County of San Diego Financial Statements — page 1

Basic Financial Statements

County of San Diego Financial Statements — page 2

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

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

]

[

Basic Financial Statements

Statement of Net Assets

STATEMENT OF NET ASSETS

June 30, 2012 (In Thousands)

Primary Government

Component Unit

Governmental

Activities

Business-type

Activities

Total

First 5 Commission

of San Diego

ASSETS

Pooled cash and investments

1,988,951

81,282

2,070,233

142,595

Cash with fiscal agents

109

Investments with fiscal agents

369,689

10,447

Receivables, net

623,939

7,977

631,916

5,918

Property taxes receivables, net

135,721

Internal balances

191

(191)

Inventories

14,386

14,388

Deposits with others

Prepaid items

430

Deferred charges

12,310

Restricted assets:

Cash with fiscal agents

242

558

Investments with fiscal agents

63,352

Lease receivable

12,685

Capital assets:

Land, easements and construction in progress

595,586

23,205

618,791

Other capital assets, net of accumulated depreciation/

amortization

2,535,089

140,982

2,676,071

Total assets

6,352,696

253,257

6,605,953

159,520

LIABILITIES

Accounts payable

189,675

993

190,668

15,290

Accrued payroll

48,766

233

48,999

Accrued interest

25,344

Unearned revenue

261,636

261,711

Non-current liabilities:

Due within one year

153,769

439

154,208

Due in more than one year

1,895,136

1,295

1,896,431

Total liabilities

2,574,326

3,035

2,577,361

15,415

NET ASSETS

Invested in capital assets, net of related debt

2,770,556

162,874

2,933,430

Restricted for:

Creditors - Capital projects

5,422

Grantors - Housing assistance

84,552

Donations

2,949

Laws or regulations of other governments:

Future road improvements

125,904

Maintenance, operation, acquisition and construction of

criminal justice facilities and courthouses

50,825

Defray administrative costs, other general restrictions

16,532

Teeter tax loss

14,643

Mental health

11,344

Vector control

13,918

Improvement and maintenance of recorded document

systems

17,327

Flood Control future drainage improvements

26,166

Public safety activities

42,361

Other purposes

141,306

First 5 Commission of San Diego

144,105

Unrestricted

454,565

87,348

541,913

Total net assets

3,778,370

250,222

4,028,592

144,105

County of San Diego Financial Statements — page 3

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

Basic Financial Statements

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

[

]

Statement of Activities

Continued on next page

STATEMENT OF ACTIVITIES

For the year ended June 30, 2012 (In Thousands)

Program Revenues

Net (Expense) Revenue and Changes in Net Assets

Functions/Programs:

Expenses

Charges for

Services

Operating

Grants and

Contributions

Capital

Grants and

Contributions

Primary Government

Component

Unit

Governmental

Activities

Business-type

Activities

Total

First 5

Commission

of San Diego

Governmental Activities:

General government

271,485

99,872

61,223

5,300

(105,090)

Public protection

1,179,815

237,632

439,004

304

(502,875)

Public ways and facilities

132,166

19,449

85,658

5,339

(21,720)

Health and sanitation

790,907

116,365

589,669

(84,873)

Public assistance

1,175,678

24,326

1,139,851

(11,501)

Education

34,669

894

1,858

(31,855)

Recreation and cultural

36,128

7,817

259

(28,052)

Interest

102,338

(102,338)

Total governmental

activities

3,723,186

506,355

2,317,522

11,005

(888,304)

Business-type activities:

Airport

12,736

11,568

539

(629)

Sanitation Districts

22,335

18,406

(3,929)

Wastewater

Management

5,980

6,502

522

Total business-type

activities

41,051

36,476

539

(4,036)

Total primary government

3,764,237

542,831

2,318,061

11,005

(888,304)

(4,036)

(892,340)

Component Unit:

First 5 Commission of San

Diego

49,832

35,424

(14,408)

County of San Diego Financial Statements — page 4

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

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

]

[

Basic Financial Statements

STATEMENT OF ACTIVITIES

For the year ended June 30, 2012 (In Thousands)

Net (Expense) Revenue and Changes in Net Assets

Primary Government

Component Unit

(Continued)

Governmental

Activities

Business-type

Activities

Total

First 5 Commission

of San Diego

Changes in net assets:

Net (expense) revenue

(888,304)

(4,036)

(892,340)

(14,408)

General Revenues

Taxes:

Property taxes

616,183

Other taxes

17,200

Property taxes in lieu of vehicle license fees

304,614

Sales and use taxes

25,055

Total general tax revenues

963,052

Investment earnings

12,338

1,151

13,489

790

Other

110,676

209

110,885

Total general revenues

1,086,066

1,360

1,087,426

790

Extraordinary gain

10,423

Transfers

(28)

Total general revenues, extraordinary gain and transfers

1,096,461

1,388

1,097,849

790

Change in net assets

208,157

(2,648)

205,509

(13,618)

Net assets at beginning of year (restated-See Note 31 to the

financial statements)

3,570,213

252,870

3,823,083

157,723

Net assets at end of year

3,778,370

250,222

4,028,592

144,105

County of San Diego Financial Statements — page 5

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

Basic Financial Statements

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

[

]

Fund Financial Statements: Balance Sheet - Governmental Funds

BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2012 (In Thousands)

General Fund

Public Safety

Fund

Tobacco

Endowment

Fund

Other

Governmental

Funds

Total

Governmental

Funds

ASSETS

Pooled cash and investments

1,321,049

39,151

955

417,471

1,778,626

Cash with fiscal agents

109

Investments with fiscal agents

369,687

369,689

Receivables, net

516,727

41,364

4,637

58,665

621,393

Property taxes receivables, net

135,292

429

135,721

Due from other funds

63,218

24,206

87,424

Inventories

11,369

1,458

12,827

Deposits with others

Prepaid items

390

430

Restricted assets:

Cash with fiscal agents

157

242

Investments with fiscal agents

63,352

Lease receivable

5,568

7,117

12,685

Total assets

2,053,531

80,515

375,279

573,189

3,082,514

LIABILITIES AND FUND BALANCES

Liabilities

Accounts payable

118,055

36,800

154,855

Accrued payroll

44,996

2,583

47,579

Due to other funds

36,162

38,204

4,401

23,278

102,045

Deferred revenues

123,144

35,431

158,575

Unearned revenue

243,327

17,726

261,053

Total liabilities

565,684

38,204

4,401

115,818

724,107

Fund Balances

Nonspendable:

Not in spendable form:

Loans, due from other funds and prepaids

1,074

3,807

4,881

Inventories and deposits with others

11,369

1,474

12,843

Restricted for:

Creditors - Debt service

74,738

Creditors - Capital projects

34,593

Grantors - Housing assistance

54,360

31,347

85,707

Donations

2,949

Laws or regulations of other governments:

Future road improvements

125,904

Maintenance, operation, acquisition and construction of

criminal justice facilities and courthouses

50,825

Fund purpose

42,311

89,319

131,630

Other purposes

137,579

26,300

163,879

Committed to:

Realignment health, mental health and social services

65,297

Unforeseen catastrophic events

55,500

Capital projects' funding

339,453

5,520

344,973

Health

370,878

Other purposes

54,984

64,369

119,353

Assigned to:

Other purposes

51,325

Unassigned

663,132

Total fund balances

1,487,847

42,311

370,878

457,371

2,358,407

Total liabilities and fund balances

2,053,531

80,515

375,279

573,189

3,082,514

County of San Diego Financial Statements — page 6

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

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

]

[

Basic Financial Statements

Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Assets

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE GOVERNMENT-WIDE

STATEMENT OF NET ASSETS

June 30, 2012

(In Thousands)

Total fund balances - governmental funds

2,358,407

Capital assets used in governmental activities (excluding internal service funds) are not current financial resources and,

therefore, are not reported in the balance sheet. This amount represents capital assets net of accumulated depreciation.

3,080,565

Unamortized issuance costs - bonds, notes and loans payable deferred charges (to be amortized over the life of the

debt).

12,310

Accrued interest on long-term debt.

(25,340)

Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds

and recognized as revenue in the statement of activities.

158,575

Long-term liabilities, including bonds, notes, and loans payable, are not due and payable in the current period and,

therefore, are not reported in the balance sheet. (See note 2 to the financial statements; table 3.)

(1,903,840)

Internal service funds are used by management to charge the costs of information technology, vehicle operations and

maintenance, employee benefits, public liability, road and communications services, materials and supplies (purchasing),

and facilities services to individual funds; to make loans for start-up services for new and existing county service districts;

and for the financing of clothing and personal sundry items for persons institutionalized at various county facilities. The

assets and liabilities of the internal service funds are included in the governmental activities in the statement of net assets.

(See note 2 to the financial statements; table 3.)

97,693

Net assets of governmental activities

3,778,370

County of San Diego Financial Statements — page 7

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

Basic Financial Statements

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

[

]

Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -

GOVERNMENTAL FUNDS

For the Year Ended June 30, 2012 (In Thousands)

General Fund

Public Safety

Fund

Tobacco

Endowment

Fund

Other

Governmental

Funds

Total

Governmental

Funds

Revenues:

Taxes

925,861

40,651

966,512

Licenses, permits and franchise fees

42,552

9,271

51,823

Fines, forfeitures and penalties

50,905

2,913

53,818

Revenue from use of money and property

17,099

2,594

10,026

29,765

Aid from other governmental agencies:

State

958,169

223,682

94,438

1,276,289

Federal

831,859

137,959

969,818

Other

65,542

16,750

82,292

Charges for current services

336,057

33,529

369,586

Other

54,161

50,486

104,647

Total revenues

3,282,205

223,728

2,594

396,023

3,904,550

Expenditures:

Current:

General government

203,179

129

7,067

210,375

Public protection

1,140,718

8,857

1,149,575

Public ways and facilities

1,300

63,622

64,922

Health and sanitation

735,916

46,588

782,504

Public assistance

1,034,961

136,701

1,171,662

Education

844

31,366

32,210

Recreation and cultural

31,175

2,127

33,302

Capital outlay

33,249

179,055

212,304

Debt service:

Principal

23,200

38,041

61,241

Interest

17,308

77,012

94,320

Bond issuance costs

374

Total expenditures

3,221,850

129

590,810

3,812,789

Excess (deficiency) of revenues over (under) expenditures

60,355

223,728

2,465

(194,787)

91,761

Other financing sources (uses):

Sale of capital assets

360

380

740

Issuance of bonds and loans:

Face value of bonds issued

32,665

Discount on issuance of bonds

(182)

Transfers in

244,148

216,044

460,192

Transfers out

(212,578)

(203,106)

(24,200)

(25,222)

(465,106)

Total other financing sources (uses)

31,930

(203,106)

(24,200)

223,685

28,309

Extraordinary loss

(3,126)

Net change in fund balances

92,285

20,622

(21,735)

25,772

116,944

Fund balances at beginning of year

1,394,380

21,689

392,613

431,526

2,240,208

Increase (decrease) in nonspendable inventories

1,182

1,255

Fund balances at end of year

1,487,847

42,311

370,878

457,371

2,358,407

County of San Diego Financial Statements — page 8

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

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

]

[

Basic Financial Statements

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

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF

GOVERNMENTAL FUNDS TO THE GOVERNMENT-WIDE

STATEMENT OF ACTIVITIES

For the Year Ended June 30, 2012

(In Thousands)

Net change in fund balances - total governmental funds

116,944

Governmental funds accrue property tax revenue which is deemed collectible within 60 days. However, for the statement

of activities the total amount estimated to ultimately be collected is accrued.

(3,460)

Revenues that do not provide current financial resources are not reported as revenues in the funds (deferred revenue) but

are recognized as revenue in the statement of activities.

(13,567)

Adjustment to nonspendable inventories.

1,255

Change in accounting estimate for postclosure costs - (public protection function) - San Marcos Landfill.

960

Accounting estimate for pollution remediation

(7,904)

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets

is allocated over their estimated useful lives and reported as depreciation/amortization expense. (See note 2 to the

financial statements; table 4.)

100,614

The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to

decrease net assets. (See note 2 to the financial statements; table 4.)

(21,930)

The issuance of long-term debt (e.g. bonds, notes, and loans) provides current financial resources to governmental funds,

while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds.

Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs,

premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the

statement of activities. (See note 2 to the financial statements; table 4.)

33,721

Some expenses reported in the statement of activities do not require the use of current financial resources and therefore

are not reported as expenditures in governmental funds. (See note 2 to the financial statements; table 4.)

(14,122)

Dissolution of San Diego County Redevelopment Agency. (See note 33 to the financial statements.)

13,549

Transfer of equipment from the Fleet Internal Service Fund to governmental activities

6,733

Internal service funds are used by management to charge the costs of centralized services to individual funds. The net

revenue (or expense) of certain activities of internal service funds is reported within governmental activities. (See note 2 to

the financial statements; table 4.)

(4,636)

Change in net assets - governmental activities

208,157

County of San Diego Financial Statements — page 9

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

Basic Financial Statements

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

[

]

Statement of Net Assets - Proprietary Funds

STATEMENT OF NET ASSETS

PROPRIETARY FUNDS

June 30, 2012 (In Thousands)

Business-type

Activities

Governmental

Activities

Enterprise Funds

Internal Service

Funds

ASSETS

Current assets:

Pooled cash and investments

81,282

210,325

Receivables, net

4,139

1,511

Due from other funds

295

23,437

Inventories

1,559

Total current assets

85,718

236,832

Noncurrent assets:

Due from other funds

3,838

Capital assets:

Land

11,565

Construction in progress

11,640

Buildings and improvements

113,990

Equipment

1,110

129,655

Software

11,657

Road infrastructure

6,449

Sewer infrastructure

91,038

Accumulated depreciation/amortization

(71,605)

(91,289)

Total noncurrent assets

168,025

50,155

Total assets

253,743

286,987

LIABILITIES

Current liabilities:

Accounts payable

993

34,820

Accrued payroll

233

1,187

Accrued interest

Due to other funds

837

7,284

Unearned revenue

583

Loans payable

267

892

Capital lease payable

Compensated absences

172

930

Claims and judgments

35,842

Total current liabilities

2,577

81,573

Noncurrent liabilities:

Loans payable

1,046

2,874

Capital lease payable

154

Compensated absences

249

1,345

Claims and judgments

102,997

Total noncurrent liabilities

1,295

107,370

Total liabilities

3,872

188,943

NET ASSETS

Invested in capital assets, net of related debt

162,874

49,925

Unrestricted net assets

86,997

48,119

Total net assets

249,871

98,044

Reconciliation between net assets - enterprise funds and net assets of business-type activities as reported

in the government-wide statement of net assets

Total net assets

249,871

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds

351

Net assets of business-type activities

250,222

County of San Diego Financial Statements — page 10

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

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

]

[

Basic Financial Statements

Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS

PROPRIETARY FUNDS

For the Year Ended June 30, 2012 (In Thousands)

Business-type

Activities

Governmental

Activities

Enterprise Funds

Internal Service

Funds

Operating revenues:

Charges for current services

36,476

312,269

Other

236

7,721

Total operating revenues

36,712

319,990

Operating expenses:

Salaries and employee benefits

7,169

36,786

Repairs and maintenance

5,913

31,776

Equipment rental

1,068

1,053

Sewage processing

14,130

Contracted services

4,934

164,269

Depreciation/amortization

5,430

15,468

Utilities

291

21,697

Cost of material

6,067

Claims and judgments

32,302

Fuel

13,272

Other

1,981

5,553

Total operating expenses

40,916

328,243

Operating income (loss)

(4,204)

(8,253)

Nonoperating revenues (expenses):

Grants

539

3,977

Investment earnings

1,151

828

Interest expense

(88)

(198)

Gain (loss) on disposal of assets

(28)

210

Other nonoperating revenues

Total nonoperating revenues (expenses)

1,575

4,817

Income (loss) before capital contributions and transfers

(2,629)

(3,436)

Capital contributions

600

Transfers in

360

9,918

Transfers out

(332)

(11,765)

Change in net assets

(2,601)

(4,683)

Net assets (deficits) at beginning of year

252,472

102,727

Net assets (deficits) at end of year

249,871

98,044

Reconciliation between changes in net assets - enterprise funds and changes in net assets of business-

type activities as reported in the government-wide statement of activities

Change in net assets

(2,601)

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds

(47)

Change in net assets of business-type activities

(2,648)

County of San Diego Financial Statements — page 11

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

Basic Financial Statements

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

[

]

Statement of Cash Flows - Proprietary Funds

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS

For the Year Ended June 30, 2012 (In Thousands)

Business-type

Activities

Governmental

Activities

Enterprise Funds

Internal Service

Funds

Cash flows from operating activities:

Cash received from customers

31,211

20,615

Cash received from other funds

6,343

301,755

Cash payments to suppliers

(27,273)

(226,305)

Cash payments to employees

(7,163)

(36,729)

Cash payments to other funds

(1,485)

(10,540)

Cash paid for claims and judgments

(29,283)

Net cash provided (used) by operating activities

1,633

19,513

Cash flows from noncapital financing activities:

Operating grants

1,467

3,759

Transfers from other funds

360

9,918

Transfers to other funds

(332)

(5,032)

Payments received on advances to other funds

Principal paid on long-term debt

(855)

Interest paid on long-term debt

(189)

Other noncapital increases

Net cash provided (used) by noncapital financing activities

1,496

7,639

Cash flows from capital and related financing activities:

Capital contributions

567

Acquisition of capital assets

(4,491)

(9,782)

Proceeds from sale of assets

681

Principal paid on long-term debt

(254)

Principal paid on capital lease

(27)

Interest paid on long-term debt

(88)

Interest paid on capital lease

(10)

Net cash provided (used) by capital and related financing activities

(4,832)

(8,571)

Cash flows from investing activities:

Investment earnings

565

883

Net increase (decrease) in cash and cash equivalents

(1,138)

19,464

Cash and cash equivalents - beginning of year

82,420

190,861

Cash and cash equivalents - end of year

81,282

210,325

Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating income (loss)

(4,204)

(8,253)

Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Decrease (increase) in accounts receivables

1,327

2,516

Decrease (increase) in due from other funds

(511)

(589)

Decrease (increase) in inventory

(1)

(228)

Increase (decrease) in accounts payable

(223)

4,832

Increase (decrease) in accrued payroll

102

Increase (decrease) in due to other funds

(218)

2,340

Increase (decrease) in unearned revenue

Increase (decrease) in compensated absences

(7)

Increase (decrease) in claims and judgments

3,241

Depreciation/amortization

5,430

15,468

Total adjustments

5,837

27,766

Net cash provided (used) by operating activities

1,633

19,513

Non-cash investing and capital financing activities:

Capital acquisitions included in accounts payable

410

1,252

Governmental contributions of capital assets

Contribution to governmental capital assets

6,733

County of San Diego Financial Statements — page 12

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

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

]

[

Basic Financial Statements

Statement of Fiduciary Net Assets - Fiduciary Funds

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

June 30, 2012 (In Thousands)

Investment Trust

Funds

County of San

Diego Successor

Agency

Private Purpose

Trust Fund

Agency Funds

ASSETS

Pooled cash and investments

3,598,411

6,795

345,407

Cash with fiscal agents

1,502

Investments with fiscal agents

1,155

Receivables:

Accounts receivable

2,056

Investment earnings receivable

3,524

3,530

Due from other government agencies

120

Deferred charges

315

Total assets

3,601,935

8,391

352,495

LIABILITIES

Accounts payable

2,214

19,375

Warrants outstanding

167,292

Accrued payroll

Accrued interest

213

Non-current liabilities:

Due within one year

393

Due in more than one year

13,477

Due to other funds

4,873

Due to other governments

165,820

Total liabilities

21,170

352,495

NET ASSETS

Held in trust for pool participants

3,601,935

Held in trust for private purpose

(12,779)

Total held in trust (deficit)

3,601,935

(12,779)

County of San Diego Financial Statements — page 13

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

Basic Financial Statements

County of San Diego

Comprehensive Annual Financial Report

For the year ended June 30, 2012

[

]

Statement of Changes in Fiduciary Net Assets - Fiduciary Funds

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

For the Year Ended June 30, 2012 (In Thousands)

Investment Trust

Funds

County of San

Diego Successor

Agency

Private Purpose

Trust Fund

ADDITIONS

Contributions:

Contributions to investments

5,729,257

Total contributions

5,729,257

Investment earnings:

Net increase (decrease) in fair value of investments

(929)

Investment earnings

18,140

Total investment earnings

17,211

Property taxes - Successor Agency Redevelopment Property Tax Trust Fund Distribution

914

Miscellaneous revenues

Total additions

5,746,468

964

DEDUCTIONS

Administrative expenses

Distributions from investments

5,575,484

Contributions to other agencies

2,214

Interest and fiscal charges

1,081

Total deductions

5,575,484

3,320

Change in net assets before extraordinary loss

170,984

(2,356)

Extraordinary loss

(10,423)

Change in net assets

170,984

(12,779)

Net assets at beginning of year

3,430,951

Net assets (deficit) at end of year

3,601,935

(12,779)

County of San Diego Financial Statements

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