Reso 2020-033 CAFR for Fiscal Year Ended June 30, 2019

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Management's Discussion and Analysis for Fiscal Year Ended June 30, 2019 The Management's Discussion and Analysis (MD&A) provides an overview of the City of San Leandro's financial activities and fiscal performance for the year ended June 30, 2019. Read this discussion and analysis in conjunction with the accompanying Transmittal Letter and Basic Financial Statements to obtain a complete picture of the City financial condition. FINANCIAL HIGHLIGHTS City's Assets and Deferred Outflow of Resources exceeded its Liabilities and Deferred Inflow of Resources by $186.0 million (Net Position), a $4.2 million decrease from the prior year. Of total net position, $191.2 million was invested in capital assets, $63.1 million was restricted for other purposes, and ($68.3) million was unrestricted. While Net Investment in Capital Assets and Unrestricted Net Position saw a decrease of $24.9 million and $1.3 million respectively, Restricted Net Position increased by $22.0 million. Assets and Deferred Outflow of Resources increased by $13.2 million from the prior fiscal year, fully offset by an increase in Liabilities and Deferred Inflow of Resources of $17.4 million. The increase in Liabilities is in part due to the issue of the 2018 Lease Revenue Bonds for the principal amount of $18.9 million to finance the acquisition and construction of capital improvement projects consisting of Police Headquarters and South Office Building, the Mulford -Marina Branch Library, Manor Park Competition Pool, and Casa Peralta. The City's total net position decrease of $4.2 million is comprised of a $10.1 million decrease in governmental activities and a $5.9 million increase in Business -Type activities. In accordance with GASB Statement No. 54, governments are obligated to enhance the financial reporting of the fund balance categories. Fund balances reported in Note 9 detail the classifications of the City's new fund balance categories. The City's governmental fund balance, which includes the general, special revenue, debt service, and capital projects funds, increased by $28.8 million for an ending fund balance of $123.1 million. Ending fund balance classifications include: a) Nonspendable: $10.9 million with these funds are not available or spendable due to advances and loans to other funds. b) Restricted: $63.8 million based on constraints on the use of resources or imposed by law through constitutional provisions or enabling legislation. These include capital projects and debt service payments. c) Assigned: $6.3 million including General fund encumbrances from prior fiscal year and a reserve to fund anticipated Other Post -Employment Benefits (OPEB) costs arising from the City's contract for Fire Services with Alameda County Fire Department. d) Unassigned: $42.1 million and is available for expenditure. Unassigned is further categorized by Compensated Absences, Major Emergencies, Economic Uncertainties and offsets from other fund deficits.