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Comprehensive Annual Financial Report as of June 30, 2011 January 20, 2012 The format of the CAFR is designed to serve the needs of three primary users. CAFR information serves the City Council and other governmental oversight bodies, the public, and agencies assessing the City's creditworthiness. DISCUSSION The City's independent auditor completed audits of the City's financial statements and the other reports stated earlier. The audits found no exception to conformance with generally accepted accounting standards, the Government Auditing Standards issued by the Comptroller of the United States, or the U. S. Office of Management and Budget Circular A -133 for state and local governments. Maze found the general- purpose financial statements present fairly, in all material ways, the City's financial position as of June 30, 2011. The audited financial statements include the statement of net assets, statements of activities and changes in net assets, balance sheets, statements of revenues, expenditures, and, changes in fund balances, and statements of cash flows. The CAFR has been prepared in accordance with the requirements for GASB 34. The Governmental Accounting Standards Board (GASB) established this framework for the financial reports of state and local governments. Important financial statement changes highlighted in the CAFR Management Discussion and Analysis include: The assets of the City's exceeded its liabilities at fiscal year ending June 30, 2011 by $332.3 million. Of this amount, $283.3 million was invested in capital assets, net of related debt. The balance was restricted for capital projects of $24.5 million, debt service $5.2 million, special revenue $7.7 million, and unrestricted $11.4 million. The City's total net assets decreased by $2.4 million; representing a $7.2 million decrease in Governmental and a $4.8 million increase in Business type activities. The net assets decrease was largely due to the increase in the Redevelopment Agency indebtedness with related non - capitalizable development expenses. The City's Governmental activities revenues increased by 2% mainly due to sales tax with an increase of $4.2 million, and charges for services which increased by $4.5 million. The increase is sales tax can be attributed to the voter approved quarter cent sales tax increase (Measure Z). The increase in charges for services of $4.5 million is primarily due to the increase in permits and fees for the construction and building of the Kaiser Hospital and other governmental program revenues. As of June 30, 2011, the City's governmental funds reported combined ending fund balances of $60.5 million, an increase of $747,480 compared to prior fiscal year.