256 37,999 40,232 43,000 54,401 62,842Number of traffic collisions 4,686 4,414 4,044 4,046 4,027 4,251 4,626 4,461 4,837 5,055Number of Hours of Volunteer service 24,124 23,470 25,309 20,335 18,038 16,201 16,820 15,654Fire Department Fire responses 885 902 923 983 1,275 1,016 1,082 649 687 519False alarm responses 1,735 1,424 1,390 1,487 1,467 1,503 1,398 719 678 581Mutual aid responses 3,001 2,860 2,744 2,707 2,560 2,532 2,662 2,296 2,271 2,530Medical responses 24,912 24,735 23,061 22,202 24,045 21,553 21,301 16,326 16,679 13,783Hazardous condition responses 211 207 201 199 207 224 203 263 322 138Public WorksCenterfine miles of arterial highway pavement improved 7.13 5.9 8.7 5.8 9.0 8.1 9.1 8.7 3.5 2.9Square feet of deteriorated pavement replaced 4,345,480 4,029,806 2,977,482 4,274,463 820,000 780,500 890,500 890,500 920,500 910,250Square feet of deteriorated pavement slurry sealed 4,422,148 2,850,939 4,208,194 4,167,569 1,975,000 2,532,000 3,483,000 3,483,000 3,522,000 4,175,500 Number of traffic intersections maintained 327 318 318 319 318 318 316 316 308 15Number of traffic control hubs maintained 19 18 18 18 18 17 16 16 15 1Square feet of deteriorated sidewalk replaced 96,399 77,590 74,780 62,940 60,000 50,500 50,200 50,200 46,500 48,850Linear feet of damaged curb/gutter replaced 29,996 25,187 27,661 24,755 11,500 12,500 11,500 11,500 11,500 1,350Square feet of medians/parkways maintained 5,644,799 5,644,818 5,511,065 5,460,655 5,400,000 5,350,000 5,350,000 5,350,000 5,212,600 5,209,500 Square feet of landscape maintained in the Anaheim Resort 1,542,442 1,430486 1,430,486 1,430,486 1,430,486 1,419,286 1,419,286 1,419,286 1,419,286 1,419,286 Square feet of hardscape maintained in the Anaheim Resort 991,360 858,828 858,828 1,001,743 858,828 858,828 858,828 858,828 858,828 858,828Number of vehicles maintained 1,144 1,106 1,152 1,162 1,331 1,331 1,351 1,283 1,273 1,273Number of vehicles per mechanic 58 58 50 47 50 55 59 48 50 50Square feetof interior space maintained 2,700,000 2,362,992 2,176,265 2,176,265 2,176,265 2,176,265 2,176,265 1,941,287 1,882,400 1,882,400 Square feet of exterior space maintained 37,655,278 37,645,278 39,138,187 39,138,187 39,138,187 39,138,187 39,138,187 35,298,000 35,238,900 35,238,900 Number of facility square feet (interior) per worker 150,000 139,000 120,904 114,540 103,631 103,631 103,631 77,651 75,296 75,500Number of construction projects 165 120 100 136 130 130 132 167 158 130Number of permit inspections 486 380 404 355 800 800 802 1,623 1,567 1,659ParksNumber of park acres maintained per fll-time equivalent emplaee 75 75 75 75 12.00 12.00 10.52 10.52 10.52 10.39Number of sports fields prepared 66 66 66 66 66 66 66 66 66 66Cost per acre of parks maintained.

$8,438 $8,192 $8,031 $8,333 $9,651 $9,950 $10,699 $10,288 $9,960 $8,791Cost per sports field maintained.

$4,387 $4,260 $4,133 $4,261 $5,134 $5,134 $4,937 $4,747 $4,596 $4,828Golf CoursesCost per acre ofgolf course maintained

$9,931 $9,595 $9,010 $9,569 $11,327 $10,674 $10,617 $10,305 $9,625 $9,242Number of rounds played 117,652 118,879 120,675 116,287 124,404 137,948 153,661 157,649 160,614 156,991Number of acres maintained 200 200 200 200 200 200 200 200 200 200 126(continued)

CITY OF ANAHEIMOperating Indicators by FunctionLast Ten Fiscal Years(continued)

Fiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Function/Program City Libraries Hours open 16,820 16,243 15,530 15,364 18,944 19,290 20,292Total circulation of materials, including eBooks 1,397,239 1,520,841 1,635,627 1,700,104 1,655,922 1,721,779 1,658,731 1,630,580 1,540,147 1,422,072 Patron assistance (reference, information, computer) 240,287 291,960 347,085 397,287 530,364 537,807 461,819 350,325 365,142 375,944Patron visits 1,264,972 1,317,689 1,321,309 1,403,995 1,572,138 1,752,838 1,615,640 1,545,205 1,375,679 1,147,079 Library cardholders 186,891 158,396 157,278 156,444 149,501 138,826 147,638 161,278 139,611 114,700Programs offered 3,397 3,097 3,235 3,927 3,991 4,777 4,410 3,923 2,740 3,559Program attendance 111,380 102,728 101,696 124,401 146,357 158,669 152,532 129,661 84,631 79,912Hours of public internet usage 209,953 237,340 220,930 209,673 246,676 277,097 242,734 192,817 170,254 154,927Community Services ProgramsNumber of youth program participants 126,429 136,345 129,215 110,013 134,611 146,381 455,725 362,839 362,839 354,505Number of youth program participants in recreation classes 13,897 10,906 9,213 10,231 10,125 16,332 16,006 13,675 15,200 14,886Number of adult program sports teams 791 841 845 908 885 875 840 756 812 820Number of park ranger contacts 263,765 233,308 275,014 232,132 187,000 208,176 161,038 140,000 139,773 88,935Public Utilities Department Electric Utility:Number of meters 115,474 115,418 115,113 114,662 113,434 112,548 111,784 111,319 110,729 110,635Megawatt-hours

-soles 4,065,552 3,312,018 2,966,119 2,976,014 3,344,188 3,208,123 2,979,396 3,233,508 3,223,728 3,090,382 Megawatt-hours

-purchased pawer 3,751,220 3,029,766 2,707,466 2,737,174 3,085,358 2,836,962 2,978,800 2,780,318 2,606,275 2,459,836 Megawatt-hours

-owned generation 467,348 410,601 430,323 431,027 410,784 435,835 301,021 696,563 929,787 936,471Water Utility:Number of meters 63,002 62,917 62,793 62,717 62,607 62,456 62,436 62,372 62,045 61,883Millions of gallons sold 20,743 20,464 19,672 19,526 20,492 22,238 23,154 24,075 22,887 22,550Millions of gallons purchased from Metropalitan Water District 5,286 6,878 7,023 7,398 8,054 6,614 4,978 8,049 10,188 9,144Millions of gallons pumped from water system wells 16,749 14,659 14,100 13,399 14,669 17,034 18,961 16,844 13,580 14,244Anaheim Convention CenterNumber of events servicedNumber of attendees Percentage of occupancy 221 263 222 200 232 310 339 347 337 3101,020,000 1,070,000 1,059,000 935,000 944,000 917,000 1,008,000 1,098,000 1,002,000 1,202,000 63.0% 58.0% 62.0% 56.0% 68.0% 56.0% 61.0% 70.0% 58.0% 66.0%Source: Various City Departments See accompanied Independent auditors' report127 CITY OF ANAHEIMCapital Assets Statistics by FunctionLast Ten Fiscal YearsFiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Function/Program Police Department Police Facilities Motorized Equipment Police Helicopters Shooting RangeCommunication/Radio TowerFixed Wing102472111102473111117910242317410242311111691025041174102664111117492553117982513111117962483101724310772Fire Department Fire stationsTraining centerFire trucks, engines, and other vehiclesPublic WorksStreets (center lane miles)Traffic signalsSewers (miles)Storm Drains (miles)1174578 578 578 578 588 633 633 633 633 588340 318 318 318 306 318 314 312 312 309575.52 575.52 573.63 570.44 569.60 568.30 565.70 561.50 560.00 560.00151.30 151.30 151.24 151.24 151.24 148.00 148.00 148.00 148.00 148.00ParksCommunity parksMini parksNeighborhood parksSpecial use parksGolf Courses1172171172171172171172171172161172161162061162061162061162162 2 2 2 2 2 2 2 2 2City Libraries Branch libraries Book mobilesMuseums/Historic properties 7 7 7 7 7 7 7 6 51 1 1 1 2 2 2 2 25 5 5 5 5 3 3 3 14(continued) 128 CITY OF ANAHEIMCapital Assets Statistics by FunctionLast Ten Fiscal Years(continued)

Fiscal Year2014 2013 2012 2011 2010 2009 2008 2007 2006 2005Function/Program Public Utilities Department Electric Utility:Transmission, 69 kV, circuit milesDistribution, 12 kV and lower, circuit milesOverheadUnderground Water Utility:Active WellsReservoirs Water Mains (miles)Fire Hydrants86 87 86 90 80 80 80 77 69 7042066617147537,83242666218147537,81642865618147537,81244065818147527,80244661718137537,80544662518137507,75145361521137507,74945858219137477,73046856421137467,72080062023137477,848Anaheim Convention CenterSquare footage available Number of exhibit halls1,130,000 1,130,000 5 51,130,000 1,130,000 1,130,000 1,130,000 5 5 5 51,130,000 1,130,000 1,130,000 1,130,000 5 5 5 5Source: Various City Departments See accompanied Independent auditors' report129 CITY OFANAHEIMLegend* CITY HALL200 S. ANAHEIM BLVD.A FIRE STATIONSPOLICE STATIONSSLIBRARIES CITY FACILITIES

• HEUPORTPARKS1. HANSEN PARK1300 S. Knott St.2. REID PARK3100 W. Orange Ave.3. SCHWEITZER PARK238 S. Bel Air St.4. MAXWELL PARK2660 W. Orange Ave.5. PETER MARSHALL PARK801 N. Magnolia Ave.6. BROOKHURST COMMUNITY PARK2271 W. Cresent Ave.7. JOHN MARSHALL PARK2066 Falmouth Ave.8. MODJESKA PARK1331 S. Nutwood St.9. CLARA BARTON PARK1926 Clearbrook Ln.10. CHAPARRAL PARK1770 E. Broadway11. WILLOW PARK1625 W. Crone Ave.12. PALM LANE PARK1595 Petais Rd.13. SAGE PARK1313 Lido Pl.14. STODDARD PARK901 S. Ninth St.15. MANZANITA PARK1260 Riviera St16. LA PALMA PARK & STADIUM1151 La Palms Park Way17. PEARSON PARK400 N. Harbor Blvd,18. LITTLE PEOPLES PARK220 W. Elm St.19. JULIANNA PARK309 E. Juliana St.20. GEORGE WASHINGTON PARK250 E. Cypress St.21. COLONY SQUARE210 E. Lincoln Ave.22. WALNUT GROVE PARK905 S. Anaheim Blvd.23. CITRUS PARK104 S. Atchison St24. PONDEROSA PARK2100 S. Heaster St.25. LINCOLN PARK1440 E. Lincoln Ave.26. EDISON PARK1145 Baxter St.27. BOYSEN PARK951 State College Blvd.28. JUAREZ PARK841 S. Sunkist St.29. PIONEER PARK2565 E. Underhil Ave.30. RIO VISTA PARK201 N. Park Vista SL31. OLIVE HILLS PARK4200 Nohl Ranch Rd.32. RIVERDALE PARK4545 E. Riverdale Ave.33. PERALTA CANYON PARK115 N. Pinney Dr.34. PELANCONI PARK222 S. Avenida Margarita

35. IMPERIAL PARK450 S. Imperial Hwy.36. EUCALYPTUS PARK100 N. Quintana Dr.37. OAK PARK6400 E. Nohl Ranch Rd.38. YORBA REGIONAL PARK7600 E. La Palma Ave.39. OAK CANYON NATURE CENTER6700 Walnut Canyon Rd.40. SYCAMORE PARK8268 Monte Vista Rd.41. CANYON RIM PARK7305 E. Canyon Rim Rd.42. RONALD REAGAN PARK945 S.Weir Canyon Rd.43. ROOSEVELT PARK8160 E.Bauer Rd.44. ROSS PARK1280 W. Santa Ana St.45. COTTONWOOD PARK853 W. Cottonwood Cir.46. DEER CANYON PARKMohler & Santa Ana Rd.47. FOUNDERS PARK400 N. West St48. COLONY PARK501 E. Water St.49. ENERGY FIELD1625 S. Ninth St.50. MAGNOLIA PARK1515 Wright Cir.51. FRIENDSHIP PLAZA PARK200 S. Anaheim Blvd.52. ANAHEIM COVES962 S. Rio Vista St.130

Anaheim, California Comprehensive AnnualFinancial ReportYear Ended June 30, 2014Seizing Our Destiny:

The Movement for Riverside's Prosperous Future CITY OF RIVERSIDE, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORTFOR FISCAL YEAR ENDED JUNE 30, 2014Prepared by theBrent A. Mason,Finance Department Finance Director/Treasurer 3900 Main Street, Riverside, California 92522 (951) 826-5660This report was printed on recycled stock CITY OF RIVERSIDE COMPREHENSIVE ANNUAL FINANCIAL REPORTYEAR ENDED JUNE 30, 2014TABLE OF CONTENTSINTRODUCTORY SECTION PageL etter of T ransm ittal .........................................................................................................

iGFOA Certificate of Achievement

......................................................................................

vLegislative and C ity O fficials

..............................................................................................

viO rganization C hart ..........................................................................................................

viFINANCIAL SECTIONR eport of Independent A uditors ...........................................................................................

1Management's Discussion and Analysis

.................................................................................

3Basic Financial Statements:

Government-wide Financial Statements:

Statem ent of N et Position

........................................................................................

19Statem ent of A ctivities

...........................................................................................

20Fund Financial Statements:

Balance Sheet -Governmental Funds ..........................................................................

21Reconciliation of the Balance Sheet of Governmental Funds to Statement of Net Position

............

22Statement of Revenues, Expenditures and Changes in Fund Balances

-Governmental Funds .........

23Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances ofGovernmental Funds to the Statement of Activities

.....................................................

24Statement of Revenues, Expenditures and Changes in Fund Balances

-Budget and Actual -G eneral Fund ..........................................................................................

...... 25Statement of Net Position

-Proprietary Funds ...............................................................

26Statement of Revenues, Expenses and Changes in Fund Net Position

-Proprietary Funds ............

28Statement of Cash Flows -Proprietary Funds ................................................................

29Statement of Net Position/(Deficit)

Fiduciary Funds ...................................................................

31Statement of Changes in Net Position/(Deficit)

Fiduciary Fund -Private-Purpose Trust ..............

32Notes to Basic Financial Statements

.............................................................................

33Required Supplementary Information (Unaudited)

..............................................................

63Combining and Individual Fund Statements and Schedules:

Combining Balance Sheet -Nonmajor Governmental Funds ..............................................

65Combining Statement of Revenues, Expenditures and Changes in Fund Balances

-NonmajorG overnm ental Funds .......................................................................................

67Schedule of Revenues, Expenditures and Changes in Fund Balances

-Budget and Actual -Nonmajor Governmental Funds ............................................................................

69Combining Statement of Net Position

-Nonmajor Enterprise Funds .......................................

73Combining Statement of Revenues, Expenses and Changes in Net Position

-Nonmajor Enterprise F unds .....................................................................................................

...... 7 5 CITY OF RIVERSIDE COMPREHENSIVE ANNUAL FINANCIAL REPORTYEAR ENDED JUNE 30, 2014TABLE OF CONTENTSFINANCIAL SECTION (CONT.)Combining Statement of Cash Flows -Nonmajor Enterprise Funds .......................................

Combining Statement of Net Position

-Internal Service Funds .............................................

Combining Statement of Revenues, Expenses and Changes in Net Position

-Internal ServiceF u n d s ..........................................................................................................

Combining Statement of Cash Flows -Internal Service Funds .............................................

Combining Statement of Changes in Assets and Liabilities

-Agency Fund ...............................

Capital Assets Used in the Operation of Governmental Funds:Schedule by Source ..........................................................................................

STATISTICAL SECTIONTableI Net Position by Component

-Last Ten Fiscal Years ..........................................................

2 Changes in Net Position

-Last Ten Fiscal Years ...............................................................

3 Fund Balances of Governmental Funds -Last four Fiscal Years ......................................................

4 Changes in Fund Balances of Governmental Funds -Last Ten Fiscal Years .............................

5 Business-Type Activities Electricity Revenues By Source -Last Ten Fiscal Years ......................

6 Governmental Activities Tax Revenues By Source -Last Ten Fiscal Years ...............................

7 Assessed Value and Estimated Actual Value of Taxable Properiy

-Last Ten Fiscal Years ............

8 Direct and Overlapping Property Tax Rates -Last Ten Fiscal Years ......................................

9 Principal Property Taxpayers

-Current Year and Nine Years Ago .........................................

10 Property Tax Levies and Collections

-Last Ten Fiscal Years ...............................................

II Electricity Sold by Type of Customer-Last Ten Fiscal Years .............................................

12 Electricity Rates -Last Ten Fiscal Y ears ........................................................................

13 Top 10 Electricity Customers

-Current Year and Nine Years Ago .........................................

14 Ratios of Outstanding Debt by Type -Last Ten Fiscal Years ...............................................

15 Ratios of General Bonded Debt Outstanding

-Last Ten Fiscal Years ......................................

16 Direct and Overlapping Governmental Activities Debt .......................................................

17 Legal Debt Margin Information

-Last Ten Fiscal Years .....................................................

18 Pledged-Revenue Coverage Business Type Activity Debt -Last Ten Fiscal Years ......................

19 Demographic and Economic Statistics

-Last Ten Calendar Years .........................................

20 Principal Employers

-Current Year and Nine Years Ago ....................................................

21 Full-Time Equivalent City Government Employees by Function

-Last Ten Fiscal Years ..............

22 Operating Indicators by Function

-Last Ten Fiscal Years ...................................................

23 Capital Asset Statistics by Function

-Last Ten Fiscal Years ................................................

76798081848688899192949596979899100101102103104105107108109110III112113 December 8, 2014To 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 yearended June 30, 2014.This report consists of management's representations concerning the finances of the City. Consequently, management assumes fullresponsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis formaking these representations, management has established a comprehensive internal control framework that is designed both toprotect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City'sfinancial statements in conformity with accounting principles generally accepted in the United States of America.

Because the cost ofinternal controls should not outweigh their benefits, internal controls have been designed to provide reasonable rather than absoluteassurance that the financial statements will be free from material misstatement.

As management, we assert that, to the best of ourknowledge and belief, this financial report is complete and reliable in all material respects.

The City's financial statements have been audited by Macias Gini & O'Connell LLP, a firm of certified public accountants.

Theindependent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unmodified opinion on the City'sfinancial statements for the fiscal year ended June 30, 2014. The independent auditor's report is presented as the first component ofthe 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 tomeet 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 legalrequirements, with emphasis on those involving the administration of federal awards. These reports are available in the City'sseparately issued Single Audit Report.i 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&Acan be found immediately following the report of the independent auditors.

Profile of the City of Riverside The City of Riverside, incorporated on October I1, 1883, is located in the western portion of Riverside County, about 60 miles east ofLos 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 avote 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 outthe policies and ordinances of the Council, for overseeing the day-to-day operations of the City, and for appointing the heads ofvarious 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 andbuilding 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 isfinancially accountable for the Riverside Housing Authority, Riverside Public Financing Authority, Riverside Municipal Improvements Corporation and the Successor Agency, which was formed to hold the assets of the former Redevelopment Agency;therefore, these entities are included as an integral part of the City's financial statements.

Additional information on these legallyseparate 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 proposedbudget to the City Council for review at least thirty-five calendar days prior to the beginning of each fiscal year. The Council isrequired to hold public hearings on the proposed budget and to adopt a final budget no later than June 30, which is the close of theCity's fiscal year. The appropriated budget is prepared by fund and department.

Department heads may make transfers ofappropriations 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 annualbudget has been adopted.

For the general fund, this comparison is presented on page 23 as part of the basic financial statements for thegovernmental funds. For governmental funds other than the general fund, with appropriated annual budgets, this comparison ispresented in the governmental fund subsection of this report, which begins on page 68.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 mostii measures of economic power, including population, income, employment, bank deposits, assessed valuation, office space and collegeenrollment.

The population of the City is 314,034, which places it as the sixth largest in Southern California.

Unemployment in the MSA is currently at 8.4% down from 9.7% for the same period last year with modest improvements in the realestate and home building sectors.

The Citywide budget for the fiscal year 2014/2015 remains relatively flat and is balanced.

The MSA is projected to grow in future years because land values continue to remain well below those in Los Angeles, Orange andSan Diego Counties.

Among the City's challenges is a lack of available space for manufacturing and industrial development withincurrent boundaries.

Goals and Vision: Seizing Our Destiny is Riverside's community-driven campaign that builds on the city's existing strengths tocreate an even better place to live, work and play for future generations.

The Seizing Our Destiny Campaign was developed by Cityofficials and civic leaders and encompasses a 20-year strategic vision that mobilizes the skills and resources of a broad cross-section of Riverside toward one common goal -a better community for us all. The goal, or Vision, has four primary aspects for Riverside:

• Nurture Intelligent Growth* Catalyst for Innovation

• Location of Choice* Evolve as a Unified CityLong-term financial planning.

Annually, the City updates a five (5) year Capital Improvement Program (CIP). Planned capitalexpenditures during fiscal years 2014/15 -2018/19 total approximately

$505 million.

The projects encompass all seven Councilwards and enhance the life of all residents.

Funding comes from multiple

sources, including existing funds; bond proceeds, user fees,special tax revenues, and regional, state and federal funds. In addition to routine electric, water, sewer and transportation-related

projects, the CIP includes improvements to Parks, Recreation and Community Services projects; railroad-related projects; andmunicipal buildings and facilities, such as library, police and fire facilities.

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 (Program) to the City of Riverside for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2013. Thiswas the twenty-sixth consecutive year that the City has received this prestigious award. The City received this award for publishing aneasily readable and efficiently organized CAFR that satisfied both GAAP and applicable legal requirements.

iii This award is valid for a period of one year only. We believe that our current CAFR continues to meet the Program's requirements andwe are submitting it to the GFOA again this year.The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of theFinance Department, particularly the leadership of Jason Al-Imam, Controller.

We would like to express our appreciation to allmembers of the department who assisted and contributed to its preparation.

Credit also must be given to the Mayor and the CityCouncil for their unfailing support for maintaining the highest standards of professionalism in the management of the City's finances.

Respectfully submitted,

~L~-Brent A. MasonFinance Director/Treasurer Scott C. BarberCity Manageriv Government Finance Officers Association Certificate ofAchievement for Excellence in Financial Reporting Presented toCity of Riverside California For its Comprehensive AnnualFinancial Reportfor the Fiscal Year EndedJune 30, 2013Executive Director/CEO The Government Finance Officers Association of theUnited States and Canada (GFOA) awarded a Certificate ofAchievement for Excellence in Financial Reporting to theCity of Riverside for our Comprehensive Annual Financial Report for the fiscal year ended June 30, 2013.In order to be awarded a Certificate of Achievement, agovernmental unit must publish an easily readable andefficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards.

Such reports must satisfy both generally acceptedaccounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of oneyear only. We believe our current report continues to meetthe Certificate of Achievement Program requirements, andwe are submitting it to GFOA to determine its eligibility foranother certificate.

ORGANIZATION CHARTLEGISLATIVE OFFICIALS Rusty Bailey ...................................................................................

MayorMike Gardner ..................................................

Councilmember

-Ward 1Andy Melendrez

..............................................

Councilmember

-Ward 2Mike Soubirous

...............................................

Councilmember

-Ward 3Paul Davis .......................................................

Councilmember

-Ward 4Chris Mac Arthur .............................................

Councilmember-Ward 5Jim Perry .........................................................

Councilmember

-Ward 6Steve Adams ...................................................

Councilmember

-Ward 7CITY OFFICIALS Scott C. Barber .................................................................

City Manager*Belinda Graham ..................................................

Assistant City ManagerDeanna Lorson ...................................................

Assistant City ManagerColleen J. Nicol .......................................................................

City Clerk*Cristina Talley ........................................................

Interim City Attorney*

Sergio G. Diaz ...................................................................

Chief of PoliceLea Deesing .......................................................

Chief Innovation OfficerAl Zelinka ...........................................

Community Development DirectorBrent A. Mason .............................................

Finance Director/Treasurer Michael Moore .........................................................................

Fire ChiefKris Martinez

..................................................

General Services DirectorBrenda Diederichs

.......................................

Human Resources DirectorTonya Kennon .................................................................

Library DirectorSarah Mundy ....................................

Museum & Cultural Affairs DirectorAdolfo Cruz ...................

Parks, Recreation

& Community Svcs. DirectorGirish Balachandran

..........................

General Manager -Public Utilities Tom Boyd .......................................

Public Works Director/City Engineer*Appointed by City Council--~1-II--.......-Hil-vi Newport Beach4675 MacArthur Court, Suite 600Newport Beach, CA 92660Certified Public Accountants.

949.221,0025 Sacramento Independent Auditor's Report Walnut CrookTo the Honorable Mayor and Members of the City Council OaklandCity of Riverside, California LA/Contury CityReport on the Financial Statements San DiegoWe have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and theaggregate remaining fund information of the City of Riverside, California (the City), as of and for the fiscal year ended June 30, 2014, and the related Seattlenotes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditingstandards generally accepted in the United States of America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor's

judgment, including the assessment of the risks of material misstatement of the financial statements, whether due tofraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the City's internal control.

Accordingly, we express no such opinion.

An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

OpinionsIn 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, as of June 30, 2014, and therespective changes in financial

position, and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund forthe fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.www.mgocpa.com Other MattersRequired Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and pension andother post-employment benefits schedules of funding progress as listed in the table of contents be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Boardwho considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,

economic, orhistorical context.

We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information andcomparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge weobtained during our audit of the basic financial statements.

We do not express an opinion or provide any assurance on the information because thelimited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements.

The accompanying introductory

section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from andrelate directly to the underlying accounting and other records used to prepare the basic financial statements.

Such information has been subjected tothe auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America.

Inour opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material

respects, in relation to thebasic financial statements as a whole.The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and,accordingly, we do not express an opinion or provide any assurance on it.Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 8, 2014 on our consideration of the City'sinternal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.

The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and theresults of that testing, and not to provide an opinion on internal control over financial reporting or on compliance.

That report is an integral part of anaudit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance.

Sglt on/Newport Beach, California December 8, 2014 Management's Discussion and Analysis(Unaudited)

As management of the City of Riverside, we offer this narrative overview and analysis of financial activities for the fiscal year ended June30, 2014. We encourage readers to consider the information presented here in conjunction with additional information furnished in ourletter of transmittal, which can be found on page i of this report. All amounts, unless otherwise indicated, are expressed in thousands ofdollars.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 threecomponents:

1) government-wide financial statements,

2) fund financial statements, and 3) notes to the financial statements.

This reportalso contains certain supplementary information.

Government-wide financial statements.

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

The statement of net position presents information on all of the City's assets, liabilities, and deferred inflows and outflows of resources, with the difference reported as net position.

Over time, increases or decreases in the City's net position may serve as a useful indicator ofwhether the financial position of the City is improving or deteriorating.

The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. Allchanges in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of relatedcash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscalperiods (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 userfees and charges (business type activities).

The governmental activities of the City include general government, public safety, highwaysand streets, and culture and recreation.

The business type activities of the City include Electric, Water, Sewer, Refuse, Public Parking,Airport and Transportation services.

3 The government-wide financial statements include the activities of the City and three blended component units, which consist of theRiverside Housing Authority, Riverside Public Financing Authority and the Riverside Municipal Improvements Corporation.

Althoughlegally separate, these entities function for all practical purposes as departments of the City and therefore have been blended as part of theprimary government.

The Successor Agency to the Redevelopment Agency of the City of Riverside (Successor Agency) is included as afiduciary component unit since it would be misleading to exclude the Successor Agency due to the nature and significance of therelationship between the City and the Successor Agency. The activity of the Successor Agency is reported with the City's fiduciary funds,which is not included in the government-wide statements since the resources of those funds are not available to support the City's ownprograms.

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 Notesto the Basic Financial Statements fully describe these bases of accounting.

Proprietary funds, discussed below, also follow the accrualbasis of accounting.

The government-wide financial statements can be found on pages 19-20 of this report.Fund financial statements.

A fund is a grouping of related accounts that is used to maintain control over resources that have beensegregated for specific activities or objectives.

The City, like other state and local governments, uses fund accounting to ensure anddemonstrate 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 finds are used to account for the same functions reported as governmental activities in thegovernment-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 thefiscal year.It is useful to compare the information presented for governmental funds with similar information presented for governmental activities inthe government-wide financial statements.

Reconciliations to facilitate this comparison are provided for both the governmental fundbalance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances.

The major reconciling itemsrelate to capital assets and debt. In the Governmental Funds, acquisitions of capital assets are treated as "expenditures" because uponpurchase 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 unrestricted fund balances of theGovernmental Funds reflect spendable resources available for appropriation by the City Council.

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

4 The City maintains thirteen individual governmental funds. Information is presented separately in the governmental fund balance sheet andin the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund and Capital Outlay Fund,which are major funds. Data from the other eleven governmental funds are combined into a single, aggregated 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 65-69 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 21-25 of this report.Proprietary funds. The City maintains two different types of proprietary funds, enterprise and internal service funds. Enterprise funds areused to report the same functions presented as business type activities in the government-wide financial statements.

The City usesenterprise funds to account for Electric, Water, Sewer, Refuse, Parking, Airport and Transportation services.

hIternal service funds are anaccounting device used to accumulate and allocate costs internally among the City's various functions.

The City uses internal service fundsto account for self-insured insurance

programs, central stores and its fleet of vehicles.

Because these services predominantly benefitgovernmental 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 accrualbasis of accounting.

Proprietary funds provide the same type of information as the government-wide financial statements (business type activities),

only in moredetail. The proprietary fund financial statements provide separate information for the Electric, Water and Sewer operations, all of whichare 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 73-81 in this report.The basic proprietary fund financial statements can be found on pages 26-29 of this report.Fiduciary funds. Fiduciary funds are used to account for situations where the City's role is purely custodial.

Fiduciary funds are notreflected in the government-wide financial statement because the resources of those funds are not available to support the City's ownprograms.

The accounting used for fiduciary funds is much like that used for proprietary funds.The fiduciary fund financial statements can be found on page 31-32 of this report, and the combining statement for the agency fund can befound on page 84.5 Notes to the financial statements.

The notes provide additional information that is essential to a full understanding of the data provided inthe government-wide and fund financial statements.

The notes to the financial statements begin on page 33 of this report.Government-wide Financial AnalysisThe following table presents a summarization of the City's assets, liabilities, deferred inflows and outflows, and net position for itsgovernmental and business type activities.

As noted earlier, a government's net position may serve over time as a useful indicator of itsfinancial position.

Governmental Activities Business typeActivities TotalCurrent and other assetsCapital assets, netTotal assets2014$ 391,0531,359,060 1,750,113 Deferred Outflows of Resources 19,880Current liabilities Long-term liabilities Total liabilities Deferred Inflows of Resources 65,949503,073569,022492013$ 368,9051,318,614 1,687,519 19,76371,349452,721524,0701,0261,083,485 80,71217,989$ 1,182,186 2014$ 740,2381,587,102 2,327,340 40,444154,9371,159,042 1,313,979 8,756616,84468,506359,699$ 1,045,049 2013$ 814,3671,454,228 2,268,595 40,453159,1731,130,283 1,289,456 10,000609,69169,068330,833$ 1,009,592 60,324 60,2162014$1,131,291 2,946,162 4,077,453 2013$1,183,272 2,772,842 3,956,114 220,8861,662,115 1,883,001 8,8051,723,228 165,093357,650$2,245,971 230,5221,583,004 1,813,526 11,0261,693,176 149,780348,822$2,191,778 Net position:

Net investment in capital assets 1,106,384 Restricted 96,587Unrestricted (2,049)Total net position

$1,200,922 The City's assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $2,245,971 at June 30, 2014,an increase of $54,193 from June 30, 2013.6 By far the largest portion of the City's net position (77 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 proceedsand cash held in bond reserve accounts.

The City uses these capital assets to provide services to citizens; consequently, these assets are notavailable for future spending.

An additional portion of the City's net position (7 percent) represents resources that are subject to external restrictions on how they may beused. The remaining unrestricted net position may be used to meet the government's ongoing obligations to citizens and creditors.

Of thisamount, $359,699 is held by the business type activities and $(2,049) net deficit is held by the governmental activities.

The City's total net position increased by $54,193 during the current fiscal year, which reflects growth in governmental activities of$18,736 as well as an increase of $35,457 in business type activities.

Governmental operating results is discussed on page 9 and business-type operating results is discussed on page 12.On the following page is a condensed summary of activities of the City's governmental and business type operations for the period endedJune 30, 2014 with the prior fiscal year presented for comparative purposes.

Also included in the following analysis are revenue andexpense graphs to aid in understanding the results of the current year's activities.

(Balance of page intentionally left blank)7 (Amount presented in Thousands)

Governmental Activities Business typeActivities Revenues:

Program Revenues:

Charge for servicesOperating Grants and Contributions Capital Grants and Contributions General Revenues:

Sales taxesProperty taxesOther taxes and feesInvestment incomeOtherTotal RevenuesExpenses:

General government Public safetyHighways and streetsCulture and recreation Interest on long-term debtElectricWaterSewerRefuseAirportTransportation Public parkingTotal expenses2014$ 46,11214,34148,43355,09651,32337,3272,7595,688261,07939.331149,55536.56442,25217,741285,443(24,364)43,10018,7361,182,186

$ 1,200,922 2013$ 42,19321.48532.20250,22252.90437,2052,7869,208248,20554,808147,65235,07240,07716,627294,236(46,031)42,262(3,769)1,185,955

$ 1,182,186 2014485,4622,52411,4868,0057,081514,5582013$ 487,5402,71811,7344,7445,767512,503304,41660,03040,38520,8311.6624.0674.610436,00178,557(43,100)35,4571,009,592

$1,045,049 292,17558,76843,94520,5812,0293,7455,051426,29486,209(42,262)(41,259)2,6881,006,904

$ 1,009,592 Total2014 2013$ 531.57416,86559,91955,09651,32337,32710,76412,769775,63739,331149,55536,56442,25217,741304,41660,03040,38520,8311,6624,0674,610721,44454,19354,1932,191,778

$2,245,971

$ 529,73324,20343.93650,22252,90437,2057,53014,975760,70854,808147,65235,07240,07716,627292,17558,76843,94520,5812,0293,7455,051720,53040,178(41,259)(1,081)2,192,859

$2,191,778 Increase (decrease) in net position before transfers and extraordinary itemsTransfers, netExtraordinary items:Power Plant ClosureTotal changes in net positionNet position

-beginning Net position

-ending8 Governmental activities.

Total net position for governmental activities increased by $18,736 or 2% over prior year. Governmental netposition in the prior fiscal year decreased by $3,769. Key elements of this year's activity in relation to the prior year are as follows:Revenues:

• While variances between years exist for the various revenue categories, the total net increase was approximately

$15 million, which islargely attributable to an increase in grant revenue and sales tax revenue.

Overall grants and contributions increased by $9 million or17% and sales tax revenue increased by $4.9 million or 10%. The increase in grants and contributions was primarily attributable to a $5million increase in grant revenue associated with the construction of the Streeter grade separation project which began construction inDecember 2012. The increase in sales tax revenue relates to an increase in general sales and use tax resulting from increased consumerspending.

Expenses:

• While variances between years exist for the various expense functions, the total net decrease was approximately

$8.8 million or lessthan 3%. This is primarily related to the $10 million judgment recorded in the prior year related to the water settlement.

(Balance of page intentionally left blank)9 Expenses and Program Revenues

-Governmental Activities

-Fiscal Year Comparison 2014 vs. 2013S160,000S140,000S120,000$100,000$80,000$60,000$40,000$20,000$0a 2014 Experses0 2013 ExpersesU 2014 Program revenuesn 2013 Program revenuesGeneral governrnent Public safetyH ghways and streets Culture and recreation Interest on long-term debt10 Revenues by Source -Governmental Activities

-Fiscal Year Comparison 2014 vs. 201320142013Investment Income1,06%Intergovernmental, unrestricted 0.10%Charges forservices17.66%Operating grants &contributions 5.49%Investment incomeCharges for services17.00%Capital grants &contributions 18.55%Operating grants &contributions 8.66%Utility users taxes -10.76%--Capital grants &contributions 12.97%Property taxes19.66%Property taxes21.31%Sales taxes21,10%11 Business-type activities.

The net position of business type activities increased by $35,457, accounting for a 3.5% increase in total netposition.

The net position of business type activities increased by $2,688 in the prior year. Key elements of this year's activity in relationto the prior year are as follows:The increase primarily related to a one-time non-recurring expense of $41,000 incurred in the prior year as a result of the San OnofrePower Plant closure, which was partially offset by the following:

• Charges for services remained relatively flat along service lines resulting in an overall decrease of $2,078.* Overall expenses increased by $9,707 primarily in Electric due to production and purchased power expense increase of $7,361related to increased energy prices.Revenues by Source -Business Type Activities

-Fiscal Year Comparison 20142013Operating grants andcontributions 0.5%Capital grantsandcontributions 2.2%'. Investment Income1.6%Miscellaneous 1.4%Operating grants andcontributions 0.5%Charges forservices94,3%Charges forservices95.1%Capital grantsandcontributions 2.3%Investment Income0.9%Miscellaneous 1.1%12 Financial Analysis of the City's FundsGovernmental funds. The focus of the City's governmentalfiunds is to provide information on near-term

inflows, outflows, and balancesof spendable resources.

Such information is useful in assessing the City's financing requirements.

In particular, unassignedfund balancemay 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, Capital Outlay, and Other Governmental Funds. As noted earlier,the City uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

Total assetsGeneral Fund2014 2013$ 109,891 $114,204$ 26.,114 $ 30,3094,917 6,804Capital Outlay2014 2013$71,633 $42,321$29.406 $34,3534,860 6,536OtherGovernmental Funds2014 2013$ 121,524 $ 120,689$ 15,312 $ 15,52534,522 34,371TotalGovernmental Funds2014 2013$303,048

$277,214$ 70,832 $ 80,18744,299 47,711Total liabilities Deferred inflows of resources Unavailable revenueFund balancesNonspendable Restricted AssignedUnassigned Total fund balanceTotal liabilities, deferredinflows and fund balances24,4192,20414,50537,73278,86026,4212,19610,71137,76377,0911,46071,96337,3671,4321,44169,35270,79325,879111,53414,50535,999187,91727,86272,98010,71137,763149,31637,367 1,432$71,633 $42,321(1,733)71,690$ 109,891 $ 114,204$ 121,524 $ 120,689$303,048

$277,21413 As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $187,917 an increase of$38,601 compared to the prior year. Additionally, 14% of the fund balance ($25,879) is nonspendable, which comprises the portion of fundbalance that cannot be spent due to form. $111,534 or 59% of fund balance is restricted, which represents the portion of fund balance thatis subject to externally enforceable limitations by law, enabling legislation or limitations imposed by creditors or grantors.

$14,505 or 8%of fund balance is constrained by the City's intent to utilize fund balance for specific

purposes, which is reported within the fund balanceclassification assigned.

The remainder of the fund balance is unassigned, meaning it is available for spending at the City's discretion.

Ofthat amount, $36,000 has been set aside for future economic contingencies at June 30, 2014 whereas $34,000 had been set aside in theprevious year. The City's governmental funds reported combined total assets of $303,048 at June 30, 2014, an increase of $25,834compared to the prior year. Liabilities and deferred inflows of resources amounted to $115,131, a decrease of $12,767.

This primaryreason for the increase in total assets and related fund balances is due to unspent bond proceeds in the Capital Outlay Fund associated withthe 2013 Certificates of Participation.

The General Fund is the principal operating fund of the City. At the end of the current fiscal year, total fund balance equaled $78,860 incomparison to $77,091 in the prior year. The portion of fund balance classified as unassigned was $37,732, most of which was set asidefor future economic contingencies.

Fund balance for the Capital Outlay Fund increased by $35,935.

As mentioned previously, the primary reason for the increase is due tounspent bond proceeds in the Capital Outlay Fund associated with the 2013 Certificates of Participation.

Proprietary 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 position of the Electric, Water and Sewer Funds at the end of the year amounted to $258,514,

$78,570, and $19,066respectively.

The unrestricted net position for the Electric, Water and Sewer Funds in the prior year was $241,696,

$69,996, and $18,65 1,respectively.

The increase in unrestricted net position for the Electric, Water and Sewer Funds is primarily a result of operating activities as described below.The Electric Fund operating results experienced a decrease in charges for services of $3,896 or 1.2%, primarily from the effects of adecrease in retail load as a result of cooler than normal temperatures.

Retail sales (residential, commercial, industrial, and other sales)represent 85.9% of total revenues.

Retail sales, net of reserve/recovery were $295,214 and $300,238 for years ended June 30, 2014 and2013, respectively.

Operating expenses increased

$12,400 or 4.6%, which primarily relates to an increase in purchased power anddistribution costs.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 91.5% of total revenues.

Retail sales, net of reserve/recovery were $62,762 and $61,83714 for the years ended June 30, 2014 and 2013, respectively.

The increase in sales was primarily due to a 1.7% increase in commercial consumption.

Net position of the Sewer Fund increased by $10,993 and $2,173 for the years ended June 30, 2014 and 2013, respectively.

Operating revenues increased by $2,390 or 5.5% primarily as a result of a rate increase and an increase in capital improvement fee revenue coupledwith a reduction in interest expense and overall operating expenses.

General Fund Budgetary Highlights Total RevenuesExpenditures:

General Government Public SafetyHighways

& StreetsCulture & Recreation Capital OutlayDebt ServiceTotal Expenditures OriginalBudget$179,95510,636136,97418,36930,33115615,846212,312(32,357)32,35777,09177,091FinalBudget$197,60115,422149,85120,21336,16513,03946,786281,476(83,875)68,306(15,569)77,091$61,522ActualAmounts$196,85210,351149,45016,94434,1658,58946,564266,063(69.211)70,9801,76977,091$78,860Variance withFinal Budget($749)5,0714013,2692,0004,45022215,41314,6642,67417,338$17,338Deficiency of Revenue Under Expenditures Other Financing SourcesNet Change in Fund BalancesBeginning Fund BalanceEnding Fund BalanceFinal budgeted revenues increased from the amount originally budgeted as a result of grant related programs and financing associated withcapital projects.

In addition, final budgeted expenditures increased from the amount originally budgeted as a result of grant relatedappropriations made during the year.Actual amounts differed from the final fund budget as follows:Li Approximately

$3.3 million of grant revenue was budgeted but not actually received during the year since the related grantexpenditures had not been incurred, which was offset by property tax revenue and sales tax revenue coming in higher than what wasbudgeted.

15 o Actual expenditures were less than budgeted amounts by approximately

$15 million.

This is primarily associated with unspentappropriations for grants, capital projects and other special programs that were not completed during the year (which are carried overto the next fiscal year).Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for governmental and business type activities as of June 30, 2014 amounted to$2,946,162 (net of accumulated depreciation).

This investment includes land, intangibles, buildings and improvements, machinery andequipment, park facilities, roads, highways, and bridges.

The total increase in the City's net investment in capital assets for the currentfiscal year was $173,320

($40,446 for governmental activities including internal service funds and $132,874 for business type activities).

Major capital improvements during the current fiscal year included:

new infrastructure, consisting primarily of street improvements of $46million and $104 million in Sewer capital improvements primarily related to the plant expansion project.Construction in progress totaled $293,892 at June 30, 2014. Some of the major projects in process are various Sewer systemimprovements including phase 1 of the Sewer plant expansion

project, the Riverside Transmission Reliability Project (RTRP) and relatedreliability improvements to the Riverside Public Utility's Sub-Transmission System. Depreciation expense during the fiscal year was$42,278 for governmental activities and $50,526 for business type activities.

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

Governmental Activities Business TypeActivities TotalLandIntangibles Buildings Improvements other thanBuildings Machinery and equipment Infrastructure Construction in progressTotal2014$333,799125,869220,18421,016625,18133,011$1,359,060 2013$325,215130,051182,24919,612622,97238,515$1,318,614 2014$51,11521,964153,9171,072,578 26,647260,881$1,5 87,1022013$42,63621,890158,4281,052,832 29,057149,385$1,454,228 2014$384,91421,964279,7861,292,762 47,663625,181293,892$2,946,162 2013$367,85121,890288,4791,235,081 48,669622,972187,900$2,772,842 Additional information on the City's capital assets can be found in note 5 on page 42 of this report.16 Long-term debt. At the end of the current fiscal year, the City had total debt outstanding of $1,662,115 which includes bonded debt of$1,588,315.

City of Riverside's Long-Term DebtGovernmental Activities Business TypeActivities TotalRevenue BondsGeneral Obligation BondsPension Obligation BondsCertificates of Participation Notes PayableLoans PayableCapital LeasesLease Revenue BondsLandfill CappingArbitrage Liability Compensated AbsencesJudgmentClaims liability Net OPEB Obligation Water Acquisition RightsTotal2014$-14,460115,775191,44647,61113,16842,34421,9966,66735,16714,439$503,0732013$-15,314122,005158,69728,6528,42443,76221,76110,00031,56912,537$452,7212014$1,094,290 36,0302,2666,172147,92511,403942$1,159,042 2013$1,031,839 28,13742,6612,5586,4572697,6389,780944$1,130,283 2014$1,094,290 14,460115,775191,44636,03047,61115,43442,3446,1721429,9216,66735,16725,842942$1,662,115 2013$1,031,839 15,314122,005158,69728,13771,31310,98243,7626,45726929,39910,00031,56922,317944$1,583,004 The City's total debt increased by $79,111 or 5.0% during the current fiscal year. The net increase primarily resulted from the issuance ofthe 2014A Sewer Bonds and 2013 Certificates of Participation as well as normal scheduled principal maturities, debt refundings, and anincrease in claims payable.The City's Water Utility maintains "AAA" 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.

17 State statutes limit the amount of general obligation debt a governmental entity may issue to 15 percent of its total adjusted assessedvaluation.

The legal debt limit was $631,942 at June 30, 2014, which applies only to general obligation debt. At June 30, 2014, the Cityhad $14,460 of general obligation debt, resulting in available legal debt capacity of $617,482.

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 RatesLI Unemployment in the City of Riverside is 8.4% as compared to 9.7% for the prior year.LI The required employer contribution rates as a percentage of payroll for the City's retirement program will be changing effective July 1,2014 as follows:" Miscellaneous Plan -18.314%

to 18.994%." Safety Plan- 26.894% to 29.041%.At the time of budget preparation for fiscal year 2015, the economic outlook for the City was considered to be stable. The General FundBudget for fiscal year 2015 of approximately

$240 million was adopted as balanced.

It represents an increase from the prior year ofapproximately 8%, largely related to an increase in pension costs and debt service for the Convention Center renovation and expansion project and several capital leases.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 tothe Finance Department, 3900 Main Street City of Riverside, CA 92522.18 City of Riverside Statement of Net PositionJune 30, 2014(amounts expressed in thousands)

AssetsCash and investments Receivables, netInventory Prepaid itemsDepositsDerivative instruments Internal balancesRestricted assets:Cash and cash equivalents Cash and investments at fiscal agentOtherAdvances to Successor AgencyLand and improvements held for resaleRegulatory assetsNet pension assetLand and other capital assets not being depreciated Capital assets (net of accumulated depreciation)

Total assetsDeferred Outflows of Resources Deferred changes in derivative valuesDeferred charge on refuniting Total deferred outflows of resources Liabilities Accounts payable and other current liabilities Accrued interest payableUnearned revenueDepositsDerivative instruments Decommissioning liability Noncurrent liabilities:

Due within one yearDue in more than one yearTotal liabilities Deferred Inflows of Resources Deterred changes in derivative valuesDeferred regulatory chargesTotal deferred inflows of resources Net PositionNet investment in capital assetsRestricted for:Expendable:

Governmental Activities

$ 62,599113.8685,8192413004913,32843.11846.0254.522101,184366.010992.2501,750.113 14.7845.09619,08020,3993,5197,3179.22919,48576.147426,926569,0224949Business-type Activities

$ 322,16962.9622.53025,520854(13,328)46,506234.1791,06710,23625.92121.622333,4881,253,614 2.327,340 Total$ 384,768176,8308,34925,7611.1544946,506277,2971.06756.2614.52225,921122,806700,2982.245.864 4,077.453 19.277 34.06121,167 26.26340,444 60,32430,42912,0102.2294,77930,19175.29986,4271.072,615 1,313.979 56,82815,5299,54614,00849,67675,299162,5741,499,541 1,883,001

-490,756 0,7568.756 8,8051,106,384 616.844 1,723,228 Capital projects 16,943 -16,943Debt service -51.240 51.240Economic development 15.328 15,328Landfill capping 901 901Public works 17,439 -17,439Housing 45.417 45,417Programs and regulatory requirements 16.365 16.365Nonexpendable 1.460 1,460Unrestricted (2.049) 359.699 357.650Total net position 1,200.922

$ 1,045.049

$ 2.245,971 The notes to the financial statements are an integral pare of this statement.

19 City of Riverside Statement of Activities For the fiscal year ended June 30, 2014(amounts expressed in thousands)

Net (Expense)

Revenue andChanges in Net PositionProgram RevenuesIndirectExpensesExpenses Allocation Operating Charges for Grants andServices Contributions Functions/Programs Governmental activities:

General government Public safetyHighways and streetsCulture and recreation Interest on long-term debtTotal governmental activities Business type activities:

ElectricWaterSewerRefuseAirportTransportation Public parkingTotal business type activities Total$ 39,331149,55536,56442,25217,741285,443304,41660,03040,38520,8311.6624,0674,610436,001$ 721,444$ (12,357)6,2793,3692,709$13,7757,44417,4877,406$ 4,1148,4446801,10346,112 14,341CapitalGrants andContributions

$ 3,8931,77839,3703,39248,4334,0083,5342,69829695011,486$ 59,919Governmental Activities

$ (5,192)(138,168) 17,604(33,060)(17,741)(176,557)

Business typeActivities Total$ (5,192)(138,168) 17,604(33,060)(17,741)(176,557) 43,62912,1958,475(154)(266)(180)(228)63,471(113,086) 344,03768,69146,16220,6771,1004134,382485,462$ 531,5742,5242,524$ 16.865$ 43,62912,1958,475(154)(266)(180)(228)63,47163,471(176,557)

General revenues:

Taxes:SalesPropertyUtility usersFranchise Transient occupancy taxIntergovemmental.

unrestricted Investment incomeMiscellaneous SubtotalTransfers, netTotal general revenues and transfers Change in net positionNet position

-beginning Net position

-ending55,09651,32328,0925,0464,1892632,7595,425152,19343,100195,29318,7361,182,186

$ 1,200,922 8,0057,08115,086(43,100)(28,014)35,4571,009,592

$ 1,045,049 55.09651,32328,0925,0464,18926310,76412,506167,279167,27954,1932,191,778

$ 2,245,971 The notes to the financial statements are an integral part of this statement.

20 City of Riverside Balance SheetGovernmental FundsJune 30, 2014(amounts expressed in thousands)

AssetsCash and investments Cash and investments at fiscal agentReceivables (net of allowance for uncollectibles)

InterestProperty taxesSales taxUtility billedAccountsIntergovernmental NotesPrepaid itemsDepositsDue from other fundsAdvances to other fundsAdvances to Successor AgencyLand & improvements held for resaleTotal assetsOther Governmental Total Governmental General Fund Capital Outlay Funds Funds$ 31,017 $ -$ 28,399 $ 59,4164,564 25.675 12,879 43,11815,02713,1061,1828,0144,445841,70044,17413422,58233,2672195,02713,1061,1829,71651,20133,267241241300 30018,116 18,11623,226 23,226652 39,739 40,3914,522 4,522109,891 $ 71,633 $ 121,524 $ 303,048Liabilities Accounts payableAccrued payrollRetainage payableIntergovernmental Unearned revenueDepositsDue to other fundsAdvances from other fundsTotal liabilities

$ 7,531 $8,635101594,961 $1341,564 5301,39614,0568,6651,540159387 6.930 -7,3179,226 -3 9,229-17,381 602 17,983166 -11,717 11,88326.114 29.406 15,312 70.8324,917 4,860 34.522 44,2994,917 4,860 34,522 44,299Deferred Inflows of Resources Unavailable revenueTotal deferred inflows of resources Nonspendable:

Inventories, prepaids and noncurrent receivables AdvancesPermanent fund principal Restricted for.Housing and redevelopment Debt serviceTransportation and public worksOther purposesGeneral government Public safetyHighways and streetsCulture and recreation Continuing projectsUnassigned Total fund balancesTotal liabilities, deferred inflows of resources, and fund balancesThe notes to the financial statements are an integral part of this statement.

54123,8781,8193851,4228348191,46037,36726,22326,17717,5092,05454123,8781,46026,22327,99654,8762,4391,4228348191,004 1,00410,426 10,42637,732 11,7331 35,99978,860 37.367 71,690 187.917$ 109,891 $ 71,633 $ 121,524 $ 303,048 CITY OF RIVERSIDE RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDSTO THE STATEMENT OF NET POSITIONJune 30, 2014(amounts expressed in thousands)

Total fund balances

-governmental funds $187,917Amounts reported for governmental activities in the Statement of Net Position aredifferent because:Capital assets net of accumulated depreciation used in governmental activities that are notcurrent financial resources and, therefore, are not reported in the funds. 1,352,707 The net pension asset is not an available resource and, therefore, is not reported in thefunds. 99,800Deferred refunding charges are not available resources and, therefore, are not reported inthe funds. 5,096Other long-term assets are not available to pay for current period expenditures and,therefore, are reported as unavailable revenue in the funds. 44,299Accrued interest payable for the current portion of interest due on various debt issues hasnot been reported in the governmental funds. (3,519)Long-term liabilities, as listed below, are not due and payable in the current periodand therefore are not reported in the funds.Bonds payable $ (170,015)

Certificates of participation payable (190,580)

Capital leases payable (13,168)Loan payable (47,611)Bond premiums (3,430)Net OPEB obligation (13,767)Compensated absences (21,437)Judgment payable (6,667)The City uses derivative instruments to hedge its exposure to changing interest ratesthrough the use of interest rate swaps. The following related items have beenreflected in the Statement of Net Position.

Net fair value of interest rate swapsDeferred amount related to the hedgeable portion of the derivative instrument 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 theinternal service funds are included in the governmental activities in the Statement of NetPosition.

Net position of governmental activities

$ (19,436)14,735(466,675)

(4,701)(14,002)$1,200,922 22 City of Riverside Statement of Revenues, Expenditures, and Changes in Fund BalancesGovernmental FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

RevenuesTaxesLicenses and permitsIntergovernmental Charges for servicesFines and forfeitures Special assessments Rental and investment incomeMiscellaneous Total revenuesExpenditures Current:General government Public safetyHighways and streetsCulture and recreation Capital outlayDebt service:Principal InterestBond issuance costsTotal expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses)Transfers inTransfers outIssuance of long term debtCapital lease financings Sales of capital assetsTotal other financing sources and usesNet change in fund balancesFund balances

-beginning Fund balances

-endingGeneral Fund$ 143,7487,69412,91515,7347,2834,2191,8573,402196,85210,351149,45016,94434,1658,58940,2026,259103266,063(69,211)45,695(13,184)30,9406,62590470,9801,76977,091$ 78,860Other TotalGovernmental Governmental Capital Outlay Funds Funds$ $ -$ 143,748-1,550 9,24428,719 17,714 59,348--15,734--7,283288 1,765 6,272307 2,151 4,3151,780 1,775 6,95731,094 24,955 252,9013,2072,27111015,44313,558151,72116,94434,27572,36548,3335,298 45,500-10,528 16,787738 2 84349,071 36,859 351,993(17,977)

(11,904)

(99,092)12,774 58,469(2,185) -(15,369)56,097 87,037--6,62527 93153,912 12,801 137,69335,935 897 38,6011,432 70,793 149,31637,367 $ 71,690 $ 187,917The notes to the financial statements are an integral part of this statement.

23 CITY OF RIVERSIDE RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSTO THE STATEMENT OF ACTIVITIES For the year ended June 30, 2014(amounts expressed in thousands)

Net change in fund balances-total governmental funds $38,601Amounts reported for governmental activities in the statement of activities aredifferent because:Governmental funds report capital outlays as expenditures.

However, in the statement of activities the cost ofthose assets is allocated over their estimated useful lives and reported as depreciation expense.

This is theamount bv which caoital outlays exceeded deoreciation in the current oeriod. as listed below:Capital asset additions

$ 66,315Depreciation expense (41,706) 24,609The net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is toincrease net position.

12,697Revenues in the statement of activities that do not meet the "availability" criteria for revenue recognition andtherefore are not reported as revenue in the funds. (3,412)The amortization of the net pension asset reported in the statement of activities does not require the use ofcurrent financial resources and, therefore, is not reported as an expenditure in the governmental funds. (4,851)i ne issuance OT iong-term aent (e.g., oonus, ieases, notesj proviaes current Tinancial resources togovernmental 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 position.

Also,governmental funds immediately report the effect of premiums, discounts and similar items when debt is firstissued, whereas these amounts are deferred and amortized in the statement of activities.

The net effect ofthese differences in the treatment of long-term debt and related items is listed below.Principal repayments

$ 45,500Payment of judgment 3,333Other post-employment benefit liabilities (1,810)Compensated absences (168)Interest 79Premiums on the issuance of long-term debt (1,211)Issuance of long-term debt (92,451)

(46,728)Internal service funds are used by management to charge the costs of insurance, centralized purchasing andfleet management to individual funds. The net revenue (expense) of certain activities of internal service fundsis reported with governmental activities.

(2,180)Change in net position of governmental activities

$ 18,736The notes to the financial statements are an integral part of this statement.

24 City of Riverside Statement of Revenues, Expenditures and Changes in Fund Balances

-Budget and ActualGeneral FundFor the year ended June 30, 2014(amounts expressed in thousands)

Budgeted AmountsActualOriginal Final AmountsPublic safety:PoliceFireActual Variance with Animal regulation Amounts Final Budget Building and zoning inspection Street lightingBudgeted AmountsOriginal Final82,02344,8093,4872,1524,503136,97491,30348,3843,5012,1524,511149,85191,20848,0193,4832,1954,545149,450Variance withFinal Budget9536518(43)(34)401RevenuesTaxesLicenses and permitsIntergovernmental Charges for servicesFines and forfeitures Special assessments Rental and investment incomeMiscellaneous Total revenuesExpenditures General government:

MayorCouncilManagerAttorneyClerkCommunity development Human resources General servicesFinanceInnovation

& technology SubtotalAllocated expenditures Total general government

$ 140,8687,7361,19513,0875,5164,4011,3185,834$ 140,8687,73616,18515,7395,5164,4011,3185,838$ 143,7487,69412,91515,7347,2834,2191,8573,402$2,880(42)(3,270)(5)Total public safetyHighways and streets18,369 20,21316,944 3,2691,767(182)539(2,436)Culture and recreation LibraryMuseum & cultural affairsParks, recreation

& community servicesTotal culture and recreation 6,6307,99015,71130,3317,4619,77518,92936,1656,8829,69817,58534,165579771,3442,000179,955 197,601196,852 (749)Capital outlay156 13,0398,589 4,4508881,2787,1763,9171,3429,6342,9428,4928,25410,4519351,2787,5174,3751,48510,4213,2449,7138,61211,5808551,2156,9124,2261,3699,2002,9527,6948,2369,64680636051491161,2212922,0193761,934Debt service:Principal InterestBond issuance costsTotal debt serviceTotal expenditures Deficiency of revenue under expenditures Other financing sources (uses)Transfers inTransfers outIssuance of long term debtCapital lease proceedsSale of capital assetsTotal other financing sources9,3196,52715,84640,2596,42410346,78640,2026,25910346,56457165222212,312 281,476 266,063(32,357)

(83,875)

(69,211)15,41354,374 59,160(43,738)

(43,738)52,305 6,855(41,954)

(1,784)42,493(10,226)9032,35745,695(15,251)30,9406,62529768,30645,695(13,184)30,9406,62590470,98014,6642,0676072,67410,636 15,422 10,351 5,071continued The notes to the financial statements are an integral part of this statement.

Net change in fund balancesFund balance, beginning Fund balance, ending(15,569)1,76917,33877,091 77,091 77,091 -$ 77,091 $ 61,522 $ 78,860 $ 17,33825 City of Riverside Statement of Net PositionProprietary FundsJune 30, 3014(amounts expressed in thousands)

Business-type Activities

-Enterprise FundsOther Enterprise Total Enterprise Funds FundsGovernmental Activities-Internal Service FundsAssetsCurrent assets:Cash and investments Receivables (net allowances for uncollectibles)

InterestUtility billedUtility unbilledAccountsIntergovernmental OtherInventory Prepaid itemsDepositsDue from other fundsRestricted assets:Cash and cash equivalents:

Rate stabilization cash and cash equivalents Other restricted cash and cash equivalents Public benefit programs receivable Total current assetsElectric Water SewerNon-current assets:Restricted assets:Cash and investments at fiscal agentRegulatory assetsPrepaid items -non-current Other receivables Advances to other fundsAdvances to Successor AgencyNet pension assetCapital assets:LandIntangible assets, non-depreciable Intangible assets, depreciable Accumulated depreciation

-intangible assets, depreciable Buildings Accumulated depreciation

-buildings Improvements other than buildings Accumulated depreciation

-improvements other than buildings Machinery and equipment Accumulated depreciation

-machinery and equipment Construction in progressTotal non-current assetsTotal assets$ 210,9291,12717,63414,7313,9303851,20222,34585491427,878939302,868176,34917,4513,1435,80011,4508,71710,651325(123)23,093(6,448)857,377(267,734) 31,626(17,173)51,105905,6091,208,477 16,33612,95229,28886,181 $4294,4753,3471,6012413,3331739218,794 $532,6751,7221347061,328156,265 $401,0417231,21785322,169 $1,64925,82520,5236,8821,4173,3332,53022,3778541,3068,367128108,51110,5549433,3334,92620,48410,841385(228)18,340(5,058)543,755(163,605) 13,306(11,203)15,828462,601571,1122,9418,21511,1569,36034,78747,2761,0287,2834,4363,1512,734120(7)191,696(97,903)100,179(17,233)11,215(6,876)193,913441,012475,799-9,360901 37,146-1,06710,272 456,4389,1523,1834454525,8196,4992,095234,17925,9213,1433,3337,28310,23621,6226,2245,6341,38419,180 51,115-21,492830-(358)35,881 269,010(5,684) (115,093) 28,084 1,529,395 (8,245) (456,817) 19,993 76,140(14,241)

(49,493)35 260,88183,597 1,892,819 93,869 2,349,257 19,27721,16740,4444581,488(300)726(83)10,809(8,227)1,48219,59528,747Deferred Outflows of Resources Deferred changes in derivative valuesDeferred charge on refunding Total deferred outflows of resources Continued 26 City of Riverside Statement of Net PositionProprietary FundsJune 30, 3014(amounts expressed in thousands)

Business-type Activities

-Enterprise FundsOther Enterprise Total Enterprise Funds FundsLiabilities Current liabilities:

Accounts payableAccrued payrollRetainage payableUnearned revenueDepositsDue to other fundsCapital leases -currentWater stock acquisitions

-currentNotes payable -currentLandfill capping -currentClaims and judgments

-currentCompensated absences

-currentCurrent liabilities payable from restricted assets:Revenue bondsAccrued interestAccounts payableTotal current liabilities Electric Water Sewer11,4011,2922833,8447003,6133,2244654109351501,3481,3033057319951,032196202,22913390620052416,9602,2587132,2294,7791337001501,6372006,48014,9205,7702,02343,8465,0151,8011,35614,70457,3254,4397,11972,2175,240Non-current liabilities:

Revenue bondsNotes payableCapital leasesAdvances from other fundsDecommissioning liability Derivative instruments Claims and judgments Water stock acquisitions Landfill cappingCompensated absencesOther postemployment benefitsOther payablesTotal non-current liabilities Total liabilities 593,0941,56611,28475,29922,108202,1769,4824,8558,083792221,7603,7253,1061851,73421,1862,5395,972971,47477,26012,01010,498136,0071,017,030 34,3931,56621,78475,29930,1917925,9721,44511,403141,199,889 1,335,896 Governmental Activities-Internal Service Funds1,808100711,30611,12226714,6743,06624,04529267228,07542,749830 3335,749 2,44614 -709,944 228,167753,790 242,871230,510 31,268302,727 36,508Deferred Inflows of Resources Deferred regulatory chargesTotal deferred inflows of resources 6,667 2,0896,667 2,0898,7568,756Net PositionNet investment in capital assetsRestricted for debt serviceRestricted for landfill cappingRestricted for programs and regulatory requirements Unrestricted Total net position196,77115,808245,7315,93012,882 2,499258,514 78,570$ 483,975 $ 332,730121,43129,50298419,066$ 170,98352,9119013,549$ 57,361616,84451,24090116,365359,699$ 1,045,049 6,353(20,355)_14,0021The notes to the financial statements are an integral part of this statement.

27 City of Riverside Statement of Revenues,

Expenses, and Changes in Net PositionProprietary FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Business-type Activities

-Enterprise FundsOther Enterprise FundsTotal Enterprise FundsGovernmental Activities-Internal Service FundsElectricOperating revenues:

Charges for services

$ 344,037Operating expenses:

Personnel services 37,572Contractual services 7,394Maintenance and operation 190,510General 12,083Materials and supplies 756Claims/Insurance 1,342Depreciation and amortization 27,260Total operating expenses 276,917Operating income (loss) 67,120Non-operating revenues (expenses):

Operating grantsInterest income 6,041Other 3,444Gain (loss) on retirement of capital assets 293Capital improvement feesInterest expense and fiscal charges (27,499)Total non-operating revenues (expenses)

(17,721)Income (loss) before capital contributions and transfE 49,399Cash capital contributions 2,890Noncash capital contributions 1,118Transfers inTransfers out (38,704)Change in net position 14,703Total net position

-beginning 469,272Total net position

-ending $ 483,975The notes to the financial statements are an integral part of this statement.

WaterSewer$ 68,691 $ 46,162 $ 26,572 $ 485,462 $ 21,77212,8472,3269,23612,87176159112,79951,43117,2601,049698(253)(8,599)(7,105)10,1552,2781,2563,333(6,991)10,031322,699332,7309,9161,4707,4866,1193,4404996,86135,79110,3718271,691(11)2,684(4,583)60810,9791410,993159,990$ 170,9838,1695,5457,2384,1191,3733004,01330,757(4,185)2,524881,204536(945)3,407(778)1,246(738)(270)57,63157,36168,50416,735214,47035,1926,3302,73250,933394,89690,5662,5248,0057,0375652,684(41,626)(20,811)69,7556,4142,3883,333(46,433)35,4571,009,592

$ 1,045,049 4,1641412,1762,15122214,62857224,054(2,282)229(4)(4)(119)102(2,180)(2,180)(11,822)(14,002)28 City of Riverside Proprietary FundsStatement of Cash FlowsFor the fiscat year ended June 30, 2014(amounts expressed in thousands)

Electric WaterCash flows from operating activities:

Cash received from customers and usersCash paid to employees for servicesCash paid to other suppliers of goods or servicesOther receiptsNet cash provided (used) by operating activities Cash flows from noncapital financing activities:

Transfers inTransfers outReceipts on interfund advancesOutflows on interfund advancesAdvances to other fundsNet cash (used) provided by noncapital financing activities Cash flows from capital and related financing activities:

Purchase of capital assetsProceeds from the sale of capital assetsProceeds from long-term obligations Principal paid on long-term obligations Interest paid on long-term obligations Capital improvement feesGrant ProceedsCapital contributions Bond issuance costsNet cash (used) for capital and relatedfinancing activities Cash flows from investing activities:

Purchase of investments Income from investments Net cash provided by investing activities Net change in cash and cash equivalents

$ 348,296(34,466)(221,460) 3,44495,814(38,704)793(497)(38,408)(36,349)3412,315(21,827)(29,400)2,890(454)(82,484)5,3015,74811,049(14,029)335,085$ 321,056$ 69,567(12,591)(22,331)69835,3433,333(6,991)364(214)(3,508)(22,648)2(4,363)(8,848)2,278(19)(33,598)1,0041,004(759)105,861$ 105,102Sewer$ 45,787(10,419)(19,941)3,77919,206254(137)117(104,392) 50,000(7,841)(10,913)2,684(103)(70,565)861861(50,381)125,811$ 75,430OtherEnterprise Funds$ 27,841(7,911)(19,701)1,2011,430(738)(1,401)(2,139)(1,787)2,642(878)(944)2,6331,2462,91273732,2764,890$ 7,166TotalEnterprise Funds$ 491,491(65,387)(283,433) 9,122151,7933,333(46,433)1,411(2,249)(43,938)(165,176) 2,98552,315(34,909)(50,105)2,6842,6336,414(576)(183,735) 5,3017,68612,987(62,893)571,647Governmental Activities-InternalService Funds$ 22,585(3,863)(14,781)13,9425,366(6,675)(1,309)(3,716)(104)(3,820)161161(1,026)4,209Cash and cash equivalents, beginning (including

$137,262 for Electric,

$32,780 for Water, $113,614 for Sewer and $1,185 for OtherEnterprise Funds in restricted accounts.)

Cash and cash equivalents, ending (including

$110,127 for Electric,

$18,921 for Water, $56,636 for Sewer and $901 for OtherEnterprise Funds in restricted accounts.)

$ 508,754 $ 3,183Continued 29 City of Riverside Proprietary FundsStatement of Cash FlowsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Continued Governmental Other Total Activities-Enterprise Enterprise InternalElectric Water Sewer Funds Funds Service FundsReconciliation of operating income (loss) to net cash provided(used) by operating activities:

Operating Income (loss)Other receiptsAdjustments to reconcile operating income (loss) tonet cash provided (used) by operating activities:

Depreciation and amortization Amortization of pension costs(Increase)

Decrease in utility billed receivable (Increase)

Decrease in utility unbilled receivable (Increase)

Decrease in accounts receivable (Increase) in intergovernmental receivable (Increase)

Decrease in prepaid itemsDecrease in inventory (Decrease)

Increase in accounts payableIncrease (Decrease) in accrued payrollIncrease (Decrease) in retainage payableIncrease (Decrease) in other payableIncrease in deferred regulatory chargesIncrease (Decrease) in deposits(Decrease) in decommissioning liabilitity (Decrease) in landfill cappingIncrease in claims and judgments

$ 67,120 $3,44427,260504(681)1864,869(5,168)(1,725)400473(868)17,26069812,799217412956523,025467177$ 10,371 $1,6906,861139(219)(125)16(47)22(941)8(966)3162,089(8)(4,185) $ 90,5661,201 7,0334,013931,275(6)(840)488(323)(286)50,933953(896)1906,725(53)(5,166)22(481)496(966)8602,089642(868)(286)$ (2,282)157261(3)87288580159S ----3,597$ 95,814 $ 35,343 $ 19,206 $ 1,430 $ 151,793 $ 3,942Net cash provided by operating activities Schedule of noncash financing and investing activities:

Capital Contributions

-capital assetsLand purchase with note payableProceeds of refunding debt$ 1,118 $80,2361,256 $9,482$$ 2,374 $9,48280,236The notes to the financial statements are an integral part of this statement.

30 City of Riverside Statement of Net Positionl(Deficit)

Fiduciary FundsJune 30, 2014(amounts expressed in thousands)

Successor AgencyPrivate-Purpose Trust FundAssetsCash and investments Cash and investments at fiscal agentReceivables:

InterestAccountsNotesDirect financing lease receivable DepositsProperty tax receivables Land & improvements held for resaleCapital assets:LandEquipment Accumulated depreciation

-equipment Total assetsLiabilities Accounts payableRetainage payableAccrued interestAdvances from City of Riverside Bonds payableNotes payableHeld for bond holdersTotal liabilities Deferred Inflows of Resources Deferred charge on refunding Total deferred inflows of resources Net Positionl(Deficit)

Held by Successor AgencyTotal net position/(deficit)

$26,10525,974972222,23520,510215,7991856(6)110,9291,1552294,94056,261248,0405,607316,232301301(205,604)

$ (205,604)

AgencyFund$ 5,6666,7402611412,54612,54612,546The notes to the financial statements are an integral part of this statement 31 City of Riverside Statement of Changes in Net Position/(Deficit)

Fiduciary Fund -Private-Purpose Trust FundFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Additions Property tax revenueRental and investment incomeMiscellaneous Total additions Successor AgencyPrivate-Purpose Trust Fund$ 26,4602,6241,24030,3242,6138,12913,68024,4225,902(211,506)

$ (_205,604L Deductions Professional services and other deductions Redevelopment projectsInterest expenseTotal deductions Change in Net Positioni(Deficit)

Net position/(deficit)

-beginning Net position/(deficit)

-endingThe notes to the financial statements are an integral part of this statement 32 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

1. Summary of Significant Accounting PoliciesThe City of Riverside (City) was incorporated on October 11, 1883 as aCharter City and operates under a Council-Manager form of Government.

The more significant accounting policies reflected in the financial statements are summarized as follows:A. Reporting EntityThese financial statements present the City and its component units, entitiesfor which the City is financially accountable.

Blended component units arelegally separate

entities, but in substance are part of the City's operations and their data is combined with that of the City's. The City has no component units that meet the criteria for discrete presentation.

All of the City'scomponent units have a June 30 year end.Blended Component UnitsRiverside Housing Authority (Housing Authority) was established in 2006 bythe City. The Housing Authority's primary purpose is to provide safe andsanitary housing accommodations for persons with low or moderate income.The Housing Authority's activity has been combined with that of the primarygovernment because City Council members serve as the Housing Authority's commissioners and because the City is financially accountable andoperationally responsible for all matters.Riverside Public Financing Authority (Public Financing Authority) wasorganized in December 1987 by the City and the Redevelopment Agency.Pursuant to Assembly Bill 1X 26 (as modified by the California SupremeCourt on December 29, 2011) all redevelopment agencies were dissolved effective February 1, 2012. Subsequently, the City became the Successor Agency to the Redevelopment Agency. The Parking Authority of the City ofRiverside was added as an additional member of the Public Financing Authority on August 14, 2012. The Public Financing Authority's activity hasbeen combined with that of the primary government because City Councilmembers serve as the Public Financing Authority's board members andbecause the Public Financing Authority exclusively provides financing assistance to the primary government.

The City is also financially accountable and operationally responsible for all matters.Riverside Municipal Improvements Corporation (Municipal Improvements Corporation) was created in 1978 and operates under provisions of theNonprofit Public Benefit Corporation Law of the State of California.

TheMunicipal Improvements Corporation's primary purpose is to providefinancing assistance by obtaining land, property and equipment on behalf ofthe City. The activity of the Municipal Improvements Corporation has beencombined with that of the primary government because three members of theCity Council serve as the Municipal Improvements Corporation's directors and because the Municipal Improvements Corporation exists to serveexclusively the primary government.

The City is financially accountable andoperationally responsible for all matters.Fiduciary Component UnitSuccessor A-qency to the Redevelopment Agency of the City of Riverside (Successor Agency) is a separate legal entity, which was formed to hold theassets and liabilities of the former Redevelopment Agency pursuant to CityCouncil actions taken on March 15, 2011 and January 10, 2012. The activityof the Successor Agency is overseen by an Oversight Board comprised ofindividuals appointed by various government agencies and the City ofRiverside as Successor Agency of the former Redevelopment Agency. Thenature and significance of the relationship between the City and theSuccessor Agency is such that it would be misleading to exclude theSuccessor Agency from the City's financial statements.

The Successor Agency is presented herein in the City's fiduciary funds as a private-purpose trust fundComplete financial statements are prepared for the Riverside PublicFinancing Authority and the Successor Agency to the Redevelopment Agency of the City of Riverside, which can be obtained from the City'sFinance Department, 3900 Main Street, Riverside, California, 92522 or onlineat www.riversideca.gov.

B. Government-wide and Fund Financial Statements The government-wide financial statements report information on all of thenonfiduciary activities of the City and its component units. Interfund activityhas been removed from these statements except for utility charges, as thiswould distort the presentation of function costs and program revenues.

Governmental activities, which normally are supported by taxes andintergovernmental

revenues, are reported separately from business typeactivities, which rely to a significant extent on fees and charges for support.The statement of net position presents financial information on all of theCity's assets, liabilities, and deferred inflows/outflows of resources, with thedifference reported as net position.

Over time, increases or decreases in netposition may serve as a useful indicator of whether the financial position ofthe City is improving or deteriorating.

33 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

The statement of activities demonstrates the degree to which the directexpenses of a given function or segment are offset by program revenues.

Direct expenses are those that are clearly identifiable with a specific functionor segment.

Program revenues include 1) charges to customers orapplicants who purchase, use, or directly benefit from goods, services, orprivileges provided by a given function or segment and 2) grants andcontributions that are restricted to meeting the operational or capitalrequirements of a particular function or segment.

Taxes and other items notproperly included among program revenues are reported instead as generalrevenues.

Indirect expenses are allocated to the various functions based ona proportionate utilization of the services rendered.

Such allocations consistof charges for accounting, human resources, information technology andother similar support services.

Separate financial statements are provided for governmental funds,proprietary funds, and fiduciary funds, even though the latter are excludedfrom the government-wide financial statements.

Major individual governmental funds and major individual enterprise funds are reported asseparate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide, proprietary and private-purpose trust fund financial statements are reported using the economic resources measurement focusand the accrual basis of accounting.

Agency funds report only assets andliabilities and therefore have no measurement focus. Revenues are recordedwhen earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied on the property.

Grantsand similar items are recognized as revenue as soon as all eligibility requirements have been met. An allowance for doubtful accounts ismaintained for the utility and other miscellaneous receivables.

Governmental fund financial statements are reported using the currentfinancial resources measurement focus and the modified accrual basis ofaccounting.

Revenues are recognized as soon as they are both measurable and available.

Revenues are considered to be available when they arecollectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues are considered to be available if they aregenerally collected within 60 days after year end, except for revenueassociated with neglected property abatement which is eleven (11) monthsand except for grant revenue, including reimbursement received fromTransportation Uniform Mitigation Fees, which is six (6) months and sales taxrevenue which is seven (7) months, as described below. Grant revenue isrecognized if received within six (6) months of year end to enable thematching of revenue with applicable expenditures.

Expenditures generally are recorded when a liability is incurred under accrual accounting.

However,debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment isdue.In 2004, the State temporarily began to exchange 25% of sales taxes for anequal amount of property taxes to securitize a short-term State bond issue.The State bond issue will remain outstanding for an uncertain number ofyears, but the bonds are currently estimated to retire in 2016. These in-lieusales taxes will be paid to the City by the State on a different calendar thansales taxes, which are paid monthly, three months in arrears.

The vastmajority of the in-lieu amount will be paid during the applicable fiscal year;however, the final payment of the in-lieu sales taxes will not be paid until theJanuary following the end of the applicable fiscal year. Since 2004, the final"true-up" payment has been reported in the fiscal year that the revenue wasearned and thus provides consistency in the reporting of sales tax revenue.Property taxes, special assessments, sales taxes, franchise taxes, licenses, charges for services, amounts due from other governments and interestassociated with the current fiscal period are all considered to be susceptible to accrual.

Other revenue items such as fines and permits are considered tobe measurable and available only when the government receives cash, andare therefore not susceptible to accrual.The government reports the following major governmental funds:The General fund is the government's primary operating fund. It accountsfor all financial resources of the general government, except thoserequired to be accounted for in another fund.The Capital Outlay fund accounts for the construction and installation ofstreet and highway capital improvements for the City, including improvements funded by the 1/ % sales tax approved by Riverside Countyin 1988.34 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

The government reports the following major proprietary funds:The Electric fund accounts for the activities of the City's electricdistribution operations.

The Water fund accounts for the activities of the City's water distribution operations.

The Sewer fund accounts for the activities of the City's sewer systems.Additionally, the government reports the following fund types:Internal service funds account for self-insurance, central stores andcentral garage on a cost reimbursement basis.Fiduciary funds include private-purpose trust and agency funds. Theprivate-purpose trust fund accounts for assets and activities of thedissolved Redevelopment Agency, which is accounted for in theSuccessor Agency Trust. The agency fund is used to account for specialassessments that service no-commitment debt.The permanent fund is a governmental fund that is used to reportresources that are legally restricted to the extent that only earnings, andnot principal, may be used for purposes that support the City's Libraryprograms.

Non-expendable net position on the Statement of Net Positionincludes

$1 million of permanent fund principal which are considered nonexpendable.

Amounts reported as program revenues include 1) charges to customers forgoods, services, or privileges

provided,

2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.

Internally dedicated resources are reported as general revenues rather thanas program revenues.

Likewise, general revenues include all taxes.Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result fromproviding services and producing and delivering goods in connection with aproprietary fund's principal ongoing operations.

The sewer fund alsorecognizes as operating revenue the portion of connection fees intended torecover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost ofsales and services, administrative

expenses, and depreciation on capitalassets. All revenues and expenses not meeting this definition are reportedas non-operating revenues and expenses.

D. Cash and Investments The City values its cash and investments in accordance with the provisions of Government Accounting Standards Board (GASB) Statement No. 31,"Accounting and Financial Reporting for Certain Investments and ExternalInvestment Pools (GASB 31)," which requires governmental entities to reportcertain investments at fair value in the statement of net position/balance sheet and recognize the corresponding change in the fair value ofinvestments in the year in which the change occurred.

Fair value isdetermined using published market prices.Cash accounts of all funds are pooled for investment purposes to enhancesafety and liquidity while maximizing interest earnings.

Investments arestated at fair value except for investments in investment contracts which arerecorded at contract value. All highly liquid investments (including restricted assets) with a maturity of 90 days or less when purchased are considered cash equivalents.

Cash and investments held on behalf of proprietary fundsby the City Treasurer are considered highly liquid and are classified as cashequivalents for the purpose of presentation in the Statement of Cash Flows.E. Restricted Cash and Investments Certain proceeds of long-term indebtedness, as well as certain resources setaside for their repayment, are classified as restricted assets on the statement of net position because their use is limited by applicable bond covenants.

Restricted cash and investments also include cash set aside for nucleardecommissioning, public benefit programs, regulatory requirements and ratestabilization because their use is legally restricted to a specific purpose.Unspent proceeds received from the City's landfill capping surcharge arealso recorded as restricted assets.F. Land and Improvements Held for ResaleLand and improvements held for resale were generally acquired for futuredevelopment projects.

The properties are carried at the lower of cost or netrealizable value.35 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

G. Inventory Supplies are valued at cost using the average-cost method. Costs arecharged to user departments when consumed rather than when purchased.

H. Prepaid ItemsPayments to vendors for services benefiting future periods are recorded asprepaid items and expenditures are recognized when items are consumed.

I. Capital AssetsCapital assets, which include property, plant, equipment, and infrastructure assets (eg., roads, bridges, sidewalks, right of way, and similar items), arereported in the applicable governmental activities and business-type activities of the government-wide financial statements and in the proprietary funds andthe fiduciary private-purpose trust fund statements of net position.

Thegovernment defines capital assets as assets with an initial, individual cost ofmore than five thousand dollars and an estimated useful life in excess of oneyear. Such assets are recorded at historical cost or estimated historical costif purchased or constructed.

Costs include:

labor; materials; interest duringconstruction; allocated indirect charges such as engineering, construction and transportation equipment, retirement plan contributions and other fringebenefits.

Donated capital assets are recorded at estimated fair market valueat the date of donation.

Intangible assets that cost more than one hundredthousand dollars with useful lives of at least three years are capitalized andare recorded at cost.Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed for proprietary funds. For the year ended June30, 2014, business-type activities capitalized net interest costs of $8,608 inthe government-wide and fund financial statements.

Total interest expenseincurred by the business-type activities (and the enterprise funds on theproprietary funds statements) before capitalization was $50,234.The costs of normal maintenance and repairs that do not add to the value ofthe asset or materially extend asset lives are not capitalized.

Capital assetsother than land are depreciated using the straight-line method. Estimated useful lives used to compute depreciation are as follows:Buildings and Improvements Improvements other than Buildings Intangibles

-Depreciable Machinery and Equipment Infrastructure 30-50 years20-99 years3-15 years3-15 years20-100 yearsJ. Compensated AbsencesCity employees receive 10 to 25 vacation days a year based upon length ofservice.

A maximum of two years' vacation accrual may be accumulated andunused vacation is paid in cash upon separation.

City employees generally receive one day of sick leave for each month ofemployment with unlimited accumulation.

Upon retirement or death, certainemployees or their estates receive a percentage of unused sick leave paid ina lump sum based on longevity.

The General, Electric and Water funds havebeen primarily used to liquidate such balances.

The liability associated with these benefits is reported in the government-wide statements.

Vacation and sick leave of proprietary funds is recorded asan expense and as a liability of those funds as the benefits accrue toemployees.

K. Derivative Instruments The City's derivative instruments are accounted for in accordance withGovernment Accounting Standards Board (GASB) Statement No. 53,"Accounting and Financial Reporting for Derivative Instruments (GASB 53),"which requires the City to report its derivative instruments at fair value.Changes in fair value for effective hedges that are achieved with derivative instruments are reported as deferrals in the statements of net position.

The City uses derivative instruments to hedge its exposure to changinginterest rates through the use of interest rate swaps. The City had debt thatwas layered with "synthetic fixed rate" swaps, which was refunded in 2008and 2011. At the time of the refunding, hedge accounting ceased to beapplied.

The balance of the deferral account for each swap is included aspart of the deferred charge on refunding associated with the new bonds. Theswaps were also employed as a hedge against the new debt. Hedgeaccounting was applied to that portion of the hedging relationship, which wasdetermined to be effective.

The negative fair value of the interest rate swapsrelated to the new hedging relationship has been recorded and deferred onthe statement of net position.

In 2012, the City also entered into an additional interest rate swap agreement, which has a positive fair value and is recorded36 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands) and deferred on the statement of net position.

See Note 10 for furtherdiscussion related to the City's interest rate swaps.Various transactions permitted in the Utility's Power Resources RiskManagement Policies may be considered derivatives, including energyand/or gas transactions for swaps, options, forward arrangements andcongestion revenue rights. The City has determined that all of its contracts including congestion revenue rights fall under the scope of "normalpurchases and normal sales" and are exempt from GASB 53.L. Long-Term Obligations Long-Term DebtLong-term debt and other long-term obligations are reported as liabilities inthe applicable governmental and business-type activities columns in thegovernment-wide financial statements and in the proprietary funds andfiduciary private-purpose trust fund statements of net position.

Bondpremiums and discounts are deferred and amortized over the life of thebonds using the effective interest method. Bonds payable are reported net ofthe applicable bond premium or discount.

In the fund financial statements, government fund types recognize bondissuance costs as expenditures during the current period. The face amountof debt issued is reported as other financing sources.

Premiums received ondebt issuances are reported as other financing sources while discounts ondebt issuance are reported as other financing uses.Decommissioning Federal regulations require the Electric Utility to provide for the futuredecommissioning of its ownership share of the nuclear units at San Onofre.The Electric Utility has established trust accounts to accumulate resources for the decommissioning of the nuclear power plant and restoration of thebeachfront at San Onofre. Based on the most recent site specific costestimate as of July 2013, prepared by ABZ Incorporated, the Electric Utilityhas fully funded the San Onofre Nuclear Generating Station ("SONGS")

decommissioning liability.

With the recent retirement of SONGS units 2 and3, there is much uncertainty as to future unknown costs to decommission SONGS. Although management believes the current cost estimate is theupper bound of decommissioning obligations, the Electric Utility hasconservatively decided to continue to set aside $1,581 per year in aninternally restricted cash reserve for unexpected costs not contemplated inthe current estimates.

Increases to the funds held for the decommission liability are from amountsset aside and investment earnings.

The investment earnings are included ininvestment income. These earnings, as well as amounts set aside, arereflected as decommissioning expense which is reflected as a component ofmaintenance and operation expense in the statement of revenues, expensesand changes in net position.

To date, the Electric Utility has set aside$77,897 in cash investments with the trustee and $1,725 in an internally restricted decommissioning reserve as the Electric Utility's estimated shareof the decommissioning cost of San Onofre, and these amounts are reflected as restricted assets and unrestricted cash and cash equivalents, respectively, on the Statements of Net Position.

The Electric Utility's decommissioning liability is equivalent to the total funds accumulated less$4,323 paid as decommissioning costs for the fiscal year ended June 30,2014 and is reflected as a non-current liability.

The plant site easement atSan Onofre terminates May 2024. The plant must be decommissioned andthe site restored by the time the easement terminates.

M. Claims and Judgments PayableClaims and judgments payable are recognized when it is probable that aliability has been incurred and the amount of loss can be reasonably estimated.

Such claims, including an estimate for claims incurred but notreported at year end, are recorded as liabilities in the self-insurance internalservice fund. As of June 30, 2014, the City had an obligation related to ajudgment, which is reflected as a liability on the government-wide statements and is more fully described in Note 8.N. Fund EquityIn the fund financial statements, governmental fund balance is made up ofthe following components:

" Nonspendable fund balance is the portion of fund balance that cannotbe spent due to form. Examples include inventories, prepaid amounts,long-term loans, and notes receivable, unless the proceeds arerestricted, committed or assigned.

Also, amounts that must bemaintained intact legally or contractually, such as the principal of apermanent fund are reported within the nonspendable category.

" Restricted fund balance is the portion of fund balance that is subject toexternally enforceable limitations by law, enabling legislation orlimitations imposed by creditors or grantors.

37 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

" Committed fund balance is the portion of fund balance that can only beused for specific purposes due to formal action of the City Councilthrough adoption of a resolution prior to the end of the fiscal year.Once adopted, the limitation imposed by resolution remains in placeuntil a similar action is taken (the adoption of another resolution) toremove or revise the limitation.

No amounts have been reported withinthis category of fund balance." Assigned fund balance reflects the City's intended use of resources.

Intent can be expressed by the City Council or by an official to whichthe City Council delegates the authority.

On February 22, 2011, theCity Council approved a policy whereby the authority to assign fundbalance was delegated to the City's chief financial

officer, whichauthorized the assignment of fund balance for specific programs orpurposes in accordance with City Council directives.

The City alsouses budget and finance policy to authorize the assignment of fundbalance, which is done through the adoption of the budget andsubsequent budget amendments throughout the year." Unassigned fund balance is the residual classification that includes allspendable amounts in the General Fund not contained in otherclassifications.

When expenditures are incurred for purposes for which both restricted andunrestricted (committed, assigned or unassigned) fund balances areavailable, the City's policy is to use restricted amounts before unrestricted amounts.

Within unrestricted resources, committed resources are used firstfollowed by assigned resources, and finally unassigned resources.

0. Net PositionNet position represents the difference between assets and deferred outflowsless liabilities and deferred inflows.

Net position invested in capital assetsconsists of capital assets, net of accumulated depreciation, reduced by theoutstanding balances of any borrowings used for the related acquisition, construction or improvement of those assets excluding unspent debtproceeds.

Restricted net position represents restricted assets less liabilities and deferred inflows related to those assets. Restricted assets are recordedwhen there are limitations imposed on their use either through legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments.

Restricted resources are used first to fund appropriations.

P. Interfund Transactions Interfund transactions are accounted for as revenues and expenditures orexpenses.

Transactions, which constitute reimbursements, are eliminated inthe reimbursed fund and accounted for as expenditures or expenses in thefund to which the transaction is applicable.

During the year, transactions occur between individual funds for goodsprovided or services rendered.

Related receivables and payables areclassified as "due from/to other funds" on the accompanying fund levelstatements.

The noncurrent portion of long-term interfund loans receivable are reported as advances and, for governmental fund types, are equallyoffset by a fund balance reserve to indicate that the receivable is not inspendable form.Any residual balances outstanding between the governmental activities andbusiness-type activities are reported in the government-wide financial statements as "internal balances".

Q. Unearned RevenueUnearned revenues arise when the government receives resources before ithas a legal claim to them, as when grant monies are received prior tomeeting all eligibility requirements.

In subsequent

periods, when bothrevenue recognition criteria are met, or when the government has a legalclaim to the resources, revenue is recognized.

R. Unavailable RevenueUnavailable revenue arises only under a modified accrual basis ofaccounting.

Accordingly, unavailable revenue is reported only in thegovernmental funds balance sheet. These amounts are deferred andrecognized as an inflow of resources (revenue) in the period that theamounts become available.

S. Deferred Outflows and Deferred Inflows of Resources When applicable, the statement of net position and the balance sheet willreport a separate section for deferred outflows of resources.

Deferredoutflows of resources represent outflows of resources (consumption of netposition) that apply to future periods and that, therefore will not berecognized as an expense or expenditure until that time.38 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014(amounts expressed in thousands)

When applicable, the statement of net position and the balance sheet willreport a separate section for deferred inflows of resources.

Deferred inflowsof resources represent inflows of resources (acquisition of net position) thatapply to future periods and that, therefore, are not recognized as an inflow ofresources (revenue) until that time.T. Regulatory Assets and Deferred Regulatory ChargesIn accordance with GASB Statement No. 62, enterprise funds that are usedto account for rate-regulated activities are permitted to defer certainexpenses and revenues that would otherwise be recognized when incurred, provided that the City is recovering or expects to recover or refund suchamounts in rates charged to its customers.

Accordingly, regulatory assetsand/or deferred regulatory charges have been recorded in the Electric, Water, Sewer and Refuse funds.U. Property Tax CalendarUnder California law, general property taxes are assessed for up to 1% of theproperty's assessed value. General property taxes are collected by thecounties along with other special district taxes and assessments and voterapproved debt. General property tax revenues are collected and pooled bythe county throughout the fiscal year and then allocated and paid to thecounty, cities and school districts based on complex formulas prescribed byState statutes.

Property taxes are calculated on assessed values as of January 1 for theensuing fiscal year. On July 1 of the fiscal year the levy is placed and a lienis attached to the property.

Property taxes are due in two installments.

Thefirst installment is due November 1 and is delinquent after December 10.The second installment is due February 1 and is delinquent after April 10.The City generally accrues only those taxes, which are received within sixtydays after the year-end.

Under the Teeter plan, the County of Riverside hasresponsibility for the collection of delinquent taxes and the City receives100% of the levy.V. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reportedamounts of assets and liabilities, disclosure of contingent assets andliabilities at the date of the financial statements, and the reported amounts ofrevenue and expenditures.

Specifically, the City has made certain estimates and assumptions relating to the revenues due and expenditures incurredthrough fiscal year end, collectability of its receivables, the valuation ofproperty held for resale, the useful lives of capital assets, and the ultimateoutcome of claims and judgments.

Actual results may differ from thoseestimates and assumptions.

2. Legal Compliance

-BudgetsBudgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America.

Annual appropriated budgets are adopted for all departments within the general, special revenueand capital project funds. Formal budgets are not employed for debt servicefunds because debt indenture provisions specify payments.

The permanent fund is not budgeted.

During the period December through February of each fiscal year,department heads prepare estimates of required appropriations for thefollowing fiscal year. These estimates are compiled into a proposedoperating budget that includes a summary of proposed expenditures andfinancial resources and historical data for the preceding fiscal year. Theoperating budget is presented by the City Manager to the City Council forreview. Public hearings are conducted to obtain citizen comments.

The CityCouncil generally adopts the budget during one of its June meetings.

TheCity Manager is legally authorized to transfer budgeted amounts betweendivisions and accounts within the same department.

Transfer ofappropriations between departments or funds and increased appropriations must be authorized by the City Council.

Expenditures may not legally exceedbudgeted appropriations at the departmental level within a fund. Allappropriations shall lapse at the end of the fiscal year to the extent they havenot been expended or lawfully encumbered, except for appropriations forcapital projects which shall continue to their completion.

3. Cash and Investments Cash and investments at fiscal year-end consist of the following:

Investments Investments at fiscal agentCash on hand and deposits with financial institutions Non-negotiable certificates of deposit$ 391,630305,464697,09474,9621,000$ 773.05E39 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

The amounts are reflected in the statements of net position of thegovernment-wide and fiduciary fund financial statements:

Cash and investments Restricted cash and cash equivalents Restricted cash and investments at fiscal agentTotal per statement of net positionFiduciary fund cash and investments

$ 384,76846,506277,297708,57164,485$ 773.056The City follows the practice of pooling cash and investments of all fundsexcept for funds required to be held by outside fiscal agents under theprovisions of bond indentures, which are administered by outside agencies.

Interest income earned on pooled cash and investments is allocated monthlyto funds based on the beginning and month-end balances.

Interest incomefrom cash and investments held at fiscal agents is credited directly to therelated account.

Bank deposits are covered by federal depository insurance for the first $250 or by collateral held in the pledging bank's trust department in the name of the City.Authorized Investments Under provisions of the City's investment policy, and in accordance withCalifornia Government Code Section 53601, the City Treasurer may invest ordeposit in the following types of investments:

more than 15% of the market value of the portfolio may be invested in onecorporation.

The City's investment policy provides two exceptions to the above; one is forinvestments authorized by debt agreements (described below) and the otherfor funds reserved in the San Onofre Nuclear Generating StationDecommissioning Account for which the five-year maturity limitation may beextended to the term of the operating license.Investments Authorized by Debt Aqreements Provisions of debt agreements, rather than the general provisions of theCalifornia Government Code or the City's investment policy, governinvestments of debt proceeds held by bond fiscal agents. Permitted investments are specified in related trust agreements and include thefollowing:

Securities of the U.S. Government and its sponsored agenciesBankers' Acceptances rated in the single highest classification Commercial Paper rated AA or higher at the time of purchaseInvestments in money market funds rated in the single highestclassification, except for certain debt proceeds which have nominimum rating requirement Municipal obligations rated Aaa/AAA or general obligations of states withratings of at least A2/A or higher by both Moody's and S&PInvestment Agreements No maximum percentage of the related debt issue or maximum investment inone issuer is specified.

Disclosures Relatinq to Interest Rate RiskInterest rate risk is the risk that changes in market interest rates willadversely affect the fair value of an investment.

Generally, the longer thematurity of an investment, the greater the sensitivity of its fair value tochanges in market interest rates. The City's investment policy requires thatthe interest rate risk exposure be managed by purchasing a combination ofshorter term and longer term investments and by timing cash flows frommaturities so that a portion of the portfolio is maturing or coming close tomaturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City's investments (including investments held by fiscal agent) to market interest rateMoney Market FundsSecurities of the U.S. Government and its sponsored agenciesCorporate Medium-Term NotesLocal Agency Investment Fund (State Pool)Negotiable Certificates of DepositRepurchase Agreements Reverse Repurchase Agreements Bankers Acceptances Commercial Paper of "prime" qualityLocal Agency BondsMaxMaturityN/A5 Years5 YearsN/A5 Years1 Year90 Days180 Days270 DaysN/AMax % ofPortfolio 20%N/A30%100%30%N/A20%40%25%N/AInvestments in Corporate Medium Term Notes may be invested in securities rated A or better by Moody's or Standard and Poor's rating services and no40 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands) fluctuations is provided by the following table that shows the distribution ofthe City's investments by maturity:

Remaining Maturity (in Months)12 Months 13 to 24 25 to 60 More thanTotal or Less Months Months 60 MonthsConcentration on Credit RiskThe investment policy of the City contains no limitations on the amount thatcan be invested in any one issuer beyond that. stated above. Investments inany one issuer (other than U.S. Treasury securities, money market funds,and external investment pools) that represent 5% or more of total Cityinvestments are as follows:Investment TypeMoney Market FundsFederal Agency Securities U.S. Treasury Notes/Bonds Corp. Medium Term NotesState Investment PoolNegotiable CDsHeld by Fiscal AgentMoney Market FundsState Investment PoolInvestment Contracts Commercial PaperFed. Agency Securities Corp. Med. Term NotesTotal$ 7,39879,715138,37454,56999,43512,13940,60719,332150,33212,87761,63420 682$697094$ 7,398 $12,31799,4353,96740,60719,33224,17312,8771,193-$53,44523,30620,4805,43725,72610,323,057$26,270115,06821,7722,73589,67250,11818,625IssuerDeutsche Bank Securities Inc.Custodial Credit RiskInvestment TypeInvestment ContractReported Amount$82,24910,761The City assumes that callable investments will not be called.Disclosures Relating to Credit RiskGenerally, credit risk is the risk that an issuer of an investment will not fulfillits obligation to the holder of the investment.

This is measured by theassignment of a rating by a nationally recognized statistical ratingorganization.

Presented below is the actual rating as of year-end for each investment type:Ratings as of Year EndCustodial credit risk for deposits is the risk that, in the event of the failure of adepository financial institution, a government will not be able to recover itsdeposits or will not be able to recover collateral securities that are in thepossession of an outside party. The custodial credit risk for investments isthe risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value ofits investment or collateral securities that are in the possession of anotherparty. The City's investment policy requires that a third party bank trustdepartment hold all securities owned by the City. All trades are settled on adelivery vs. payment basis through the City's safekeeping agent. The Cityhas no deposits with financial institutions; bank balances are swept daily intoa money market account.Investment in State Investment PoolThe City is a voluntary participant in the Local Agency Investment Fund(LAIF) that is regulated by California Government Code Section 16429 underthe oversight of the Treasurer of the State of California.

The fair value of theCity's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair valueprovided by LAIF for the entire LAIF portfolio (in relation to the amortized costof that portfolio).

The balance available for withdrawal is based on theaccounting records maintained by LAIF, which are recorded on an amortized cost basis.4. Direct Financing Lease Receivable The former Redevelopment Agency had a direct financing lease arrangement with the State of California (the State) for a twelve-story office building, whichwas transferred to the Successor Agency. The lease term is for thirty yearsand the State takes ownership of the facility at the conclusion of that term.TotalInvestment TypeMoney Market FundsFederal Agency Securities U.S. Treasury Notes/Bonds Corporate Medium Term NotesState Investment PoolNegotiable CDsHeld by Fiscal AgentMoney Market FundsState Investment PoolInvestment Contracts Commercial PaperFederal Agency Securities Corporate Medium Term NotesTotal$ 7,39879,715138,37454,56999,43512,13940,60719,332150,33212,87761,63420,682AAA$ 1,06279,715138,3749,23261,634AA A Unrated$ 1,290 $ 5,046 $44,301 10,268--99,435-12,13929,650 1,725-19,332-150,33212,877 -8 0 344 -2 _ 41 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30. 2014 (amounts expressed in thousandsl The lease calls for semi-annual payments not less than the debt serviceowed on the related lease revenue bonds issued by the formerRedevelopment Agency for the purchase and renovation of the building.

Thefuture minimum lease payments to be received are as follows:20152016201720182019Thereafter Total DueLess: amount applicable to interestTotal direct financing lease receivable

$ 2,5072,5332,5612,5982,62616,44329,268(8,758)Business type activities:

Capital assets, not depreciated:

LandIntangibles, non-depreciable Construction in progressTotal capital assets not depreciated Capital assets being depreciated:

Buildings Improvements other than buildings Intangibles, depreciable Machinery and equipment Total capital assets beingdepreciated Less accumulated depreciation for:Buildings Improvements other than buildings Intangibles, depreciable Machinery and equipment Total accumulated depreciation Total capital assets beingdepreciated, netBusiness type activities capital assets, net21,492149,38$ 10,558174,847185,405Beginning Additions/

Deletions/

Balance Transfers In Transfers Oul$ (2,079)(63,351)(65.430)EndingBalance$51,11521,492267,232 1,778 -269,0101,475,267 58,011 (3,883) 1,529,395 645 185 -8307452 3,0 179) 7,41,817,70 6337 (5,74 1,875,7(108,804)

(6,289) -(115,093)

(422,435)

(38,404) 4,022 (456,817)

(247) (111) -(358)(45.469)

(5.722) 1,9 (49,493)(576.955)

(50.526) 5,2 (621,.761) 1,240,15 1~2,5 46 1,23,64~I ~ $198-258 Skd,85. Capital AssetsThe following is a summary of changes in the capital assets during the fiscalyear ended June 30, 2014.Governmental activities:

Capital assets, not depreciated:

LandConstruction in progressTotal capital assets not depreciated Capital assets being depreciated:

Buildings Improvements other than buildings Machinery and equipment Infrastructure Total capital assets beingdepreciated Less accumulated depreciation for:Buildings Improvements other than buildings Machinery and equipment Infrastructure Total accumulated depreciation Total capital assets beingdepreciated, netGovernmental activities capital assets, netBeginning Additions/

Deletions/

Balance Transfers In Transfers Out$ 325,21538,515363,730180,337250,02179,782910,700$ 8,628$ (44)(29.160)(29,204)EndingBalance$ 333,79933,011366,810180,654299,34582,5629j34,1Depreciation expense was charged to various functions as follows:469 (152)49,3246,449(3,669)(331)1,20,840 8048 (4,152) 1,497,74(50,286)

(4,618)119 (54,785)Governmental activities:

General government Public safetyHighways and streets, including depreciation ofgeneral infrastructure assetsCulture and recreation Total depreciation expense -governmental activities Business type activities:

ElectricWaterSewerRefuseSpecial Transportation AirportPublic ParkingTotal depreciation expense -business type activities

$ 4,4904,11322,989$42.2Z8$27,26012,7996,8611,223612698(67,772)(60,170)(287,728)

(465,956)

(11,389)(4,567)(21,704)(42,278)3,191(842)(79,161)(61,546)(309,432)

(504.924) 954,884 38,208IL318.6-14 42 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

6. Long-Term Obligations Changes in Long-Term Obligations:

Below is a summary of changes in long-term obligations during the fiscal year:Governmental Activities:

The following debt has been issued for the purpose of generating capitalresources for use in acquiring or constructing municipal facilities orinfrastructure projects.

Long-Term Obliqations at June 30, 2014:Beginning Balance$15,314General Obligation BondsPension Obligation BondsCertificates ofParticipation Capital LeasesLease RevenueBondsLoan PayableCompensated AbsencesClaims Liability JudgmentNet OPEBObligation TotalAdditions

$Reductions

$ 854EndingBalance$14,460DueWithinOne Year$ 900Revenue Bonds:Principal Outstanding Electric122,005 30,940158,697 36,4468,424 6,62537,170 115,775 37,9903,697 191,446 4,2101,881 13,168 2,6351,418 42,344 1,330691 47,611 2,03643,76228,65219,65021,761 12,480 12,245 21,99631,569 13,582 9,984 35,16710,000 -3,333 6,66712,537 2,566 664 14,43957.93712,37211,1223,333$27,500 2004 Electric Revenue Bonds; Series A fixedrate bonds, due in a final principal installment of $2,645on October 1, 2014, interest of 5.0%.$141,840 2008 Electric Refunding/Revenue Bonds;Series A and C. The bonds were issued at a variablerate; however the City entered into an agreement toconvert to a fixed rate of 3.1% for the Series A bondsand 3.2% for the C bonds. For information on the swapagreements see note 10. Bonds are due in annualinstallments from $700 to $7,835 through October 1,2035.$209,740 2008 Electric Revenue Bonds; Series D fixedrate bonds, 3.6% to 5.0%, due in annual installments from $3,460 to $25,345 through October 1, 2038.$34,920 2009 Electric Refunding/Revenue Bonds;Series A fixed rate bonds, 4.0% to 5.0%, due in annualinstallments from $1,150 to $7,035 through October 1,2018. The bonds refunded the 1998 series andpartially refunded the 2001 series.$ 2,645112,515209,740Business-type activities:

Revenue BondsLoan PayableNotes PayableCapital LeasesLandfill CappingArbitrage Liability Water StockAcquisition RightsCompensated AbsencesNet OPEBObligation TotalBeginning Balance$1,031,839 42,66128,1372,5586,457269Additions

$134,8419,482353Reductions

$72,39042,6611,589645285255EndingBalance$1,094,290 36,0302,2666,17214DueWithinOne Year$77,2601,637700200$140,380 2010 Electric Revenue Bonds; Series A and Bfixed rate bonds, 3% to 5.0%, due in annual installments 150 from $95 to $33,725 through October 1, 2040.13,815140,38094429427,638 6,536 6,249 7,9259,780 2,190 567 11,403SM12.63 1.59046,480$56,450 2011 Electric Revenue Refunding Bonds; SeriesA. The bonds were issued at a variable rate; however,the City entered into an agreement to convert to a fixedrate of 3.2%. For information on the swap agreements see note 10. Bonds are due in annual installments from$725 to $5,175 through October 1, 2035.41,92543 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014For he yar ededJune30.

014(amounts expressed in thousandsl

$79,080 2013 Electric Revenue Refunding Bonds; SeriesA fixed rate bonds, 3% to 5.25%, due in annualinstallments from $795 to $12,685 through October 1,2043.$50,000 2014 Sewer Revenue Bonds; variable ratefinancing with Wells Fargo due June 1, 2015. Theinterest rate is 70% of the LIBOR one-month index plus50 basis points.SubtotalAdd: Unamortized bond premiumSubtotalAdd: Unamortized bond premium597,58010,434$608,014277,1151,970$279,085$1.094-290 WaterTotal Revenue Bonds$58,235 2008 Water Revenue Bonds; Series B fixedrate bonds, 4.0% to 5.0%, due in annual installments from $1,210 to $7,505 through October 1, 2038.$31,895 2009 Water Refunding/Revenue Bonds;Series A fixed rate bonds, 3.0% to 5.0%, due in annualinstallments from $2,360 to $4,335 through October 1,2020. The bonds refunded the 1998 series andpartially refunded the 2001 series.$67,790 2009 Water Revenue Bonds; Series B fixedrate bonds, 3.3% to 4.1%, due in annual installments from $2,475 to $4,985 through October 1, 2039.$59,000 2011 Water Refunding/Revenue Bonds; SeriesA. The bonds were issued at a variable rate; howeverthe City entered into an agreement to convert to a fixedrate of 3.2%. For information on the swap agreements see note 10. Bonds are due in annual installments from$600 to $3,950 through October 1, 2035.SubtotalAdd: Unamortized bond premiumSewer$240,910 2009 Sewer Revenue Bonds; Series A & Bfixed rate bonds, 3.65% to 5.0%, due in annualinstallments from $5,555 to $13,350 through August 1,2039.Remaining revenue bond debt service payments will be made from revenuesof the Electric, Water and Sewer Enterprise funds. Annual debt servicerequirements to maturity are as follows:$58,235Electric Utility FundWater Utility Fund21,20567,79056,525203,7553,436$207,191Fiscal Year201520162017201820192020-2024 2025-2029 2030-2034 2035-2039 2040-2041 PremiumTotalFiscal Year201520162017201820192020-2024 2025-2029 2030-2034 2035-2039 2040PremiumTotalPrincioa$14,92(15,82113,32(13,79114,44~80,57197,711120,15~149,04(77,79(1043dPrincioa$ 57,32~7,66(8,05~8,41(8,72~32,8836,56(46,01(58,13~13,35(1,97(J Interest$26,194 $25,51924,86324,2795 23,636109,4625 91,6285 68,29838,0474,8444 $46.77 $_Sewer Utility FundI Interest5 $10,4350 9,8115 9,4180 9,0635 8,7475 39,2440 31,7490 22,3065 10,1800 31205 151265Total41,11441,34438,18338,07438,081190,037189,343188,453187,08782,63410,434Total$ 67,76017,47117,47317,47317,47272,12968,30968,31668,31513,6621,970Principal

$ 5,0155,2605,1805,4155,63531,58038,05546,20056,4304,9853,436Interest$ 8,2768,0467,8147,5777,35233,26526,56318,1747,625103Total$13,29113,30612,99412,99212,98764,84564,61864,37464,0555,0883 436$331.9B6$227,11544 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014f,,n,,. ,n,+* vr , in +h,, AI -l IJU .0 -h!000. --I "I IIU00I 21.General Obligation Bonds:Principal Outstanding Remaining pension obligation bond debt service payments will be made fromunrestricted revenues of the General fund. Annual debt service requirements to maturity are as follows:$20,000 Fire Facility

Projects, Election of 2003 GeneralObligation Bond; 3.0% to 5.5%, due in annualinstallments from $410 to $1,740 through August 1,2024.Add: Unamortized bond premiumTotal General Obligation Bonds$14,295165$14A60Fiscal Year201520162017201820192020-2023 TotalPrincipal

$ 37,9907,9308,8809,92011,03540$020Interest$ 4,9504,3913,9713,4822,9365,891Total$ 42,94012,32112,85113,40213,97145,911$141 .396Remaining general obligation bond debt service payments will be made fromunrestricted revenues of the General fund. Annual debt service requirements to maturity are as follows:Fiscal Year201520162017201820192020-2024 2025PremiumTotalPrincipal

$ 9009651,0401,1101,1957,3451,740165Interest$ 6716345925444921,48548-$4.466Total$ 1,5711,5991,6321,6541,6878,8301,788165$18.926Principal Outstanding

$66,320Principal Outstanding Certificates of Participation:

Pension Obligation Bonds:$89,540 California Statewide Community Development Authority (Public Safety) 2004 Taxable PensionObligation Bond; 2.65% to 5.896%, due in annualinstallments from $1,125 to $10,715 through June 1,2023.$30,000 2005 Taxable Pension Obligation BondsSeries A; 3.85% to 4.78%, due in annual installments

$630 to $3,860 through June 1, 2020.$30,940 2014 Taxable Pension Obligation Refunding Bond Anticipation Notes; rate at June 30, 2014 was0.60%, $30,940 due June 1, 2015.$19,945 2006 Galleria at Tyler Public Improvements Certificates of Participation; 4.0% to 5.0%, due inannual installments from $435 to $1,270 throughSeptember 1, 2036.$128,300 2008 Riverside Renaissance Certificates ofParticipation; issued at a variable rate; however, theCity entered into an agreement to convert to a fixedrate of 3.4%. For information on the swap agreement see note 10. Due in annual installments from $2,900 to$7,200 through March 1, 2037.$20,660 2010 Recovery Zone Facility Hotel ProjectCertificates of Participation; 4.0% to 5.5%, due inannual installments from $415 to $1,410 through March1,2040.$35,235 2013 Pavement Rehab Certificates ofParticipation; 4.0% to 5.0%, due in annual installments from $1,285 to $2,855 through June 1, 2034SubtotalPlus: Unamortized bond premiumTotal Certificates of Participation

$18,585116,10020,66018,51535,235190,580866$191.445Total Pension Obligation Bonds$115.77545 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

Remaining certificates of participation debt service payments will be madefrom unrestricted revenues of the debt service fund. Annual debt servicerequirements to maturity are as follows:Fiscal Year201520162017201820192020-2024 2025-2029 2030-2034 2035-2039 2040PremiumTotalPrincipal

$ 4,2105,7305,9206,1106,31035,95543,72050,65030,5651,410866$191,44Interest7,4957,3457,1376,9226,70029,52121,73412,1412,94378Lease Revenue Bonds -Governmental Activities:

On August 15, 2012, the City issued the Series 2012ALease Revenue Refunding Bonds in the amount of$41,240.

The bonds were issued to refinance the 2003Certificates of Participation.

Interest on the bonds ispayable semi-annually on May 1 and November 1 ofeach year, commencing May 1, 2013. The rate ofinterest varies from 2% to 5% per annum depending onmaturity date. Principal is payable in annualinstallments ranging from $1,295 to $2,840commencing November 1, 2013 and ending November1, 2033. The refunding transaction resulted in aneconomic gain of $2,455 and a reduction of $3,034 infuture debt service payments.

Add: Unamortized bond premiumTotal Lease Revenue Bonds -Governmental Activities Total11,70513,07513,05713,03213,01065,47665,45462,79133,5081,488866Principal Outstandinq

$39,9452 399Fiscal Year201520162017201820192020-2024 2025-2029 2030-2034 PremiumTotalPrincipal

$1,3301,3701,4201,4851,5609,08010,54013,1602,399$42.3-44Interest$ 1,7431,7021,6531,5881,5116,2714,0581,370$19.896Principal Outstanding Loans Payable -Governmental Activities:

In March 2012 the City entered into a financing arrangement in the amount of $4,000 with PinnaclePublic Finance, Inc. for the construction of RyanBonaminio Park at the Tequesquite Arroyo. The debtwill be paid with resources from the General Fund insemi-annual debt service payments of approximately

$468 per year over a 10 year period, which includesinterest at an annualized rate of 3.05%.On July 19, 2012, the City secured financing in theamount of $41,650 with BBVA Compass Bank for therenovation and expansion of the Riverside Convention Center. In March 2014, the financing arrangement withBBVA was increased to $44,650.

The financing consists of an initial 21-month variable rate interest onlyperiod during construction that has a swap transaction layered over the remaining 20-year amortization resulting in a "synthetic fixed" rate of 3.24% for 20 ofthe 22 years. For information on the swap agreement see note 10. At the end of the construction period,principal and interest are due on the first of eachmonth, with equal payments each year ofapproximately

$2,850.Total Loans Payable -Governmental Activities Total$ 3,0733,0723,0733,0733,07115,35114,59814,53022399$62.24Q$ 3,294Remaining lease revenue bond debt service payments will be made fromunrestricted revenues of the debt service fund. Annual debt servicerequirements to maturity are as follows:44,31746 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the Year ended-June 30, 2014For he yar ededJune30.

014(amounts expressed in thousands)

Remaining loans payable debt service payments will be made fromunrestricted revenues of the debt service fund. Annual debt servicerequirements to maturity are as follows:Remaining notes payable debt service payments will be made fromunrestricted revenues of the Sewer fund. Annual debt service requirements to maturity are as follows:Fiscal Year201520162017201820192020-2024 2025-2029 2030-2034 TotalPrincipal

$ 2,0362,0942,1572,2222,28311,57911,92113$319Interest$1,4671,4091,3461,2811,2205,0043,2611,293Total$ 3,5033,5033,5033,5033,50316,58315,18214612Notes Payable -Enterprise Funds:Principal Outstandinq Fiscal Year201520162017201820192020-2021 TotalFiscal Year201520162017201820192020-2024 2025-2029 2030-2032 TotalPrincipal

$ 731745759774788659Principal

$ 9069409771,0141,0545,9177,1604,124$2_2092Sewer FundInterest$ 857258432920$3O7Public Parking FundInterest$ 8418077707336932,8171,574241_$8476Total$ 816817817817817679Total$ 1,7471,7471,7471,7471,7478,7348,7344,365$30_-568Sewer fund loan from State of California forCogeneration

project, 2.336%, payable in net annualinstallments of $339, beginning January 29, 2003through January 29, 2021Sewer fund loan from State of California for Headworks

project, 1.803%, payable in net annual installments of$477, beginning November 6, 1999 through November6, 2018Public parking fund loan from City National Bank forFox Entertainment Plaza project, 3.85%, payable in netannual installments of $1,747, beginning June 16, 2011through December 16, 2031In 2014, the Water fund purchased property fromHillwood Enterprises, L.P. (Hillwood).

The propertywas subsequently leased back to Hillwood, which is tobe developed into a logistics center. In consideration ofthe costs to purchase the property the Water fund willmake payments to Hillwood in the form of a credit equalto Hillwood's rental payments to the Water fund for thefirst 15 years of the lease. Rent will commence theearlier of when Hillwood starts construction of thelogistic center or May 20, 2016.Total notes payable -Enterprise Funds$2,1912,265Water Fund22,092Fiscal Year201520162017201820192020-2024 2025-2029 2030-2031 TotalPrincipal

$-404834925122,9003,5221,533$9.482Interest$-15615214413654327926$1.-436Total$-1966356366483,4433,8011,559$1O919,48247 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

Principal Outstanding Contracts

-Enterprise Funds:Water stock acquisition rights payable ondemand to various water companies Current Year Refunding:

$941On July 25, 2013 the City issued $79,080 of 2013A Electric RevenueRefunding Bonds, which refunded previously outstanding debt. Therefunding resulted in an increase in debt service payments of $10,962 overthe next 30 years and an economic gain of $2,961.Letters of Credit:The City's 2008 Certificates of Participation and 2008 Electric RevenueBonds (Series A and C) require an additional layer of security between theCity and the purchaser of the bonds. The City has entered into the following letters of credit ("LOC") in order to provide liquidity should all or a portion ofthe debt be optionally tendered to the remarketer without being successfully remarketed:

Capital Leases:The City leases various equipment through capital leasing arrangements inthe governmental and proprietary fund types. These activities are recordedfor both governmental and business-type activities in the government-wide financial statements.

The assets and related obligations under leases ingovernmental funds are not recorded in the fund statements.

For proprietary funds, the assets and their related liabilities are reported directly in the fund.Amortization applicable to proprietary assets acquired through capital leasearrangements is included with depreciation for financial statement presentation.

The assets acquired through capital leases are as follows:Governmental Business-Type Asset Activities Activities Buildings and improvements

$1,103 $ -Equipment 9,722 4,830Subtotal 10,825 4,830Less: Accumulated depreciation (3,315) (1,738)TotalThe future minimum lease obligations as of June 30, 2014 were as follows:Debt Issue2008 Certificates of Participation 2008A Electric Revenue Bonds2008C Electric Revenue BondsLOC ProviderBank of America, N.A.Barclays Bank, PLCBank of America, N.A.LOCExpiration Date201520172017AnnualCommitment Fee0.450%0.275%0.390%To the extent that remarketing proceeds are insufficient or not available, tendered amounts will be paid from drawings made under an irrevocable direct-pay letter of credit.Liquidity advances drawn against the LOC that are not repaid will beconverted to an installment loan over a 5-year period. The City would berequired to pay $63,420 a year for 5 years (assuming a 12 percent interestrate) if $116,100 of 2008 Certificates of Participation and $112,515 of 2008Electric Revenue Bonds (Series A and C) were "put" and not resold. Noamounts have ever been drawn against the three letters of credit due to afailed remarketing.

The various indentures allow the City to convert the mode of the debt' in thecase of a failed remarketing.

Years Ending June 30,20152016201720182019Thereafter CopiersTotal Minimum lease paymentsLess: Amount representing interest(rates ranging from 1.2% to 9%)Total capital lease payableGovernmental Activities

$2,8542,8542,2322,2321,9271,7712013,890Business-type Activities

$ 75138732232232230912,414(722)(148)$2.26648 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

The following are legally required debt service cash reserves.

Theseamounts, at a minimum, are held by the City or fiscal agents at June 30,2014:Governmental longi-term obligations:

Certificates of Participation TotalEnterprise funds:ElectricSewerTotal$10,281$1O281$14,83320,142$34-975The City has a number of debt issuances outstanding that are collateralized by the pledging of certain revenues.

The amount and term of the remainder of these commitments are indicated in the debt service to maturity tablespresented in the accompanying notes. The purposes for which the proceedsof the related debt issuances were utilized are disclosed in the debtdescriptions in the accompanying notes. For the current year, debt servicepayments as a percentage of the pledged gross revenue (or net of certainexpenses where so required by the debt agreement) are indicated in thetable below. The debt service coverage ratios also approximate therelationship of debt service to pledged revenue for the remainder of the termof the commitment.

Landfill Capping:State and Federal laws and regulations require the City to place a final coveron all active landfills when closed and to perform certain maintenance andmonitoring functions at the landfill site for 30 years after closure.

To complywith these laws and regulations, the City is funding the costs of closure and"final capping" of the Tequesquite landfill located in the City. This area,comprised of approximately 120 acres, operated as a "Class II SanitaryLandfill" until its closure in 1985. During its operation, the landfill did notaccept hazardous waste and no clean up and abatement or cease and desistorders have been issued to the City. The capacity used at June 30, 2014 was100%. The remaining post closure period is currently 19 years.The estimated costs as determined by an independent consultant andupdated by the City's Engineering Department are associated with floodcontrol upgrades, remediation of possible ground water contamination andcontrol of methane gas. All potential costs have been recognized in thefinancial statements.

However, there is the potential for these estimates tochange due to inflation, deflation, technology, or change in laws orregulations.

The City is recovering such costs in rates charged to itscustomers.

The portion of costs to be recovered through future rates isclassified as a regulatory asset and will be amortized over future periods.7. Risk Management The City is exposed to various risks of loss related to torts; theft of, damageto, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

Property insurance coverage has a limit of$1,000,000, with a deductible of $100. Earthquake and flood insurance coverage has a limit of $25,000, with a deductible of 5% for earthquake and$100 for flood. Workers' compensation insurance coverage has a limit of$25,000, with a self-insured retention of $3,000 per occurrence.

The Citycarries commercial insurance in the amount of $20,000 for general and autoliability claims greater than $3,000. There were no claims settled in the lastthree fiscal years that exceed insurance coverage.

Internal service fundshave been established to account for and finance the uninsured risks of loss.All funds of the City participate in the Risk Management program and makepayments to the Internal Service Funds based on actuarial estimates of theamounts needed to fund prior and current year claims and incidents thathave been incurred but not reported.

Interfund premiums are accounted foras quasi -external transactions and are therefore recorded as revenues ofthe Internal Service funds in the fund financial statements.

Description ofPledged RevenueElectric revenuesWater revenuesSewer revenuesAnnual Amount ofPledged Revenue(net of expenses, where required)

$106,40536,76123,168"Annual Debt ServicePayments (of alldebt secured bythis revenue)$49,20713,11018,534Debt ServiceCoverageRatiofor FYE6/30/142.162.801.25* Includes

$2,425 of cash set-aside in a rate stabilization account inaccordance with applicable bond covenants.

There are also a number of limitations and restrictions contained inAssessment Bond indentures.

The City believes they are in compliance withall significant limitations and restrictions.

49 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

Changes in the self-insurance fund's claims liability amounts are:Unpaid Claims, June 30, 2012Incurred claims (including IBNR's)Claim payments and adjustments Unpaid Claims, June 30, 2013Incurred claims (including IBNR's)Claim payments and adjustments Unpaid Claims, June 30, 2014$27,54220,897(16,870)31,56913,582(9,984)8. JudgmentIn April 2013, the City settled a lawsuit challenging its century-old practice oftransferring Water Fund monies to the General Fund. Under the settlement agreement, the General Fund agreed to pay $10 million over a three yearperiod beginning in fiscal year 2013/14.

In fiscal year 2013/14, the GeneralFund paid the first installment of $3,333. The remaining obligation is $6,667,which has been reflected as a liability in the government-wide statements.

9. Other Long-Term Obligations Changes in Long-Term Obligations:

Below is a summary of changes in long-term obligations during the fiscal year for the former Redevelopment Agency,which is accounted for in the Successor Agency Trust (a fiduciary fund):$17,025 1999 University Corridor/Sycamore CanyonMerged Project Area, Tax Allocation Bonds, Series A;$6,205 serial bonds, 3.4% to 4.7% due in annualinstallments from $40 to $570 through Aug. 1, 2014;$4,810 term bonds at 4.75% due Aug. 1, 2021; and$6,010 term bonds at 5.0% due Aug. 1, 2027.$6,055 1999 University Corridor/Sycamore CanyonMerged Project Area, Subordinate Tax Allocation Bonds, Series B; $1,900 serial bonds, 4.5% to 5.5%due in annual installments from $35 to $190 throughSep. 1, 2013; $1,135 term bonds at 5.5% due Sep. 1,2018; and $3,020 term bonds at 5.625% due Sep. 1,2027.$20,395 1999 Casa Blanca Project Area, TaxAllocation Bonds, Series A; $8,925 serial bonds, 3.4%to 4.7% due in annual installments from $455 to $780through Aug. 1, 2014; $2,565 term bonds at 4.75% dueAug. 1, 2017; $4,035 term bonds at 4.75% due Aug. 1,2021; and $4,870 term bonds at 5% due Aug. 1, 2025.$4,550 Arlington Redevelopment

Project, 2004 TaxAllocation Bonds, Series A; $420 term bonds at 3.8%due Aug. 1, 2014; $615 term bonds at 4.6% due Aug.1, 2024; $3,515 term bonds at 4.7% due Aug. 1, 2034.$2,975 Arlington Redevelopment Project Area, 2004Tax Allocation Bonds; Series B: 5.5% due in annualinstallments from $85 to $235 through Aug. 1, 2024.$26,255 State of California Department of GeneralServices

Project, 2003 Lease Revenue Refunding Bonds, Series A; 2% to 5% due in annual installments from $545 to $2,230 through Oct. 1, 2024.$4,810 State of California Dept. of General ServicesProject, 2003 Lease Revenue Refunding Bonds, SeriesB; $310 serial bonds 1.20% to 1.42% through Oct.1,2004; $620 term bonds at 3.090% due Oct. 1, 2008;$1,110 term bonds at 4.340% due Oct. 1, 2014 and$2,770 term bonds at 5.480% due Oct. 1, 2024.11,3904,15512,250Successor Agency Trust:Beginning Balance*

Additions Reductions DueEnding WithinBalance One Year4,175Redevelopment Agency bondsNotes PayableTotal$ 256,2226,257$$ 8,182650$248,0405,607$8,3107332,010Principal Outstanding Redevelopment Agency Bonds:17,790$13,285 1991 Public Financing Authority RevenueBonds, Series A, Multiple Project Areas; $1,470 serialrevenue bonds 7.15% to 7.6%, due in annualinstallments from $100 to $145 through Feb. 1, 2003;and $4,175 term bonds, 8.0%, due in annualinstallments from $155 to $450 through Feb. 1, 2018(portion not refunded).

$ 852,97550 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

$40,435 Downtown/Airport Merged Project Area, 2003Tax Allocation and Refunding Bonds; $32,720 serialbonds 2.0% to 5.25% due in annual installments from$1,220 to $1,955 through Aug. 1, 2023; and $7,715term bonds at 5.0% due in annual installments from$195 to $2,060 through Aug. 2034.$24,115 2005 Housing Set-Aside Tax Allocation Bonds;$17,025 serial bonds 3.0% to 4.625% due in annualinstallments from $505 to $1,165 through Aug. 1, 2025;$2,425 term bonds at 5.0% due Aug. 1, 2028; and$4,665 term bonds at 4.85% due Aug. 1, 2034.$8,340 Downtown/Airport Merged Project Area andCasa Blanca Project Area 2007 Tax Allocation Bonds,Tax Exempt, Series A, serial bonds 4.0% to 4.25% duein annual installments from $20 to $590,000 throughAug. 1, 2025; $4,980 term bonds at 4.5% due Aug. 1,2029; $410 term bonds at 4.375% due Aug. 1, 2037.$1,465 California Statewide Communities Development Authority 2005 Taxable Revenue Bonds, Series A(CRA/ERAF Loan Program);

3.87% to 5.01% due inannual installments of $105 to $180 through Aug. 1,2015.$14,850 Downtown/Airport Merged Project Area andCasa Blanca Project Area 2007 Tax Allocation Bonds,Taxable, Series B, $4,050 term bonds at 5.2% dueAug. 1, 2017; $10,800 term bonds at 5.8% due Aug. 1,2028.$89,205 University Corridor/Sycamore Canyon MergedProject Area, Arlington Project Area, HunterPark/Northside Project Area, Magnolia Center ProjectArea, and La Sierra/Arlanza Project Area 2007 TaxAllocation Bonds, Tax-Exempt, Series C, serial bonds4.0% to 5.0% due in annual installments from $50 to$3,210 through Aug. 1, 2025; $17,955 term bonds at4.5% due Aug. 1, 2030; $47,775 term bonds at 5.0%due Aug. 1, 2037.26,78018,4158,220$43,875 University Corridor/Sycamore Canyon MergedProject Area, Arlington Project Area, HunterPark/Northside Project Area, Magnolia Center ProjectArea, and La Sierra/Arlanza Project Area 2007 TaxAllocation Bonds, Taxable, Series D, $15,740 termbonds at 5.24% due Aug. 1, 2017; $28,135 term bondsat 5.89% due Aug. 1, 2032.SubtotalAdd: Unamortized bond premiumTotal Redevelopment Agency Bonds34,785242,8405,2001248.040Remaining debt service will be paid by the Successor Agency Trust fromfuture property tax revenues.

Annual debt service requirements to maturityare as follows:Fiscal Year201520162017201820192020-2024 2025-2029 2030-2034 2035-2038 PremiumTotalPrincipal

$ 8,3108,5208,9059,66010,12561,01558,17545,20532,9255,200$248.040Interest$12,04711,66511,25610,79910,29942,74426,73613,8263,110$142.482Total$ 20,35720,18520,16120,45920,424103,75984,91159,03136,0355,200$390,522Principal Outstandinq 180Notes Payable -Successor Agency:12,520These notes payable have been issued to promotedevelopment and expansion within the City'sredevelopment areas.Pepsi Cola Bottling Company of Los Angeles, 10.5%,payable in net annual installments of $341, subject torecording of completion.

$2,98777587,11051 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

HUD Section 108 loan for University

Village, 5.36% to7.66%, payable in semi-annual installments beginning Aug. 1, 1996 of $272 to $425 through Aug. 1, 2015HUD Section 108 loan for Mission Village Project,6.15% to 6.72%, payable in semi-annual installments beginning Aug. 1, 1999 of $110 to $420 through Aug. 1,2018Total notes payable -Successor AgencyDescription ofPledged RevenueProperty Taxes:Non-Housing HousingAnnual Amount ofPledged Revenue(net of expenses, where required)

$41,3358,667Annual Debt ServicePayments (of alldebt secured bythis revenue)$15,2982,765Debt ServiceCoverageRatiofor FYE6/30/142.703.131,845Remaining debt service will be paid by the Successor Agency Trust fromfuture property tax revenues.

Annual debt service requirements to maturityare as follows:Fiscal Year201520162017201820192020-2024 2025-2029 2030-2034 2035-2038 TotalPrincipal

$ 7337713994284622864717771Q280Interest$ 3833573373233061,4231,238933430Total$ 1,1161,1287367517681,7091,7091,7101,710* The computations above are based on the total tax increment generated forthe year ended June 30, 2014 for each project area that had been pledgedas collateral for the Bonds. As discussed above, only a portion of taxincrement has been actually remitted to the Successor Agency and reportedas revenue in the accompanying financial statements.

Assessment Districts and Community Facilities Districts Bonds(Not obligations of the City)As of June 30, 2014, the City has several series of Assessment District andCommunity Facility District Bonds outstanding in the amount of $45,350.Bonds were issued for improvements in certain districts and are long-term obligations of the property owners. The City Treasurer acts as an agent forthe property owners in collecting the assessments, forwarding the collections to bondholders and initiating foreclosure proceedings, if applicable.

Sincethe debt does not constitute an obligation of the City, it is not reflected as along-term obligation of the City and is not reflected in the accompanying basic financial statements.

Conduit Debt Obligations Mortgage Revenue Bonds outstanding of $5,385 and Industrial Development Revenue Bonds of $1,700 are not included in the accompanying financial statements.

These bonds are special obligations of third parties and payablesolely from and secured by a pledge of the receipts received from loans andcertain other reserve funds and related monies. The bonds are not payablefrom any other revenues or assets of the City. Neither the faith and creditnor the taxing power of the City, the State of California or any political subdivision thereof is pledged to the payment of the principal and interest onthe bonds.As a result of action by the State of California to dissolve all redevelopment agencies in the state, the Successor Agency no longer receives the fullamount of tax increment previously pledged by the dissolved redevelopment agency to its bondholders.

In its place is a new revenue stream provided tothe Successor Agency that represents only that portion of tax increment thatis necessary to pay the enforceable obligations approved by the California Department of Finance.For the current year, debt service payments as a percentage of the pledgedgross revenue (or net of certain expenses where so required by the debtagreement) are indicated in the table below. The debt service coverageratios for the Successor Agency also approximate the relationship of debtservice to pledged revenue for the remainder of the term of the commitment.

52 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

10. Derivative Instruments Interest Rate SwapsThe City has six cash flow hedging derivative instruments, which are pay-fixed swaps. These swaps were employed as a hedge against debt that wasrefunded in 2008 and 2011 and against debt issued in 2012. At the time ofthe refundings, hedge accounting ceased to be applied.

The balance of thedeferral account for each swap is included as part of the deferred charge onrefunding associated with the new bonds. The swaps were also employedas a hedge against the new debt. Hedge accounting was applied to thatportion of the hedging relationship, which was determined to be effective.

Hedge accounting was also applied to the swap associated with the debtissued in 2012, which was also determined to be effective.

The following is a summary of the derivative activity for the year ended June30, 2014:during construction, which swaps to a fixed rate for the remaining 20-yearamortization whereby the City will pay a fixed payment and will receive avariable payment computed at 65.01% of the LIBOR one month index plus150 basis points. The lease interest rate on the Convention Center has acap at the lesser of 12% or the highest rate permitted by applicable lawwhereas the related swap does not have a cap. The swaps have notionalamounts equal to the principal amounts stated above. The notional value ofthe swaps and the principal amounts of the associated debt decline by $975to $7,200 until the debt is completely retired in fiscal year 2037.The bonds and the related swap agreements for the 2008A Electric RevenueBonds mature on October 1, 2029, 2008C Electric and 2011A Electric and2011A Water Revenue/Refunding Bonds mature on October 1, 2035. The2008 Certificates of Participation mature on March 1, 2037. The loan withBBVA Compass Bank will be paid in full on April 1, 2034.As of June 30, 2014 rates were as follows:Fair ValueNotional as ofAmount 6/30/14Change inFair Valuefor FiscalYear2008 ElectricRefunding/

RevenueBondsSeries ARates2008 ElectricRefunding/

RevenueBondsSeries CRatesGovernmental Activities 2008 Renaissance Certificates of Participation 2012 Convention Center Financing Business-Type Activities 2008 Electric Refunding/Revenue Bonds Sedes A2008 Electric Refunding/Revenue Bonds Series C2011 Electric Refunding/Revenue Bonds Series A2011 Water Refunding/Revenue Bonds Series A$116,100 (19,485)

(146)41,406 49 (977)68,52541,97541,92556,525(8,845)(6,646)(6,617)(8,083)800410411(199)Objective:

In order to lower borrowing costs as compared to fixed-rate bonds, the City entered into interest rate swap agreements in connection withits $141,840 2008 Electric Revenue Bonds (Series A and C), $56,450 2011Electric Revenue Bonds, $59,000 2011 Water Revenue Bonds and $128,3002008 Certificates of Participation

("COP").

Also, in 2012, the City enteredinto an additional interest rate swap agreement in connection with theConvention Center financing with BBVA Compass Bank.Terms: Per the existing swap agreements, the City pays a counterparty afixed payment and receives a variable payment computed as 62.68% of theLondon Interbank Offering Rate ("LIBOR")

one month index plus 12 basispoints for the Electric and Water swaps. For the COP swap, the City pays afixed payment and receives a variable payment computed as 63.00% of theLIBOR one month index plus 7 basis points. The Convention Centerfinancing consists of an initial 21-month variable rate interest only periodInterest rate swap:Fixed payment to counterparty Variable payment from counterparty Net interest rate swap paymentsVariable-rate bond coupon paymentsSynthetic interest rate on bondsInterest rate swap:Fixed payment to counterparty Variable payment from counterparty Net interest rate swap paymentsVariable-rate bond coupon paymentsSynthetic interest rate on bonds(0.42414%)

2.68686%0.35041%2011 WaterRefunding/

RevenueBondsSeries A(0.42543%)

2.77857%0.34837%312fi94%2008Renaissance COPs3.11100%

3.20400%2011 ElectricRefunding/

RevenueBondsSeries ARates3.20100%(0.24925%)

2.95175%0.14338%a3.9513%2012Convention CenterFinancing Rates Rates Rates3.20000%

3.36200%

3.24000%(0.24900%)

2.95100%0.16488%__WI5_66%

(0.39595%)

2.96605%0.38032%-346&U%(1.59857%)

1.64143%1.59857%3U24010%53 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

Fair Value: As of June 30, 2014, in connection with all swap arrangements, the transactions had a combined net negative fair value of <$49,627>.

Because the coupons on the City's variable-rate bonds adjust to changinginterest rates, the bonds do not have a corresponding fair value decrease.

The fair value was developed by a pricing service using the zero-coupon method. This method calculates the future net settlement payments requiredby the swap, assuming that the current forward rates implied by the yieldcurve correctly anticipate future spot interest rates. These payments arethen discounted using the spot rates implied by the current yield curve forhypothetical zero-coupon bonds due on the date of each future netsettlement of the swap.Credit risk: The City is exposed to credit risk on one of its derivative instruments that has a positive fair value. The counterparty for this swap isBBVA/Compass Bank. To mitigate credit risk, the City has the ability tooffset swap payments due to it from BBVA/Compass pursuant to the swap,against current and future rental payments required to be made by the City toCompass Mortgage Corporation under the lease agreement.

The City is notexposed to credit risk on the remaining swaps because those swaps have anegative fair value. The swap counterparties, Bank of America, N.A., Bankof America Corp. and J.P. Morgan Chase & Co. were rated A, A- and Arespectively by Standard

& Poor's. To mitigate the potential for credit risk forthese swaps, the swap agreements require the fair value of the swap to becollateralized by the counterparty with U.S. Government securities if thecounterparties' rating decreases to negotiated trigger points. Collateral would be posted with a third-party custodian.

At June 30, 2014, there is norequirement for collateral posting for any of the outstanding swaps.Basis risk: The city is exposed to basis risk on its pay-fixed interest rateswap and rate cap hedging derivative instruments because the variable-rate payments received by the city on these hedging derivative instruments arebased on a rate or index other than interest rates the city pays on its hedgedvariable-rate debt. If a change occurs that results in the rates' moving toconvergence, the expected cost savings may not be realized.

Termination risk: The derivative contract uses the International SwapDealers Association Master Agreement, which includes standard termination events, such as failure to pay and bankruptcy.

The Schedule to the MasterAgreement includes an "additional termination event." That is, a swap maybe terminated by the City if either counterparty's credit quality falls below"BBB-" as issued by Standard and Poor's. The City or the counterparty mayterminate a swap if the other party fails to perform under the terms of thecontract.

If a swap is terminated, the Variable-rate bond would no longercarry a synthetic interest rate. Also, if at the time of termination a swap has anegative fair value, the City would be liable to the counterparty for a paymentequal to the swap's fair value.Swap payments and associated debt: As of June 30, 2014, the debt servicerequirements of the variable-rate debt and net swap payments assumingcurrent interest rates remain the same, for their term are summarized in thefollowing table. As rates vary, variable-rate bond interest payments and netswap payments will vary.Variable-Rate BondsFiscal YearEndingJune 30201520162017201820192020-2024 2025-2029 2030-2034 2035-2039 TotalPrincipal

$ 5,8426,1385,9647,21713,51686,52591,151105,97949,050$371,.382 Interest$ 1,6921,6541,6141,5711,5146,4184,3692,050194$21 .076InterestRateSwaps. Net$ 10,54010,38910,23510,0589,73641,55529,40315,3911 790$139,0_97 Total$ 18,07418,18117,81318,84624,766134,498124,923123,42051,034$53155511. Economic Contingency A portion of unassigned fund balance within the General Fund is set aside forfuture economic contingencies.

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

12. Interfund Assets, Liabilities and Transfers Due From/To Other Funds: These balances resulted from expenditures being incurred prior to receipt of the related revenue source.The following table shows amounts receivable/payable between funds withinthe City at June 30, 2014:54 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

Receivable FundGeneralPayable FundNonmajor Governmental FundsCapital Outlay FundNonmajor Enterprise FundsCentral Stores *Central Stores *Amount$ 60217,38113318,116914392In addition, the following advances to the former Redevelopment Agency areaccounted for in the Private-Purpose Trust Fund of the Successor Agency:ElectricWaterTotalReceivable FundGeneralNonmajor Governmental FundsElectricSewerSelf-Insurance Trust *TotalAmount$ 65239,7395,8004,4365,634* Internal service fundAdvances To/From Other Funds: These balances consist of advances usedto fund capital projects in advance of related financing/assessments and forother long-term borrowing purposes.

The following table shows amounts advanced from funds within the City toother funds within the City at June 30, 2014:Transfers In/Out: Transfers are primarily used to (1) move revenues to thefund that statute or budget requires to expend them, and (2) move receiptsrestricted to debt service from the funds collecting the receipts to the debtservice fund as debt service payments become due.The following table shows amounts transferred to/from funds within the Cityas of June 30, 2014:Receivable FundGeneralPayable FundElectricWaterSewerNonmajor Governmental FundsNonmajor Enterprise FundsSelf-Insurance Trust *Central Stores *Central Garage *Self-Insurance Trust *Central Garage *Amount$11,2844,8553,1065162,08720421396123,2264521664581,6882,7643,4607$283$36-733Transfer In FundGeneralGeneral FundNonmajor Governmental FundsTransfer Out FundElectricWaterCapital Outlay FundNonmajor Enterprise FundsWaterTotalGeneral FundAmount$38,7046,99145.6959,8512,18573812,7743 333Nonmajor Enterprise FundsGeneral FundNonmajor Governmental FundsCentral Garage *Nonmajor Governmental FundsNonmajor Governmental Funds13. Deficit Net PositionDeficit net position exists in the Self-Insurance Internal Service Fund($25,953).

In order to begin funding a portion of the deficit in the internalservice fund, self-insurance rates were increased in the current year.However, this was offset by unusually large losses incurred during the yearcombined with an adjustment for the increase in the amount estimated forclaims and judgments.

Management believes that there are sufficient fundson hand to cover current payment obligations and plans to continue to controlSewerTotal55 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands) costs and increase rates over the next few years as needed to matchexpected long-term payment requirements.

Deficit net position exists in the Special Capital Improvement Fund ($1,733).

The deficit relates to short-term borrowings, which will be repaid over thenext six years as park development fees are expected to increase as thelocal economy continues to recoverDeficit net position also exists in the Successor Agency Private-Purpose Trust Fund ($205,604).

The deficit in the Successor Agency Trust Fund willbe reduced over the years as the related debt is paid-off with funds receivedfrom the Redevelopment Property Tax Trust Fund (RPTTF),

which isadministered by the County Auditor-Controller.

14. Litigation The City is a defendant in various lawsuits arising in the normal course ofbusiness.

Present lawsuits and other claims against the City are incidental tothe ordinary course of operations and are largely covered by the City's self-insurance program.

In the opinion of management and the City Attorney, such claims and litigation will not have a materially adverse effect upon thefinancial position or results of operation of the City.The Water Utility is a plaintiff in a lawsuit against several entities that eitherowned or leased a property site in the City of Colton and City of Rialto that iscontaminated by perchlorate.

The lawsuit was filed March 31, 2009, and notrial date has been set.15. City Employees Retirement Plan(A) Plan Description.

The City of Riverside contributes to the California PublicEmployees Retirement System (CaIPERS),

an agent multiple employerpublic employee defined benefit pension plan. CalPERS provides retirement and disability

benefits, annual cost-of-living adjustments, and death benefitsto plan members and beneficiaries.

CalPERS acts as a common investment and administrative agent for participating public entities within the State ofCalifornia.

PERS issues a publicly available financial report that includesfinancial statements and required supplementary information for the costsharing plans that are administered by PERS. Benefit provisions and all otherrequirements are established by state statute and City ordinance.

A copy ofCaIPERS' annual financial report may be obtained online atwww.calpersca.gov.

(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'actuaries.

Participants are required to contribute 8% (9% for safetyemployees) of their annual covered salary. The City has a multiple tierretirement plan with benefits varying by plan. The City pays the employees' contribution to CaIPERS for both miscellaneous and safety employees hiredon or before specific dates as follows:Safety (Police):

• 1st Tier (RPOA, RPOA Supervisory

& RPAA) -The retirement formula is 3% at age 50 for employees hired before February 16,2012. The City pays the employee share (9%) of contributions ontheir behalf and for their account.* 2 d Tier (RPOA only) -The retirement formula is 3% at age 50 andnew employees hired on or after February 17, 2012 pay their share(9%) of contributions.

• 3rd Tier (RPOA, RPOA Supervisory

& RPAA) -The retirement formula is 2.7% at age 57 for new members hired on or after January1, 2013 and the employee must pay the employee share (9%).Classic members (CalPERS members prior to 12/31/12) hired on orafter January 1, 2013 may be placed in a different tier.Safety (Fire):* 1st Tier -The retirement formula is 3% at age 50 for employees hiredbefore June 11, 2011. The City pays the employee share (9%) ofcontributions on their behalf and for their account.* 2nd Tier -The retirement formula is 3% at age 55 and newemployees hired on or after June 11, 2011 pay their share (9%) ofcontributions.

• 3rd Tier -The retirement formula is 2.7% at age 57 for new membershired on or after January 1, 2013 and the employee must pay theemployee share (9%). Classic members (CalPERS members priorto 12/31/12) hired on or after January 1, 2013 may be placed in adifferent tier.Miscellaneous:

a 1st Tier -The retirement formula is 2.7% at age 55. The City paysthe employee share (8%) of contributions on their behalf and for theiraccount except for general SEIU employees, which contributed 2%in fiscal year 2013/14, with the City paying the remaining 6% of theemployee share.* 2nd Tier -The retirement formula is 2.7% at age 55, and:56 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014+k .4For the yar ended une 30. 214 loll I.JU tO VAIJ C00CU "I LIILUaOO aUo SEIU and SEIU Refuse employees hired on or after June 7,2011 pay their share (8%) of contributions.

o All other miscellaneous employees hired on or after October19, 2011 pay their share (8%) of contributions.

3 Tier -The retirement formula is 2% at age 62 for new membershired on or after January 1, 2013 and the employee must pay theemployee share ranging from 7-8% based on bargaining groupclassification.

Classic members (CalPERS members prior to12/31/12) hired on or after January 1, 2013 may be placed in adifferent tier.The contribution requirements of plan members and the City are established and may be amended by CalPERS.(C) Annual Pension Cost. The required contribution was determined as partof the June 30, 2011 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.50% investment rateof return (net of administrative expenses),

(b) projected salary increases of3.30% per year compounded

annually, attributable to inflation, and (c) 2.75%expected long term inflation.

The actuarial value of CalPERS assets wasdetermined using techniques that smooth the effects of short-term volatility inthe market value of investments (smoothed market value). All changes in theunfunded actuarial accrued liability due to plan amendments, changes inactuarial assumptions, or changes in actuarial methodology are amortized separately as a level percentage of pay over a closed 20-year period. Allgains or losses are tracked and amortized over a rolling 30-year period withthe exception of special gains and losses in fiscal years 2008-2009, 2009-2010 and 2010-2011.

Each of these years' gains or losses has been isolatedand amortized over fixed and declining 30 year periods (as opposed to thecurrent rolling 30 year amortization).

Three-year trend information for CalPERS:In 2004 and 2005, the City issued pension obligation bonds to fund theunfunded actuarial accrued liability for safety and miscellaneous employees.

The asset related to the net pension asset will be amortized in accordance with the method used by CalPERS for calculating actuarial gains and lossesover a 19-year period. A total of $122,806 of net pension assets is includedin the Government-wide Statement of Net Position and in the proprietary fundstatements.

Determination of Net Pension Asset as of June 30, 2014:Misc SafetyAnnual required contribution Interest on net pension assetAdjustment to annual required contribution Annual pension costLess contributions madeDecrease in net pension assetNet pension asset, beginning of yearNet pension asset, end of year$ 20,151(3,887)6,09722,361(20,151)2,210(51,825)$17,206(5,763)9,41820,861(17,206)3,655(76,846)Schedule of funding for CalPERS:EntryAgeNormalActuarial AccruedLiability (AAL)Actuarial Valuation Plan DateActuarial Value ofAssetsUnfunded/

(Overfunded)

Actuarial AccruedLiability (UAAL)FundedRatioAnnualCoveredPayrollUAAL asa % ofCoveredPayroll102.1128.1Misc. 6/30/11 $998,216 887,857Safety 6/30/11 $731,074 650,95416. Other Post-Employment Benefits110,359 88.9 108,10680,120 89.0 62,538FiscalYearJune 30,201220122013201320142014PlanMiscSafetyMiscSafetyMiscSafetyAnnualPensionCost (APC)$21,66118,54221,90718,94522,36120,861% of APCContributed 92.8%86.6%91.5%83.9%90.1%82.5%Net PensionObligation (Asset)$(53,694)

(79,890)(51,825)(76,846)(49,615)(73,191)The City provides healthcare benefits to retirees in the form of an implied ratesubsidy.

Retirees and active employees are insured together as a group,thus creating a lower rate for retirees than if they were insured separately.

Although the retirees are solely responsible for the cost of their healthinsurance benefits through this plan, the retirees receive the benefit of alower rate. The difference between these amounts is the implied ratesubsidy, which is considered an other post-employment benefit (OPEB)under GASB 45.57 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands)

Retiree coverage terminates either when the retiree becomes covered underanother employer health plan, or when the retiree reaches Medicare eligibility age, which is currently age 65. Spousal coverage is available until the retireebecomes covered under another employer health plan, attains Medicareeligibility age, or dies. However, the retiree benefit continues to the surviving spouse if the retiree elects the CalPERS survivor annuity.The contribution requirements are established by the City Council.

The Cityis not required by law or contractual agreement to provide funding other thanthe pay-as-you-go amount necessary to provide current benefits to eligibleretirees and beneficiaries.

The City's annual OPEB cost (expense) is reported based on the annualrequired contribution of the employer (ARC), an amount actuarially determined in accordance with GASB 45. The ARC represents a level offunding that, if paid on an ongoing basis, is projected to cover normal costeach year and amortize any unfunded actuarial liability (or funding excess)(UAAL) over a period not to exceed thirty years. The ARC for the year endedJune 30, 2014 was $4,913, which consisted of normal cost of $2,553 andUAAL amortization of $2,360. The ARC as a percentage of payroll was 3.2%for the year ended June 30, 2014.As of June 30, 2013, the most recent actuarial valuation date, the OPEB planwas 0.0% funded. The actuarial accrued liability for benefits was $47 million,and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $47 million.Determination of the Net OPEB Obligation as of June 30, 2014:results are compared to past expectations and new estimates are madeabout the future. The method used by the actuary was the entry age normalcost method. The actuarial assumptions included (a) discount rate of 4.30%,(b) 2.75% inflation, (c) projected salary increases of 3.00% annually and (d)healthcare cost trend rates ranging from 5.0% to 7.0%.Projections of benefits are based on the substantive plan (the plan asunderstood by the employer and plan members) and include the types ofbenefits in force at the valuation date and the pattern of sharing benefit costsbetween the city and the plan members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions thatare designed to reduce short-term volatility in actuarial accrued liabilities andthe actuarial value of assets.Three-year trend information:

Fiscal YearJune 30,201220132014Fiscal YearJune 30,201220132014ActualARC Contributions

$5,8216,0114,913AnnualOPEB Cost$5,7896,1474,756$1,4261,6261,232% of OPEB CostContributed 25%26%26%Yo of ARCrntributed 25%27%25%Net OPEBObligqation

$17,79622,31725,842Annual required contribution Interest on net OPEB obligation Amortization of net OPEB obligation Annual benefit pension costLess contributions madeIncrease in net OPEB obligation Net OPEB liability, beginning of yearNet OPEB liability, end of year$ 4,913960(1,116)4,757(1,232)3,525225317M258-42The table below displays the funding progress of the plan and is based uponthe most recent actuarial valuation data:Actuarial Valuation Date6/30/13Actuarial AccruedLiability

$47,195Actuarial Value ofAssets$ -UnfundedActuarial Liability (U$L1*$47,195FundedRatio0%AnnualCoveredPayroll$153,077UL as a% ofCoveredPayroll31%Actuarial valuations involve estimates of the value of reported amounts andassumptions about the probability of events in the future. Amountsdetermined regarding the funded status of the plan and the annual requiredcontributions of the employer are subject to continual revision as actual58 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousandsl

17. Commitments and Contingencies A. Long-Term Electric Utility Commitments Intermountain Power AQencyThe Electric Utility has entered into a power purchase contract withIntermountain Power Agency (IPA) for the delivery of electric power. TheElectric Utility's share of IPA power is equal to 7.6 percent, or approximately 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 andthe debt fully matures in 2024.The contract constitutes an obligation of the Electric Utility to make paymentssolely from operating revenues.

The power purchase contract requires theElectric Utility to pay certain minimum charges that are based on debt servicerequirements.

Such payments are considered a cost of production.

Southern California Public Power Authority On November 1, 1980, the City of Riverside joined with the Imperial Irrigation District and the cities of Los Angeles,

Anaheim, Vernon, Azusa, Banning,Colton, Burbank, Glendale and Pasadena to create the Southern California Public Power Authority (SCPPA) by a Joint Powers Agreement under thelaws of the State of California.

As of July 2001, the City of Cerritos wasadmitted as a member. The primary purpose of SCPPA is to plan, finance,develop,

acquire, construct, operate and maintain projects for the generation and transmission of electric energy for sale to its participants.

SCPPA isgoverned by a Board of Directors, which consists of one representative foreach of the members.

During the 2013-14 and 2012-13 fiscal years, theElectric Utility paid approximately

$17,440 and $16,171, respectively, toSCPPA under various take-or-pay contracts.

These payments are reflected as a component of maintenance and operation expense in the financial statements.

The projects and the Electric Utility's proportionate share of SCPPA'sobligations, including final maturities and contract expirations are as follows:Terms of Take or Pay Commitments As part of the take-or-pay commitments with IPA and SCPPA, the ElectricUtility has agreed to pay its share of current and long-term obligations.

Management intends to pay these obligations from operating revenuesreceived during the year that payment is due. A long-term obligation has notbeen recorded on the accompanying financial statements for thesecommitments.

Take-or-pay commitments terminate upon the later of contractexpiration or final maturity of outstanding bonds for each project.Outstanding debts associated with the take-or-pay obligations have variableinterest rates for the Palo Verde Nuclear Generating Station Project and theremaining projects have fixed interest rates which range from 0.35 percent to6.13 percent.

The schedule below details the amount of principal and interestthat is due and payable by the Electric Utility as part of the take-or-pay contract for each project in the fiscal year indicated.

SCPPAFiscalYearIPA PV STS Hoover MPP MATTotal20152016201720182019Thereafter Total$14,78622,12711,65016,93518,827551421$ 669672675679$ 8,3108,3648,1828,0207,92754,497$95.300$ 703701701699$ 269269262258257443$ 3,0873,0132,9522,9102,8824,995$ 27,82435,14624,42229,50129,89311535622f..2._142 Final maturities of outstanding debt associated with take-or-pay obligations and related contract expirations are as follows:ProiectPalo Verde Nuclear Generating StationSouthern Transmission SystemHoover Dam UpratingMead -Phoenix Transmission Mead -Adelanto Transmission Final Maturity20172027201720202020Contract Expiration 20302027201720302030ProiectPalo Verde Nuclear Generating Station (PV)Southern Transmission System (STS)Hoover Dam Uprating (Hoover)Mead -Phoenix Transmission (MPP)Mead -Adelanto Transmission (MAT)Percent Share5.4%10.2%31.9%4.0%13.5%Entitlement 12.3MW244.0MW30.0MW18.0MW118.0MWIn addition to debt service, Riverside's entitlements require the payment offuel costs, operating and maintenance, administrative and general and othermiscellaneous costs associated with the generation and transmission 59 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands) facilities discussed above. These costs do not have a similar structured payment schedule as debt service and vary each year.The costs incurred for the year ended June 30, 2014 and 2013, are asfollows (in thousands):

Calendar year 2013, renewable resources provided 24% of retail salesrequirements.

In an effort to increase the share of renewables in the Electric Utility's powerportfolio, the Electric Utility entered into power purchase agreements withvarious entities described below on a "take-and-pay" basis. The contracts inthe following table were executed as part of compliance with this standard.

Fiscal Year20142013IPA$24,466$26,445P__v$2,416$2,528STS$3,296$2,405Hoover$104$ 97MPT$ 50$ 41MAT$ 312$ 338Total$30,644$31,854Long-term renewable power purchase agreements:

These costs are reflected as a component of maintenance and operation expense on the statement of revenues, expenses and changes in netposition.

B. Other Commitments SupplierSalton Sea Power LLCWintecWKN WagnerTypeGeothermal WindWindPower Purchase Agreements:

MaximumContract46.0MW1.3MW6.0MW533MWMaximumContract186.0MW20.0MWContractExpiration 5/31/2012/30/1812/22/32Estimated Annual Costfor 2015$ 23,6752111,113The Electric Utility has a firm power purchase agreement with Bonneville Power Administration (BPA) for the purchase of capacity (50 megawatts during the summer months and 13 megawatts during the winter months)beginning April 30, 1996, for 20 years. Effective May 1, 1998, these summerand winter capacity amounts increased to 60 megawatts and 15 megawatts, respectively, for the remainder of the second agreement.

On January 29,2013, Riverside revised the delivery and return portion of the agreement toallow for a flat 40 MW of delivery during May and June through calendar year2013, 2014 and 2015. The Agreement with BPA will terminate on May 1,2016.On April 12, 2011, the California Renewable Energy Resources Act (SB 2(1X)) was passed by the State Legislative and signed by the Governor.

SB 2(1X) revised the amount of statewide retail electricity sales from renewable resources in the State Renewable Energy Resources Program to 33% byDecember 31, 2020 in three stages: average of 20% of retail sales during2011-2013; 25% of retail sales by December 31, 2016; and 33% of retailsales by December 31, 2020. The Riverside Public Utilities Board and CityCouncil approved the enforcement program required by SB 2 (1X) onNovember 18, 2011 and December 13, 2011, respectively, and furtherapproved the City's RPS Procurement plan implementing the new RPSmandates on May 3, 2013 and May 14, 2013, respectively.

It is expected thatthe City will be able to meet the new mandates with new resourceprocurement actions as outlined in the City's RPS Procurement Plan. ForSupplierCalEnergy AP North LakeFTP SolarSummer SolarAntelope BigSky RanchFirst SolarRecurrent Clearwater Dominion Columbia IICabazon WindSolar StarTypeGeothermal Photovoltaic ExpectedDelivery2/11/166/30/15EnergyDeliveryNo LaterThan2/11/1612/31/15ContractTermIn Years2525Photovoltaic 10.0MW 6/30/16 12/31/16 25Photovoltaic Photovoltaic Photovoltaic Photovoltaic WindPhotovoltaic 10.0MW14.0MW14.9MW11.1MW39.0MW7.3MW212.3MW6/30/1612/31/15Delayed12/31/141/1/159/30/1512/31/166/30/1612/31/1512/31/1512/31/1512/31/152520202010251Contracts are contingent on energy production from specific relatedgenerating facilities.

Riverside has no commitment to pay any amountsexcept for energy produced on a monthly basis from these facilities.

Construction Commitments:

As of June 30, 2014, the Sewer and Electric Utilities had approximately

$86million and $11 million, respectively, in major construction commitments related to unfinished capital projects.

These construction commitments areexpected to be funded primarily with current and future bond proceeds.

60 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014(amounts expressed in thousands)

C. Jointly-Owned Utility Project -SONGSThe City has a 1.79% undivided ownership interest in Units 2 and 3 ofSONGS, located south of the City of San Clemente in northern San DiegoCounty; however, on June 7, 2013, Southern California Edison (SCE)announced in a press release its plan to retire Units 2 and 3 of SONGSpermanently.

Consequently, the units are no longer a source of supply for theElectric

Utility, but remain associated with certain of its costs, including thoseassociated with the units' shutdown and decommissioning.

SONGS was operated and maintained by SCE, under an agreement with theCity and San Diego Gas & Electric Company (SDG&E),

which expires upontermination of the easement for the plant in 2024. The three-member SONGS Board of Review approved the budget for capital expenditures andoperating expenses.

The City and the two other owners each had onerepresentative on that board. The participation agreement provided that eachowner was entitled to its proportionate share of benefits of, and paid itsproportionate share of costs and liabilities incurred by SCE for, construction, operation and maintenance of the project; each owner's obligation wasseveral, and not joint or collective.

In 2005, the CPUC authorized a project to install four new steam generators in Units 2 and 3 at SONGS and remove and dispose of the predecessor generators.

SCE completed the installation of these steam generators in2010 and 2011 for Units 2 and 3, respectively.

Replacement of the steamgenerators was expected to enable plant operations to continue through atleast 2022, and perhaps beyond, subject to the approval of the NuclearRegulatory Commission (NRC).In January 2012, a water leak occurred in one of the heat transfer tubes ofUnit 3's steam generators, causing it to be shut down. At that time, Unit 2was off-line for a planned outage when unexpected wear in areas of tube-to-support structure were found. Units 2 and 3 remained off-line for extensive inspections, testing and analysis of their steam generators.

On June 7, 2013,SCE unilaterally announced its plan to retire Units 2 and 3 permanently.

The current plant site easement for SONGS terminates on May 12, 2024 andwould need to be extended in order for the plant to be decommissioned andthe site restored.

As a result of SCE's decision to permanently retire SONGS Units 2 and 3,SCE has begun the decommissioning phase of the plant. The process ofdecommissioning a nuclear power plant is governed by NRC regulations.

The regulations categorize the decommissioning activities into three phases:initial activities, major decommissioning and storage activities, and licensetermination.

Initial activities include providing notice of permanent cessation of operations (accomplished on June 12, 2013) and notice of permanent removal of fuel from the reactor vessels (provided by SCE to the NRC onJune 28 and July 22, 2013 for Units 3 and 2, respectively).

Within two yearsafter the announcement of retirement, SCE, as the operating licensee mustsubmit a post-shutdown decommissioning activities report, an irradiated fuelmanagement plan and a site-specific decommissioning cost estimate.

SCEcurrently estimates that it will provide the other initial activity phase plans andcost estimates to the NRC by the end of 2014.SCE has prepared a draft decommissioning plan, an environmental evaluation and an updated cost estimate to decommission the San Onofrenuclear plant. The draft plan, called a Post-Shutdown Decommissioning Activities Report (PSDAR),

spells out the timetable for majordecommissioning work expected to begin in early 2016 and indicates adequate funds exist to pay for the work. SCE estimates that it will cost $4.4billion to safely complete the 20-year decommissioning of San Onofre.There are no separate financial statements for the jointly-owned utility plantsince each participant's interests in the utility plant and operating expensesare included in their respective financial statements.

The Electric Utility willcontinue to set aside approximately

$1,600 per year to funddecommissioning costs. The Electric Utility's portion of current and long-term debt associated with the decommissioning of SONGS is included in theaccompanying financial statements.

Replacement Power CostsDuring the outage, the City has procured replacement power to serve itscustomers' requirements.

These costs are in addition to the operating andmaintenance expenses paid annually during normal operations.

Replacement power costs incurred by the City as a result of the outage(commencing on January 31, 2012 for Unit 3 and March 5, 2012 for Unit 2)were approximately

$13.2 million and are reported as regulatory assets onthe Statements of Net Position.

Contractual MattersThe replacement steam generators for Units 2 and 3 were designed andmanufactured by Mitsubishi Heavy Industries (MHI) and were warranted foran initial period of 20 years from acceptance.

MHI was contractually 61 CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS For the year ended June 30, 2014 (amounts expressed in thousands) obligated to repair or replace defective items and to pay specified damagesfor certain repairs.

MHI's liability under the purchase agreement is limited to$138 million and excludes consequential

damages, defined to include "thecost of replacement power." The limitations are subject to certainexceptions.

There are insurance policies for both property damage and accidental outageissued by Nuclear Electric Insurance Limited (NEIL), and SCE has notifiedNEIL of claims under the two policies.

The City is a named insured on theSCE insurance policies covering SONGS and will assist SCE in pursuingclaims recoveries from NEIL, but there is no assurance that the City willrecover all or any of its applicable costs under these arrangements.

To theextent that any third-party recoveries are made, they will reduce cost to theElectric Utility.

In fiscal year 2014, the City continued to collect fromcustomers, through its rates, which paid for the City's share of the ongoingoperating costs and replacement power related to SONGS.As a result of the decision by SCE to permanently retire Units 2 and 3 ofSONGS prior to the expiration of the NRC licenses, the City expects to incurcertain costs resulting from the early termination of long-term uranium fuelsupply contracts.

On November 12, 2013, Uranium One Inc. served aDemand for Arbitration on SCE, SDG&E and the City, seeking an award ofdamages in the approximate amount of $12.5 million.

Uranium One, Inc.asserts damages from a purchase agreement to deliver certain amounts ofuranium concentrates in 2011, 2012 and 2013. On April 25, 2014, EnergyResources of Australia, Ltd. and Rossing Uranium Ltd. served a Demand forArbitration on SCE, asserting similar claims as Uranium One Inc. andseeking an award of damages in the approximate amount of $19.5 million.No arbitration dates have been set and the City cannot estimate theoutcomes of these pending claims at this time.18. Subsequent Events2014 Subordinate Tax Allocation Refunding BondsOn October 16 2014, the Successor Agency to the Redevelopment Agencyof the City of Riverside issued 2014 Subordinate Tax Allocation Refunding Bonds (Series A and B) in the amount of $62,980.

The bonds were issued torefund certain obligations of the former Redevelopment Agency of the City ofRiverside.

Interest is due semi-annually on March 1 and September 1,commencing March 1, 2015. Principal is due in annual installments from$160 to $4,745 through September 1, 2034. The rate of interest varies from0.6% to 5% per annum.62

-4 ___

Required Supplementary Information Consists of the following:

• Pension Plan Funding Progress* Other Post-Employment Benefits (OPEB) Funding Progress CITY OF RIVERSIDE REQUIRED SUPPLEMENTARY INFORMATION

-UNAUDITED SUMMARY OF PENSION OBLIGATION AND OTHER POST EMPLOYMENT BENFITS FUNDING PROGRESS (THOUSANDS)

Employee Retirement System -Schedule of Funding ProgressValue of AssetsUnfunded Liability Funded RatiosJune 30, 2012Actuarial Valuation DateActuarial Valueof Assets Market Value of(AVA) Assets (MVA)AnnualCoveredPayrollUL as a% ofPayrollAccrued Liability AVA MVA AVA MVAMiscellaneous SafetyTotal$ 919,572673,938$ 1,593,510

$ 766,804561,734$ 1,328,538

$ 1,046,200 766,405$ 1,812,605

$ 126,62892,468$ 219,096$ 279,395204,672$ 484,06787.9% 73.3% $ 110,03787.9% 73.3% 63,115$ 173,152115.1%146.5%Value of AssetsActuarial Valueof Assets Market Value of(AVA) Assets (MVA)Unfunded Liability Funded RatiosAVA MVA AVA MVAJune 30, 2011Actuarial Valuation DateAnnualCoveredPayrollUL as a% ofPayrollMiscellaneous SafetyTotal$ 887,857650,954$ 1,538,811

$ 786,080575,006$ 1,361,086 Accrued Liability

$ 998,216731,074$ 1,729,290

$ 110,35980,120$ 190,479$ 212,136156,068$ 368,20488.9% 78.7% $ 108,10689.0% 78.7% 62,538$ 170,644102.1%128.1%Value of AssetsUnfunded Liability Funded RatiosJune 30, 2010 Actuarial Valuation DateActuarial Valueof Assets Market Value of(AVA) Assets (MVA)AnnualCoveredPayrollUL as a% ofPayrollAccrued Liability AVA MVA AVA MVAMiscellaneous SafetyTotal$ 846,368621,107$ 1,467,475

$ 660,844483,776$ 1,144,620

$ 952,499685,213$ 1,637,712

$ 106,131621,107$ 727,238$ 291,656201,437$ 493,09388.9% 69.4% $ 106,59090.6% 70.6% 61,778$ 168,36899.6%103.8%Other Post-Employment Benefits

-Schedule of Funding ProgressActuarial Valueof Assets (AVA)Unfunded FundedLiability RatiosAccrued Liability AVA AVAActuarial Valuation DateAnnualCoveredPayroll$ 153,077149,321132,275UL as a% ofPayrollJune 30, 2013June 30, 2011June 30, 2009$ 47,19556,06054,869$ 47,19556,06054,86931%38%41%63 Nonmajor Governmental FundsSpecial Revenue FundsSpecial 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.

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 ofstate gasoline taxes which state law requires to be used to maintain streets.Air Quality Improvements Fund -To account for qualified air pollution reduction programs funded by the South Coast Air Quality Management District.

Housing & 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.National Pollution Discharge Elimination System (NPDES) Storm Drain Fund -To account for storm drain maintenance and inspection required forCalifornia storm water permits.

Activities are funded by a special assessment district of Riverside County, California.

Housing Fund -To account for the housing activities for persons with low or moderate income.Capital Projects FundsCapital Projects Funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.Special Capital Improvement 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 theTransportation Development Act of 1971 of the State of California.

Debt Service FundDebt Service Funds are used to account for the accumulation of resources for, and the payment of, long-term debt principal,

interest, and related costs.The General Debt Service Fund accounts for the resources accumulated and payments made for principal, interest and related costs on long-term general obligation debt of governmental funds.Permanent FundPermanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes thatsupport 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 SheetNonmajor Governmental FundsJune 30, 2014(amounts expressed in thousands)

Special RevenueHousing &Urban Areas Air Quality Community NPDES StormSecurity Initiative Gas Tax Improvements Development Drain Housing Total$ $ 17,867 $ 571 $ 1,194 $ $ 1,383 $ 21,015-163 163AssetsCash and investments Cash and investments at fiscal agentReceivable (net of allowance for uncollectibles):

InterestAccountsIntergovernmental NotesAdvances to Successor AgencyLand & improvements held for resaleTotal assets866281022545 208 96 1,077 656 -2,582--12,602 -20,665 33,267-20,571 20,571--1,310 -3,212 4,522$ 545 $ 18,161 $ 669 $ 16,191 $ 656 $ 46,002 $ 82,224Liabilities Accounts payableAccrued payrollRetainage payableDepositsDue to other fundsAdvance from other fundsTotal liabilities

$298 $306 $22 $331 $16$110 $141,067301,36431,3643Deferred Inflows of Resources Unavailable revenueTotal deferred inflows of resources Fund Balances (Deficits)

Restricted for:Housing and redevelopment Transportation and public worksTotal fund balances (deficits)

Total liabilities deferred inflows ofresources, and fund balances (deficits) 247 -355 602--516 -458 974545 1,670 22 863 355 585 4,040--13,913 -20,609 34,52213,913 20,609 34,522--1,415 -24,808 26,22316,491 647 -301 -17,439-16,491 647 1,415 301 24,808 43,662$ 545 $ 18,161 $ 669 $ 16,191 $ 656 $ 46,002 $ 82,22465 City of Riverside Combining Balance SheetNonmajor Governmental FundsJune 30, 2014(amounts expressed in thousands)

AssetsCash and investments Cash and investments at fiscal agentReceivable (net of allowance for uncollectibles):

InterestAccountsIntergovernmental NotesAdvances to Successor AgencyLand & improvements held for resaleTotal assetsCapital ProjectsSpecial CapitalImprovement Storm Drain Transportation Total$ 3,053 $ 2,043 $ 70 $ 5,1662,418 --2,418Permanent FundTotal NonmajorGeneral Governmental Debt Service Library Special Funds$ 758 $ 1,460 $ 28,39910,298 -12,879151126613422,58233,26739,7394,522$ 121,524$ 5,486 $ 2,054 $ 70 $ 7,61019,16830,230 $ 1,460Liabilities Accounts payableAccrued payrollRetainage payableDepositsDue to other fundsAdvance from other fundsTotal liabilities

$326 $-S-$326 $ 171 $-$1,564301,396332326,861 6,861 3,8827,219 7,219 4,05360211,71715,312Deferred Inflows of Resources Unavailable revenueTotal deferred inflows of resources

---

34,522----34,522Fund Balances (Deficits)

Nonspendable:

Permanent fund principal Restricted for:Housing and redevelopment Debt serviceTransportation and public worksOther purposesUnassigned Total fund balances (deficits)

Total liabilities, deferred inflows ofresources, and fund balances (deficits) 1,4601,460-70 702,054 -2,054(1,733) --(1,733)(1,733) 2,054 70 39126,17726,177 1,46026,22326,17717,5092,054(1,733)71,690$ 5,486 $ 2,054 $ 70 $ 7,610 $ 30,230 $ 1,460 $ 121,52466 City of Riverside Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesNonmajor Governmental FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Special RevenueRevenuesIntergovernmental Special assessments Rental and investment incomeMiscellaneous Total revenuesExpenditures Current:General government Public safetyCapital outlayDebt service:InterestBond issuance costsTotal expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses)Sales of capital assetsTotal other financing sources (uses)Net change in fund balancesFund balances

-beginning Fund balances

-endingUrban Area Security Air QualityInitiative Gas Tax Improvement

$ 2,271 $ 9,418 $ 480202 5-2582,271 9,620 743Housing &Community Development NPDES Storm Drain Housing Total$ 5,429 $ -$ $ 17,598-657 65733 -96 336314 -564 1,1365,776 657 660 19,7275564231,4722,2712,4512,27112,7477,4794,73653212 5 172 25,173 532 1,477 17,4882,271 7,479 5562,141 187 603 125 (817) 2,2392,141 18714,350 460$ $ 16,491 $ 64727 2727 27603 125 (790) 2,266812 176 25,598 41,396$ 1,415 $ 301 $ 24,808 $ 43,66267 City of Riverside Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesNonmajor Governmental FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Capital ProjectsPermanent FundSpecialCapitalImprovement Storm DrainTransportation TotalRevenuesLicenses and permitsIntergovernmental Special assessments Rental and investment incomeMiscellaneous Total revenuesExpenditures Current:General government Public safetyCulture and recreation Capital outlayDebt service:Principal InterestBond issuance costsTotal expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses)Transfers inSales of capital assetsTotal other financing sources (uses)Net change in fund balancesFund balances

-beginning Fund balances

-ending1,422 $128 $116$ 1,550116General LibraryDebt Service Special$ -$1,1081,748 14419 1153,275 12930221051,557 266736 42,517 179693,322 1831 531051 1,8247402,696693,505Total NonmajorGovernmental Funds1,55017,7141,7652,1511,77524,9553,2072,27111015,4435,29810,528236,859161105,29810,44215,756 110(1,765) 83 1 (1,681) (12,481) 19 (11,904)12,774(1,765) 8332 1,971(1,733) $ 2,0541 (1,681)69 2,072$ 70 $ 39112,774293 1925,884 1,441$ 26,177 $ 1,46012,7742712,80189770,793$ 71,69068 City of Riverside Schedule of Revenues, Expenditures and Changes in Fund Balances

-Budget and ActualNonmajor Governmental FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Special RevenueUrban Area Security Initiative VarianceFinal to FinalBudget Actual BudgetGas TaxAir Quality Improvement VarianceFinal to FinalBudget Actual BudgetFinalBudget ActualVarianceto FinalBudgetRevenuesIntergovernmental Rental and investment incomeMiscellaneous Total revenues$ 3,171 $2,271 $ (900) $ 6,985--150$9,418 $ 2,433 $202 52360 $ 480 $ 1205-233 2583,171 2,271 (900) 7,135 9,620 2,485 593 743525150Expenditures Current:General government Public safetyCapital outlayTotal expenditures 3,3492,2719225563661,0783,349 2,271 1,07819,26719,2677,479 11,7887,479 11,7882,141 14,27314,350 -$ 16,491 $ 14,273922 556 366Net change in fund balancesFund balances (deficit),

beginning Fund balances (deficit),

ending(178) 178 (12,132)14,350$ (178) $ $ 178 $ 2,218(329) 187460 460$ 131 $ 647516$ 516(continued) 69 City of Riverside Schedule of Revenues, Expenditures and Changes in Fund Balances

-Budget and ActualNonmajor Governmental FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Special RevenueHousing & Community Development VarianceNPDES Storm DrainVarianceHousingVarianceRevenuesIntergovernmental Special assessments Rental and investment incomeMiscellaneous Total revenuesExpenditures Current:General government Capital outlayDebt service:Principal InterestBond issuance costsTotal expenditures FinalBudget$ 6,473284046,9051,27716,900231518,215(11,310)to Final FinalActual Budget Budget$ 5,429333145,7764234,7361225,173$ (1,044)5(90)(1,129)85412,164233(2)13,042$604$65 $ 5 $657 53-$-$96564604 657 53 66096564660to Final Final to FinalActual Budget Budget Actual Budget7475322151,4231,472(49)5747 532 215 1,423 1,477(5)(54)Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses)Sale of capital assetsTotal other financing sources (uses)Net change in fund balancesFund balances (deficit),

beginning Fund balances (deficit),

ending603 11,913 (143) 125 268 (1,423) (817) 606--- --27 27--- --27 27(11,310)812$ (10,498)603812$ 1,41511,913$ 11,913(143)176$ 33125176$ 301268$ 268(1,423) (790)25,598 25,598$ 24,175 $ 24,808633$ 633(continued) 70 City of Riverside Schedule of Revenues, Expenditures and Changes in Fund Balances

-Budget and ActualNonmajor Governmental FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Capital ProjectsCapital OutlaySpecial Capital Improvement Storm DrainTransportation RevenuesLicenses and permitsIntergovernmental Special assessments Rental and investment incomeMiscellaneous Total revenuesExpenditures Current:General government Capital outlayDebt service:InterestBond issuance costsTotal expenditures Excess (deficiency) of revenuesover (under) expenditures Other financing sources (uses)Transfers outIssuance of long-term debtBond PremiumTotal other financing sources (uses)Net change in fund balancesFund balances (deficit),

beginning Fund balances (deficit),

endingFinalBudget$84,0921251703,59987,986138,244738138,982Varianceto Final FinalActual Budget Budget ActualVarianceto Final FinalBudget Budget ActualVarianceto FinalBudgetFinalBudget ActualVarianceto FinalBudget1$28,7192883071,78031,094$(55,373)163137(1,819)(56,892)$ 3,120 $ 1,42230-1053,120 1,557$ (1,698)30105(1,563)$1003,34525$12811622$ 28 $(3,229)(3)(3,204)113,470 266-1 148,33389,9112,3364,6341377,1077362,517693,3221,6002,11744,85741794,67873849,071 89,911683,785 4,861 183 4,678(50,996)

(17,977) 33,019 (3,987) (1,765) 2,222 (1,391) 83 1,474 1 1(1,521)54,8861,21154,5763,5801,432$ 5,012(2,185)54,8861,21153,91235,9351,432$ 37,367664------

-664-- -----33,683$ 33,683(3,987)32$ (3,955)(1,765)32$ (1,733)2,222$ 2,222(1,391) 831,971 1,971$ 580 $ 2,0541,474$ 1,474-169 69$ 69 $ 70$ 171 Nonmajor Enterprise FundsEnterprise Funds are used to account for the operations that are financed and operated in a manner similar to private business enterprises.

TheCity's intent is to demonstrate that the cost of services provided to the general public on a continuing basis is financed or recovered through usercharges; 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 ofsolid 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 Article4 of the Transportation Development Act of 1971 (SB325) of the State of California.

Federal Transit Administration Funds are also accounted forin 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 PositionNonmajor Enterprise FundsJune 30, 2014(amounts expressed in thousands)

AssetsCurrent assets:Cash and investments Receivables (net of allowance for uncollectibles)

InterestUtility billedUtility unbilledAccountsIntergovernmental Restricted assets:Other restricted cash and cash equivalents Total current assetsNon-current assets:Regulatory assetsNet pension assetCapital assets:LandBuildings Accumulated depreciation-buildings Improvements other than buildings Accumulated depreciation-improvements other than buildings Machinery and equipment Accumulated depreciation-machinery and equipment Construction in progressTotal non-current assets:Airport RefuseTransportation Public ParkingTotal$3,444 $231,0417235922,477 $12361344 $56,265401,0417231,2178534755559_ 901 -901109 6,724 2,526 913 10,2726,4991,1645601576,4992,0952149,9882,631(1,245)19,662(6,510)412(307)24,84522(10)1,691-(98)14,487 3,956(9,978) (2,948)-3512,172 3,2089,19233,228(4,429)6,731(1,637)1,138(1,008)43,37219,18035,881(5,684)28,084(8,245)19,993(14,241)3583,59793,869Continued Total assets24,954 18,896 5,734 44,28573 City of Riverside Combining Statement of Net PositionNonmajor Enterprise FundsJune 30, 2014(amounts expressed in thousands)

Liabilities Current liabilities:

Accounts payableAccrued payrollRetainage payableUnearned revenueDue to other fundsNotes payable -currentLandfill capping -currentCompensated absences

-currentTotal current liabilities Airport712Refuse Transportation Public Parking853105245014829202,229133221742003931,551702,373906391,142Non-current liabilities:

Notes payablesAdvances from other fundsLandfill cappingCompensated absencesOther postemployment benefitsTotal non-current liabilities 21,186608Total1,032196202,2291339062005245,24021,1862,5395,972971,47431,26836,50852,9119013,54957,3612134993161,1605,972738248,029558137375 176946 21,977Total liabilities 490 9,5803,31923,119Net PositionNet investment in capital assetsRestricted for landfill cappingUnrestricted Total net position24,631(167)$ 24,4644,5099013,906$ 9,3162,64821,123(233) 432,415 $ 21,16674 City of Riverside Combining Statement of Revenues,

Expenses, and Changes in Net PositionNonmajor Enterprise FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Airport RefuseOperating revenues:

Charges for servicesOperating expenses:

Personnel servicesContractual servicesMaintenance and operation GeneralMaterials and suppliesInsurance Depreciation and amortization Total operating expensesOperating Income (loss)$ 1,1005445122511319286981,678(578)$ 20,6774,4723,9605,9113,5781,1141151,63020,780(103)Transportation

$ 4132,10620661382221496124,051(3,638)2,5243084(16)2,550(1,088)950(138)2,553$ 2,415Public Parking$ 4,3821,0471,51444146191081,0734,2481347699524(886)344478(738)(260)21,426$ 21,166Total$ 26,5728,1695,5457,2384,1191,3733004,01330,757(4,185)2,524881,204536(945)3,407(778)1,246(738)(270)57,631$ 57,361Nonoperating revenues (expenses):

Operating grantsInterest incomeOtherGain/loss on retirement of capital assetsInterest expense and fiscal chargesTotal non-operating revenuesIncome (loss) before capital contributions and transfers Cash capital contributions Transfers outChange in net positionTotal net position

-beginning Total net position

-ending5184 41327 (19)(11) (32)100 413(478) 310296(182)24,646$ 24,4643109,006$ 9,31675 City of Riverside Combining Statement of Cash FlowsNonmajor Enterprise FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Airport RefuseCash flows from operating activities:

Cash received from customers and usersCash paid to employees for servicesCash paid to other suppliers of goods or servicesOther receiptsNet cash provided (used) by operating activities Cash flows from noncapital financing activities:

Transfers outOutflows on interfund advancesNet cash (used) by noncapital financing activities Cash flows from capital and related financing activities:

Purchase of capital assetsProceeds from the sale of capital assetsPrincipal paid on long-term obligations Interest paid on long-term obligations Grant proceedsCapital contributions Net cash (used) provided for capital and relatedfinancing activities Cash flows from investing activities:

Income from investments Net cash provided by investing activities Net change in cash and cash equivalents Cash and cash equivalents, beginning Cash and cash equivalents, ending$ 1,120(537)(733)83(329)(329)(25)27(11)109296$ 20,785(4,363)(14,831)4132,004(51)(51)9(32)PublicTransportation Parking$ 1,006 4,930(1,999) (1,012)(1,676) (2,461)6 699(2,663) 2,156-(738)(25) (996)(25) (1,734)(834) (928)4 2,602(7) (871)(16) (885)2,524 -950 -2,621 (82)28 328 3(39) 3432,516 1$ 2,477 $ 344Totals$ 27,841(7,911)(19,701)1,2011,430(738)(1,401)396 (23)-42421,9722,373$ 4,345(1,787)2,642(878)(944)2,6331,2462,91273732,2764,890$ 7,166Continued 76 City of Riverside Combining Statement of Cash FlowsNonmajor Enterprise FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Continued PublicAirport Refuse Transportation Parking TotalsReconciliation of operating income (loss) to net cash provided(used) by operating activities:

Operating Income (loss)Other receiptsAdjustments to reconcile operating income (loss) tonet cash provided (used) by operating activities:

Depreciation and amortization Amortization of pension costsDecrease in accounts receivable (Increase) due from other governments Increase (Decrease) in accounts payableIncrease (Decrease) in accrued payrollIncrease (Decrease) in other payable(Decrease) in landfill cappingNet cash provided (used) by operating activities (578) $ (103)83 413(3,638)6134699$ (4,185)1,201698 1,630 612 1,073 4,0139 52 25 7 9320 108 593 554 1,275(6) (6)(297) 133 (343) (333) (840)(15) 471 30 2 48813 (414) 52 26 (323)(286) --(286)(67) $ 2,004 2,663) 2,156 $ 1,43077 Internal Service FundsInternal 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 servicesprovided to City departments.

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

City of Riverside Combining Statement of Net PositionInternal Service FundsJune 30, 2014(amounts expressed in thousands)

AssetsCurrent assets:Cash and investments Receivables (net of allowance for uncollectibles)

InterestAccountsIntergovernmental Inventory Total current assetsNon-current assets:Advances to other fundsAdvances to Successor AgencyNet pension assetCapital assets:LandBuildings Accumulated depreciation-buildings Improvements other than buildings Accumulated depreciation

-improvements other than buildings Machinery and equipment Accumulated depreciation-machinery and equipment Construction in progressTotal non-current assets:Self-Insurance Trust Central Stores Central Garage Total$1,118 $-$2,065 $3,18316461,180285465,444 3755,444 2,5284454525,8199,1522,7645,6342053,4606,2245,6341,38421596458, 60Y89,788139(139)2155,6594581,488(300)726(83)10,665(8,088)1,48210,77213,300Total assetsLiabilities Current liabilities:

Accounts payableAccrued payrollRetainage payableDue to other fundsClaims and judgments

-currentCompensated absences

-currentTotal current liabilities 4581,488(300)726(83)10,809(8,227)1,48219,59528,7471,808100711,30611,12226714,6743,06624,04529267228,07523313212161,36371711,306Non-current liabilities:

Advances from other fundsClaims and judgments Compensated absencesOther postemployment benefitsTotal non-current liabilities 11,1221511,38320424,045179224,35835,74145 2071,579 1,712213481113721,9512,6492274693,345Total liabilities 5,057 42,749Net PositionNet investment in capital assetsUnrestricted Total net position5(25,958) 3,708(25,953)

$ 3,708796,3481,8958,2436,3532o,3ý55$ (14,002)

City of Riverside Combining Statement of Revenues,

Expenses, and Changes in Net PositionInternal Service FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Operating revenues:

Charges for servicesOperating expenses:

Personnel servicesContractual servicesMaintenance and operation GeneralMaterials and suppliesClaims/Insurance Depreciation and amortization Total operating expensesOperating income (loss)Non-operating revenues (expenses):

Interest incomeOtherGain (loss) on retirement of capital assetsInterest expense and fiscal chargesTotal non-operating revenue (expenses)

Change in net positionTotal net position

-beginning Total net position

-endingSelf-Insurance Trust Central Stores Central Garage Totals$ 11,894 $ 1,511 $ 8,367 $ 21,772511686622,991734,1641414 26 2,146 2,1761,034 367 750 2,1511 11 210 22214,572 9 47 14,628--572 57216,190 1,075 6,789 24,054(4,296) 436 1,578 (2,282)153762291 (5) (4)(4) (4)(72) (6) (41) (119)82 (6) 26 102(4,214) 430 1,604 (2,180)(21,739) 3,278 6,639 (11,822)(25,953) 3,708 8,243 $ _14,002)80 City of Riverside Combining Statement of Cash FlowsInternal Service FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Cash flows from operating activities:

Cash received from customers and usersCash paid to employees for servicesCash paid to other suppliers of goods or servicesOther receiptsNet cash provided (used) by operating activities Cash flows from noncapital financing activities:

Receipts on interfund advancesOutflows on interfund advancesNet cash provided (used) by noncapital financing activities Cash flows from capital and related financing activities:

Interest paid on long-term obligation Purchase of capital assetsNet cash (used) for capital and relatedfinancing activities Cash flows from investing activities:

Income from investments Self-Insurance Trust$ 11,902(487)(12,059)1(643)3,692(1,948)1,744(72)(5)CentralStores$ 2,322(631)(460)1,231(1,225)(1,225)CentralGarage Total8,361(2,745)(2,262)$ 22,585(3,863)(14,781)3,354 3,9421,674 5,366(3,502) (6,675)(1,828) (1,309)(26) (104)(3,711) (3,716)(3,737) (3,820)67 16167 161(6)(6)9494Net increase (decrease) in cash and cash equivalents 1,118(2,144)(1,026)Cash and cash equivalents, beginning Cash and cash equivalents, ending4,209 4,2092,065 $ 3,183Continued 1,118$81 City of Riverside Combining Statement of Cash FlowsInternal Service FundsFor the fiscal year ended June 30, 2014(amounts expressed in thousands)

Continued Self-Insurance TrustCentral CentralStores GarageReconciliation of operating income (loss) to net cash provided(used) byoperating activities:

TotalOperating (loss) income $ (4,296) $ 436 $ 1,578 $Other receipts 1 --(2,282)1Adjustments to reconcile operating income (loss) tonet cash provided (used) by operating activities:

Depreciation and amortization Amortization of pension costs(Increase)

Decrease in account receivable Decrease in inventory Increase (Decrease) in accounts payableIncrease in other payableIncrease in accrued payrollIncrease in claims and judgments Net cash (used) provided by operating activities

--572 5729 9 43 618 (11) (3)-811 61 87223 (46) 908 88513 21 125 1592 -78 803,597 -3,597$ (643) $ 1,231 $ 3,354 $ 3,94282 Agency FundThe City's Agency Fund is used to account for special assessments that service no-commitment debt.

City of Riverside Fiduciary Fund -Agency FundCombining Statement of Changes in Assets and Liabilities For the fiscal year ended June 30, 2014(amounts expressed in thousands)

BalanceBalanceJuly 1, 2013 Additions Deductions June 30, 2014AssetsCash and investments Cash and investments at fiscal agentInterest receivable Accounts receivable Property taxes receivable Total assets$6,6886,778$4,9085,938212332412413,647$ 5,9305,9762192412412,273$5,6666,74026114F -11,17211412,546Liabilities Accounts payableHeld for bond holdersTotal liabilities

$ -$ 82 $ 82 -13,647 11,090 12,191 12,546$ 13,647 $ 11,172 $ 12,273 $ 12,64684 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS City of Riverside Capital Assets Used in the Operation of Governmental FundsSchedule By SourceJune 30, 2014(amounts expressed in thousands)

Governmental funds capital assets:LandBuildings and improvements Improvements other than buildings Machinery and equipment Infrastructure Construction in progressTotal governmental funds capital assetsInvestments in governmental funds capital assets by source:Certificates of participation GiftsOperating revenueGeneral obligation bondsRevenue bondsCounty contracts and grantsState grantsAsset forfeiture

-stateAsset forfeiture

-federalHousing and community development grantsOther federal grantsCommunity facilities bondsAssessment district bondsCapital leasesRDA tax increment bondsCapital projects fundsTotal governmental funds capital assets$ 333,799180,653299,34582,561934,61433,011$ 1,863,983

$ 122,610322,300537,4984,36421,22931640,5069942,87018,95535,2481,02639710,8252,983741,862$ 1,863,983 86 Statistical Section(Unaudited)

This part of the City's comprehensive annual financial report presents detailed information as a context for understanding what theinformation in the financial statements, note disclosures, and required supplementary information says about the City's overallfinancial health.Contents PageFinancial Trends 88These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.Revenue Capacity 94These schedules contain information to help the reader assess the factors affecting the City's ability to generateproperty and sales taxes.Debt Capacity 103These schedules present information to help the reader assess the affordability of the City's current levels ofoutstanding debt and the City's ability to issue additional debt in the future.Demographic and Economic Information 109These 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 withother governments.

Operating Information 111These 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 forthe relevant year.

Table ICity of Riverside Net Position by Component Last Ten Fiscal Years(accrual basis of accounting)

(in thousands)

Governmental activities Net investment in capital assetsRestricted Unrestricted Total governmental activities net positionBusiness-type activities Net investment in capital assetsRestricted Unrestricted Total business-type activities net positionPrimary government Net investment in capital assetsRestricted Unrestricted Total primary government net positionFiscal Year2005 2006 2007 2008 2009 2010 2011 20121 2013 2014$ 515,354 $ 622,336 $ 712,801 $ 850,740 $ 950,496 $ 976,614 $1,019,892

$ 1,076,485

$ 1,083,485

$ 1,106,384 154,957 158,038 107,982 102,677 98,903 108,932 80,820 86,325 80,712 96,587(46,419)

(51,261)

(34,245)

(31,429)

(41,861)

(80,947)

(90,159) 23,145 17,989 (2,049)$ 623,892 $ 729,113 $ 786,538 $ 921,988 $ 1,007,538

$1,004,599

$ 1,010,553

$ 1,185,955

$1,182,186

$1,200,922

$ 402,377 $ 425,285 $ 520,059 $ 601,999 $ 659,904 $ 660,619 $ 654,974 $ 666,919 $ 609,691 $ 616,84454,540 71,386 57,613 43,341 38,621 59,863 56,397 54,923 69,068 68,507229,462 250,041 242,966 225.281 207,405 219,720 256,038 285,062 330,833 359,698$ 686,379 $ 746,712 $ 820,638 $ 870,621 $ 905,930 $ 940,202 $ 967,409 $ 1,006,904

$1,009,592

$ 1,045,049

$ 917,731 $ 1,047,621

$ 1,232,860

$ 1,452,739

$ 1,610,400

$1,637,233

$ 1,674,866

$ 1,743,404

$1,693,176

$ 1,723,228 209,497 229,424 165,595 146,018 137,524 168,795 137,217 141,248 149,780 165,094183,043 198,780 208,721 193,852 165,544 138,773 165,879 308,207 348,822 357,649$ 1,310,271

$ 1,475,825

$ 1,607,176

$ 1,792,609

$ 1,913,468

$1,944,801

$1,977,962

$ 2,192,859

$2,191,778

$2,245,971 1 The increase in total governmental activities net position (and related unrestricted net position) is primarily due to the dissolution of the Redevelopment Agency.88 Table 2City of Riverside Changes in Net PositionLast Ten Fiscal Years(accrual basis of accountina)

(in thousands)

Page 1 of 2ExpensesGovernmental activities:

General government Public safetyHighways and streetsCulture and recreation Interest on long-term debtTotal governmental activities expensesBusiness-type activities:

ElectricWaterSewerRefuseAirportTransportation Public parkingTotal business-type activities expensesTotal primary government expensesProgram RevenuesGovernmental activities:

Charges for services:

General government Public safetyHighways and streetsCulture and recreation Operating grants and contributions Capital grants and contributions Total governmental activities program revenuesBusiness-type activities:

Charges for services:

ElectricWalerSewerRefuseAirportTransportation Public parkingOperating grants and contributions Capital grants and contributions Total business-type activities program revenuesTotal primary government program revenuesFiscal Year2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$ 58,460 $ 74,458 $ 105,486 $ 113,897 $ 71,391 $ 85,110 $ 72,606 $ 48,731 $ 54,808 $ 42,664110,969 120,470 114,312 122,783 142,353 137.338 139,364 148,605 147,652 149,55520,364 20,757 22,556 26,986 29.700 31,492 32,131 35,342 35,072 36,56426,353 32,602 28,016 31,659 29,423 44,319 50,017 54,594 40,077 42,25215,885 16,358 26,378 34,075 34,361 32,049 33,638 25,087 16,627 17,741232,031 264,645 296,748 329,400 307,228 330,308 327,756 312,359 294,236 288,776200,030 226.186 232,346 271,412 269,209 256,860 275,922 288,799 292,175 304,41636,709 39,486 42,108 47,570 53,931 55,402 56,390 56,715 58,768 60,03026,108 27,299 29,510 31,209 34,853 41,248 42,276 43,702 43.945 40,38512,841 14,546 16,490 18,430 18,425 20,527 20,046 19,979 20.581 20,8311,185 1,004 1,201 1,418 1,734 2,206 2,320 2,646 2,029 1,6622,557 2,917 2,831 3,190 3.194 3,368 3,493 3,667 3,745 4,067824 2,701 3,762 4,093 5,095 4,024 4.401 4,984 5,051 4,610280,254 314,139 328,248 377,322 386,441 383,635 404,848 420,492 426,294 436,001$ 512,285 $ 578,784 $ 624.996 $ 706.722 $ 693,669 $ 713,943 $ 732,604 $732,851

$720,530

$724,777$ 25,995 $ 24,683 $ 10,245 $ 23,969 $ 13.691 $ 12,933 $ 14,241 $ 14,662 $ 13,336 $ 13,7756,982 5,645 12,410 9,924 8,414 8,177 8.075 7,837 7,793 7,44423,108 25,412 30,563 19,695 14,391 17,847 16,985 16,532 15,825 17,4877.002 7,716 8,302 4.370 3,168 2,367 3.180 4,622 5,237 7,40616,140 13,150 12,101 15,024 23,313 32,853 21,127 31,581 21,485 14,3415,292 18,618 10,557 115.982 69,745 23.395 38,138 54,476 32,202 48,43384,519 95,424 84,178 188,964 132,722 97.572 101,746 129,710 95.880 108,886252,322 259,572 278,888 305,299 314,164 309,910 313,703 333,029 347,933 344,03734.002 37,613 47,080 49,855 54,923 57,534 62,084 65,206 68.489 68.69121,967 21,510 24.057 22,525 23,247 27,342 32.769 37,747 43,772 46,16214,492 15,160 15,833 16,289 18,394 18,712 19.134 19,588 20,829 20,6771,088 1,162 1,263 1,423 1,232 1,315 1,342 1,524 1,396 1,100200 238 302 313 336 328 344 352 344 4132,961 2,837 3,431 3,717 4,332 4,876 5,205 4.803 4,777 4,3822,261 2,704 1,939 3,308 1,929 2,487 2,159 2,738 2,718 2.52432,317 29,293 40,066 29,215 17,288 6,838 7,337 21.164 11,734 11,486361.610 370,089 412,859 431.944 435.845 429,342 444.077 486.151 501.992 499.472$ 446,129 $ 465.513 $ 497.037 $ 620.908 $ 568.567 $ 526,914 $ 545.823 $615,861

$597,872

$608,358(continued) 89 Table 2City of Riverside Changes In Net PositionLast Ten Fiscal YearsFiscal Year2005 2006 2007 2008 2009 2010 2011 20121 2013' 2014Net Revenues (Expense)

Governmentalactivities

$(147,512)

$(169,221)

$ (212,570)

$(140,436)

$ (174,506)

$ (232,736)

$ (226,010)

$ (182,649)

$(198,356)

$(179,890)

Business-type activities 81.356 55,950 84,611 54,622 49,404 45,707 39,229 65,659 75,698 63,471Total primary government net expense $ (66,156)

$(113,271)

$ (127,959)

$ (85,814)

$ (125,102)

$ (187,029)

$ (186,781)

$ (116,990)

$(122,658)

(1116,419)

General Revenues and Other Changes In Net PositionGovernmental activities:

TaxesSales $ 53.348 $ 57,522 $ 55,666 $ 50,526 $ 41,882 $ 39,645 $ 44,157 $ 47,701 $ 50,222 $ 55,096Property 61,553 80,934 106,114 114,176 116,420 104,087 100,802 74,179 52,904 51,323Utility users 22,133 23,502 25,384 26.267 25,964 25,975 26,691 27,320 28,206 28,092Franchise 4,481 4,813 5,031 4,972 5,144 4,477 4,937 4,883 4,959 5,046Transient occupancy 3,828 4,372 3,581 3,795 2,912 2,488 2,731 2,995 3,703 4,189Intergovernmental, unrestricted 1,795 1,747 1,863 2,074 4,569 1,339 1,285 351 337 263Unrestricted grants and contributions 15,220 39,653 29,743 -------Investment earnings 7,815 10,150 18,582 25,670 15,941 8,289 7,439 4,440 2,786 2,759Miscellaneous 5,756 26,173 4,228 9,480 5,137 3,344 9,544 9,273 9,208 5,425Transfers 14,918 25,576 31,171 32,326 42,087 40,153 34,378 40,679 42,262 46,433Extraordinary items ------149,617 -Total governmental activities 190,847 274,442 281,363 269,286 260,056 229,797 231,964 361,438 194,587 198,626Business-type activities:

Investment income 7.548 11,259 16,988 22,756 23,402 21,271 17,548 11,405 4,744 8,005Miscellaneous 7,362 18,700 3,498 4,931 4,590 7,447 4,808 3,110 5,767 10,414Special item (3,014) ---------Transfers (14,918)

(25,576)

(31,171)

(32,326)

(42,087)

(40,153)

(34,378)

(40,679)

(42,262)

(46,433)Extraordinary items ---(41,259)

-Total business-type activities 13,022) 4,383 (10,685)

(4,639) (14,095)

(11,435)

(12,022)

(26,164)

(73,010)

(28,014)Total primary government 187,825 278,825 270.678 264,647 245,961 218,362 219,942 335,274 121,577 170,612Change in Net PositionGovernmental activities

$ 43.335 $ 105,221 $ 68,793 $ 128,850 $ 85,550 $ (2,939) $ 5,954 $ 178,789 $ (3,769) $ 18,736Business-type activities 78,334 60,333 73,926 49,983 35,309 34,272 27,207 39,495 2,688 35,457Total primary government

$ 121,669 $ 165,554 $ 142,719 $ 178,833 $ 120,859 $ 31,333 $ 33,161 $ 218,284 $ (1,081) $ 54,193' The increase in total governmental activities net position is primarily due to the dissolution of the Redevelopment Agency.2 The decrease in total business-type activities net position is primarily due to the power plant closure.90 Table 3City of Riverside Fund Balances of Governmental FundsLast Four Fiscal Years(modified accrual basis of accounting, in thousands)

General fundNonspendable Restricted AssignedUnassigned Total general fundAll other governmental fundsNonspendable Restricted for:Housing and redevelopment Debt serviceTransportation and public worksOther purposesUnassigned Total all other governmental funds2011 20121,2 2013 2014$ 26,646 $ 25,720 $ 26,421 $ 24,41982,249 2,803 2,196 2,20415,589 6,380 10,711 14,50536,359 39,347 37,763 37,732$ 160,843 $ 74,250 $ 77,091 $ 78,860$ 1,626 $ 1,539 $ 1,441 $ 1,46096,571 26,911 26,410 26,22356,526 29,080 25,884 26,17726,459 31,075 16,487 54,8765,073 1,401 2,003 2,054---(1,733)$ 186,255 $ 90,006 $ 72,225 $ 109,057The decrease in fund balance of the General Fund primarily relates to the transfer ofland held for resale (in the amount of $76.3 million) to the Redevelopment AgencyCapital Projects Fund, which had been transferred to the General Fund during thefiscal year ended June 30, 2011.2 The decrease in fund balance of all other governmental funds relates to thedissolution of the Redevelopment Agency.The City of Riverside implemented GASB 54 in the fiscal year ended June 30, 2011.The City has elected to show four years of data for this schedule.

91 Table 4City of Riverside Changes in Fund Balances of Governmental FundsLast Ten Fiscal Years(modified accrual basis accounting)

(in thousands)

Page 1 of 2Revenues:

TaxesLicenses and permitsIntergovernmental Charges for servicesFines and forfeitures Special assessments Use of money and propertyMiscellaneous Total revenuesExpenditures:

General government Public safetyHighways and streetsCulture and recreation Capital outlayDebt Service:Principal InterestDebt issuance costsPayment for advance refunding Total expenditures Excess of revenuesover (under) expenditures 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$ 142,056 $ 170,638 $ 191,131 $ 200,438 $ 192,322 $ 177,255 $ 179,318 $ 156,593 $ 139,994 $ 143,74814,389 16,351 12,984 10,027 7,368 6,899 7,657 9,292 10,173 9,24442,568 55,178 47,934 79,423 86,873 60,550 61,082 66,618 50,734 59,34811,299 11,538 11,914 11,325 9,099 9,570 10,720 11,774 12,062 15,7342,006 2,098 2,778 4,573 6,213 7,512 8,928 6,293 6,234 7,2836,272 6,247 6,170 5,245 5,431 5,464 6,014 6,276 6,669 6,27210,915 14,324 22,587 27,970 18,620 11,173 10,173 8,095 3,878 4,3159,996 8,502 6,164 12,796 7,596 7,082 16,605 10,611 14,933 6,957$ 239,501 $ 284,876 $ 301,662 $ 351,797 $ 333,522 $ 285,505 $ 300,497 $ 275,552 $ 244,677 $ 252,901$ 21,800 $ 25,193 $ 39,093 $ 26,177 $ 25,995 $ 23,835 $ 26,090 $ 18,835 $ 15,713 $ 13,558117,267 126,007 139,739 151,773 145,802 138,594 140,994 150,878 150,290 151,72111,695 11,281 19,722 25,209 18,452 14,987 14,587 16,651 16,294 16,94428,939 31,017 31,039 30,622 26,859 40,373 44,345 57,538 45,356 34,27564,127 121,978 149,325 171,952 180,394 131,908 105,689 75,482 73,581 72,3658,599 9,733 12,045 11,257 44,349 48,078 89,264 83,378 45,006 45,50015,025 19,205 21,330 31,239 33,033 31,267 32,611 24,133 15,116 16,7871,538 -2,551 697 259 231 174 169 581 843--------3,521 -$ 268,990 $ 344,414 $ 414,844 $ 448,926 $ 475,143 $ 429,273 $ 453,754 $ 427,064 $ 365,458 $ 351,993$ (29,489)

$ (59,538)

$ (113,182)

$ (97,129)

$ (141,621)

$ (143,768)

$ (153,257)

$ (151,512)

$(120,781)

$ (99,092)(continued) 92 Table 4City of Riverside Changes in Fund Balances of Governmental FundsLast Ten Fiscal Years(modified accrual basis accounting)

(in thousands)

Page 2 of 2Other financing sources (uses):Transfers inTransfers outIssuance of long term debtCapital lease financings Sales of capital assetsPayments to refunded bond agentTotal other financing sources (uses)Special item -pension contribution Extraordinary items:Dissolution of Riverside Redevelopment AgencyTransfer of assets and liabilities toSuccessor AgencyTransfer of assets from Successor AgencyAssumption of obligation Total extraordinary itemsNet change in fund balances2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$ 49,944 $ 59,545 $ 84,306 $ 62,841 $ 100,797 $ 88,303 $ 214,631 $ 196,859 $ 56,572 $ 58,469(35,026)

(33,969)

(53,135)

(30,515)

(58,710)

(48,150)

(180,280)

(156,305)

(14,178)

(15,369)85,691 20,969 299,645 164,408 30,425 51,821 104,875 34,940 99,753 87,037-----3,116 2,000 -7,203 6,6256,230 1,281 541 8,931 (5,798) 529 (1,629) 156 82 931(9,167) --(148,975)

---

(43,591)

-97,672 47,826 331,357 56,690 66,714 95,619 139,597 75,650 105,841 137,693y:(32,141)(130,174) 28,121(4,927)(106,980)

-$ 36,042 $ (11,712)

$ 218,175 $ (40,439)

$ (74,907)

$ (48,149)

$ (13,660)

$ (182,842)

$ (14,940)

$ 38,601Debt service as a percentage ofnoncapital expenditures 15.301% 13.777% 14.011% 16.947% 26.058%(1) (2)23.211% 32.757%(3)32.507%(4)21.039%21.803%(1) Increase in debt service related to the issuance of the 2007 Redevelopment Agency Tax Allocation Bonds and 2008 Riverside Renaissance Certificates of Participation.

(2) 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-fulland immediately re-issued each year in 2009, 2010, 2011,2012, 2013 and 2014.(3) 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 yearand re-paid within the year.(4) Includes one-time early redemption of $33.3 million of 2011 Redevelopment Tax Allocation Bonds.93 Table 5City of Riverside Business-Type Activities Electricity Revenues By SourceLast Ten Fiscal Years(accrual basis of accounting)

(in thousands)

OtherFiscal Residential Commercial Industrial Wholesale Other Transmission Operating TotalYear Sales Sales Sales Sales Sales Revenue Revenue Revenues2005200620072008200920102011201220132014$ 79,78685,24394,42699,981105,525107,301107,792110,471118,173111,880$ 59,99853,77355,42160,76865,53265,09164,03966,04766,63267,063$ 59,15771,08483,69892,69797,10097,458102,067107,455110,680111,260$ 15,24911,9529,91314,8054,6741,466124506381156,3377,1395,7135,4255,6845,6395,5295,6145,7125,600$ 20,21320,04320,09719,21118,67321,10022,09130,73532,68832,630$ 12,6979,1839,53612,40512,25011,85512,06112,65713,41015,489$ 253,437258,417278,804305,292309,438309,910313,703333,029347,933344,03794 Table 6City of Riverside Governmental Activities Tax Revenues By SourceLast Ten Fiscal Years(accrual basis of accounting)

(in thousands)

Fiscal SalesYear TaxUtilityProperty UsersTax1TaxTransient Franchise Occupancy TotalTax Tax Taxes200520062007200820092010201120122013201453,34857,52255,66650,52641,88239,64544,15747,70150,22255,09661,55380,934101,469114,176116,420104,087100,80274,17952,90451,32322,13323,50225,38426,26725,96425,97526,69127,32028,20628,0924,4814,8135,0314,9725,1444,4774,9374,8834,9595,0461,7954,3723,5813,7952,9122,4882,7312,9953,7034,189143,310171,143191,131199,736192,322176,672179,318157,078139,994143,7461 Decrease in property taxes in fiscal years 2012 and 2013 relates to the dissolution of the Redevelopment Agency. Upon the dissolution of the Redevelopment Agency on February 1, 2012, property taxes receivedby the Successor Agency are reported in a private-purpose trust fund and therefore are excluded from theactivities of the primary government.

95 Table 7City of Riverside Assessed Value and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years(in thousands)

CityDissolved Redevelopment Agency'Fiscal TotalYear Taxable Taxable DirectEnded Less: Assessed Less: Assessed TaxJune 30 Secured Unsecured Exemptions Value Secured Unsecured Exemptions Value Rate2200520062007200820092010201120122013201415,540,982 17,557,341 20,672,126 23,618,776 24,428,633 22,644,262 22,056,793 22,031,328 22,313,665 23,045,134 951,2111,058,995 1,140,891 1,291,972 1,330,053 1,299,353 1,260,923 1,264,151 1,244,448 1,201,634 (2,751,844)

(4,002,177)

(5,417,388)

(6,960,666)

(7,515,667)

(7,103,040)

(6,920,720)

(6,952,649)

(7,142,401)

(7,394,982) 13,740,349 14,614,159 16,395,629 17,950,082 18,243,019 16,840,575 16,396,996 16,342,830 16,415,712 16,851,786 1,775,655 2,914,600 4,145,700 5,509,441 5,998,768 5,598,484 5,396,219 5,395,632 N/AN/A158,148210,025410,625553,124581,943564,825544,906572,153N/AN/A(33,654)(51,992)(93,261)(138,490)

(224,025)

(266,257)

(268,323)

(270,313)

N/AN/A1,900,149 3,072,633 4,463,064 5,924,075 6,356,686 5,897,052 5,672,802 5,697,472 N/AN/A0.2660.3090.3040.3340.3430.3490.3470.3480.3480.125Notes: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 propertybeing 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 onlyre-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.1 In accordance with the timeline set forth in Assembly Bill 1X 26 (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in theState of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.2 Total Direct Rate is the weighted average of all individual direct rates. Beginning in 2013/14, the Direct Rate no longer includes revenue generated from the formerredevelopment tax rate areas.Source: Riverside County Auditor-Controller 96 Table 8City of Riverside Direct and Overlapping Property Tax Rates(Rate per $100 of Assessed Valuation)

Last Ten Fiscal Years2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Basic Levy1Unified School Districts Debt Service2City of Riverside Debt ServiceEastern Municipal Water Improvement DistrictMetropolitan Water Distdct Original AreaRiverside City Community College Debt ServiceRubidoux Community Service Debt ServiceTotal Direct & Overlapping 3 Tax RatesCity's Share of 1% Levy Per Prop 134General Obligation Debt RateRedevelopment Rate5.7Total Direct Rate61.000 1.000 1.000 1.000 1.000 1.0000.234 0.220 0.155 0.185 0.291 0.3260.011 0.009 0.008 0.006 0.007 0.0060.023 0.010 0.009 0.008 --0.006 0.005 0.005 0.005 0.004 0.0040.018 0.018 0.018 0.013 0.013 0.0120.003 -----1.295 1.262 1.195 1.217 1.315 1.3480.145 0.145 0.145 0.145 0.145 0.1450.011 0.009 0.009 0.006 0.007 0.0061.006 1.005 1.005 1.005 1.004 1.0040.266 0.309 0.304 0.334 0.343 0.3491.000 1.000 1.000 1.0000.334 0.363 0.409 0.4620.0Q6 0.006 0.006 0.0070.004 0.004 0.004 0.0040.015 0.017 0.017 0.0181.359 1.390 1.436 1.4910.145 0.145 0.145 0.1450.006 0.006 0.006 0.0071.004 1.004 --0.347 0.348 0.348 0.1251 In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% isshared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, propertyowners 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 ValleyUnified School District, Riverside Unified School District and Val Verde Unified School District.

3Ovedapping 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 withinthe 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 1989per California State statue. RDA direct and overlapping rates are applied only to the incremental property values. The approval ofABX1 26 eliminated Redevelopment from the State of California for the fiscal year 2012/13 and years thereafter.

6 Total Direct Rate is the weighted average of all individual direct rates. Beginning in 2013/14, the Direct Rate no longer includesrevenue generated from the former redevelopment tax rate areas.7 In accordance with the timeline set forth in Assembly Bill Xl 26 (as modified by the California Supreme Court on December 29, 2011)all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.Source: Riverside County Assessor 2004/05 -2013/14 Tax Rate Table.97 Table 9City of Riverside Principal Property Taxpayers Current Year and Nine Years Ago (in thousands) 20142005Property OwnerTyler MallLa Sierra University Riverside Healthcare SystemRohr IncCole IDState Street Bank & Trust Co of CalifVestar Riverside PlazaCorona Pointe Apartments 7450 Northrop Drive Apartments Canyon Springs Marketplace CorpBRE Properties California State Teachers Retirement Charter Comm Entertainment IIBottling GroupPress Enterprise CompanyMission Grove Park Apartments TaxableAssessedValue$ 194,241136,505110,756108,70393,33091,63684,86077,45073,29770,030Percentage ofTotal TaxableAssessedRank Value123456789100.8%0.6%0.5%0.5%0.4%0.4%0.4%0.3%0.3%0.3%TaxableAssessedValue$ 141,69852,39549,989101,260Percentage ofTotal TaxableAssessedRank Value16720.9%0.3%0.3%0.6%91,58955,39154,93149,16844,91244,27034589100.6%0.4%0.4%0.3%0.3%0.3%Totals$ 1,040,808 4.5%$ 685,6034.4%Notes:The amounts shown above include assessed value data for both the City and the Successor Agency.Source: Riverside County Assessor 2013/14 and 2004/05 Combined Tax Rolls98 Table 10City of Riverside Property Tax Levies and Collections Last Ten Fiscal Years(in thousands)

Last Ten Fiscal Years (in thousands)

Fiscal YearEndedJune 30Collections Taxes Collected within the inLevied for Fiscal Year of the Levy Subsequent Fiscal Year Amount Percentage of Levy YearsTotal Collections To DateAmount Percentage of Levy200520062007200820092010201120122013201436,82552,53269,24683,99686,25177,22874,60841,02043,33345,13836,33251,81567,04682,34584,13474,49172,32740,34042,44744,68498.66%98.64%96.82%98.03%97.55%96.46%96.94%98.34%97.96%98.99%493 36,825717 52,5322,200 69,2461,651 83,9962,117 86,2512,737 77,2282,281 74,608680 41,020886 43,333-44,684100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%98.99%Note:The table reflects amounts related to the City. In addition, it includes amounts related to the Redevelopment Agencythrough dissolution (1/31/12).

The amounts collected by the Redevelopment Agency include monies that were passed-though to other agencies.

Current tax levies are the original charge as provided by the County of Riverside.

Current tax collections donot include supplemental taxes, aircraft taxes or other property taxes.The City adopted the Teeter plan available with the County of Riverside effective Fiscal year 2014. Under the Teeter plan theCounty of Riverside has responsibility for the collection of delinquent taxes and the City receives 100% of the levy.99 Table 11City of Riverside Electricity Sold by Type of CustomerLast Ten Fiscal Years(in millions of kilowatt-hours)

Type of Customer:

Residential Commercial Industrial Wholesale salesOtherTotalTotal direct rateMonthly Base Rate2005 2006 2007 2008 2009 2010 2011 2012 2013 2014675 696 748 734 733 701 666 688 726 700530 474 456 441 433 406 400 413 419 421707 810 924 960 946 906 912 969 1,003 997470 287 295 357 137 44 7 2 14 450 58 39 34 33 32 31 31 31 302,432 2,325 2,462 2,526 2,282 2,089 2,016 2,103 2,193 2,1523.363.36 5.00 11.35 13.06 18.0618.0618.0618.06 18.06Monthly Base Rate includes a Reliability Charge of $5.00 (small residence 100 amp) implemented in January 2008.increased to $10.00 (small residence 100 amp).In January 2010 the Reliability ChargeSource: Riverside Public Utilities, Finance Services100 Table 12City of Riverside Electricity RatesLast Ten Fiscal Years(Average Rate in Dollars per Kilowatt-Hour)

FiscalYear EndedJune 302005200620072008200920102011201220132014Residential 0.118130.122220.126210.136130.143890.153070.161730.160680. 162740.15995Commercial 0.113210.113300.121640.137810.151220.160140.160010.159910.159130.15936Industrial 0.083690.087980.090590.096580.102710.107560.111940.110880.110300.11156Other0.127680.123730.144930.160990.171690.178760.180890.179380.183750.18513Source: Riverside Public Utilities, Finance Services101 Table 13City of Riverside Top 10 Electricity Customers Current Year and Nine Years Ago2014Percent ofElectricity Total ElectricCharges Revenues2005Percent ofElectricity Total ElectricCharges RevenuesElectricity CustomerLocal University Local Government Local Government Local School DistrictCorporation Corporation Corporation HospitalCorporation Corporation

$10,947,884 8,335,217 7,386,521 4,189,035 3,677,670 3,315,738 2,775,346 2,453,555 2,120,900 2,113,037 3.70%2.82%2.50%1.42%1.24%1.12%0.94%0.83%0.72%0.71%N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A$47,314,903 16.00%N/A N/ARetail Sales Per Financial Statements

$295,803,687 N/A -not available Source: Riverside Public Utilities, Finance Services102 Table 14City of Riverside Ratios of Outstanding Debt by TypeLast Ten Fiscal Years (in thousands)

GeneralFiscal Obligation Year BondsRedevelopment BondsRevenueBondsGovernmental Activities PensionAssessment Obligation Bonds Bonds200520062007200820092010201120122013201420,28019,85819,33118,77418,17117,53316,84516,10715,31414,460144,024140,195296,598292,244285,743278,867305.195148,280146,470144,450142,170139,410136,050132,095127,480122,005115,775Certificates ofParticipation 57,33655,571192,874200,273198,268211,212207,246207,278158,697191,446CapitalLeases7,4316,0084,9299,3917,4556,3036,6705,2208,42413,168Notes/Loans Payable10,64510,2159,7599,0408,7499,2918,8494,00028,65247,61143,76242,344Business-Type Activities FiscalYear2005200620072008200920102011201220132014RevenueBonds419,581509,577482,929720,749670,512968,3931,071,554 1,063,853 1,031,839 1,094,290 Notes/Loans Payable10,4599,8419,2118,5697,9157,24976,74773,82170,79836,030CapitalLeases3923172532112,5742,1511,7201,3322,5582,266TotalPrimaryGovernment 818,428898,0521,160,334 1,401,421 1,342,931 1,637,049 1,826,921 1,499,091 1,482,049 1,557,390 Percentage of PersonalIncome114.98%15.47%18.67%21.51%20.15%24.83%27.58%22.01%21.41%22.54%DebtPerCapita12.913.134.014.804.545.446.014.864.754.961 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 19.103 Table 15City of Riverside Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (in thousands, except per capita amount)FiscalYear2005200620072008200920102011201220132014GeneralObligation Bonds20,28019,85819,33118,77418,17117,53316,84516,10715,31414,460Certificates ofPensionBonds Participation 148,280146,470144,450142,170139,410136,050132,095127,480122,005115,77557,33655,571192,874200,273198,268211,212207,246207,278158,697191,446TaxAllocation Bonds144,024140,195296,598292,244285,743278,867305,195Total369,920362,094653,253653,461641,592643,662661,381350,865296,016321,681Percent ofAssessedValue 12.69%2.48%3.98%3.64%3.52%3.82%4.03%2.15%1.80%1.91%PerCapita21,3161,2642,2602,2392,1672,1402,1751,1379491,024Notes:General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (which, the City has none.)1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California.

2 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 Department.

104 Table 16City of Riverside Direct and Overlapping Governmental Activities DebtAs of June 30, 2014 Page 1 of 22013-14 Assessed Valuation:

Less Dissolved Redevelopment Agency Incremental Valuation:

Adjusted Assessed Valuation:

$ 22,864,558,235 6,012,772,332

$ 16,851,785,903 Overlapping debt repaid with property taxes2Metropolitan Water DistrictRiverside City Community College DistrictAlvord Unified School DistrictRiverside Unified School DistrictCorona-Norco Unified School DistrictJurupa Unified School DistrictMoreno Valley Unified School DistrictAlvord Unified School District Community District No.2006-1 Riverside Unified School District Community Facilities Districts City of Riverside Community Facilities Districts City of Riverside 1915 Act BondsTotal overlapping debt repaid with property taxesTotal Debt$ 1,322,750 227,729,565 227,560,233 139,315,000 260,100,000 46,700,000 36,708,522 7,960,000 89,052,000 15,210,000 26,755,000

% Applicable 1.059%29.81671.17987.0400.0010.00211.15982.33389.479-100.

100.100.City's Shareof Debt1$ 1,400,792 67,899,847 161,975,098 121,259,776 2,6019344,096,304 6,553,707 88,906,388 15,210,000 26,755,000

$ 494,060,447 (continued) 105 Table 16City of Riverside Direct and Overlapping Governmental Activities DebtAs of June 30, 2014Other overlapping debt2Page 2 of 2Riverside County General Fund Obligations Riverside County Pension Obligations Riverside County Board of Education Certificates of Participation Alvord Unified School District Certificates of Participation Corona-Norco Unified School District Certificates of Participation Jurupa Unified School District Certificates of Participation Moreno Valley Unified School District Certificates of Participation Riverside Unified School District General Fund Obligations Total other overlapping debtLess: Riverside County supported obligations

$ 718,909,871 334,515,000 2,700,000 2,027,061 29,000,000 6,450,000 13,279,998 11,880,000 11.053%11.05311.05371.1790.0010.00211.15987.040$ 79,461,108 36,973,943 298,4311,442,842 2901291,481,915 10,340,352 129,999,010 1,116,603 128,882,407 262,192,206 885,135,060 424,804,000

$ 1,309,939,060 Overlapping tax Increment debtTotal overlapping debtCity direct debtCombined total direct and overlapping debt(1) Debt balances are as of April 1, 2014 (most recent available) for other agency debt, and June 30, 2014 for all City of Riverside direct debt.(2) Excludes tax and revenue anticipation notes, enterprise

revenue, mortgage

revenue, non-bonded capital lease obligations.

Qualified Zone Academy bonds are included based on principal due at maturity.

Ratios to 2013-14 Assessed Valuation:

Total debt repaid with property taxes ....................................

2.16%City direct debt ($424,804,000)

..........................................

1.86%Combined total direct and overlapping debt ............................

5.73%Ratios to Dissolved Redevelopment Incremental Valuation

($6,012,772,332):

Total overlapping tax Increment debt ...................................

4.36%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 govemments that is borne by the residents and businesses of the City. Thisprocess recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by theresidents 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: California Municipal Statistics, Inc., Riverside County Auditor-Controller and City Finance Department.

106 Table 17City of Riverside Legal Debt Margin Information Last Ten Fiscal Years (in thousands) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Assessed valuation

$13,740,349

$14,614,159

$16,395,629

$17,950,082

$ 18,243,019

$ 16,840,575

$ 16,396,996

$ 16,342,830

$ 16,415,712

$ 16,851,786 Conversion percentage 25% 25% 25% 25% 25% 25% 25% 25% 25% 25%Adjusted assessed valuation 3,435,087 3,653,540 4,098,907 4,487,521 4,560,755 4,210,144 4,099,249 4,085,708 4,103,928 4,212,947 Debt limit percentage 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%Debt limit 515,263 548,031 614,836 673,128 684,113 631,522 614,887 612,856 615,589 631,942Total net debt applicable to limit: 20,280 19,858 19,331 18,774 18,171 17,533 16,845 16,107 15,314 14,460Legal debt margin 494,983 528,173 595,505 654,354 665,942 613,989 598,042 596,749 600,275 617,482Total net debt applicable to the limitas a percentage of debt limit3.9% 3.6% 3.1% 2.8% 2.7% 2.8% 2.7% 2.6% 2.5% 2.3%The Government Code of the State of California provides for a legal debt limit of15% of gross assessed valuation.

However, this provision was enacted whenassessed valuation was based upon 25% of market value. Effective with the 1981-82fiscal year, each parcel is now assessed at 100% of market value (as of the mostrecent change in ownership for that parcel).

The computations shown above reflecta conversion of assessed valuation data for each fiscal year from the current fullvaluation perspective to the 25% level that was in effect a the time that the legaldebt margin was enacted by the State of California for local governments locatedwithin the State,Source: City of Riverside, Statistical Table 7 and Notes to Financial Statements.

107 Table 18City of Riverside Pledged-Revenue CoverageBusiness Type Activity DebtLast Ten Fiscal Years (in thousands)

Electric Revenue BondsWater Revenue BondsLess: Net Less: NetFiscal Pledged Operating Available Debt Service Pledged Operating Available Debt ServiceYear Revenue1Expenses1Revenue Principal Interest Coverage Revenue1Expenses' Revenue Principal Interest Coverage2005200620072008200920102011201220132014262,350265,086289,784314,733320,447320,560319,177340,098348,187347,541164,159184,421187,700219,680202,904199,040212,878221,876226,997241,13698,19180,665102,08495,053117,543121,520106,299118,222121,190106,40514,55515,01518,81519,46020,57221,57423,02925,17418,48621,63212,14315,24514,20016,79024,94122,57225,08727,63025,94127,5753.682.673.092.622.582.752.212.242.7321645,34866,22655,69967,31260,88661,98584,32873,55772,70071,31726,43627,02829,46133,82735,63935,95335,22035,30935,94037,69818,91239,19826,23833,48525,24726,03249,10838,24836,76036,7614,0453,8754,3004,3554,4734,5334,7994,7085,3954,5742,5913,7903,4544,2756,7288,0089,2638,8728,7008,5362.855.113.383.882.252.083.492.822.612.80Sewer Revenue BondsLess: NetFiscal Pledged Operating Available Debt ServiceYear Revenue1Expenses' Revenue Principal Interest Coverage2010201120122013201431,47037,77242,56252,94452,09826,86527,57529,63229,99928,9304,60510,19712,93022,94523,1686666926927,4657,7531511255,47110,89110,7815.6412.482.101.251.25Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

Amounts have been calculated in accordance with the provisions set forth in the debt covenants.

Total operating expenses exclusive of depreciation.

Pledged revenue includes applicable cash set aside in a rate stabilization account in accordance with applicable bond covenants.

The City of Riverside does not have any pledged revenue related to Govermental Activities.

108 Table 19City of Riverside Demographic and Economic Statistics Last Ten Calendar YearsCalendarYear2004200520062007200820092010201120122013Sources:Population 281,192286,572289,045291,814296,038300,769304,051308,511311,955314,034PersonalIncome2(in thousands) 5,462,823 5,806,339 6,214,628 6,514,489 6,665,142 6,592,294 6,623,143 6,811,923 6,923,217 6,909,376 PerCapitaPersonalIncome 219,42720,26121,50122,32422,51421,91821,78322,08022,19322,002Unemployment Rate 36.15.45.16.18.613.714.813.79.78.41 California State Department of Finance.2 Demographic Estimates for 2004-2009 are based on the last available Census. Projections are developed by incorporating all fo the prior census data released to date. Demographic Datais totaled from Census Block Groups that overlap the City's boundaries.

Demographic Estimates for 2010 and later are per the US Cenus Bureau, most recent American Community Survey.3 State of California Empolyment Development Department.

109 Table 20City of Riverside Principal Employers Current Year and Nine Years Ago20142005Percentage of Total CityEmployment Employees RankPercentage of Total CityEmployment EmployerEmployees RankCounty of Riverside University of California Riverside Unified School DistrictKaiserCity of Riverside Riverside Community HospitalRiverside County Office of Education Alvord Unified School DistrictParkview Community HospitalRiverside Community College District11,1877,2183,4613,1562,4761,8801,7651,4451,3501,061123456789107.6%4.9%2.4%2.1%1.7%1.3%1.2%1.0%0.9%0.7%N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/ATotal34,99923.8%N/AN/AN/A -not available Source: City of Riverside, Finance Department 110 Table 21City of Riverside Full-Time Equivalent City Government Employees by FunctionLast Ten Fiscal YearsFunctionGeneral government Public safety (sworn and non-sworn personnel PoliceFire2005 2006 2007 2008 2009 2010 2011 2012 2013 2014331.88 377.15 412.22 436.35 439.10 433.40 431.40 440.40 413.90 356.25I)568.83 589.33 618.33 637.33 591.93 589.93 589.93 599.93 596.75 551.75221.11 221.73 251.73 254.21 254.21 255.46 255.46 255.46 255.46 255.00281.35 262.35 286.35 318.35 369.65 349.50 348.11 357.11 362.11 333.4848.49 59.49 60.29 64.29 58.60 59.00 56.00 56.00 57.00 59.00300.92 311.45 324.26 339.52 340.71 328.07 328.07 341.22 351.48 269.986.00 6.00 7.00 7.00 7.00 7.00 9.50 9.50 9.50 6.00130.00 133.00 142.00 167.00 167.00 177.65 180.15 181.15 181.15 182.15305.60 337.60 351.35 404.60 408.10 419.45 448.50 452.50 459.50 462.502,194.18 2,298.10 2,453.53 2,628.65 2,636.30 2,619.46 2,647.12 2,693.27 2,686.85 2,476.11Highways and streetsSanitation Culture and recreation AirportWaterElectricTotal1 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).

2 In fiscal year 2013/14 the City Council deleted a number of long-term unfunded positions.

Source: City of Riverside, Finance Department 111 Table 22City of Riverside Operating Indicators by FunctionLast Ten Fiscal YearsFunction/Program 20'PoliceArrestsFireNumber of calls answeredInspections Public works:Street resurfacing (miles)Parks and recreation Number of recreation classesNumber of facility rentalsWaterNumber of accountsAnnual consumption (ccf) 27,8ElectricNumber of accountsAnnual consumption (kvh)Sewer:New connections Average daily sewage treatment (millions of gallons)'Amounts expressed in millionsN/A -not available Source: City of Riverside, various departments 05 2006 2007 200811,28026,50517,028102.4515,19527,07462,492175,253103,4632,4329,62138.0710,09326,69619,26151.2616,27227,48362,98528,865,030 104,2942,35916,71735.919,82727,4587,26173.4019,07932,98063,43132,110,208 105,2262,46215,42332.509,36727,42910,81226.2722,14635,07663,49430,583,266 106,0152,52616,41232.10200910,15026,3977,63818.9021,88436,82264,06229,721,236 106,3852,28218,76533.002010 20118,69026,4847,23420.0027,76234,56564,23126,687,271 106,3352,08916,97133.298,11827,3226,50521.2537,30342,63864,34925,902,439 106,8552,01617,74630.0620127,73627,63710,07418.4343,31843,28864,36727,062,142 107,3212,10318,16629.842013 20148,36229,98810,15116.5041,36443,35864,59128,186,178 107,5252,19317,60729.579,32130,66812,47635.3845,70746,43264,82928,887,304 108,3582,15217,27428.49112 Table 23City of Riverside Capital Asset Statistics by FunctionLast Ten Fiscal YearsFiscal Year2005 2006 2007 (1) 2008 2009 2010 2011 2012 2013 2014FunctionPublic SafetyPoliceStationsSubstations Helicopters FireStationsActive apparatus Reserve apparatus Training facilities Highways and streetsStreets (miles)Streetlights Signalized intersections Culture and recreation Parks acreageCommunity centersPlaygrounds Swimming poolsSoftball

& baseball diamondsLibrary branchesMuseum exhibit-fixed Museum exhibit-special WaterFire hydrantsSewerSanitary sewers (miles)ElectricMiles of overhead distribution systemMiles of underground system274133051836.0028,5813222,534.0011267355816,926354132961845.3528,8473532,534.001127633677.127344143061852.0429,0283582,773.00113874461327,187344143061864.6829,3123632,773.0011387446857,381354143071866.8929,6753652,773.0011417447627,523344143071867.9629,7573622,773.0011417447527,593344142691868.3929,8683622,811.0011417498827,632344142791868.7029,9333652,811.0011417518517,682829515.0804.034414281113431428111868.8929,9493652,891.001143754834871.1929,9683672,911.801144754834765 775 785 794 794 820 8237,726829513.0810.07,754829513.0814.0531.0622.0527.0663.0528.0704.0523.5741.6522.0769.0519.0782.0517.0791.0Source: City of Riverside, various departments (1) 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.113 City ?fArts &Innovation 3900 Main StreetRivelrsde CA 92522xplore vrside. corn