City Annual Financial Report FYE 6-30-2013

CITY OF CARMEL-BY-THE-SEA, CALIFORNIA
ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2013
Prepared by:
Paul Wood
Finance Director
This page intentionally left blank.
City of Carmel-by-the-Sea, California

Basic Financial Statements
For the year ended June 30, 2013
Table of Contents
Page
INTRODUCTORY SECTION
Table of Contents ..................................................................................................................................i
Organization Chart ........................................................................................................................... iii
List of Officials iv
FINANCIAL SECTION
Independent Auditors Report ........................................................................................................... 1
Managements Discussion and Analysis (Required Supplementary Information) ....................... 3
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ........................................................................................................ 15
Statement of Activities ............................................................................................................ 16
Fund Financial Statements:
Governmental Funds:
Balance Sheet ................................................................................................................................ 20
Reconciliation of Governmental Funds Balance Sheet to the
Statement of Net Position ........................................................................................................ 22
Reconciliation of Fund Basis Balance Sheet to Government-wide
Statement of Net Position Governmental Activities ............................................................. 23
Statement of Revenues, Expenditures, and Changes
in Fund Balances Governmental Funds ................................................................................ 24
Reconciliation of Fund Basis Statements to Government-wide
Statement of Activities ............................................................................................................ 26
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities ............................... 27
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget to Actual General Fund and
Major Special Revenue Funds ................................................................................................. 28

Table of Contents, Continued
Page
Basic Financial Statements, Continued:
Notes to Basic Financial Statements .......................................................................................... 33
Other Supplemental Information:
Required Supplementary Information:
Other Postemployment Benefits Schedule of Funding Progress ................................................ 61
Combining and Individual Fund Financial Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet ............................................................................................................. 66
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances ............................................................................................................... 68
Nonmajor Special Revenue Funds:
Schedule of Revenues, Expenditures, and Changes in Fund Balances
Budget to Actual ............................................................................................................... 70
Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance With Government Auditing Standard .................................................................. 75
ii

Organization Chart
iii

List of Officials
CITY COUNCIL
Jason Burnett, Mayor

Ken Talmage, Vice Mayor
Victoria Beach, Councilmember
Carrie Theis, Councilmember
Steve Hillyard, Councilmember
CITY OFFICIALS
Jason Stilwell, City Administrator
Don Freeman, City Attorney
Susan Paul, Administrative Services Director
James Emery, City Treasurer
Sherman Low, City Engineer
iv
INDEPENDENT AUDITORS REPORT
To the Honorable Mayor and City Council

of the City of Carmel-by-the-Sea
Carmel-by-the-Sea, California
Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, each major fund, the aggregate
remaining fund information, and the budgetary comparison information of the City of Carmel-by-the-Sea, California (City),
as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the
Citys basic financial statements as listed in the table of contents.
Managements 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.
Auditors Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free 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 auditors judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used 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 to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the City, as of June 30, 2013, and the respective changes in financial position and, where applicable, cash
flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of
America.
7080 Donlon Way, Suite 204, Dublin, CA 94568 phone (925) 556-6200 fax: (510) 217-5930
www.jjacpa.com

of the City of Carmel-by-the-Sea
Page 2
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Managements Discussion and
Analysis and budgetary comparison information and other information 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 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 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 and comparing the information for consistency with managements responses to our inquiries, 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 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
Citys basic financial statements. The combining and individual nonmajor fund financial statements and the introductory
sections 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 the introductory sections are the responsibility of
management and was derived from and relates directly to the underlying accounting and other records used to prepare the
basic financial statements. Such information has been 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 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. In our opinion, the combining and individual nonmajor fund financial statements and the introductory sections
are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The combining and individual nonmajor fund financial statements and the introductory sections has 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 January 31, 2014 on our
consideration of the City's internal 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 the results 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 an audit
performed in accordance with Government Auditing Standards in considering Citys internal control over financial
reporting and compliance.
]]TVcT? \vA
January 31, 2014
JJACPA, INC.
Dublin, CA

Managements Discussion and Analysis
This section provides a narrative overview and analysis of the financial activities of the City of
Carmel-by-the-Sea (City) for the fiscal year ended June 30, 2013. It should be read in conjunction with
the accompanying transmittal letter and basic financial statements.
FINANCIAL HIGHLIGHTS
As of June 30, 2013, total assets of the City exceeded its liabilities by $32,377,893 (net position).
The portion of net position that may be used to meet the governments ongoing obligations to
citizens and creditors (unrestricted net position) is $2,205,463. The portion of net position that is
restricted and may only be used for specific purposes is $566,992. The remaining $29,605,438 is
invested in capital assets.
As of June 30, 2013, the Citys governmental funds reported combined ending fund balances of
$10,558,901. Approximately .4% of this total amount ($46,747) is non-spendable to indicate that it
is not available because it represents amounts that are more long-term in nature or will never be
converted to cash. Of the remaining balance, $566,992 is restricted because it represents resources
that are required to be spent for specific purposes as provided by an external source. The
committed balance of $2,898,615 represents a Council commitment for economic uncertainties and
anticipated future short-term structural deficits. The assigned fund balances in Special Revenue
Funds amounted to $1,793,249 and represented Library, Parking and Ambulance Fund items. The
remaining fund balance is unassigned.
Capital assets, net of depreciation, decreased to $37,285,185 from $39,349,535, due to depreciation
and adjustments of ($1,256,304) and net capital asset retirements and adjustments of ($808,046).

Managements Discussion and Analysis, Continued
OVERVIEW OF THE ANNUAL FINANCIAL REPORT

This Annual Financial Report is in two major parts:
1) Introductory section, which includes the Transmittal Letter and general information;
2) Financial section, which includes the Managements Discussion and Analysis (this part), the Basic
Financial Statements, which include the Government-wide and the Fund Financial Statements
along with the notes to these financial statements and Combining and Individual Fund Financial
Statements and Schedules.
The Basic Financial Statements
The Basic Financial Statements are comprised of the Government-wide Financial Statements and the
Fund Financial Statements; these two sets of financial statements provide two different views of the
Citys financial activities and financial position.
The Government-wide Financial Statements
The Government-wide Financial Statements provide a broad overview of the Citys activities as a
whole and comprise the Statement of Net Position and the Statement of Activities. The Statement of
Net Position provides information about the financial position of the City as a whole, including all its
capital assets and long-term liabilities on the full accrual basis, similar to that used by corporations.
The Statement of Activities provides information about all the Citys revenues and all its expenses,
also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each the
Citys programs. The Statement of Activities explains in detail the change in Net Position for the year.
All of the Citys activities are grouped into Governmental Activities, as explained below.
Governmental activities All of the Citys basic services are considered to be governmental
activities, including general government, community development, economic development, public
safety, animal control, engineering, community events, public improvements, planning and zoning,
building inspections, and general administration. These services are supported by general City
revenues such as taxes and by specific program revenues such as developer fees.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of
the funds of the City can be divided into two categories: governmental funds and proprietary funds.

OVERVIEW OF THE ANNUAL FINANCIAL REPORT, Continued

Fund Financial Statements, continued
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the Government-wide Financial Statements. However, unlike the
Government-wide Financial Statements, Governmental Fund Financial Statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a governments near-term
financing requirements.
Because the focus of the Governmental Fund Financial Statements is narrower than that of the
Government-wide Financial Statements, it is useful to compare the information presented for
governmental funds with similar information presented for governmental activities in the Governmentwide Financial Statement. By doing so, readers may better understand the long-term impact of the
governments near-term financial decisions. Both the governmental fund balance sheet and the
governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Governmental Fund Financial Statements provide detailed information about each of the Citys
most significant funds, called major funds. The concept of major funds, and the determination of which
are major funds, was established by GASB Statement 34 and replaces the concept of combining like
funds and presenting them as one total. Instead, each major fund is presented individually, with all
non-major funds summarized and presented only in a single column. Subordinate schedules present the
detail of these non-major funds. Major funds present the major activities of the City for the year, and
may change from year to year as a result of changes in the pattern of the Citys activities.
For the fiscal year ended June 30, 2013, the Citys major funds are as follows:
GOVERNMENTAL FUNDS:
General Fund
Harrison Memorial Library Special Revenue Fund
Parking Special Revenue Fund
Ambulance Special Revenue Fund
Notes to the Basic Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in
the Government-wide and Fund Financial Statements. The notes to the basic financial statements can
be found on pages 33-60 of this report. Required Supplementary Information follows the notes on page
61.
Combining and Individual Fund Financial Statements and Schedules
The combining statements referred to earlier in connection with non-major governmental funds are
presented immediately following the notes to the financial statements. Combining and individual fund
statements can be found on pages 63-73 of this report.
5

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net position may serve over time as a useful indicator of a governments financial
position.
In the case of the City, assets exceeded liabilities by $32,377,893 as of June 30, 2013.
The Summary of Net Position as of June 30, 2013, and 2012, follows:
Summary of Net Position
2013
Governmental
Activities
Current and other assets
Noncurrent assets
Total assets
12,042,025
37,285,185
49,327,210
2012
Governmental
Activities
$
11,027,118
39,349,535
50,376,653
Changes
$
1,014,907
(2,064,350)
(1,049,443)
Current and other liabilities

Long-term liabilities
Total liabilities
2,440,181
14,509,136
16,949,317
1,812,246
9,226,006
11,038,252
627,935
5,283,130
5,911,065
Net position:
Net invested in capital assets
Restricted
Unrestricted
29,605,438
566,992
2,205,463
31,374,354
555,524
7,408,523
(1,768,916)
11,468
(5,203,060)
Total net position
32,377,893
39,338,401
(6,960,508)

GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

The change in net position for the fiscal years ended June 30, 2013, and 2012, follows:
Changes in Net Position
2013
Governmental
Activities
Revenues:
Program revenues:
Charges for services
Grants and contributions:
Operating
General revenues:
Property taxes
and assessments
Transient occupancy taxes
Sales tax
Franchises
Business licenses
Use of money and property
Other general revenues
Total revenues
2012
Governmental
Activities
702,381
493,248
Changes
209,133
1,474,331
871,230
4,652,176
4,615,598
2,760,414
981,831
577,364
69,735
98,331
15,932,161
4,571,481
4,179,900
1,743,748
491,674
532,019
55,995
276,751
13,216,046
80,695
435,698
1,016,666
490,157
45,345
13,740
(178,420)
2,716,115
Expenses:
Governmental activities:
Administration
Building maintenance
Public safety
Public works
Forest, parks and beaches
Culture and recreation
Economic development
Interest and fiscal charges
Total expenses
9,481,135
3,763,094
4,193,157
1,896,305
472,123
2,405,481
304,587
376,787
22,892,669
2,904,382
2,718,581
4,694,672
1,790,684
1,578,381
1,314,073
361,458
194,153
15,556,384
6,576,753
1,044,513
(501,515)
105,621
(1,106,258)
1,091,408
(56,871)
182,634
7,336,285
Excess (Deficiency) of revenues over

expenditures before transfers
Transfers
(6,960,508)
-
(2,340,338)
-
(4,620,170)
-
13,760,000
(13,760,000)
(6,960,508)
11,419,662
(4,620,170)
Special Item:
Infrastructure capitalization
Change in net position
Net position:
Beginning of year
End of year
39,338,401
32,377,893
27,918,739
39,338,401
603,101
11,419,662
6,799,492


Revenues
The Citys total revenues for governmental were $15,932,161 for the fiscal year ended June 30, 2013.
Approximately 75% of the Citys key revenues are generated from three major sources.
The following discusses variances in key revenues from the prior fiscal year:
1. Property Taxes. Property taxes increased 1.77% over last year reflecting a continuing
strengthening real estate market over the past year.
2. Transient occupancy taxes. Hostelry taxes increased 10.42% reflecting a continuing
growth in tourism and potential benefit from citywide and individual marketing efforts.
3. Sales Tax. Annual receipts increased 4.8%. This increase is attributed to increases in
building and construction (+21%) and hotels and restaurants (+8%) offset by decreases in
general consumer goods (-1%) and business and industry (-34%). We anticipate that sales
tax revenue will continue to rebound next fiscal year at about a 4% rate.
Beginning in April, 2013, the City started collecting an additional 1% use tax pursuant to the
passage of Measure D in the November, 2012 election. Receipts for the three months ended
June 30, 2013 were in excess of $682,000.


Expenses
Governmental activity expenses of the City for the year totaled $22,892,669. Public Safety costs
represented 18.32% of total governmental activities expenses and represented the largest single
expense for governmental activities.
Governmental Activities
The following table shows the cost of each of the Citys major programs and the net cost of the
programs. Net cost is the total cost less fees and other direct revenue generated by the activities. The
net cost reflects the financial burden that was placed on the Citys taxpayers by each of the programs.
The total cost of services and the net cost of services for the fiscal years ended June 30, 2013, and
2012, are as follows:
2013
2012
Total Cost
of Services
Net Cost
of Services
Total Cost
of Services
Net Cost
of Services
Administration
Public safety
Public works
9,481,135
3,763,094
4,193,157
1,896,305
472,123
2,405,481
304,587
376,787
9,461,314
3,763,094
3,250,139
1,118,292
472,123
1,969,621
304,587
376,787
2,904,382
2,718,581
4,694,672
1,790,684
1,578,381
1,314,073
361,458
194,153
2,899,647
2,718,581
4,065,576
1,096,067
1,578,381
1,278,043
361,458
194,153
Total
22,892,669
20,715,957
15,556,384
14,191,906


Revenues by source for the fiscal years ended June 30, 2013, and 2012, are as follows:
Revenues by Source - Governmental Activities
2013
Other general
Use of money
Business licenses
3.62%
revenues
0.62%
and property
0.44%
Charges for
services
4.41%
Operating grants
9.25%
Franchises
6.16%
Sales tax
17.33%
Transient
occupancy taxes
28.97%
Property taxes
29.20%
Revenues by Source - Governmental Activities

2012
Use of money &

property 0.42%
Other 2.09%
Business licenses
4.03%
Charges for
services 3.73%
Operating grants
4.46%
Franchises 3.72%
Capital grants
2.13%
Sales and use tax

13.19%
Property taxes
34.59%
Transient
occupancy tax
31.63%
10


Financial Analysis of the Governments Funds
The City of Carmel-by-the-Sea uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements. The fund financial statements focus on individual parts of the City
government, reporting the Citys operations in more detail than the government-wide financial
statements.
Governmental funds. The Citys governmental funds provide information on near-term inflows,
outflows, and balances of spending resources. At the fiscal year ended June 30, 2013, the Citys
governmental funds reported combined fund balances of $10,558,901. This is an increase of
$1,190,077 or 12.7% over last year. The increase is due to both a surplus of revenue vs. budget, and a
savings on expenditures vs. budget. The General Fund is the chief operating fund of the City. At the
fiscal year ended June 30, 2013, General Fund committed and unassigned fund balance totaled
$8,151,913 of which $5,253,298 was unassigned.
General Fund Budgetary Highlights
The difference between the final budget and actual revenues reflects a positive amount of $1,383,550.
This was mainly due to an increase in all tax revenues, property, sales and transient occupancy taxes.
There was a $577,538 difference between the final expenditure budget and actual expenditures. Actual
expenditures were $577,538. More than this amount ($651,785) was due to unbudgeted debt service
payments for the new Pension Obligation Bonds. Otherwise, the General Fund expenditures reflect a
surplus against budget.
Capital Assets
The Citys investment in capital assets for its governmental activities as of June 30, 2013, amount to
$37,285,185. This investment in capital assets includes roads, curbs and gutters, streets and sidewalks,
and drainage systems.
Land
Art
Buildings and improvements
Vehicles
Infrastructure
Machinery and equipment
Total
2013
2012
3,633,723
$
3,488,036
1,467,918
1,467,918
17,997,655
19,257,849
347,338
409,114
13,301,333
13,760,000
537,218
966,618
37,285,185
$
39,349,535
More detail of the capital assets and current activity can be found in the notes to the financial
statements on pages 39 and 40 for significant accounting policies and Note 4 on page 48 for
other capital asset information.
11


Debt Administration
Debt, considered a liability of governmental activities, increased by $5,869,566, reflecting the pay
down of the Sunset bond and lease obligations, offset by an increase in the OPEB obligation, and the
issuance of the new Pension Obligation Bonds, see Note 6 on page 49. Compensated absences
decreased by $79,995 to $458,376 of which $273,981 is considered a current liability.
Economic Outlook
Fiscal year 2013-2014 will continue to be another hard to forecast year. While consumer spending
continues to rise at a modest pace, still assisted by an extraordinarily simulative Federal Reserve, it is
hard to predict what consumers will do when the Fed takes its foot off the gas pedal. The State of
California has seen larger than expected revenue surpluses brought about by Proposition 30s personal
income tax rates for high-income taxpayers and healthy local property tax growth, but the states
Legislative Analysts Office (LAO) expresses cautious optimism due to economic and political
uncertainty. On issues that relate to us more locally, Wells Fargos California Economic Outlook
states that California tourism continues to rebound with hotel occupancy and ADR (average daily room
rate). Average daily rates in the San Francisco and San Jose areas are up roughly 8 to 10 percent year
to date. From our records, we confirm the trend with Carmels YOY (year over year) ADR increasing
8%. Somewhat promising, recent unemployment figures for the Monterey Region have fallen to 10.9
percent from over 12 percent last year. Additionally, home prices are rising in the coastal region, and
are adding to local coffers in property taxes. These factors and the many unanswered
questions concerning political, fiscal, including international monetary outcomes, will likely result in a
relatively weak economic period ahead.
The Citys major General Fund revenue sources are property tax, hostelry tax and sales tax. All of
these revenue sources are rising currently, but with the economy in such slow recovery, and for such
unsustainable reasons, we must prepare ourselves for an economic slowdown. We are estimating an
increase for sales tax revenue in fiscal year 20132014 of 3-4%. Also, in fiscal year 20132014, we are
estimating property taxes to increase 4-5%.
The City maintains a multi-year forecasting model to project anticipated revenues and expenditures.
The model projects continued increased revenues through fiscal year 2017-18, along with increased
investments in infrastructure maintenance, capital outlay and IT backbone and infrastructure. If the
national economy reverses, there will be a correlated reduction in this capital spending.
Requests for Information
This Annual Financial Report is intended to provide citizens, taxpayers, investors, and creditors with a
general overview of the Citys finances. If you have any questions about this report, need additional
financial information, or would like to obtain component unit financial statements, contact the City of
Carmel-by-the-Sea Finance Department, PO Box CC, Carmel-by-the-Sea, CA 93921, or visit the
Citys web page at ci.carmel.ca.us/carmel/.
12
BASIC FINANCIAL STATEMENTS
13
14

Statement of Net Position
June 30, 2013
Governmental
Activities
ASSETS
Current assets:
Cash and investments
Cash and investments with fiscal agents
Receivables:
Accounts receivable
Intergovernmental receivable
Other receivables
Total current assets
Noncurrent assets:
Capital assets:
Nondepreciable
Depreciable
Total noncurrent assets
9,012,438
400,008
809,875
929,066
890,638
12,042,025
5,101,641
32,183,544
37,285,185
Total assets
49,327,210
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities
Deposits payable
Interest payable
Compensated absences - current portion
Due within one year
Total current liabilities
Noncurrent liabilities:
Long-term liabilities:
Claims liabilities
Compensated absences
Due after one year
Net OPEB obligation
Total noncurrent liabilities
562,889
460,235
47,793
273,981
1,095,283
2,440,181
460,000
184,395
12,749,464
1,115,277
14,509,136
Total liabilities
16,949,317
NET POSITION
Restricted
Unrestricted
29,605,438
566,992
2,205,463
Total net position
32,377,893
Total liabilities and net position
49,327,210
The accompanying notes are an integral part of these basic financial statements.
15

Statement of Activities
Functions/Programs
Primary government:
Administration
Public safety
Public works
Expenses
Total governmental activities

Total primary government
Program Revenues
Operating
Charges for
Grants and
Services
Contributions
9,481,135
3,763,094
4,193,157
1,896,305
472,123
2,405,481
304,587
376,787
22,892,669
$
22,892,669
19,821
167,723
433,928
80,909
-
702,381
$
702,381
1,474,331
$
General revenues:
Taxes:
Property taxes, levied for general purposes
Transient occupancy tax, levied for general purposes
Sales and use tax
Franchises
Business licenses
Other general revenues
Total general revenues
Transfers
Total general revenues and transfers
Change in net position
Net position:
Beginning of year
Net position - Ending
16
775,295
344,085
354,951
-
1,474,331
Net (Expense) Revenue and

Changes in Net Position
Governmental
Activities
(9,461,314)
(3,763,094)
(3,250,139)
(1,118,292)
(472,123)
(1,969,621)
(304,587)
(376,787)
Totals
(9,461,314)
(3,763,094)
(3,250,139)
(1,118,292)
(472,123)
(1,969,621)
(304,587)
(376,787)
(20,715,957)
(20,715,957)
(20,715,957)
(20,715,957)
4,652,176
4,615,598
2,760,414
981,831
577,364
69,735
98,331
13,755,449
13,755,449
4,652,176
4,615,598
2,760,414
981,831
577,364
69,735
98,331
13,755,449
13,755,449
(6,960,508)
(6,960,508)
39,338,401
32,377,893
39,338,401
32,377,893
17
18
FUND FINANCIAL STATEMENTS

MAJOR FUNDS
The Fund Financial Statements present only individual major fiunds, while non-major funds are combined in a single column.
Major funds are defined as having significant activities or balances in the current year.
Fund
Description
Governmental Funds:
General Fund
Primary operating fund of the City; accounts for all activities except
those legally or administratively required to be accounted for in other
funds.
Accounts for activities associated with the Harrison Memorial Library
Accounts for activities associated with parking in-lieu fees.
Accounts for activities associated with ambulance service billings,

which have been outsourced to a third party.
19

Balance Sheet
Governmental Funds
June 30, 2013
Major Funds
Special Revenue Funds
Harrison Memorial
Library
Parking
General
Fund
ASSETS
Receivables:
Accounts
Intergovernmental
Other receivable
Due from other funds
Total assets
7,165,306
-
146,812
892,080
890,638
452,477
614,752
-
698,086
-
9,547,313
614,752
698,086
475,165
460,235
460,000
LIABILITIES AND FUND BALANCES

Liabilities:
Deposits payable
Due to other funds
Claims liabilities
Total liabilities
Fund balances:
Nonspendable:
Endowments
Restricted reported in:
Special revenue funds
Committed
Assigned reported in:
Unassigned (deficit), reported in:
General Fund
Total fund balances
Total liabilities and fund balances
1,395,400
46,747
2,898,615
568,005
698,086
5,253,298
8,151,913
614,752
698,086
9,547,313
614,752
20
698,086
Nonmajor
Governmental
Funds
Ambulance
$
663,063
-
534,294
400,008
Totals
$
36,986
-
9,012,438
400,008
809,875
929,066
890,638
452,477
663,063
971,288
12,494,502
86,259
452,477
-
1,465
-
562,889
460,235
452,477
460,000
538,736
1,465
1,935,601
46,747
566,992
-
566,992
2,898,615
124,327
402,831
1,793,249
5,253,298
124,327
969,823
10,558,901
663,063
971,288
12,494,502
21

Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2013
Total fund balances - total governmental funds
10,558,901
Amounts reported for governmental activities in the Statement of Net Position are
different because:
Capital assets used in governmental activities are not current financial
resources and, therefore, are not reported in the governmental funds balance
sheet.
37,285,185
Long-term liabilities are not due and payable in the current period and,
therefore, are not reported in the governmental funds balance sheet.
Long-term liabilities
Net OPEB obligation
(458,376)
(13,844,747)
(1,115,277)
(15,418,400)
Interest payable on long-term debt does not require the use of current
financial resources and, therefore, is not reported in the governmental funds.
Net position of governmental activities
(47,793)
$
22
32,377,893

Reconciliation of Fund Basis Balance Sheet to Government-wide Statement of Net Position
June 30, 2013
Governmental
Funds
Balance Sheet
ASSETS
Current assets:
Receivables:
Accounts receivable
Intergovernmental receivable
Other receivable
Due from other funds
Total current assets
Noncurrent assets:
Capital assets, net
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities:
Deposits payable
Due to other funds
Interest payable
Compensated absences - current
Due within one year
Total current liabilities
Noncurrent liabilities:
Long-term liabilities:
Claims liabilities
Due after one year
Net OPEB obligation
Total noncurrent liabilities
Total liabilities
FUND BALANCES/NET POSITION
Fund balances:
Nonspendable:
Endowments
Restricted reported in:
Assigned reported in:
Capital projects funds
General Fund
Net position:
Restricted
Unrestricted
Total fund balances/ net position
Total liabilities and net position
9,012,438
400,008
Statement of
Net Position
9,012,438
400,008
809,875
929,066
890,638
452,477
12,494,502
(452,477)
(452,477)
809,875
929,066
890,638
12,042,025
12,494,502
(452,477)
37,285,185
37,285,185
37,285,185
37,285,185
37,285,185
49,327,210
Changes
in GAAP
Reclassifications
562,889
460,235
452,477
-
(452,477)
-
1,475,601
(452,477)
460,000
460,000
1,935,601
47,793
273,981
1,095,283
1,417,057
562,889
460,235
47,793
273,981
1,095,283
2,440,181
(452,477)
184,395
12,749,464
1,115,277
14,049,136
15,466,193
460,000
184,395
12,749,464
1,115,277
14,509,136
16,949,317
46,747
(46,747)
566,992
(566,992)
1,793,249
-
(1,793,249)
-
5,253,298
-
(5,253,298)
-
10,558,901
12,494,502
10,558,901
(452,477)
29,605,438
566,992
(8,353,438)
21,818,992
37,285,185
29,605,438
566,992
2,205,463
32,377,893
49,327,210
23

Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
General
Fund
REVENUES:
Taxes and assessments
Licenses and permits
Fines and forfeitures
Intergovernmental
Contributions
Other revenues
Total revenues
EXPENDITURES:
Current:
Administration
Public safety
Public works
Capital outlay
Debt service:
Principal
Total expenditures
REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING SOURCES (USES):
Proceeds from sales of assets
Transfers in
Transfers out
Proceeds from bond issuance
Retirement of PERS side fund
Total other financing sources (uses)
Net change in fund balances
FUND BALANCES:
Beginning of year
End of year
12,505,034
1,011,292
16,647
378,410
283,233
88,200
3,884
109,392
Major Funds
Harrison Memorial
Library
Parking
$
4,050
1,273
18,098
350,901
-
14,396,092
374,322
3,029,816
2,263,763
3,114,048
1,313,412
466,021
673,022
304,587
651,785
1,227,965
-
410,434
216,284
12,443,172
1,227,965
1,952,920
(853,643)
2,346
4,924,039
(5,986,953)
6,280,000
(6,280,000)
945,455
-
(1,060,568)
945,455
892,352
91,812
7,259,561
522,940
698,086
8,151,913
614,752
24
698,086
Other
Governmental
Funds
Ambulance
$
168
606,299
-
183,800
116,521
226,844
25,769
-
Totals
$
12,505,034
1,195,092
133,168
609,304
284,674
738,366
354,785
109,392
606,467
552,934
15,929,815
912,836
-
28,192
17,209
-
3,029,816
2,263,763
4,026,884
1,341,604
466,021
1,918,196
304,587
651,785
112,710
410,434
328,994
912,836
158,111
14,742,084
(306,369)
394,823
1,187,731
310,748
-
121,747
(315,036)
-
2,346
6,301,989
(6,301,989)
6,280,000
(6,280,000)
310,748
(193,289)
2,346
4,379
201,534
1,190,077
119,948
768,289
9,368,824
124,327
969,823
10,558,901
25

Reconciliation of Fund Basis Statements to Government-wide Statement of Activities
Capital
Asset
Fund Based
Debt
Compensated
Totals
Service
Absences
Functions/Programs
Government-
(Additions)/
OPEB
wide
Depreciation
Retirements
Obligation
Adjustment
$ 248,871
Totals
Administration
Infrastructure capitalization
3,029,816
$ 6,280,000
(79,995)
2,055
388
$ 9,481,135
2,263,763
39,888
1,459,443
3,763,094
Public safety
4,026,884
166,273
4,193,157
Public works
1,341,604
554,701
1,896,305

466,021
6,102
1,918,196
487,285
304,587
Capital outlay
651,785
Debt service/Interest
739,428
$ 14,742,084
(362,641)
$ 5,917,359
(79,995)
1,256,304
(651,397)
808,046
$ 248,871
26
472,123
2,405,481
304,587
(388)
376,787
$ 22,892,669

Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
Net change in fund balances - total governmental funds
1,190,077
Amounts reported for governmental activities in the Statement of Activities are

different because:
Governmental funds report capital outlays as expenditures while
governmental activities report depreciation expense to allocate those
expenditures over the life of the assets:
Capital asset purchases capitalized
Capital asset retirements
Depreciation expense
651,397
(1,459,443)
(1,256,304)
(2,064,350)
Repayment of debt principal is an expenditure in the governmental funds,

but the repayment reduces long-term liabilities in the Statement of Net
Position
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:
Change in interest payable
Change in compensated absences
410,434
(47,793)
79,995
32,202
The issuance of long-term debt (e.g., bonds, leases) 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
position. 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.
This amount is the net effect of these differences in the treatment of longterm debt and related items.
Bond issuance
(6,280,000)
Certain employee benefit obligations are recorded on a pay-as-you-go

basis in the governmental funds, but are accrued as liabilities in the
Net OPEB obligation
(248,871)
Change in net position of governmental activities
27
(6,960,508)

Budget to Actual - General Fund and Major Special Revenue Funds
General Fund
Budgeted Amounts
Original
Final
REVENUES:
Intergovernmental
Contributions
Other revenues
Actual
11,373,698
895,000
195,200
86,700
59,300
90,700
125,266
11,484,861
895,000
195,200
158,715
59,300
94,200
125,266
12,825,864
13,012,542
14,396,092
3,118,986
2,358,243
3,368,141
1,205,221
518,567
722,670
306,735
-
3,087,145
2,367,575
3,139,902
1,169,912
535,636
711,756
306,735
-
3,029,816
2,263,763
3,114,048
1,313,412
466,021
673,022
304,587
651,785
57,329
103,812
25,854
(143,500)
69,615
38,734
2,148
(651,785)
285,000
252,200
285,000
252,200
410,434
216,284
(125,434)
35,916
12,135,763
11,855,861
12,443,172
(587,311)

EXPENDITURES
690,101
1,156,681
1,952,920
796,239

Transfers in
Transfers out
Proceeds from bond issuance
Retirement of PERS side fund
575,002
-
585,002
-
2,346
4,924,039
(5,986,953)
6,280,000
(6,280,000)
2,346
4,339,037
(5,986,953)
575,002
585,002
(1,060,568)
(1,645,570)
1,265,103
1,741,683
892,352
(849,331)
7,259,561
7,259,561
7,259,561
Total revenues
EXPENDITURES:
Current:
Administration
Public safety
Public works
Capital outlay
Debt service:
Principal
Total expenditures

FUND BALANCES:
Beginning of year
End of year
8,524,664
9,001,244
12,505,034
1,011,292
16,647
378,410
283,233
88,200
3,884
109,392
Variance w/Final
Positive
(Negative)
8,151,913
28
1,020,173
116,292
(178,553)
219,695
223,933
(6,000)
3,884
(15,874)
1,383,550
(849,331)
Harrison Memorial Library

Budgeted Amounts
Original
Final
$
1,000
19,000
300,200
-
Actual
1,000
19,000
300,200
-
Parking
Variance w/Final
Positive
(Negative)
4,050
1,273
18,098
350,901
-
4,050
273
(902)
50,701
-
Budgeted Amounts
Original
Final
$
Variance w/Final
Positive
(Negative)
Actual
-
320,200
320,200
374,322
54,122
1,309,176
-
1,276,828
-
1,227,965
-
48,863
-
1,309,176
1,276,828
1,227,965
48,863
(988,976)
(956,628)
(853,643)
102,985
945,455
-
945,455
-
945,455
945,455
(988,976)
(956,628)
91,812
1,048,440
522,940
522,940
522,940
698,086
698,086
698,086
698,086
$ 698,086
$ (466,036)
(433,688)
614,752
1,048,440
698,086
(continued)
29

Budget to Actual - General Fund and Major Special Revenue Funds, Continued
Ambulance
Budgeted Amounts
Original
Final
REVENUES:
Intergovernmental
Contributions
Other revenues
Total revenues
EXPENDITURES:
Current:
Administration
Public safety
Public works
Debt service:
Principal
Total expenditures
EXPENDITURES
370,000
-
End of year
370,000
-
168
606,299
-
168
236,299
-
370,000
606,467
236,467
803,179
-
782,576
-
912,836
-
(130,260)
-
803,179
782,576
912,836
(130,260)
(433,179)
(412,576)
(306,369)
106,207
310,748
-
310,748
-
310,748
310,748
(433,179)
(412,576)
4,379
416,955
119,948
119,948
119,948
FUND BALANCES:
Beginning of year
Actual
370,000

Transfers in
Transfers out
Variance w/Final
Positive
(Negative)
$ (313,231)
$ (292,628)
30
124,327
416,955
(concluded)
NOTES TO BASIC FINANCIAL STATEMENTS
31

Index to Notes to Basic Financial Statements
Page
Note 1 - Summary of Significant Accounting Policies .................................................................... 33
Financial Reporting Entity ............................................................................................................. 33
Basis of Presentation...................................................................................................................... 35
Measurement Focus ....................................................................................................................... 37
Basis of Accounting ....................................................................................................................... 37
Assets, Liabilities, and Equity ....................................................................................................... 38
Revenues, Expenditures, and Expenses ......................................................................................... 43
Budgetary Accounting ................................................................................................................... 44
Note 2 Cash and Investments......................................................................................................... 45
Note 3 Accounts Receivable ........................................................................................................... 48
Note 4 Capital Assets ...................................................................................................................... 48
Note 5 Accounts Payable and Accrued Liabilities ....................................................................... 49
Note 6 Long-term Liabilities .......................................................................................................... 49
Note 7 Net Position/ Fund Balances .............................................................................................. 52
Note 8 Interfund Transactions ...................................................................................................... 54
Note 9 Risk Management ............................................................................................................... 55
Note 10 Public Employees Retirement System ........................................................................... 56
Plan Description............................................................................................................................. 56
Funding Policy ............................................................................................................................... 56
Note 11 Other Post-Employment Benefits.................................................................................... 56
Note 12 Commitments and Contingencies .................................................................................... 59
Note 13 New Accounting Pronouncements................................................................................... 59
32

Notes to Basic Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City of Carmel-by-the-Sea (City) was incorporated on November, 1956, under the laws and
regulations of the State of California (State). The City operates under a City Council/Manager form of
government and provides the following services: public works, planning and building, general
administrative services, public safety (County Sheriff), fire suppression and prevention services, and
sewage treatment services.
The financial statements of the City have been prepared in accordance with accounting principles
generally accepted in the United States of America (GAAP) as applied to governmental units. The
Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental
accounting and financial reporting. On June 15, 1987, GASB issued a codification of the existing
Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB
pronouncements (Statements and Interpretations), constitutes GAAP for governmental units. The City
applies all GASB pronouncements to its activities.
In addition, the City applies all Financial Accounting Standards Board (FASB) Statements and
Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins
(ARB) issued after November 30, 1989, unless they conflict with or contradict GASB
pronouncements. The more significant of these accounting policies are described below and, where
appropriate, subsequent pronouncements will be referenced.
Financial Reporting Entity
The City operates as a self-governing local government unit within the State. It has limited authority to
levy taxes and has the authority to determine user fees for the services that it provides. The Citys main
funding sources include sales taxes, other intergovernmental revenue from state and federal sources,
user fees, and federal and state financial assistance. All property taxes are paid to San Mateo County
(County) as part of the revenue neutrality payment obligation. The financial statements do not reflect
the amounts received on behalf of the City and retained by the County.
The financial reporting entity consists of (a) the primary government, the City, (b) organizations for
which the primary government is financially accountable, and (c) other organizations for which the
primary government is not accountable, but for which the nature and significance of their relationship
with the primary government are such that exclusion would cause the reporting entitys financial
statements to be misleading or incomplete. Financial accountability is defined as the appointment of a
voting majority of the component units board, and either (a) the City has the ability to impose its will
on the organization, or (b) there is a potential for the organization to provide a financial benefit to or
impose a financial burden on the City.
33

Notes to Basic Financial Statements, Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Financial Reporting Entity, Continued
As required by GAAP, these financial statements present the government and its component units,
entities for which the government is considered to be financially accountable. These component units
are reported on a blended basis. Blended component units, although legally separate entities, are, in
substance, part of the governments operations and so data from these units are combined with data of
the primary government. The financial statements of the individual component units, if applicable as
indicated below, may be obtained by writing to the City of Carmel-by-the-Sea, Finance Department,
Post Office Box CC, Carmel-by-the-Sea, CA 93921.
The Citys reporting entity includes the following blended component units:
Carmel Public Improvement Authority

The above component units are included in the Citys basic financial statements using the blended
method. There are no component units of the City that meet the criteria for discrete presentation.
34


Basis of Presentation
Government-Wide Financial Statements
The statement of Net Position and statement of activities display information about the reporting
government as a whole. They include all funds of the reporting entity except for fiduciary funds. The
statements distinguish between governmental and business-type activities. Governmental activities
generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues.
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services, or privileges provided by a given function or segment, 2) operating grants and contributions,
and 3) capital grants and contributions restricted to the operating or capital requirements of a specific
function or segment. All taxes and internally dedicated resources are reported as general revenues
rather than program revenues.
Fund financial statements of the reporting entity are organized into funds, each of which is considered
to be a separate accounting entity. Each fund is accounted for by providing a separate set of selfbalancing accounts, which constitute its assets, liabilities, fund equity, revenues, and
expenditures/expenses. Funds are organized into three major categories: governmental, proprietary,
and fiduciary. An emphasis is placed on major funds within the governmental and proprietary
categories. A fund is considered major if it is the primary operating fund of the City or meets the
following criteria:
a. Total assets, liabilities, revenues, or expenditures/expenses of that individual
governmental fund are at least ten percent of the corresponding total for all funds of that
category or type; and,
b. Total assets, liabilities, revenues, or expenditures/expenses of the individual
governmental fund are at least five percent of the corresponding total for all
governmental funds combined.
The City reports the following major funds:
General Fund
35


Basis of Presentation, Continued
Descriptions of these funds are included on the divider page preceding the Governmental Funds
Balance Sheet.
The funds of the financial reporting entity are described below:
Governmental Funds
General Fund
The General Fund is used to account for resources traditionally associated with the City which are not
required legally or by sound financial management to be accounted for in another fund. From this fund
are paid the Citys general operating expenditures, the fixed charges, and the capital costs that are not
paid through other funds.
The Special Revenue Funds are used to account for specific revenues that are legally or otherwise
restricted to expenditures for particular purposes.
Debt Service Fund
The Debt Service Fund is used to account for financial resources used for the repayment of debt.
36


Measurement Focus
Measurement focus is a term used to describe which transactions are recorded within the various
financial statements.
On the government-wide Statement of Net Position and the Statement of Activities, governmental and
business-type activities are presented using the economic resources measurement focus. The
accounting objectives of this measurement focus are the determination of net income, financial
position, and cash flows. All assets and liabilities (whether current or noncurrent) associated with their
activities are reported. Fund equity is classified as net position, which serves as an indicator of
financial position.
In the fund financial statements, the current financial resources measurement focus is used for
governmental funds. Only current financial assets and liabilities are generally included on their balance
sheets. Their operating statements present sources and uses of available spendable financial resources
during a given period. These funds use fund balance as their measure of available spendable financial
resources at the end of the period.
Basis of Accounting
In the government-wide Statement of Net Position and Statement of Activities, governmental and
business-type activities are presented using the accrual basis of accounting. Under the accrual basis of
accounting, revenues are recognized when earned and expenses are recorded when the liability is
incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting
from exchange and exchange-like transactions are recognized when the exchange takes place.
In the fund financial statements, governmental funds are presented on the modified accrual basis of
accounting. Under this modified accrual basis of accounting, revenues are recognized when
measurable and available. Measurable means knowing or being able to reasonably estimate the
amount. Available means the amount is collectible within the current period or soon enough thereafter
to pay current liabilities. The City considers all revenues reported in the governmental funds to be
available if the revenues are collected within 60 days after year end, with the exception of grant
revenues and ambulance billing revenues. Grant revenues and ambulance billing revenues are
considered to be available if collected within 180 days of the end of the current fiscal period.
37


Basis of Accounting, Continued
Property taxes, transient occupancy taxes, franchise taxes, licenses, and interest associated with the
current fiscal period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal year. All other revenue items are considered to be measurable and
available only when cash is received by the government. Expenditures (including capital outlay) are
recorded when the related fund liability is incurred.
Assets, Liabilities, and Equity
Cash Deposits and Investments
The Citys cash and cash equivalents are considered to be cash on hand, demand deposits, and shortterm investments with original maturities of three months or less from the date of acquisition.
The City pools cash and investments from all funds for the purpose of increasing income through
investment activities. Highly liquid money market investments with maturities of one year or less at
time of purchase are stated at amortized cost. All other investments are stated at fair value in
accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain
Investments and for External Investment Pools. Market value is used as fair value for those securities
for which market quotations are readily available.
Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds that may result
in amounts owed between funds. Those related to goods and services type transactions are classified
as due to and from other funds. Long-term interfund loans (noncurrent portion) are reported as
advances from and to other funds. Interfund receivables and payables between funds within
governmental activities are eliminated in the Statement of Net Position. See Note 9 for details of
interfund transactions, including receivables and payables at year-end.
38


Assets, Liabilities, and Equity, Continued
Receivables
In the government-wide statements, receivables consist of all revenues earned at year-end and not yet
received. Major receivable balances for the governmental activities include property taxes, sales and
use taxes, utility user taxes, intergovernmental subventions, interest earnings, and expense
reimbursements.
In the fund financial statements, material receivables in governmental funds include revenue accruals
such as property tax, sales tax, utility user tax, and intergovernmental subventions since they are
usually both measurable and available. Non-exchange transactions collectible but not available, such
as property tax, are deferred in the fund financial statements in accordance with the modified accrual
basis, but not deferred in the government-wide financial statements in accordance with the accrual
basis.
Interest and investment earnings are recorded when earned only if paid within 60 days since they
would be considered both measurable and available. The loans receivable are recorded in the fund
statements, but are deferred to indicate they do not represent current financial resources. The loans are
recognized when advanced in the government-wide statements. The Citys experience is that all
accounts receivable are collectible; therefore an allowance for doubtful accounts is unnecessary.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government-wide and fund financial statements. In the governmental fund
financial statements, prepaid items are offset with a reservation of fund balance for long-term assets to
indicate they do not constitute current resources available for appropriation.
Capital Assets
The City's assets are capitalized at historical cost or estimated historical cost, if actual is unavailable,
except for donated Capital Assets which are recorded at their estimated fair value at the date of
donation. Policy has set the capitalization threshold for reporting at $5,000 for non-infrastructure
capital assets and $25,000 for infrastructure capital assets.
39


Capital Assets, Continued
Government-Wide Statements
Public domain (infrastructure) capital assets include roads, bridges, curbs and gutters, streets,
sidewalks, drainage systems, and lighting systems.
The accounting treatment of property, plant and equipment (capital assets) depends on whether the
assets are used in governmental fund operations or proprietary fund operations and whether they are
reported in the government-wide or fund financial statements.
Prior to July 1, 2003, governmental funds infrastructure assets were not capitalized, since then these
assets have been valued at estimated historical cost.
Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of
Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is
provided over the assets estimated useful lives using the straight-line method of depreciation. No
depreciation is recorded in the year of acquisition or in the year of disposition.
The range of estimated useful lives by type of asset is as follows:
Sewer Lines
Machinery and equipment
Computer Software
20 50 years
30 years
5 - 20 years
10 years

In the fund financial statements, capital assets used in governmental fund operations are accounted for
as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in
proprietary fund operations are accounted for the same way as in the government-wide statements.
40


Compensated Absences
Employees accrue vacation, sick, holiday, and compensatory time off benefits. City employees have
vested interests in the amount of accrued time off, with the exception of sick time, and are paid on
termination. Also, annually an employee may elect to be compensated for up to 40 hours of unused
annual leave. However, this is contingent upon the employee using at least 40 hours during the
previous year and, the employee having a minimum balance of 80 annual leave hours after the
payment. All vacation pay is accrued when incurred in the government-wide and proprietary financial
statements. A liability for these amounts is reported in the governmental funds only if they have
matured, for example, as a result of employee resignations or retirements and is currently payable. The
City had no employee resignations or retirements for which compensated absences should be accrued
in governmental funds at year-end. The general fund is typically used to liquidate compensated
absences.
Equity Classification
Government-Wide Statements
Equity is classified as net position and is displayed in three components:
a. Net invested in capital assets consists of capital assets, including restricted capital
assets, net of accumulated depreciation and reduced by the outstanding balances of any
bonds, mortgages, notes, or other borrowings that are attributable to the acquisition,
construction, or improvement of those assets.
b. Restricted net position consists of net position with constraints placed on the use by
external groups such as creditors, grantors, contributors, or by laws or regulations of
other governments or law through constitutional provisions or enabling legislation.
c. Unrestricted net position all other net position that do not meet the definition of
restricted or net invested in capital assets.
41


Equity Classification, Continued
Governmental fund equity is classified as fund balance. Fund balance is classified as nonspendable,
restricted, committed, assigned, or unassigned. Proprietary fund equity is classified the same as in the
government-wide statements. The classifications for governmental funds are defined as follows for the
City:
Nonspendable Fund Balance
Assets that will never convert to cash (prepaid items, inventory).

Assets that will not convert to cash soon enough to affect the current period (long-term notes or
loans receivable).
Resources that must be maintained intact pursuant to legal or contractual requirements (the
principal of an endowment).
Restricted Fund Balance
Resources that are subject to externally enforceable legal restrictions imposed by parties
altogether outside the government (creditors, grantors, contributors and other governments).
Resources that are subject to limitations imposed by law through constitutional provisions or
enabling legislation (e.g., Gas Tax).
Committed Fund Balance
Self imposed limitations set in place prior to the end of the period (encumbrances, economic
contingencies and uncertainties).
Limitation at the highest level of decision-making (Council) that requires formal action at the
same level to remove.
Assigned Fund Balance
Amounts in excess of nonspendable, restricted, and committed fund balance in funds other than
the general fund automatically are reported as assigned fund balance.
Unassigned Fund Balance
Residual net resources.

Total fund balance in the general fund in excess of nonspendable, restricted, committed and
assigned fund balance (surplus).
Excess of nonspendable, restricted, and committed fund balance over total fund balance
(deficit).
42


Revenues, Expenditures, and Expenses
Property Tax
The County of Monterey (County) is responsible for the collection and allocation of property taxes.
Under California law, property taxes are assessed and collected by the County up to 1% of the full cash
value of taxable property, plus other increases approved by the voters and distributed in accordance
with statutory formulas. The City recognizes property taxes when the individual installments are due,
provided they are collected within 60 days after year-end.
Secured property taxes are levied on or before the first day of September of each year. They become a
lien on real property on March 1 preceding the fiscal year for which taxes are levied. These taxes are
paid in two equal installments; the first is due November 1 and delinquent with penalties after
December 10; the second is due February 1 and delinquent with penalties after April 10. Secured
property taxes, which are delinquent and unpaid as of June 30, are declared to be tax defaulted and are
subject to redemption penalties, cost, and interest when paid. If the delinquent taxes are not paid at the
end of five years, the property is sold at public auction and the proceeds are used to pay the delinquent
amounts due. Any excess is remitted, if claimed, to the taxpayer. Additional tax liens are created when
there is a change in ownership of property or upon completion of new construction. Tax bills for these
new tax liens are issued throughout the fiscal year and contain various payments and delinquent dates,
but are generally due within one year. If the new tax liens are lower, the taxpayer receives a tax refund
rather than a tax bill. Unsecured personal property taxes are not a lien against real property. These
taxes are due on March 1, and become delinquent, if unpaid on August 31.
The City participates in an alternative method of distribution of property tax levies and assessments
known as the Teeter Plan. The State Revenue and Taxation Code allow counties to distribute secured
real property, assessment, and supplemental property taxes on an accrual basis resulting in full
payment to cities each fiscal year. Any subsequent delinquent payments and penalties and interest
during a fiscal year will revert to Monterey County.
43


Interfund Transfers
Resources are reallocated between funds by reporting them as interfund transfers. For the purposes of
the Statement of Activities, all interfund transfers between individual governmental funds have been
eliminated.
Budgetary Accounting
The City Council establishes budgets for the General Fund and all Special Revenue Funds, except for
certain Special Revenue Funds for which expenditures are controlled by grant funding or by
assessments received. Budgetary control is legally maintained at the fund level for these funds.
Department heads submit budget requests to the City Manager. The City Manager prepares an estimate
of revenues and prepares recommendations for the next years budget. The preliminary budget may or
may not be amended by the City Council and is adopted by resolution by the City Council on or before
June 30 in accordance with the municipal code.
The City Council may amend the budget by motion during the fiscal year. Only the Council can
authorize transfers between funds and approve inter-fund loans. The City Manager is authorized to
transfer budgeted amounts within a fund without formal council action or approval. The City Manager
is authorized to increase expenditures in relation to revenues in funds receiving assigned revenues
without approval by the City Council.
Expenditures may not legally exceed appropriations at the fund level, which is the legal level of
control. Supplemental appropriations, which increase appropriations, may be made during the fiscal
year. There were no material supplemental appropriations made for the fiscal year ended June 30,
2013. Budget information is presented for the General and budgeted Special Revenue Funds in the
fund financial statements. The budget information is presented on a basis consistent with generally
accepted accounting principles. Appropriations, except open project appropriations, and unexpended
grant appropriations, lapse at the end of each fiscal year.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those
estimates.
44

2. CASH AND INVESTMENTS

At June 30, 2013, the Citys pooled cash and investments, classified by maturity, consisted of the
following stated at fair value:
Maturities (in years)
1 to 2
<1
Cash equivalents and investments pooled
Pooled cash, at fair value
Cash in bank
Petty cash
Total pooled items
Pooled investments, at fair value
Certificate of Deposits
Money Market
State of California Local Agency Investment Fund
Total pooled investments - interest obligations
Total cash equivalents and investments pooled
411,561
4,308,360
4,719,921
4,719,921
>2
1,998,017
1,998,017
1,998,017
Fair
Market Value
Deposits
2,693,403
1,105
2,694,508
2,694,508
Amounts reported in:

Governmental activities - Unrestricted
Governmental activities - Restricted
Total
$
$
$
Investment Type
Certificates of Deposit
Money Market
LAIF
Total fair value
45
Fair Value
1,998,017
411,561
4,308,360
6,717,938
Weighted Average
Maturity (Years)
3.15
N/A
N/A
2,693,403
1,105
2,694,508
1,998,017
411,561
4,308,360
6,717,938
9,412,446
9,012,438
400,008
9,412,446

2. CASH AND INVESTMENTS, Continued

California statutes authorize cities to invest idle or surplus funds in a variety of credit instruments as
provided for in the California Government Code, Section 53600, Chapter 4 Financial Affairs. The
table below identifies the investment types that are authorized for the City by the California
Government Code (or the Citys investment policy, where more restrictive) that address interest rate
risk, credit risk, and concentration of credit risk. During the year ended June 30, 2013, the Citys
permissible investments included the following instruments:
Authorized Investment Type

U.S. Treasury Obligations
U.S. Agency Securities
Bankers' Acceptances
High-Grade Commercial Paper
Negotiable Certificates of Deposit
LAIF
Local Government Investment Pools
Medium-term Corporate Notes
Money Market Mutual Funds
Collateralized Negotiable Investments
Repurchase Agreements
Maximum
Maturity
5 years
5 years
180 days
270 days
5 years
N/A
N/A
5 years
N/A
5 years
92 days
Maximum
Percentage
of Portfolio
None
50%
40%
15%
30%
None
None
30%
20%
50%
15%
Maximum
Investment
in One Issuer
None
50%
30%
10%
30%
None
None
30%
10%
50%
5%
Interest rate risk In accordance with its investment policy, the City manages its exposures to declines
in fair values by limiting the weighted average maturity of its investment portfolio to less than 5 years.
As of June 30, 2013, the weighted average maturity was 3.15 years.
Credit risk As of June 30, 2013, the Citys investments in money market funds were rated AAA by
Standard & Poors and Fitch Ratings, and Aaa by Moodys Investors Service. The State of California
Local Agency Investment Fund is not rated. The Citys policy related to credit risk is to invest in only
AAA rated securities as measured by Standard & Poors and Fitch Ratings or unrated securities backed
by the full faith and credit of the State of California. The current portfolio adheres to this credit risk
policy.
Concentration of credit risk The Citys investment policy does not allow for an investment in any
one issuer that is in excess of five percent of the governments total investments. The investments
made by the City Treasurer are limited to those allowable under State statutes as incorporated into the
Citys Investment Policy, which is accepted annually by the City Council. There were no
concentrations in any one issuer for the year.
The City participates in an investment pool managed by the State of California titled Local Agency
Investment Fund (LAIF) which has invested 1.96% of the pool funds in Structured Notes and AssetBacked Securities. LAIF's investments are subject to credit risk with the full faith and credit of the
State of California collateralizing these investments. In addition, these Structured Notes and AssetBacked Securities are subject to market risk as to changes in interest rates.
46

2. CASH AND INVESTMENTS, Continued

Custodial credit risk deposits. For deposits, this is the risk that in the event of a bank failure, the
Citys deposits may not be returned to it. The Citys Investment Policy addresses custodial credit risk,
which follows the Government Code. As of June 30, 2013, the City had a balance of $2,443,403 in the
pool exposed to custodial credit risk because they exceeded the $250,000 Federal Deposit Insurance
Corporations insurance limits. The uninsured bank balance is collateralized by the pledging financial
institutions at 110% of the deposits, in accordance with the State of California Government Code.
Custodial credit risk investments. For investments, this is the risk that, in the event of the failure of
the counterparty, the City will not be able to recover the value of its investments or collateral securities
that are in the possession of an outside counterparty. For the investments maintained by the City, no
security was uninsured or unregistered or held by a brokerage firm which is also the counterparty for
the security.
At June 30, 2013, the carrying amount of the Citys deposits was $2,019,052 and the balances in
financial institutions were $2,308,643. Of the balance in financial institutions, $250,000 was covered
by federal depository insurance and $2,058,643 was collateralized as required by State law
(Government Code Section 53630), by the pledging financial institution with assets held in a common
pool for the City and other governmental agencies, but not in the name of the City. As of June 30,
2013, the Citys investments were held by the Citys custodial agent, but not in the Citys name, and
were insured up to specified limits by the Securities Investor Protection Corporation (SPIC) and
supplemental private insurance up to a limit of $150 million.
Investment in LAIF: LAIF is stated at amortized cost, which approximates fair value. The LAIF is a
special fund of the California State Treasury through which local governments may pool investments.
The total fair value amount invested by all public agencies in LAIF is $58,852,094,221 of which the
City had a balance of $4,308,360, which approximated market value and was managed by the State
Treasurer. Of the total invested, 98.04% was invested in non-derivative financial products and 1.96%
in structured notes and asset-backed securities. The Local Investment Advisory Board (Board) has
oversight responsibility for LAIF. The Board consists of five members as designated by State Statute.
The fair value of the Citys investment in this pool is reported in the accompanying financial
statements at amounts based upon the Citys pro-rata share of the fair value provided by LAIF for the
entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for
withdrawal is based on the accounting records maintained by LAIF, which are recorded on an
amortized cost basis.
47

3.
ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following at June 30, 2013:

Governmental
Activities
Accounts
Intergovernmental
Other receivables
Total accounts receivable
809,875
929,066
890,638
30.8%
35.3%
33.9%
2,629,579
1.00
These amounts resulted in the following concentrations in receivables:

Other Governments
30.8%
Individuals/Businesses 35.3%
Other
33.9%
Amounts do not indicate a significant concentration (greater than 25%) with any single individual,
business, or agency.
4. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2013, was as follows:
Balance
July 1, 2012
Nondepreciable assets:
Land
Art
Total nondepreciable assets
Depreciable assets:
Infrastructure
Vehicles
Machinery & equipment
Total depreciable assets
Total
Accumulated depreciation:
Infrastructure
Vehicles
Machinery & equipment
Total accumulated depreciation
Net depreciable assets
Total net capital assets
3,488,036
1,467,918
4,955,954
Additions
$
25,918,132
13,760,000
2,272,099
2,532,625
44,482,856
49,438,810
(6,660,284)
(1,862,985)
(1,566,006)
(10,089,275)
34,393,581
$ 39,349,535
Transfers/
Adjustments
Deletions
145,687
145,687
342,223
71,334
92,153
505,710
651,397
(541,461)
(458,667)
(133,110)
(123,066)
(1,256,304)
(750,594)
(604,907)
48
Balance
June 30, 2013
-
(1,060,955)
(398,488)
(1,459,443)
(1,459,443)
$
(1,459,443)
(1,459,443)
3,633,723
1,467,918
5,101,641
25,199,400
13,760,000
2,343,433
2,226,290
43,529,123
48,630,764
(7,201,745)
(458,667)
(1,996,095)
(1,689,072)
(11,345,579)
32,183,544
$ 37,285,185

4. CAPITAL ASSETS, Continued

Depreciation expense for capital assets was charged to functions as follows:
2,055
39,888
166,273
554,701
6,102
487,285
$ 1,256,304
Administration
Public safety
Public works
Total
5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following at June 30, 2013:
Governmental
Activities
Accounts payable
Accrued payroll and related liabilities
Total
Total
309,039
253,850
309,039
253,850
562,889
562,889
55%
45%
These amounts resulted in the following concentrations in payables:

Vendors
Employees
55%
45%
Amounts do not indicate a significant concentration (greater than 25%) with any single vendor or
employee.
6.
LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for the year ended June 30, 2013:
Balance
July 1, 2012
Governmental Activities:
Sunset Center COP
Countywide Radio Project
Capital Lease Obligations
Pension Obligation Bonds
Total governmental debt
Claims liabilities
Net OPEB obligation
Additions
7,295,000
336,050
344,131
7,975,181
201,721
6,280,000
$ 6,481,721
538,371
460,000
866,406
9,839,958
248,871
$ 6,730,592
49
Transfers/
Retirements
Balance
June 30, 2013
(285,000)
(15,675)
(196,480)
(115,000)
(612,155)
7,010,000
320,375
349,372
6,165,000
$ 13,844,747
(79,995)
(692,150)
458,376
460,000
1,115,277
$ 15,878,400
Due Within
One Year
$
285,000
17,009
213,274
580,000
1,095,283
273,981
1,369,264

6.
LONG-TERM LIABILITIES, Continued
Sunset Center COP

In 2010, the Carmel Public Improvement Authority, a component unit of the City, refunded previously
issued Certificates of Participation in the amount of $7,485,000, bearing an average interest rate of
4.73%, secured by general revenues of the City, and matures in October 2031. The original proceeds
were used to remodel the Sunset Cultural Center property. Interest is payable semi-annually on
October 1st and April 1st with principal payments due each October 1st. The outstanding balance due at
June 30, 2013 was $7,010,000.
Countywide Radio Project
In 2009, the City entered into a participation agreement with Monterey County to provide funding
related to the "Next Generation Radio Project," a Federal Communications Commission mandated
alteration of public safety and local government radio systems. Estimated payments will change should
individual local jurisdictions elect out of the project. The outstanding balance due at June 30, 2013 was
$320,375.
In 2009, the City entered into a lease purchase agreement to acquire firefighting equipment in the
amount of $435,982, bearing interest at 4.5%, secured by equipment, with interest and principal
payments due annually on July 1st, and matures in July 2015.
During fiscal year 2010, the City purchased vehicles and accessories for its public safety department
through a lease purchase agreement in the amount of $77,195 at an interest rate of 2%, payable
annually on December 1st through 2012 under this agreement.
Additionally, in 2010, the City purchased a wheel loader through a lease purchase agreement in the
amount of $126,262 at an interest rate of 3.3% payable monthly through December 2012.
On November 29, 2012, the City issued $6,280,000 in 2012 Taxable Pension Obligation Bonds, the
purpose of which was to fund certain PERS side fund obligations. The bonds bear an interest rate of
.55% to 3.1% and mature on June 1, 2023. The outstanding balance due at June 30, 2013 was
$6,165,000.
Compensated Absences
The City records employee absences, such as vacation, illness, and holidays, for which it is expected
that employees will be paid as compensated absences. Compensated absences had a balance of
$458,376 at June 30, 2013; of that amount $273,981 is expected to be paid within a year.
Claims Liabilities
The City has recorded a liability for potential claims in excess of amounts covered by the
insurance pool. See Note 9 for further discussion on the Citys risk management activities.
50

6.
LONG-TERM LIABILITIES, Continued
Net OPEB Obligation

A net OPEB obligation is the cumulative differences between annual OPEB cost and an employers
contributions to a plan. At June 30, 2013, the City had a Net OPEB Obligation of $1,115,277 See Note
11 for further discussion on OPEB.
Future debt service for Governmental Activities at June 30, 2013, is as follows for all debt except
compensated absences and claims liabilities:
Year Ending
Sunset Center COP
June 30,
Principal
2014
285,000
County-wide Radio Project
Interest
$
Principal
219,763
Interest
17,009
12,655

Principal
Interest
$ 213,274
8,515
2015
290,000
213,963
17,681
11,983
67,227
3,325
2016
295,000
208,063
18,379
11,285
68,871
1,682
2017
300,000
202,063
19,105
10,559
2018
310,000
194,313
19,860
9,804
1,675,000
831,688
111,706
36,614
2019-2023
2024-2028
1,985,000
530,838
116,635
12,332
2029-2032
Total
1,870,000
7,010,000
115,000
2,515,691
320,375
105,232
$ 349,372
$ 13,522
285,000
219,763
17,009
12,655
$ 213,274
6,725,000
7,010,000
2,295,928
2,515,691
303,366
320,375
92,577
105,232
136,098
$ 349,372
5,007
$ 13,522
Due within one year

Due after one year
Total

2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2032
Total
Due within one year

Due after one year
Total
$
$
Principal
580,000
580,000
585,000
595,000
605,000
3,220,000
6,165,000
580,000
5,585,000
6,165,000
Total
Interest
122,593
118,243
112,443
105,131
96,205
277,825
$
832,440
Principal
1,095,283
954,908
967,250
914,105
934,860
5,006,706
2,101,635
1,870,000
$ 13,844,747
Interest
363,526
347,514
333,473
317,753
300,322
1,146,127
543,170
115,000
$ 3,466,885
122,593
709,847
832,440
1,095,283
12,749,464
$ 13,844,747
51
363,526
3,103,359
3,466,885
8,515

7. NET POSITION/ FUND BALANCES

Net Position
Governmental
Activities
Restricted
Unrestricted
Total
29,605,438
566,992
2,205,463
32,377,893
Restricted balances are for the same purposes as fund balance restrictions because external
restriction requirements are the same. See descriptions of the restrictions below.
Fund Balance
Nonspendable, Restricted and Committed fund balance consisted of the following at June 30, 2013:
Nonspendable:
Major Funds:
Total Major Funds - Nonspendable
Restricted:
Nonmajor Funds:
Gas Tax
Debt service
Total Nonmajor Funds - Restricted
Total Restricted
Committed:
General Fund Reserve
Total Committed
52
46,747
46,747
166,983
400,009
566,992
566,992
$
$
2,898,615
2,898,615

7.
NET POSITION/ FUND BALANCES, Continued
The following describes the purpose of each nonspendable, restriction, and commitment account used
by the City:
Nonspendable
Harrison Memorial Library Endowment - used to segregate that portion of fund balance
to indicate that bequest and endowment amounts do not represent available, spendable
resources because the principal is nonspendable.
Restricted
Gas Tax represents amounts restricted for street purposes by the California Streets and
Highways Code.
Debt service represents amounts restricted for repayment of debt.
Committed
General Fund Reserve represents amounts committed through Council Resolution for
economic uncertainties and anticipated future short-term structural deficits. This amount
can be changed only by Council Resolution.
There were no deficit net position or fund balances at June 30, 2013.
Excess of Expenditures and Transfers Over Appropriations: Expenditures and transfers exceeded
appropriations for the year ended June 30, 2013, for the following funds:
Major Funds:
General Fund
Ambulance
Non-major Funds:
Special Revenue Funds:
Traffic Safety*
Road Impact Fees*
Grants*
Forest Theater*
Final Budget
Total
Expenditures
and Transfers
Excess
Expenditures
over Appropriations
$ 11,855,861
782,576
$ 18,430,125
912,836
116,000
130,000
2,900
17,209
* Indicates Fund is not budgeted
Sufficient fund balance existed in all of these funds to cover the excesses.
53
(6,574,264)
(130,260)
(116,000)
(130,000)
(2,900)
(17,209)

8.
INTERFUND TRANSACTIONS
Due to and due from other funds consisted of the following as of June 30, 2013:
Due from
Other Funds
Major Funds:
General Fund
Ambulance
Total Major Funds
Total
452,477
452,477
452,477
Due to
Other Funds
452,477
452,477
452,477
Due to and from balances result from the time lag between the dates that (1) interfund goods and
services are provided or reimbursable expenditures occur, (2) transactions are recorded in the
accounting system, and (3) payments between funds are made.
Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to
the fund that statute or budget requires to expend them, and (2) use unrestricted revenues collected in
the general fund to finance various programs accounted for in other funds in accordance with
budgetary authorizations.
Transfers consisted of the following at June 30, 2013:
Transfers In
Major Funds:
General Fund
Harrison Memorial Library - Special Revenue
Ambulance - Special Revenue
Total Major Funds
Non-major Funds:
Traffic Safety
Road Impact Fees
Gas Tax
Total Non-major Special Revenue Funds
Debt Service Funds:
General Debt Service
Total Non-major Debt Service Funds
Total Non-major Funds
Total Governmental Activities
Total Transfers
54
Transfers Out
4,924,039
945,455
310,748
6,180,242
5,986,953
5,986,953
116,000
130,000
60,000
306,000
121,747
121,747
121,747
6,301,989
6,301,989
9,036
9,036
315,036
6,301,989
6,301,989

8.
INTERFUND TRANSACTIONS, Continued
The General Fund received transfers from various programs to fund activities in the General Fund for
which these revenue sources are dedicated. The General Fund also transferred amounts to the General
Debt Service Fund to fund the current debt service payments.
9.
RISK MANAGEMENT
The City of Carmel-by-the-Sea (City) is a member of CSAC-EIA (California State and County Excess
Insurance Authority) which is a shared risk pool. CSAC-EIA covers claims for City for both Workers
Compensation and General Liability. The Citys Liability SIR is pre-funded through CSAC-EIA for 8
quarters of payments made on behalf of City. Currently, the SIR fund for the City with CSAC-EIA is
maintained at $8,414. If the pre-funded SIR balance drops below this amount, the City is billed by
CSAC-EIA to replenish the fund to the $8,414 level. For Fiscal Year 2013/2014, this pre-funded level
will increase to $10,784 because of claims paid on behalf of the City. The City does not make claim
payments, they are all issued by the city's third party administrator from a CSA-EIA account.
The City has two layers of Liability coverage through CSAC-EIA and under the first layer, the Primary
General Liability layer, there is an SIR (Self Insured Retention) of $10,000 per claim. Thereafter, the
next layer of coverage kicks in (General Liability 1 program) which carries an SIR of $100,000 which
is satisfied by exhausting the coverage limit of $100,000 under the Primary Liability program. The
maximum limit of coverage under the primary General Liability 1 program is $25 million. The City
retains the risk of loss above $25 million.
For Workers Compensation, the City is a member of both the CSAC-EIA Primary Workers
Compensation program and then, the CSAC-EIA Excess Workers Compensation program. The
Primary Workers compensation program provides dollar 1 coverage to the City for Workers
Compensation claims. In other words, City has no deductible or SIR. This layer of Workers
Compensation coverage carries a maximum limit of $125,000 per occurrence. Thereafter, CSACEIA's excess coverage steps in and the SIR (Self Insured Retention) is $125,000 which again, is
satisfied by exhausting the limits of coverage under the Primary Workers Compensation program. The
upper limit of coverage under the Excess Workers Compensation program is "statutory". What this
means is that regardless of the total cost of the claim, it is covered under the CSAC-EIA Excess
Workers Compensation program. There is absolutely no monetary exposure to the City under these
two Workers Compensation programs except for the premium costs to purchase this coverage. The
City has had no settlements which exceeded insurance coverage in the last three fiscal years and no
significant changes or reductions in insurance coverage during the current year.
55

10.
PUBLIC EMPLOYEES RETIREMENT SYSTEM
Plan Description
The City of Carmel-by-the-Sea contributes to the California Public Employees Retirement System
(PERS), a cost-sharing multiple-employer public employee defined benefit pension plan. PERS
provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to
plan members and beneficiaries. PERS acts as a common investment and administrative agent for
participating public entities within the State of California. All permanent and part-time employees
working at least 1,000 hours per year are enrolled in PERS. Under PERS, benefits vest after five years
of service. Upon retirement, participants are entitled to an annual retirement benefit, payable for life, in
an amount equal to a benefit factor multiplied by their highest average monthly salary over 12
consecutive months of employment. Benefit provisions and all other requirements are established by
State statute. The establishment and amendment of specific benefit provisions of the Plan is authorized
by resolution of the City Council. PERS requires plans with less than 100 active participants to
participate in risk pools. The City participated in the Miscellaneous 2% at 55 Risk Pool and in the
Safety 3.0% at 50 Risk Pool for the year ended June 30, 2013. Copies of the PERS annual financial
report may be obtained from their Executive Office at 400 P Street, Sacramento, CA 95814.
Funding Policy
The City is required to contribute at an actuarially determined rate. The current rate is 11.522% of the
annual covered payroll for miscellaneous employees and 27.849% for safety employees. In November
2012, the City paid off a side-fund balance due to PERS by issuing Pension Obligation Bonds. This
decreased the rate for miscellaneous employees in 2012-13 and all subsequent years. The Citys
contributions for the years ended June 30, 2013, 2012, and 2011 were $896,806 (exclusive of side fund
payoff), $1,204,375, and $1,553,399, respectively, which were equal to the required contributions for
each year. Active PERS plan members are required to contribute a percentage of their annual covered
salary. The percentage required is up to 8% for miscellaneous employees and 9% for safety employees.
The contribution requirement of plan members and the City are established and may be amended by
PERS.
11.
OTHER POST EMPLOYMENT BENEFITS
Plan Description. The City of Carmel-by-the-Sea Retiree Healthcare Plan (Plan) is a single-employer
defined benefit healthcare plan administered by the City. The Plan provides access to lifetime
healthcare benefits to eligible retirees and their dependents. The City provides retiree medical benefits
through the California Public Employees Retirement System healthcare program (PEMHCA). For
eligible retirees, the City contributes not less than 5% of the active contribution times years in
PEMHCA (max $100/month increase). The City pays actives the PEMHCA minimum, and the City
joined PEMHCA in 1998. The Citys retiree contribution is $112.00 for 2012, $115 for 2013 and $119
for 2014.
56

11.
OTHER POST EMPLOYMENT BENEFITS, Continued
Plan Description, Continued

Eligibility: Employees are eligible to participate in the Citys Retiree Healthcare Plan if they retire
directly from the City under CalPERS with five years of PERS service (there is no minimum service
requirement if retirement is due to a service-connected disability.) Since PEMHCA is a community
rated plan for most employers, an implied subsidy is not reflected under GASB 45. The City does not
provide dental, vision, life, or Medicare Part B reimbursement to retirees. The Retiree Healthcare Plan
does not issue a financial report.
Membership of the plan consisted of the following at June 30, 2013
Retirees and beneficiaries receiving benefits
Other participants fully eligible for benefits
Other participants not yet fully eligible for
benefits
Total
29
38
57
124
Funding Policy. The contribution requirements of the Plan participants and the City are established by
and may be amended by the City. The City currently does not prefund plan benefits.
The Annual Required Contribution (ARC) is an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefit Other Than Pensions. The ARC represents a level of funding that, if paid on
an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed 30 years.
For fiscal year 2013, the City contributed $55,137 for current benefit payments.
Annual OPEB Cost and Net OPEB Obligation. The Citys annual other postemployment benefit cost
(expense) is calculated based on the annual required contribution (ARC) of the employer. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost
each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to
exceed 30 years.
57

11.
OTHER POST EMPLOYMENT BENEFITS, Continued
Annual OPEB Cost and Net OPEB Obligation, Continued

The following table shows the components of the Citys annual OPEB cost for the year, the amount
actually contributed to the Plan, and changes in the Citys Net OPEB obligation:
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost (expense)
Benefit payments made
Increase (Decrease) in net OPEB obligation
Net OPEB obligation beginning of year
Net OPEB obligation end of year
$ 309,226
30,324
_ (35,542)
$ 304,008
__(55,137)
$ 248,871
__866,406_
$ 1,115,277
The Citys annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net
OPEB obligation for fiscal year 2013 and the two preceding fiscal years were as follows:
Fiscal
Year
Ended
6/30/11
6/30/12
6/30/13
Annual
OPEB Cost
Percentage of
Annual OPEB
Cost Contributed
Net
OPEB
Obligation
$265,640
284,309
304,008
6%
17%
18%
$630,971
866,406
1,115,277
Funded Status and Funding Progress. The funded status of the Plan as of June 30, 2009, the Plans
most recent actuarial valuation date, was as follows:
Actuarial accrued liability (AAL)
Actuarial value of Plan assets
Unfunded actuarial accrued liability (UAAL)
Funded ratio (actuarial value of Plan assets/AAL)
Covered payroll (active Plan participants)
UAAL as a percentage of covered payroll
$
$
2,752,948
0
2,752,948
0%
$5,432,667
50.67%
Actuarial valuations of an ongoing plan involve estimates of the value of expected benefit payments
and assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined
regarding the funded status of the plan and the annual required contributions of the employer are
subject to continual revision as actual results are compared with 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, presents multi-year trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for benefits.
58

11. OTHER POST EMPLOYMENT BENEFITS, Continued

Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are
based on the substantive plan (the plan as understood by the employer and the plan participants) and
include the types of benefits provided at the time of each valuation and the historical pattern of sharing
of benefit costs between the employer and plan participants to that point. The actuarial methods and
assumptions used include techniques that are designed to reduce the effects of short-term volatility in
actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective
of the calculations.
For the June 30, 2009, actuarial valuation, the entry age normal actuarial cost method was used. The
actuarial assumptions included a 3.5% discount rate. Premiums were assumed to increase with a preMedicare medical cost increase rate of 8.4% for HMOs and 9.0% for PPOs for 2013, both grading
down to 4.5% for 2017 and thereafter. The post-Medicare medical cost increase rates were 8.7% for
HMOs and 9.3% for PPOs for 2013, both grading down to 4.5% for 2017 and thereafter. The total
UAAL calculated in the June 30, 2009, valuation was amortized as a level percentage of projected
payroll over a fixed 21-year period beginning fiscal year 2013.
12. COMMITMENTS AND CONTINGENCIES

The City is a party to claims and lawsuits arising in the ordinary course of business. The Citys
management and legal council are of the opinion that the ultimate liability, if any, arising from these
claims will not have material adverse impact on the financial position of the City. The City participates
in a number of federal and state assisted grant programs. These programs are subject to program
compliance audits by the grantors. The amount, if any, of expenditures which may be disallowed by
the granting agencies cannot be determined at this time although the City expects such amounts, if any,
to be immaterial.
13. NEW ACCOUNTING PRONOUNCEMENTS

The GASB has issued Statement No. 65, Item Previously Reported as Assets and Liabilities. This
Statement establishes accounting and financial reporting standards that reclassify, as deferred outflows
of resources or deferred inflows of resources, certain items that were previously reported as assets and
liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were
previously reported as assets and liabilities. The City implemented this Statement in Fiscal year 201213.
The GASB has issued Statement No. 66, Technical Corrections 2013. The objective of this
Statement is to improve accounting and financial reporting for a governmental financial reporting
entity by resolving conflicting guidance that resulted from the issuance of two pronouncements,
Statements No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and No. 62,
Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989
FASB and AICPA Pronouncements. The implementation of this Statement did not have an effect on
these financial statements.
59

13. NEW ACCOUNTING PRONOUNCEMENTS, Continued

The GASB has issued Statement No. 67, Financial Reporting for Pension Plans. The objective of
this Statement is to improve financial reporting by state and local governmental pension plans. This
Statement replaces the requirements of Statements No. 25, Financial Reporting for Defined Benefit
Pension Plans and Note Disclosures for Defined Contribution Plans and No. 50, Pension
Disclosures as they relate to pension plans that are administered through trusts or equivalent
arrangements (hereafter jointly referred to as trusts) that meet certain criteria. The requirements of
Statements 25 and 50 remain applicable to pension plans that are not administered through trusts
covered by the scope of this Statement and to defined contribution plans that provide postemployment
benefits other than pensions. This Statement is effective for periods beginning after June 15, 2013.
The implementation of this statement will not have an effect on these financial statements.
The GASB has issued Statement No. 68, Accounting and Financial Reporting for Pensions - An
Amendment of GASB Statement No. 27 The primary objective of this Statement is to improve
accounting and financial reporting by state and local governments for pensions. It also improves
information provided by state and local governmental employers about financial support for pensions
that is provided by other entities. This Statement establishes accounting and financial reporting
requirements related to pensions for governments whose employees are provided with pensions
through pension plans that are covered by the scope of this Statement, as well as for nonemployer
governments that have a legal obligation to contribute to those plans. This Statement will be effective
for periods beginning after June 15, 2014. The City will implement this Statement in fiscal year 201415.
The GASB has issued Statement No. 69, Government Combinations and Disposals of Government
Operations. This Statement establishes accounting and financial reporting standards related to
government combinations and disposals of government operations. This Statement will be effective for
government combinations and disposals of government operations occurring in financial reporting
periods beginning after December 15, 2013. The City will implement this Statement in fiscal year
2014-15, if applicable.
The GASB has issued Statement No. 70 Accounting and Financial Reporting for Nonexchange
Financial Guarantees. The objective of this Statement is to improve accounting and financial
reporting by state and local governments that extend and receive nonexchange financial guarantees.
This Statement will be effective for periods beginning after June 15, 2013. The City will implement
this Statement in fiscal year 2014-15, if applicable.
60


Other Postemployment Benefits
Schedule of Funding Progress
Actuarial
Valuation
Date
n/a
6/30/091
1
Actuarial
Value of
Assets
(a)
n/a
$0
Actuarial
Accrued
Liability
(b)
n/a
$2,752,948
Unfunded
Actuarial
Accrued
Liability
(b-a)
n/a
$2,752,948
Funded
Ratio
(a/b)
n/a
0%
UAAL as a
Percentage of
Covered
Covered
Payroll
Payroll
(c)
((b-a)/c)
n/a
n/a
$5,432,667
50.67%
The 6/30/09 Actuarial Accrued Liability was calculated using a discount rate of 3.5%.
61
62
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
63
64
NON-MAJOR GOVERNMENTAL FUNDS
Fund Type
Traffic Safety
Description
Accounts for traffic safety and public safety augmentation funds for
police and fire
Road Impact Fees
Accounts for road impact fees used for transportation related

expenditures.
Grants
Accounts for grants utilized for specific purposes
Forest Theater
Accounts for activities related to the Forest Theater
Gas Tax
Accounts for revenues collected in accordance with the Streets and

Highway Code
Debt Service Funds:

General
Accounts for activities related to the repayment of the Certificate of

Participation and capital lease obligations
65

Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2013
Traffic
Safety
Road
Impact Fees
Grants
ASSETS
Receivables:
Accounts
Interest
Intergovernmental
14,673
-
Total assets
113,296
-
158,083
25,000
14,673
113,296
183,083
LIABILITIES AND FUND BALANCES

Liabilities:
Accounts payable
Due to other funds
Deferred revenue
Total liabilities
Fund Balances:
Restricted
Assigned, reported in:
Total fund balances
$
Total liabilities and fund balances
66
14,673
113,296
183,083
14,673
113,296
183,083
14,673
113,296
183,083
Forest
Theater
$
General
Debt Service
Gas Tax
92,254
-
155,987
-
11,986
1
400,008
Total
Non-Major
Governmental
Funds
$
534,294
400,008
36,986
92,254
167,973
400,009
971,288
475
-
990
-
1,465
-
475
990
1,465
166,983
400,009
566,992
91,779
402,831
91,779
166,983
400,009
969,823
92,254
167,973
400,009
67
971,288

Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Traffic
Safety
REVENUES:
Fees and permits
Intergovernmental
116,521
-
Total revenues
EXPENDITURES:
Current:
Public works
Debt Service:
Primcipal
Total expenditures
EXPENDITURES
Transfers in
Transfers out
Total other financing
sources (uses)
REVENUES AND OTHER FINANCING
SOURCES OVER (UNDER)
EXPENDITURES AND OTHER
FINANCING (USES)
FUND BALANCES:
Beginning of year
End of year
Road
Impact Fees
183,800
-
130,085
-
116,521
183,800
130,085
2,900
-
2,900
116,521
183,800
127,185
(116,000)
(130,000)
(116,000)
(130,000)
521
53,800
127,185
14,152
59,496
55,898
14,673
68
Grants
113,296
183,083
Forest
Theater
$
General
Debt Service
Gas Tax
25,769
96,759
-
Total
Non-Major
Governmental
Funds
183,800
116,521
226,844
25,769
25,769
96,759
552,934
17,209
25,292
-
28,192
17,209
112,710
112,710
17,209
25,292
112,710
158,111
8,560
71,467
(112,710)
394,823
(60,000)
121,747
(9,036)
121,747
(315,036)
(60,000)
112,711
(193,289)
8,560
11,467
201,534
83,219
155,516
400,008
768,289
91,779
166,983
400,009
69
969,823

Combining Statement of Revenues, Expenditures and Changes in Fund Equity
Special Revenue Funds - Budget and Actual
Traffic Safety
Original
Budget
REVENUES:
Fees and permits
Amended
Budget
-
Intergovernmental
Total revenues
Variance
w/Amended
Positive
(Negative)
Actual
-
116,521
116,521
116,521
116,521
EXPENDITURES:
Public works
REVENUES OVER (UNDER) EXPENDITURES
116,521
(116,521)

Transfers in
Transfers out
(116,000)
(116,000)
116,000
116,000
REVENUES AND OTHER FINANCING SOURCES

OVER (UNDER) EXPENSES AND OTHER
FINANCING (USES)
521
14,152
14,152
14,152
Total expenditures
FUND BALANCE:
Beginning of year
End of year
14,152
70
14,152
14,673
(521)
$
(521)
Road Impact Fees
Original
Budget
$
Amended
Budget
-
Grants
Variance
w/Amended
Positive
(Negative)
Actual
-
183,800
183,800
Original
Budget
183,800
183,800
Amended
Budget
-
Actual
-
183,800
(183,800)
(130,000)
(130,000)
59,496
59,496
59,496
59,496
Variance
w/Amended
Positive
(Negative)
130,085
130,085
130,085
130,085
2,900
2,900
2,900
(2,900)
127,185
(127,185)
(130,000)
130,000
53,800
(53,800)
127,185
(127,185)
59,496
55,898
55,898
55,898
113,296
(53,800)
55,898
55,898
183,083
(127,185)
(continued)
71

Combining Statement of Revenues, Expenditures and Changes in Fund Equity
Special Revenue Funds - Budget and Actual, Continued
Forest Theater
Original
Budget
REVENUES:
Fees and permits
Amended
Budget
-
Intergovernmental
Total revenues
Variance
w/Amended
Positive
(Negative)
Actual
-
25,769
25,769
25,769
25,769
EXPENDITURES:
Public works
17,209
17,209
(17,209)
(17,209)
REVENUES OVER (UNDER) EXPENDITURES
8,560
8,560

Transfers in
Transfers out
REVENUES AND OTHER FINANCING SOURCES

OVER (UNDER) EXPENSES AND OTHER
FINANCING (USES)
8,560
8,560
83,219
83,219
83,219
Total expenditures
FUND BALANCE:
Beginning of year
End of year
83,219
72
83,219
91,779
8,560
Gas Tax
Original
Budget
$
Amended
Budget
72,450
2,500
74,950
Total
Variance
w/Amended
Positive
(Negative)
Actual
72,450
2,500
74,950
96,759
96,759
Original
Budget
24,309
(2,500)
21,809
25,292
25,292
(25,292)
(25,292)
74,950
74,950
71,467
(100,000)
(100,000)
(100,000)
(100,000)
(25,050)
155,516
130,466
Amended
Budget
72,450
2,500
74,950
Variance
w/Amended
Positive
(Negative)
Actual
72,450
2,500
74,950
183,800
116,521
226,844
25,769
552,934
183,800
116,521
154,394
(2,500)
25,769
477,984
28,192
17,209
45,401
28,192
(17,209)
10,983
3,483
74,950
74,950
507,533
432,583
(60,000)
(60,000)
(40,000)
(40,000)
(100,000)
(100,000)
(100,000)
(100,000)
(306,000)
(306,000)
(206,000)
206,000
(25,050)
11,467
(36,517)
(25,050)
(25,050)
201,533
638,583
155,516
155,516
368,281
368,281
368,281
130,466
166,983
(36,517)
343,231
343,231
569,814
(226,583)
(concluded)
73
74
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS
City of Carmel-by-the-Sea
We have audited, in accordance with the auditing standard 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, the financial statements of the governmental
activities, each major fund, and the aggregate remaining fund information of the City of Carmel-bythe-Sea (City), as of and for the year ended June 30, 2013, and the related notes to the financial
statements, which collectively comprise City of Carmel-by-the-Seas basic financial statements, and
have issued our report thereon dated January 31, 2014.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Citys internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of internal control of the City internal
control. Accordingly, we do not express an opinion on the effectiveness of the Citys internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control, such that there is a reasonable possibility that a
material misstatement of the entitys financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit attention
by those charged with governance.
Our consideration of the internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we considered to be material weaknesses. However, material
weaknesses may exist that we have not identified.
7080 Donlon Way, Suite 204, Dublin, CA 94568 phone (925) 556-6200 fax: (510) 217-5930
www.jjacpa.com
Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Citys financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the result of that testing, and not to provide an opinion on the effectiveness of the
entitys internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entitys internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
]]TVcT? \vA
January 31, 2014
JJACPA, INC.
Dublin, CA

City Annual Financial Report FYE 6-30-2013

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CITY OF CARMEL-BY-THE-SEA, CALIFORNIA

ANNUAL FINANCIAL REPORT

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City of Carmel-by-the-Sea, California

City of Carmel-by-the-Sea, California

City of Carmel-by-the-Sea, California

City of Carmel-by-the-Sea, California

Jason Burnett, Mayor

INDEPENDENT AUDITORS REPORT

To the Honorable Mayor and City Council

Report on the Financial Statements

To the Honorable Mayor and City Council

City of Carmel-by-the-Sea, California

City of Carmel-by-the-Sea, California

OVERVIEW OF THE ANNUAL FINANCIAL REPORT

City of Carmel-by-the-Sea, California

OVERVIEW OF THE ANNUAL FINANCIAL REPORT, Continued

City of Carmel-by-the-Sea, California

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Current and other liabilities

Total net position

City of Carmel-by-the-Sea, California

GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

Excess (Deficiency) of revenues over

City of Carmel-by-the-Sea, California

GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

City of Carmel-by-the-Sea, California

GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

City of Carmel-by-the-Sea, California

GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

Revenues by Source - Governmental Activities

Use of money &

Sales and use tax

City of Carmel-by-the-Sea, California

GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

City of Carmel-by-the-Sea, California

GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

BASIC FINANCIAL STATEMENTS

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City of Carmel-by-the-Sea, California

Total net position

Total liabilities and net position

City of Carmel-by-the-Sea, California

Total governmental activities

Net (Expense) Revenue and

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FUND FINANCIAL STATEMENTS

Harrison Memorial Library Special Revenue Fund

Accounts for activities associated with the Harrison Memorial Library

Parking Special Revenue Fund

Accounts for activities associated with parking in-lieu fees.

Ambulance Special Revenue Fund

Accounts for activities associated with ambulance service billings,

City of Carmel-by-the-Sea, California

LIABILITIES AND FUND BALANCES

City of Carmel-by-the-Sea, California

Total fund balances - total governmental funds

City of Carmel-by-the-Sea, California

City of Carmel-by-the-Sea, California

City of Carmel-by-the-Sea, California

Forest, parks and beaches

Total governmental activities

City of Carmel-by-the-Sea, California

Net change in fund balances - total governmental funds