FY 07-08

FY 07-08

COUNTY OF BUTTE

STATE OF CALIFORNIA

COMPREHENSIVE ANNUAL

FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED

JUNE 30, 2008

Butte Creek

Photo by Lynne Pillus

Prepared Under the Supervision of:

David A. Houser

County Auditor-Controller

Introductory Section

COUNTY OF BUTTE, CALIFORNIA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2008

Table of Contents

Page

INTRODUCTORY SECTION:

Table of Contents

Letter of Transmittal

Board of Supervisors and Principal County Officials

Organization Chart

i

v

xiv

xv

GFOA Certificate of Achievement

FINANCIAL SECTION:

xvi

Independent Auditor’s Report............................................................................................................ 1

Management’s Discussion and Analysis (Required Supplementary Information) ............................

Basic Financial Statements:

Government-Wide Financial Statements:

3

Statement of Net Assets ........................................................................................................... 13

Fund Financial Statements:

Reconciliation of the Governmental Funds Balance Sheet to the

Statement of Revenues, Expenditures, and Changes in Fund Balances..............................

Reconciliation of the Statement of Revenues, Expenditures, and Changes

18

19

in Fund Balances of Governmental Funds to the Governmental-Wide

Statement of Activities ...................................................................................................... 20

Statement of Revenues, Expenses, and Changes in Net Assets ..........................................

Statement of Fiduciary Net Assets ......................................................................................

Statement of Changes in Net Assets – Investment Trust Fund ...........................................

22

25

26

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COUNTY OF BUTTE, CALIFORNIA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2008

FINANCIAL SECTION (CONTINUED):

Notes to the Basic Financial Statements:

(1) Summary of Significant Accounting Policies ................................................................ 27

(3) Receivables..................................................................................................................... 45

(5) Capital Assets ................................................................................................................. 49

(6) Short-term Debt.............................................................................................................. 50

(7) Long-term Obligations ...................................................................................................

(8) Restricted Net Assets/Reserved and Designated Fund Balances ...................................

(9) County Employees Retirement Plan (Defined Benefit Pension Plan)............................

51

58

59

(10) Post-Retirement Health Benefits ....................................................................................

(11) Other Post Employment Benefits (OPEB) .....................................................................

(12) Risk Management...........................................................................................................

(13) Contingencies .................................................................................................................

(14) Subsequent Events..........................................................................................................

(15) Stewardship, Compliance, and Accountability ..............................................................

Required Supplementary Information (other than MD&A):

61

65

66

66

66

67

County Employee’s Retirement Plan (Defined Pension Benefit Plan):

Schedule of Funding Progress.................................................................................................... 69

Budgetary Comparison Schedule – General Fund ........................................................................

Budgetary Comparison Schedule – Welfare Fund .......................................................................

71

81

Budgetary Comparison Schedule – Public Health Fund ..............................................................

Budgetary Comparison Schedule – Behavioral Health Fund .......................................................

Budgetary Comparison Schedule – Road Fund ...........................................................................

Note to Required Supplementary Information - Budgetary Basis of Accounting ........................

OTHER SUPPLEMENTARY INFORMATION:

85

87

89

91

Combining and Individual Fund Statements and Schedules:

Nonmajor Governmental Funds:

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances................ 100

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COUNTY OF BUTTE, CALIFORNIA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2008

FINANCIAL SECTION (CONTINUED):

OTHER SUPPLEMENTARY INFORMATION (CONTINUED):

Combining and Individual Fund Statements and Schedules (Continued):

Internal Service Funds:

Combining Statement of Net Assets ........................................................................................ 124

Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets ................... 128

Combining Statement of Cash Flows....................................................................................... 132

Fiduciary Funds:

Combining Statement of Fiduciary Assets and Liabilities ....................................................... 140

Combining Statement of Changes in Fiduciary Assets and Liabilities .................................... 141

STATISTICAL SECTION:

Net Assets by Component.................................................................................................................. 144

Changes in Net Assets ....................................................................................................................... 145

Fund Balances, Governmental Funds ................................................................................................ 147

Changes in Fund Balances, Governmental Funds ............................................................................. 148

Property Taxes Levies and Collections.............................................................................................. 149

Assessed Value of Taxable Property ................................................................................................. 150

Property Tax Rates – Direct and Overlapping Governments............................................................. 151

Principal Property Tax Payers............................................................................................................ 152

Legal Debt Margin Information ......................................................................................................... 153

Ratio of Net General Obligation Bonded Debt to Taxable Assessed Value and Net

General Obligation Bonded Debt per Capita ................................................................................... 154

Ratio of Outstanding by Debt by Type .............................................................................................. 155

Overlapping Bonded Debt ................................................................................................................. 156

Ratio of General Bonded Debt Outstanding ...................................................................................... 157

Demographics and Economic Statistics ............................................................................................. 158

Principal Employers........................................................................................................................... 159

Miscellaneous Statistical Information................................................................................................ 160

Operating Indicators by Function ...................................................................................................... 161

Capital Assets by Function ................................................................................................................ 162

Full-time Equivalent County Government Employees by Function/ Program .................................. 163

GLOSSARY:

Glossary to the Comprehensive Annual Financial Report ................................................................. 165 iii

(This Page Intentionally Left Blank)

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December 29, 2008

To the Citizens of Butte County, California

Dear Citizens:

The Comprehensive Annual Financial Report (CAFR) of the County of Butte (County) for the fiscal year ended June 30, 2008, is hereby submitted in compliance with Sections 25250 and 25253 of the

Government Code of the State of California. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the County. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and present fairly the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the County, as of June 30, 2008, and the respective changes in financial position and cash flow, where applicable, thereof for the fiscal year then ended. All disclosures necessary to enable the reader to gain an understanding of the County’s financial activities have been included.

This letter of transmittal is designed to complement the Management’s Discussion and Analysis (MD&A) and should be read in conjunction with it. The County’s MD&A can be found on pages 3 through 12 of this report.

The financial reporting entity of the County includes all the funds of the primary government (i.e., Butte

County as legally defined), as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable.

Blended component units, although legally separate entities, are, in substance, part of the primary government’s operations and are included as part of the primary government. Accordingly, certain districts and agencies accounted for in the Special Revenue and Trust and Agency Fund Types are reported as part of the primary government.

For a more detailed overview of the County’s component units see the Notes to the Basic Financial

Statements.

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PROFILE OF THE GOVERNMENT

One of the State’s original 27 counties, the County was established by an act of the State Legislature on

February 18, 1850. The County is located in the northern portion of the Sacramento Valley. Rising from the Sacramento River, the County’s western boundary, to the Sierra Nevada Mountains, its eastern perimeter, the County’s 1,665 square miles range in elevation from sixty feet to over 7,000 feet resulting in a considerable variation in climate. There are five incorporated cities/town located within the County:

Biggs, Chico, Gridley, Oroville, and Paradise. The County’s population is 220,407 with approximately

38% of the residents living in the unincorporated area.

Policymaking and legislative authority is vested in the County Board of Supervisors (the Board), which consists of an elected supervisor from each of five districts. The Board is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and appointing the County

Administrative Officer (CAO), and appointing non-elected department heads. Supervisors are elected to four-year staggered terms with two supervisors being elected in Gubernatorial-year elections and three supervisors being elected in Presidential elections. The County Charter designates that certain officers are elected. These officials are responsible for the offices of the County Clerk-Recorder, Assessor, Auditor-

Controller, District Attorney, Sheriff-Coroner, and Treasurer/Tax Collector.

The County provides a full range of services including law enforcement; health and sanitation; the construction and maintenance of highways, streets, and infrastructure assets; prosecution; jail; juvenile hall; elections; libraries; social services; and administration.

MAJOR INITIATIVES

Butte County is undertaking several major initiatives notwithstanding significant fiscal limitations:

Improvements to Information Systems Paves the Way to Future Savings

During the prior fiscal year the County made an upgrade to the Pentamation Financial Management

System. This upgrade provides increased efficiency, access to reports, and data previously unavailable.

The County’s Information Systems department continues to work diligently with all departments to provide additional streamlining of data processing.

Financial Management Options Committee

A Financial Management Options Committee (Committee) was created during the 2006/2007 fiscal year to consider a restructuring of the Auditor-Controller, Treasury-Tax Collector, General Services, and

Administration’s duties. The Committee recommended the creation of a financial management division within the Administrative Office managed by a Chief Financial Officer to improve the accountability and effectiveness of county government, while also emphasizing their belief in the importance of checks and balances provided by an elected Auditor-Controller.

During the 2007/2008 fiscal year, the process began to set in place the creation of a Chief Financial

Officer and staff within the Administrative Office. At present, the transition of staff and related duties continues.

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Federal Energy Regulatory Commission (FERC) Relicensing of Oroville Dam

The Lake Oroville Project (Project), which lies primarily within the unincorporated area of Butte County, has been called the “crown jewel” of the State Water Project. The Project, which has been in operation since 1968, includes Oroville Dam and Reservoir, three power plants, the Thermalito Diversion Dam, the

Feather River Fish Hatchery and Fish Barrier Dam, Thermalito Power Canal, Oroville Wildlife Area, the

Thermalito Forebay and Dam, the Thermalito Afterbay and Dam, transmission lines, and a number of recreation facilities. The Project covers 41,000 acres of land and is owned by the California Department of Water Resources (DWR), on which the State pays no property taxes. If the land were owned by a private entity or individual, it would produce approximately $6,900,000 in property taxes each year.

While the Project generates in excess of $100,000,000 of revenue each year for DWR, and DWR and its water contractors receive other electricity and water benefits from the Project worth approximately

$1,000,000,000 dollars each year, Butte County and its residents are left paying for over $4,500,000 in services provided to the Project area and its visitors. In essence, the County and its taxpayers have been forced to subsidize Project operations for the State, leaving less revenue to provide services for the people who actually pay for the services, the residents of Butte County.

Butte County provides the following services to the Project and its visitors:

• Law Enforcement/Criminal Justice Services, including general police response, investigation and patrol services; special police operation unit services (e.g., emergency ordinance disposal team, special weapons and tactics team, canine unit, aviation unit, dive and rescue team, and narcotics task force); jail services; prosecution services; probation department services; and public defender services;

• Fire and Rescue Services, including all rescue services (e.g., emergency medical response, rescue teams, vehicular accident responses, water rescue response, and animal rescue); general fire department services

(including responding to structural, grass, refuse, and vehicle fire events); and specialized services, including responses by the County's Interagency Hazardous Materials Team ("HazMat Team"), Technical

Rescue Team, Drowning Accident Rescue Team, Vehicle Extraction Team, and the Critical Incident

Stress Debriefing Team;

• Communications Services, including the equipment and technology that allow the various safety-related agencies to respond to requests for assistance at the Project;

• Public Works - Road Services, including the construction and maintenance of roads serving the Project and responding to increased air quality and water pollution impacts due to this road usage;

• Emergency Operations Center (EOC) and Services, including EOC services and the provision of facilities used by County, state and federal agencies to respond to threatened and actual floods and other disaster events; and

• Health and Human Services, including, but not limited to, welfare payments and services, medical payments for children and the elderly, and assistance to families.

In addition to the cost of providing these services to Non-Resident Visitors, as individual demand is presented, it is important to note that the Project requires that public safety and rescue services, including manpower, training and equipment, be available to the Project 24 hours per day, 365 days per year, so that those services might be immediately deployed as demand arises.

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FACTORS AFFECTING FINANCIAL CONDITION

Butte County Fire Storm

Between June 10 and July 29, 2008, Butte County was ravaged by a series of fires unprecedented in

County history. During the 49-day siege, thousands of residents were evacuated, hundreds lost their homes, and entire communities were transformed. Butte County mobilized an unmatched response to the suffering caused by the fires.

Total estimated costs may exceed $6.2 million. However, due to FEMA’s denial of a Major Disaster

Declaration, the County will likely only receive approximately $2 million in reimbursement from this source, of which $1.1 million is expected to be received in fiscal year 2008-09. The balance of the funds, if not recouped by some other legislative or federal administrative means, will have a serious impact on local services, at a time when the County is still vulnerable to other disasters.

Butte County may be burdened with an unreimbursed balance of over $4.2 million in related fire costs.

Most of these costs have already been accounted for in an analysis of department budgets, but some costs are not yet fully realized and/or not yet budgeted.

Fiscal Year 2008-2009 First Quarter Financial Forecast

Similar to the vast majority of public agencies and private enterprises around the globe, Butte County is experiencing financial crises involving swells of instability in the financial markets, significant delays of cash reimbursement from the State of California for services provided on their behalf, and a budget challenge deeper than the County has seen in decades.

The global financial crisis of 2008 is expected to cause a deep global economic recession in 2009 that will drive down revenues for years to come. All the while, the State of California appears to be unwilling or maybe unable to truly balance its own budget deficits.

Many long-term financial challenges are occurring concurrently and deepening suddenly. The State of

California has been withholding over ten million dollars owed to Butte County for services rendered on the State’s behalf. It has caused a cash crunch that is demanding extraordinary cash management efforts be performed by the Finance, Treasurer/ Tax Collector, and Auditor-Controller offices. Because of the global liquidity crisis in the financial markets, the State of California and others, including Butte County, do not have access to additional credit at affordable rates. This credit crunch requires staff to seek Board of Supervisors approval for short-term cash flow borrowing between county operating and internal service funds to ensure sufficient operating capital through the end of the fiscal year. And, last but not least concerning, the County is expecting a $10 million budget shortfall in tax revenues, interest earnings, other revenues and unanticipated expenses this fiscal year.

Economy-driven impacts to County provided programs and services will be less severe with proactive management of the County’s budget. A broad array of immediate actions will be taken to ensure sufficient liquidity, by curtailing spending, improving revenue collections, and adjusting to a new economic condition. Actions may include increased advocacy, internal borrowing, extraordinary reviews of proposed hiring, a stringent purchase and contract review procedure, deferment of capital projects, and required cost reductions. viii

While analysis finds substantial department budget shortfalls, which will likely reduce the County

General Fund contingency to near zero by the end of the 2008-09 fiscal year, the most concerning trend is the sharp drop in tax and other discretionary revenue trends. Several key revenues are on track to be about $6 million less than originally anticipated. The cause for the estimated $6 million shortfall rests entirely on the recently sharpening downturn in the state and local economies. The state, national, and global economies have fallen sharply and the general prognosis, among economists at all levels, is that we are entering into a deepening and prolonged global recession.

County tax receipts typically lag behind economic activity, ranging from 6 months for sales taxes to more than a year for property taxes. Economic activity is expected to continue to decline more in 2009 compared to 2008. Staff is forecasting further declines in revenues next fiscal year than the County is experiencing this fiscal year. The following fiscal year looks equally bleak or worse, due to the property tax collections lag following re-evaluations, and recent news from the California Public Employees’

Retirement System (CalPERS) that the County can expect a 4% of payroll cost increase to the County’s pension obligations beginning July 1, 2011, if CalPERS’ current 21% asset loss holds up through the balance of the fiscal year.

The State of California has recently revised their current budget deficit from $10 billion to $14 billion.

State financial forecasters are clearly responding to similar revenue decline trends and economic data that the County and other California agencies are observing. Since the County relies heavily on State subventions for most of its budget, staff expects additional risk and potentially additional budgetary impacts this fiscal year, if and when the State comes to terms with its increasing budget deficit.

One action that the State Legislature may feel pressured to take is to suspend Proposition 1A and, subsequently, transfer County property tax revenues away from the County this fiscal year. The impact to the County certainly depends on the prescribed methodology but, based on past methods the impact would probably be about a $3 million additional general purpose revenue loss this fiscal year.

The Administrative, Finance, Treasurer/Tax Collector and Auditor-Controller offices were joined by fiscal staff in all County departments to conduct a thorough review of the County’s financial condition, including current year budgetary status, cash situation, credit position, and its outlook for the new budget year commencing July 1, 2009. The County is not alone in facing these unprecedented challenges on three tough financial fronts. Governments and businesses, at all levels worldwide, are facing these same challenges. The review of all three fiscal arenas concludes with the following findings:

The County needs to conduct internal short-term cash borrowing to ensure sufficient cash for daily operations through June 30, 2009.

The County, and other municipalities, will have new challenges when seeking cash flow loans and selling bonds for capital, pension, and/or other obligations. Staff efforts will need to be redirected to minimize new credit costs.

The remaining $3 million of General Fund contingency will be needed to offset unanticipated department expenses and under-realized department revenues. Much of these adjustments are due to the summer fire responses and recovery efforts.

The County needs to find an additional $6 million in General Fund budgetary solutions this fiscal year, due to the sharp economic downturn’s impact on tax and other discretionary revenues. Since the County is a service organization that must maintain a balanced budget, these solutions are expected to significantly impact important services, County residents, other customers and County employees.

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The County is facing a structural budget deficit next fiscal year that is currently estimated to be at $10 million. This estimate will be revised after the first installment of property taxes is collected in December and closure of the second quarter.

The County is fortunate to have an experienced Board of Supervisors and professional staff to lead our community through these very difficult financial challenges. Collectively, the County will fully and comprehensively respond to the economic downturn, while minimizing short and long-term impacts. We will need to wrestle with the State of California over their delays in reimbursements. We will need to contemplate all ideas for solutions, leaving no rock unturned.

Internal Control

The management of the County is responsible for establishing and maintaining internal controls designed to ensure that the assets of the government are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. Internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) choices between these two concepts often require estimates and judgments by management.

Single Audit

As a recipient of federal and state financial assistance, the County is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-profit

Organizations. Information related to this single audit, including the schedule of federal awards, findings and questioned costs, and the independent auditor’s report on internal control and compliance. The

County is also responsible for ensuring that adequate internal controls are in place to ensure compliance with applicable laws and regulations related to those programs. Internal controls are subject to periodic evaluation by management and the Auditor-Controller Division’s internal audit staff. The 2007-08 Single

Audit will be issued under separate cover and will be available by contacting the Auditor-Controller’s office, after March 31, 2009.

Budgeting Controls

In addition to accounting controls, the County maintains budgetary controls. The objective of these controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Board of Supervisors.

In accordance with the provisions of Sections 29000 and 29143, inclusive, of the California Government

Code and other statutory provisions, commonly known as the County Budget Act, the County prepares a budget for each fiscal year on or before August 30. Budgeted expenditures are enacted into law through the passage of an Appropriation Ordinance. This ordinance mandates the maximum authorized expenditures for the fiscal year and cannot be exceeded except by subsequent amendments to the budget by the County’s Board of Supervisors.

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An operating budget is adopted each fiscal year for all Governmental Funds except for the Butte County

Air Quality Management District. Expenditures are controlled at the object level within budget units for the County. The object level within a budget unit is the level at which expenditures may not legally exceed appropriations. Any amendments or transfers of appropriations between object levels within the same budget unit or between departments or funds are authorized by the County Chief Administrative

Officer’s office and must be approved by the Board of Supervisors. The Board of Supervisors must approve supplementary appropriations normally financed by unanticipated revenues during the year.

Pursuant to Board Resolution, the County Chief Administrative Officer is authorized to approve transfers and revision of appropriations under $50,000 within a single budget unit as deemed necessary and appropriate. Budgeted amounts in the budgetary financial schedules are reported as originally adopted and are amended during the fiscal year by resolutions approved by the Board of Supervisors.

The County uses an encumbrance system as an extension of normal budgetary accounting for the general, special revenue, and other debt service funds and to assist in controlling expenditures of the capital projects funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as reservations of fund balance since they do not constitute expenditures or liabilities. Encumbrances are combined with expenditures for budgetary comparison purposes.

The County also maintains an encumbrance accounting system as one technique of accomplishing budgetary control and cash planning. Open encumbrances at June 30, 2008, for all governmental fund types are reported as reservations of fund balances. Unencumbered appropriations lapse at the end of each fiscal year.

Cash Management

Cash temporarily idle during the year was invested in the Local Agency Investment Fund (LAIF) managed by the California State Treasurer’s Office, CalTrust a California public agency investment trust, certificates of deposits, and Federal Agency investments.

The first and primary objective of the Treasurer’s investment of public funds is to safeguard investment principal; second, to maintain sufficient liquidity within the portfolio to meet daily cash flow requirements, and third, to achieve a reasonable rate of return or yield on the portfolio consistent with these objectives. The portfolio is actively managed in a manner that is responsive to the public trust and consistent with State law.

Restrictive investment policies are in place to minimize credit and market risks while maintaining a competitive yield on the portfolios. The County Treasurer’s selection of investments is more restrictive than those authorized in Sections 53601 and 53635 of the California Government Code and gives primary consideration to the safety and preservation of the principal amounts invested. On-going cash flow projections are maintained for the coming twelve months to assure that adequate funds are available to meet daily cash expenditure requirements.

State statutes, specific debt financing indentures and contractual arrangements generally determine the investment restrictions of County cash and investments not held in the County Treasury.

xi

In accordance with Governmental Accounting Standards Board (GASB) Statement No. 31, Accounting

and Financial Reporting for Certain Investments and External Pools, school districts and special district external investments pools are reported as investment trust funds. Of the Treasurer’s total cash and investments pool of $394,021,450 at June 30, 2008, $267,168,930 relates to the external investment pool participants. See page 40, Note 2, Cash and Investments for more detail.

Risk Management

The County self-insures for property damage, liability, workers’ compensation, unemployment, and dental insurance claims. Self-insurance transactions are accounted for in Internal Service Funds. It is the

County’s policy to fund current self-insurance liabilities for Governmental Funds by making provisions in the budget of the succeeding year. Proprietary premium charges are expensed in the year incurred.

Employee Benefit Plans

The County participates in and contributes to the employee retirement plans with CalPERS, an agent multiple-employer defined benefit retirement plan that acts as a common investment and administrative agent for various local and state governmental agencies within the state. CalPERS provides retirement, disability, and death benefits based on the employees’ years of service, age, and final compensation.

Copies of the CalPERS’ annual financial report are available through CalPERS.

Post-retirement Health Care Benefits

The County provides post-retirement health insurance benefits, in accordance with County ordinance, to employees who retire from the County before attaining age 65 with at least ten (10) years or more of cumulative service with Butte County who, upon termination, immediately retire under the provisions of the County's contract with the Public Employees' Retirement System. Such employees shall be eligible for the health benefit only coverage for themselves (employees only) to Medicare Supplemental

Qualifying Age. Under the certain conditions, CalPERS members shall be entitled to twelve (12) months of reimbursable health premiums immediately following retirement. In addition, miscellaneous members are permitted one of the following choices: 1) to receive one (1) month of reimbursable health only premium for each day of sick leave on accrual at the date of retirement; or 2) to receive one (1) month of reimbursable health only premium for each two and one-half (2 1/2) days in excess of thirty (30) days accrued sick leave to cover both employee and spouse to Medicare Supplemental Qualifying Age; or 3) one (1) month of reimbursable health plan benefits (employee only) will be granted for each day of accrued sick leave until the sick leave credit is exhausted or the employee reaches Medicare Supplemental

Qualifying Age; and one (1) month of reimbursable health plan benefits for each one and one-half days in excess of thirty (30) days accrued sick leave to cover employee's spouse until the sick leave credit is exhausted or spouse reaches Medicare Supplemental Qualifying Age.

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COUNTY OF BUTTE

BOARD OF SUPERVISORS AND PRINCIPAL COUNTY OFFICIALS

June 30, 2008

Board of Supervisors

Bill Connelly

Jane Dolan, Vice Chair*

Maureen Kirk

Curt Josiassen, Chair*

Kim K. Yamaguchi Fifth

*Chosen annually at the first meeting in January.

County-wide Elected Officials

Assessor

Auditor-Controller

Clerk/Recorder

Kenneth O. Reimers

David A. Houser

Candace Grubbs

Sheriff-Coroner

Mike Ramsey

Perry Reniff

C. Linda Barnes

Appointed Officials

Chief Administrative Officer C. Brian Haddix

Bruce Alpert

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xv

Certificate of

Achievement for Excellence in Financial

Reporting

Presented to

County of Butte

California

For its Comprehensive Annual Financial Report for the Fiscal Year Ended

June 30, 2007

A Certificate of Achievement for Excellence in Financial

Reporting is presented by the Government Finance Officers

Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting.

President

Executive Director

xvi

Financial Section

Management’s Discussion and Analysis

The information in this section is not covered by the Independent Auditor’s Report. It is presented as required supplementary information for the benefit of the readers of the Comprehensive Annual Financial Report.

I.

In this section of the County of Butte’s (County) Comprehensive Annual Financial Report, the County’s management discusses financial results for the fiscal year ended June 30, 2008. It should be read in conjunction with the County’s financial statements following this section. All dollar amounts are expressed in thousands in the text and tables unless otherwise indicated.

FINANCIAL HIGHLIGHTS

The assets of the County exceeded its liabilities at the close of the most recent fiscal year by

$364,638 (net assets). Of this amount, $29,822 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors.

The government’s total net assets decreased by $22,403 during the fiscal year.

As of June 30, 2008, the County’s governmental funds reported combined ending fund balances of

$73,606, a net decrease of $10,743 in comparison with the prior fiscal year. This net decrease represents an increase of $30,250 in reserved fund balances, a decrease of $27,735 in designated fund balances, and a decrease of $13,258 in unreserved, undesignated fund balances, which may be used to meet the government’s ongoing obligations to citizens and creditors.

At the end of the current fiscal year, the unreserved, undesignated fund balance for the general fund was $10,160 or 10.5% of total general fund expenditures.

The County’s total long-term obligations as of June 30, 2008 decreased by $3,221 over the prior period. The key factor in the decrease was the retirement of $640 in Certificates of Participation notes, the retirement of $5,765 in Pension Obligation Bonds, and the retirement of $370 in capital lease obligations. Payment of other principal obligations throughout the fiscal year contributed a portion of the overall decrease.

II.

A.

OVERVIEW OF THE FINANCIAL STATEMENTS

GASB 34 Financial Report Model

The County of Butte has adopted a financial reporting model that is designed to demonstrate government accountability by presenting both a long-term and a near-term view of its finances. This model is prescribed by Statement Number 34 of the Government Accounting Standard Board (GASB 34). This model is comprised of three parts: 1) Management’s Discussion and Analysis which provides the financial highlights; 2) The County’s basic financial statements, which consist of the Government-Wide financial statements; the Fund financial statements, and the Notes to the financial statements; and 3)

Required Supplementary Information.

B. Government-Wide Financial Statements

The government-wide financial statements provide an overview of the County’s finances, in a manner similar to a private-sector business that is, using the accrual basis of accounting. They demonstrate accountability of Butte County by showing the extent to which it has met operating objectives efficiently and effectively, using all resources available, and whether it can continue to do so.

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The statement of net assets presents information on all of the County’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the County is improving or deteriorating.

The statement of activities presents information on expenses and revenues to show how the government’s net assets changed during the fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues are reported as soon as earned and expenses are reported as soon as incurred even though the related cash flows may not take place until future fiscal periods (e.g., earned but unused vacation leave).

Both of these government-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities) The governmental activities of the County include general government, public protection, public ways and facilities, health and sanitation, public assistance, education, and recreation. The business-type activities of the County include the Butte County Neal Road Landfill and

Butte County Transit Funds.

Certain component units such as county service areas are essentially part of County operations and their financial data are blended in with operational funds of the County.

C. Fund Financial Statements

The fund financial statements provide evidence of accountability by demonstrating compliance with budgetary decisions made in public forum. A fund is a grouping of related accounts that are used to maintain control over resources that have been segregated for specific activities or purposes stipulated by laws, regulations or policies. The funds of the County are divided into three categories: governmental, proprietary, and fiduciary.

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 government’s near-term financing requirements.

The County maintains 143 individual governmental funds. On the financial statements for governmental funds information is presented separately for five major funds: the General Fund, the Welfare Fund, the

Public Health Fund, the Behavioral Health Fund, and the Road Fund. Data from the other governmental funds are aggregated into a single column.

4

Proprietary funds are of two types. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses an enterprise fund to account for its central landfill operations. Internal service funds are used to accumulate and allocate costs internally among the County’s various functions. The County uses internal service funds to account for a variety of services including telephone services, insurance, information systems, duplicating, utilities, and facilities maintenance. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the governmentwide financial statements.

Proprietary funds statements provide the same type of information as the part of government-wide financial statements pertaining to business-type activities, only in more detail. The County’s internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements

Fiduciary funds are used to account for resources held for the benefit of parties outside the government.

Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the County’s programs. In the fiduciary fund category, the

County maintains both agencies funds and investment trust funds.

Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of the financial information provided in the government-wide and fund financial statements.

D. Required Supplementary Information

In addition to the basic financial statements, this report presents Required Supplementary Information.

The required supplementary information is presented concerning the County’s progress in funding its obligation to provide pension benefits to its employees and the County General fund budgetary comparison schedule and the major special revenue funds.

E.

Combining Statements and Schedules

The combining and individual fund statements and schedules referred to earlier provide information for nonmajor governmental funds, internal service funds, and fiduciary funds and are presented immediately following the required supplementary information.

5

III. FINANCIAL ANALYSIS COUNTY-WIDE

Table 1 – Net Assets (in thousands)

2007 2008 2007 2008 2007

Current and other assets

Capital assets

Total assets

Current and other liablilities

Long-term liabilities

Total liabilities

Net assets:

Invested in capital assets,

net of related debt

Restricted net assets

Unrestricted net assets

Total net assets

306,377

468,449

14,254

84,493

98,747

299,087

26,322

44,293

$ 163,559

286,612

450,171

21,025

83,455

104,480

280,126

46,000

19,565

$ 345,691

$ 18,706

14,759

33,465

2,332

13,794

16,126

1,793

4,083

11,463

$ 17,339

$ 17,315

17,011

34,326

701

14,678

15,379

4,390

4,300

10,257

$ 18,947

$ 180,778

321,136

501,914

16,586

98,287

114,873

300,880

30,405

55,756

$ 387,041

2008

$ 180,874

303,623

484,497

21,726

98,133

119,859

Change Change

$ 96

(17,513)

(17,417)

0.1 %

(5.5)%

(3.5)%

5,140

(154)

4,986

31.0 %

(0.2)%

4.3 %

284,516

50,300

29,822

$ 364,638

(16,364)

19,895

(25,934)

$ (22,403)

(5.4)%

65.4 %

(46.5)%

(5.8)%

Investment in capital assets net of related debt reflects the County’s investment in capital assets (i.e. its land, structures and improvements, infrastructure, and equipment). The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

Restricted net assets represent resources that are subject to external restrictions on how they may be used.

Unrestricted net assets represent 8.18% of the total net assets and may be used to meet the County’s ongoing obligations to citizens and creditors.

Beside the amount invested in capital assets, there are externally imposed debt service reserve and statutory constraints on the use of 100% of the restricted net assets.

6

The following table presents the activities that accounted for the changes in net assets.

Table 2 – The Change in Net Assets (in thousands)

2007

Governmental

Activit ies

2008

Business-type

Activities

2007 2008 2007

Total

2008

Revenues:

Program revenues:

Charges for services

Operating grants and contributions

Capital grants and contributions

General revenues:

Property taxes

Sales taxes

Other taxes and related revenues

Unrestricted grants and contributions

Unrestricted investment income

Miscellaneous revenues

$ 34,211

206,382

13,137

45,642

4,552

1,356

21,030

5,559

11,430

$ 35,943

214,120

12,981

47,929

4,007

989

21,299

5,367

12,932

$ 6,663

71

702

$ 5,982

108

1,004

$ 40,874

206,453

13,137

45,642

4,552

1,356

21,030

6,261

11,430

$ 41,925

214,228

12,981

47,929

4,007

989

21,299

6,371

12,932

Total revenues 343,299 355,567 7,436 7,094 350,735 362,661

Dollar

Change

Total

$ 1,051

7,775

(156)

2,287

(545)

(367)

269

110

1,502

11,926

Percent

Change

2.6 %

3.8 %

(1.2)%

5.0 %

(12.0)%

(27.1)%

1.3 %

1.8 %

13.1 %

3.4 %

Program expenses:

General Government

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Enducation

Culture and recreation services

Interest on long-term debt

Sanitation

Transit

Total expenses

19,087

87,501

34,624

64,268

135,872

3,117

604

4,315

349,388

20,866

96,664

40,000

72,458

142,125

3,394

375

3,696

379,578

4,403

389

4,792

5,486

5,486

19,087

87,501

34,624

64,268

135,872

3,117

604

4,315

4,403

389

354,180

20,866

96,664

40,000

72,458

142,125

3,394

375

3,696

5,486

385,064

1,779

9,163

5,376

8,190

6,253

277

(229)

(619)

1,083

(389)

30,884

9.3 %

10.5 %

15.5 %

12.7 %

4.6 %

8.9 %

(37.9)%

(14.3)%

24.6 %

(100.0)%

8.7 %

Excess or deficiency

(before any transfers)

Transfer

(6,089)

(9)

(24,011) 2,644

9

1,608 (3,445) (22,403) (18,958) 550.3 % n/a

Net increase (decrease)

in n et assets

(6,098) (24,011)

375,800 369,702

2,653

14,686

1,608

17,339

(3,445)

390,486

(22,403) (18,958)

387,041 (3,445)

550.3 %

(0.9)% Net assets, beginning

Net assets, ending $ 369,702 $ 345,691 $ 17,339 $ 18,947 $ 387,041 $ 364,638 $ (22,403) (5.8)%

The following highlights significant factors that affected the governmental and business-type activities and contributed to the decrease in net assets:

• Governmental Activities accounted for a decrease in net assets of $24,011, primarily due to current year depreciation expense of the County’s infrastructure (roads and bridges), which amounted to $23,573. The decrease was offset by a $2,287 increase in property taxes and a

$7,738 increase in operating grants.

• Business-Type Activities accounted for an increase in net assets of $1,608, primarily due to current year increases in operating grants for the Neal Road Landfill in the amount of $37 plus a

$302 increase in investment earnings.

7

Expenses and Program Revenues – Governmental Activities expenses - actual dollar amount program revenues - actual dollar amount

$160,000,000

$150,000,000

$140,000,000

$130,000,000

$120,000,000

$110,000,000

$100,000,000

$90,000,000

$80,000,000

$70,000,000

$60,000,000

$50,000,000

$40,000,000

$30,000,000

$20,000,000

$10,000,000

$-

Ge ner al go ver nm ent

Pu bli c p rot ect

Pu ion bli c wa ys an d f aci liti es

He alt h a nd

sa nit ati on

Pu bli c a ssi sta nce

Cu

Ed uc ati on ltu re and

re cre ati on

se

Int rvi ces ere st o n l on g-t erm

de bt

IV. FINANCIAL ANALYSIS OF FUNDS

As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with budgetary and legal requirements.

Governmental funds The general government functions are included in the General, Special Revenue,

Capital Project, and Debt Service Funds. Included in these funds are the special districts governed by the

Board of Supervisors. The focus of the County’s governmental funds is to provide information on nearterm inflows, outflows, and balances of spendable resources. Such information is useful in assessing the

County’s financing requirements. In particular, the unreserved fund balance may serve as a useful measure of the County’s net resources available for spending at the end of the fiscal year.

At June 30, 2008, the County’s governmental funds reported combined ending fund balances of $73,606.

Approximately 16.8% of this total amount ($12,351) constitutes the unreserved fund balance, which may be used to meet the County’s ongoing general obligations to citizens and creditors. The remainder of the fund balance is reserved to indicate that it is not available for general obligations because it has been committed in the form of prior year obligations (encumbrances), inventories, debt service reserves, or the funds have statutory restrictions.

8

The general fund is the main operating fund of the County. At June 30, 2008, the unreserved fund balance of the general fund was $10,252 while the total fund balance reached $25,876. As measures of the general fund’s liquidity, it is useful to note that the unreserved fund balance represents 10.6% percent of total fund expenditures, while the total fund balance represents 26.7% percent of that same amount.

The general fund’s fund balance decreased by $4,150 during the current fiscal year.

The welfare fund has a total fund balance of $3,321. Of this amount, $2,084 is reserved, and the balance of $1,237 is unreserved. The overall fund balance increased by $1,567 due to increase in welfare related aid.

The public health fund has a total fund balance of $18,220. Of this amount, $17,622 is reserved, and the balance of $598 is unreserved. The overall fund balance increased by $876 due to a decrease in expenditures during the current fiscal year.

The behavioral health fund has a total fund balance of $(5,694). Of this amount, $3,850 is reserved, and the balance of $(9,544) is unreserved. The behavioral health fund incurred a negative fund balance due to the State of California’s reduction to funding for behavioral health.

The road fund has a total fund balance of $11,517. Of this amount, $13,142 is reserved, and the balance of $(1,625) is unreserved. The overall fund balance increased by $616.

The following table presents revenues from various sources as well as reflecting increases or decreases from the prior fiscal year in the governmental funds.

Table 3 – Revenues in the Governmental Funds (in thousands)

FY 2007 FY 20 08 Change

Revenue Sources

T axes

L icenses and permits

Fines, fo rfeitures, and penalties

Use of mo ney and pro perty

Intergov ernmental

Charges fo r services

Other

T otal

Amo unt % o f total Amount

$ 5 2,3 84 15.2% $ 53,797

4,8 62

2,7 29

1.4%

0.8%

4,604

3,140

5,2 85

24 0,5 30

2 6,6 45

1 1,4 30

$ 34 3,8 65

1.5%

69.9%

7.7%

3.3%

10 0% $

4,983

248,377

27,758

12,932

355,591

% of total Amo unt % of change

15 .1% $ 1 ,4 13 2.7%

1 .3%

0 .9%

(2 58)

4 11

(5.3 %)

15.1%

1 .4%

69 .8%

7 .8%

3 .6%

100% $

(3 02)

7 ,8 47

1 ,1 13

1 ,5 02

11 ,7 26

(5.7 %)

3.3%

4.2%

13.1%

3.4%

County of Butte

General Fu nd Revenues

For th e Fiscal Year Ended June 30 , 2007

Intergovernmental

70%

Use of money and property

1%

Fines, forfeitures , and penalties

1%

Licenses and permits

1%

Taxes

15%

Other

4%

Charges for services

8%

9

Significant changes for major revenue sources are explained below.

• Taxes – Tax revenues include sales taxes and property taxes. The increase in tax revenues is due primarily to increased property taxes as a result of rising property values, as well as smaller increases in sales tax and property transfer tax revenues.

• Licenses and permits – Increased revenues from construction permits and planning application fees account for most of the increase noted in this revenue category.

• Fines, forfeitures, and penalties – Increase in court related fines and forfeitures.

• Use of money and property – Reflects increase due to the change in fair value of the County’s investments.

• Other – Increased revenue under other is primarily due to increase in reimbursements.

The following table presents expenditures by function compared to prior fiscal year’s amounts in the governmental funds.

Table 4 – Expenditures in the Governmental Funds (in thousands)

FY 2007 FY 20 08 Change

Function

General government

Pub lic pro tection

Pub lic ways and facilities

Health and sanitation

Pub lic assistance

Education

Culture and recreation services

Debt serv ice

Total

Amount % of to tal Amou nt % o f total Amount % of change

$ 20,441 6 .0% $ 21,641 5.9% 5.5%

89,379 26 .2% 97,513 26.5% 8 ,13 4 8.3%

17,037

65,632

1 37,501

3,056

476

7,082

$ 3 40,604

5 .0%

19 .3%

40 .4%

0 .9%

0 .1%

2 .1%

100%

18,547

72,966

1 42,598

3,397

575

10,375

5.0%

19.8%

38.8%

0.9%

0.2%

2.8%

10 0%

1 ,51 0

7 ,33 4

5 ,09 7

34 1

9 9

3 ,29 3

$ 27 ,00 8

8.1%

10.1%

3.6%

10.0%

17.2%

31.7%

7.3%

P ublic ass istance

38%

Education

1%

Culture and recr eatio n s er vices

0%

D ebt service

3%

G ener al g overnment

6%

P ublic pro tectio n

27%

Health and s anitation

20%

P ublic w ays and facilities

5%

10

Significant changes for major functions are explained below.

• Culture and recreation – The increase in this function is due to the increase in purchases for book and periodical purchases for libraries.

• Debt service – The increase in this function is due to the County paying down the entire remaining balance of the Pension Obligation Bonds Series C.

V.

Proprietary funds The County’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The funds include the enterprise funds: the

County Central Landfill Fund; and the internal service funds, which are presented in aggregate.

The Landfill fund has total net assets of $18,947. Of this amount, $4,390 is invested in capital assets, net of related debt, $4,300 is restricted, and the balance of $10,257 is unreserved. Overall net assets increased by $1.6 due to an increase in investment earnings and operating grants.

GENERAL FUND BUDGETARY HIGHLIGHTS

Differences between the original budget and the final amended budget for revenues were an increase of

$2,980. This increase was due to the County anticipating additional aid from other governments that was not originally anticipated.

During the fiscal year, actual revenues were less than budgetary estimates by $2,869. The main reason for the decrease was that licenses and permits were $1,860 less than the estimated amount due to decreased development permits. Plus, revenues from other governments decreased $2,039 less than estimated amount due to decreases in grant revenues. Actual expenditures and transfers were less than budgetary estimates by $19,068. The net effect of under-realization of revenues and under-utilization of appropriations resulted in a favorable variance of $16,200.

VI. CAPITAL ASSETS AND DEBT ADMINISTRATION

A. Capital Assets

The County’s investment in capital assets for its governmental and business-type activities as of June 30,

2008, amounts to $303,623 (net of accumulated depreciation). This investment in capital assets includes land, structures and improvements, equipment, construction-in-progress, and infrastructure. The total decrease in the County’s net investment in capital assets for the current period was 5.5%. The decrease resulted from infrastructure depreciation exceeding infrastructure assets acquired by $21,163.

Additional information on the County’s capital assets can be found in the Notes to the Financial

Statements section of this report on page 49, note 5 – Capital Assets.

Key events affecting capital assets during the fiscal year included the following:

• Construction in progress capital assets being transferred structures and improvements and equipment.

11

• For government-wide financial statement presentation, all depreciable capital assets were depreciated from acquisition date to the end of the current fiscal year. Fund financial statements record capital asset purchases as expenditures.

Table 5 – Capital Assets (Net of Depreciation) (in thousands)

L and

Structures & imp rov ements

E quipment

Infrastructure

Co nstruction in progress

T otal

Go vernmental activities

200 7 20 08

44,56 9

13,29 0

$ 3 ,40 6

44 ,18 3

14 ,58 1

245,99 4

60 1

222 ,94 3

1 ,50 0

$ 286 ,61 3

Business-type activities

200 7 2 008

$ 488

100

2,355

$ 488

97

2,055

$

1 1,817

1 4,760 $

14,371

17,011

T otal

2007

$ 2,411

44,669

15,645

2008

$ 3,894

44,280

16,636

245,994

12,418

$ 321,137

222,943

15,871

$ 303,624

Long-Term Obligations B.

At June 30, 2008, the County had total long-term obligations outstanding of $95,065 consisting of

$14,675 in Certificates of Participation, capital lease obligations of $1,153, bonds payable of $50,575, loan payable of $400, and notes payable of $2,703. Additional long-term liabilities include compensated leave payable of $16,685, actuarial claims liability of $5,249 for general insurance and worker’s compensation self insurance, landfill closure/post closure care liability of $1,930, and supplemental retirement benefits payable of $1,519.

Additional information on the County’s long-term liabilities can be found in the Notes to the Financial

Statements section of this report on page 51, note 7 – Long-Term Obligations.

VII. Fiscal Outlook

The County adopted its fiscal year 2008-2009 Final Budget in the total amount of $416,062, with a

General Fund Contingency Appropriation of $3,316. This represents decreased financing requirements of

$9,524 from the prior fiscal year, and a General Fund Contingency Appropriation decrease of $2,638. The

County will continue to face difficult fiscal challenges in the foreseeable future. Although the most critical fiscal uncertainty facing the County continues to be the impact on local government resulting from actions the State of California may take in addressing its own fiscal problems, declining revenues and increasing social service and indigent health caseloads due to the declining economy will also impact the ability of the County to maintain current service levels.

VIII. Request for Information

This financial report is designed to demonstrate accountability of the Butte County government by providing both long-term and near-term views of the County’s finances. Questions or comments regarding any of the information presented in this report or requests for additional financial information should be addressed to the Auditor-Controller, 25 County Center Drive, Oroville, CA 95965.

12

Basic Financial Statements-

Government-wide Financial Statements

ASSETS

Cash and investments

Cash and investments with fiscal agent

Imprest cash

Interest receivable

Accounts receivable

Due from other governments

Prepaid items

Deposits from others

Inventories

Internal balances

Receivables from external parties

Loans receivable

Net pension asset

Deferred debt issuance costs

Capital assets, net

Non-depreciable

Depreciable assets, net

Total assets

LIABILITIES

Liabilities:

Accounts payable

Salaries and benefits payable

Deposits payable

Unearned revenue

Accrued interest

Other postemployment benefits

Long term liabilities:

Due within one year

Due in more than one year

Total liabilities

NET ASSETS

Invested in capital assets, net of related debt

Restricted for:

General restrictions

County Service Areas

Other purposes

Debt service

Landfill post-closure care requirements

Unrestricted

Total net assets

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF NET ASSETS

JUNE 30, 2008

Governmental

Activities

Primary Government

Business-type

Activities Total

$ 80,532,993

3,771,864

85,845

760,460

4,722,264

19,030,042

77,896

52,797

451,342

(11,113)

447,747

1,688,637

51,422,858

525,441

4,906,164

281,706,363

450,171,600

7,042,714

6,140,547

97,392

7,690,112

54,654

3,067,312

6,368,815

74,018,707

104,480,253

280,126,245

32,574,438

5,694,483

1,407,021

6,323,784

19,565,376

$ 345,691,347

$ 15,201,961

1,504,307

2,800

138,754

162,398

11,113

294,413

14,858,947

2,151,668

34,326,361

405,389

52,748

243,575

121,232

14,556,612

15,379,556

4,389,846

4,300,259

10,256,700

$ 18,946,805

$ 95,734,954

5,276,171

88,645

899,214

4,884,662

19,030,042

77,896

52,797

451,342

447,747

1,688,637

51,422,858

819,854

19,765,111

283,858,031

484,497,961

7,448,103

6,193,295

97,392

7,690,112

298,229

3,067,312

6,490,047

88,575,319

119,859,809

284,516,091

32,574,438

5,694,483

1,407,021

6,323,784

4,300,259

29,822,076

$ 364,638,152

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

13

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF ACTIVITIES

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Functions/Programs

Primary government:

Governmental activities:

General government

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Education

Culture and recreation services

Interest on long-term debt

Total governmental activities

Business-type activities:

Sanitation

Total business-type activities

Total Butte County

Expenses

$ 20,865,771

96,664,267

39,999,631

72,458,490

142,125,227

3,394,070

374,615

3,696,005

379,578,076

Program Revenues

Operating

Charges for

Services

Grants and

Contributions

$ 20,463,697

6,000,509

3,547,975

5,176,893

543,906

89,362

120,209

35,942,551

$ 3,103,818

23,229,633

3,259,072

38,385,293

145,318,884

350,605

472,497

214,119,802

5,486,248

5,486,248

$ 385,064,324

5,981,595

5,981,595

$ 41,924,146

108,566

108,566

$ 214,228,368

General revenues:

Taxes:

Property taxes

Sales taxes

Other taxes and related revenues

Grants and contributions not restricted to specific programs

Unrestricted investment earnings

Miscellaneous

Total general revenues

Net assets, beginning

Change in net assets

Net assets, ending

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

14

Program

Revenues

Capital

Grants and

Contributions

Governmental

Activities

Net (Expense) Revenue and

Changes in Net Assets

Business-Type

Activities Total

$ 150,514

821,116

12,009,834

12,981,464

$ 12,981,464

$ 2,852,258

(66,613,009)

(21,182,750)

(28,896,304)

3,737,563

(2,954,103)

218,091

(3,696,005)

(116,534,259)

$ -

(116,534,259)

603,913

603,913

603,913

$ 2,852,258

(66,613,009)

(21,182,750)

(28,896,304)

3,737,563

(2,954,103)

218,091

(3,696,005)

(116,534,259)

603,913

603,913

(115,930,346)

47,928,940

4,006,588

989,470

21,299,136

5,367,056

12,932,121

92,523,311

(24,010,948)

369,702,295

$ 345,691,347

1,004,069

1,004,069

1,607,982

17,338,823

$ 18,946,805

47,928,940

4,006,588

989,470

21,299,136

6,371,125

12,932,121

93,527,380

(22,402,966)

387,041,118

$ 364,638,152

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

15

(This Page Intentionally Left Blank)

16

Basic Financial Statements-

Fund Financial Statements

COUNTY OF BUTTE, CALIFORNIA

BALANCE SHEET

GOVERNMENTAL FUNDS

JUNE 30, 2008

General Welfare

Fund Fund

Public

Health

Fund

ASSETS

Cash and investments

Cash and investments with fiscal agent

Imprest cash

Due from other funds

Interest receivable

Accounts receivable

Due from other governments

Due from external parties

Deposits from others

Inventory

Loans receivable

Total assets

$ 17,775,854

801,259

44,095

7,003,693

426,613

2,475,676

4,247,698

447,747

2,500

$ -

205,797

(20,828)

91,139

8,878,128

$ 33,225,135 $ 9,154,236

LIABILITIES AND FUND BALANCES

Liabilities:

Due to other funds

Accounts payable

Salaries and benefits payable

Deposits payable

Deferred revenue

Total liabilities

$ 2,391,107

2,188,817

2,530,971

238,110

7,349,005

$ 1,210,903

753,231

1,273,620

2,595,650

5,833,404

Fund balances:

Reserved for:

Encumbrances

Imprest cash

Deposits with others

Legislative/Grant restrictions

Debt service

Inventory

Unreserved:

Designated, reported in:

General fund

Undesignated, reported in:

General fund

Special revenue funds

Capital project funds

Total fund balances

Total liabilities and fund balances

4,164,873

44,095

2,500

10,611,120

801,259

1,599,255

484,315

$

91,826

10,160,457

25,876,130

33,225,135

1,237,262

3,320,832

$ 9,154,236

500

249,559

9,423

892,886

1,573,272

$

1,314,475

500

16,307,697

46,115

155,845

491,699

289,634

983,293

597,765

18,220,437

Behavioral

Health

Fund

Road

Fund

Other

Governmental

Funds

Total

Governmental

Funds

$ 2,545,761

45,720

(5,534)

614,129

2,371,612

$ 10,967,964

50

24,858

99,009

833

1,302,212

293,954

$ 5,571,688 $ 12,688,880

$ 17,982,825

2,923,899

1,200

1,973,530

150,047

338,041

657,120

297

1,688,637

$ 25,715,596

$ 65,750,494

3,725,158

45,845

9,503,157

658,730

4,412,704

19,030,042

447,747

2,797

293,954

1,688,637

$ 5,418,244

1,107,541

981,212

$ 62,367

829,990

279,913

3,758,797

11,265,794 1,172,270

$ 1,056,867

1,407,620

384,669

3,392

2,496,558

5,349,106

$ 10,185,603

6,443,044

5,942,084

3,392

9,378,749

31,952,872

3,506,554

343,325

9,469,666

50

3,377,717

293,954

1,960,148

1,200

297

1,450,264

5,522,525

22,014,971

45,845

2,797

32,574,438

6,323,784

293,954

91,826

(9,543,985) (1,624,777)

(5,694,106)

$ 5,571,688 $

11,516,610

12,688,880

10,583,469

848,587

20,366,490

$ 25,715,596

10,160,457

1,249,734

848,587

73,606,393

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

17

COUNTY OF BUTTE, CALIFORNIA

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Amounts reported for governmental activities in the statement

of net assets are different because:

Fund balances-total governmental funds

Capital assets used in governmental activities are not financial resources and,

therefore, are not reported in the governmental funds. These assets consist of:

Land

Construction in progress

Infrastructure

Structures and improvements

Equipment

Less: accumulated depreciation

Total capital assets

In governmental funds, other long-term assets are not available to pay for current-period expenditures:

Net pension asset

Loans receivable

Governmental funds report the effect of issuance costs and similar items when debt is

first issued, whereas these amounts are deferred and amortized in the statement of

activities. This amount is the long-term debt issuance costs.

Interest payable on long-term debt does not require current financial resources, therefore, interest payable is not reported as a liability in the Governmental Funds

Balance Sheet.

Internal service funds are used by the county to charge the cost of liability,

malpractice, and worker's compensation insurance to individual funds. The

assets and liabilities of the internal service funds are included in governmental

activities in the statement of net assets.

Long-term liabilities applicable to the County's governmental activities are not

due and payable in the current period and accordingly are not reported as fund

liabilities. Interest on long-term debt is not accrued in governmental funds, but

rather is recognized as an expenditure when due. All liabilities are reported in the

statement of net assets. Balances as of June 30, 2008 are:

Certificates of participation

Bonds payable

Notes payable

Capital leases

Supplemental retirement benefit obligation

Other postemployment benefits

Compensated absences

Total long-term liabilities

Net assets of governmental activities

$ 73,606,393

$ 3,406,451

1,499,713

581,212,366

62,213,549

42,559,699

(406,348,739)

284,543,039

51,422,858

1,688,637

525,441

(54,654)

11,486,318

(2,650,000)

(50,575,340)

(2,702,602)

(1,133,680)

(1,518,509)

(3,067,312)

(15,879,242)

(77,526,685)

$ 345,691,347

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

18

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

General

Fund

Welfare

Fund

Public

Health

Fund

Behavioral

Health

Fund

Road

Fund

Other Total

Governmental Governmental

Funds Funds

REVENUES

Taxes

Licenses and permits

Fines, forfeitures, and penalties

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Total revenues

3,588,532

2,446,684

2,702,932

30,115,180

17,573,082

4,045,587

(17,661)

$ -

452,964

376,369

357,310

685,684

1,297,288

2,712,658

54,736

$ -

113,678

41,359

39,060,480

2,524,419

7,298

41,747,234

$ -

51,539

78,531

564,316

11,919,290

2,620,451

637,031

15,871,158

$ 872,240

511,463

124,554

1,334,713

14,356,062

1,641,645

6,890,181

25,730,858

$ 53,797,238

4,604,498

3,139,816

4,982,969

248,376,861

27,757,939

12,932,121

355,591,442

EXPENDITURES:

Current:

General government

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Education

Recreation and cultural services

Debt Service:

Principal

Interest

Total expenditures

18,077,149

77,021,192

385,059

302,329

475,632

30,019

466,553

96,757,933

818,109

22,293,994 47,728,742

17,346,968

47,728,742 17,346,968

3,563,551

19,673,399

1,200,457

2,943,563

21,640,700

97,512,700

18,547,425

72,966,299

142,597,681

3,397,317

574,995

3,094,988

99,363

6,744,935

3,133,171

48,456,672

6,774,954

3,599,724

367,611,795

Excess (deficiency) of revenues

over expenditures

OTHER FINANCING SOURCES (USES):

16,639,062

Sales of capital asset

Transfers in

Transfer out

Proceeds from inception of capital lease

Total other financing sources (uses)

18,822

131,447

(21,062,131)

123,162

(20,788,700)

1,518,745

47,746

47,746

Net change in fund balances (4,149,638) 1,566,491

Fund balances, beginning

Fund balances, ending

30,025,768 1,754,341

4,972 (5,981,508) (1,475,810) (22,725,814) (12,020,353)

2,731

868,708

871,439

876,411

17,344,026

(5,517,007)

137

464,364

464,501

(177,099)

8,181

2,153,172

2,161,353

685,543

10,831,067

433,636

20,663,362

(2,575,909)

18,521,089

463,507

24,328,799

(23,638,040)

123,162

1,277,428

(4,204,725) (10,742,925)

24,571,215 84,349,318

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

19

COUNTY OF BUTTE, CALIFORNIA

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE

GOVERNMENT-WIDE STATEMENTS OF ACTIVITIES

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

The schedule below reconciles the Net Changes in Fund Balances reported on the Government Funds Statement of

Revenues, Expenditures, and Changes in Fund Balances, which measure only changes in current assets and current liabilities on the modified accrual basis, with the Change in Net Assets of Governmental Activities reported in the

Statement of Activities, which is prepared on the full accrual basis.

$ (10,742,925)

Net change to fund balances-total governmental funds

Amounts reported for governmental activities in the statements of activities are different because:

Governmental funds reported capital outlay as expenditures. However, in the statement of activities, the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.

Capital outlay expenditures are therefore added back to fund balances

Depreciation expense not reported in governmental funds

Loss on sale of capital assets

Governmental funds the effect of the pension asset when first paid, whereas the amount is deferred and amortized in the statement of activities.

Decrease in pension asset

$ 8,493,880

(27,760,239)

(527,550) (19,793,909)

(592,278)

Repayment of long-term receivables is treated as revenue in governmental funds, but the repayment reduces long-term receivables in the Statement of Net Assets. Issuance of long-term receibables is treated as expenditures in th governmental funds, but the issuance increases long-term receibables in the Statement of Net Assets.

Change in loans receivable (413,519)

Debt proceeds provide current financial resources to governmental funds; however issuing debt increases long-term liabilities in the statement of net assets. Costs associated with the issuance of long-term debt are reported as expenditures in the governmental funds, but in the statement of net assets, the costs are deferred and amortized throughout the period during which the related debt is outstanding. Repayment of debt principal is an expenditure in the governmental funds, but in the statement of net assets the repayment reduces long-term liabilities.

Principal payments

Proceeds from inception of capital lease

Amortization expense of costs of issuance not reported

in governmental funds

6,774,954

(123,162)

(101,751) 6,550,041

Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available (net change).

Interest payable

Supplemental retirement benefit obligation

Other postemployment benefits

Compensated absences

Internal service funds are used by the County to charge the costs of liability, malpractice, and worker's compensation insurance to individual funds. The net revenue of internal service funds is reported with governmental activities.

5,470

1,518,509

(3,067,312)

(3,790,654) (5,333,987)

6,315,629

Change in net assets of governmental activities

$ (24,010,948)

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

20

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF NET ASSETS

PROPRIETARY FUNDS

JUNE 30, 2008

Landfill Total

Governmental

Activities

Internal Service

Funds

ASSETS

Current assets:

Cash and investments

Cash and investments with fiscal agent

Imprest cash

Due from other funds

Interest receivable

Accounts receivable

Due from external parties

Inventory

Deposits with others

Prepaid items

Total current assets

Noncurrent assets:

Deferred debt issuance costs

Capital assets:

Nondepreciable:

Land

Construction in progress

Depreciable:

Structures

Equipment

Less: Accumulated depreciation

Total capital assets, net

Total noncurrent assets

Total assets

LIABILITIES

Current liabilities:

Due to other funds

Interest payable

Accounts payable

Accrued salaries and benefits

Deposits payable

Compensated absences, current portion

Capital lease payable, current portion

Claims and judgments, current portion

COP payable, current portion

Loans payable, current portion

Total current liabilities

Noncurrent liabilities:

Compensated absences, noncurrent portion

Loans payable, less current portion

COP payable, less current portion

Claims and judgments, less current portion

Landfill closure/post-closure care costs

Total noncurrent liabilities

Total liabilities

NET ASSETS

Invested in capital assets, net of related debt

Restricted for landfill closure costs

Unrestricted

Total net assets

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

$ 15,201,961

1,504,307

2,800

21,496

138,754

162,398

17,031,716

$ 15,201,961

1,504,307

2,800

21,496

138,754

162,398

17,031,716

$ 14,782,499

46,706

40,000

1,029,894

101,730

309,560

157,388

50,000

77,896

16,595,673

294,413 294,413

488,133

14,370,814

488,133

14,370,814

121,695

4,182,338

(2,152,365)

17,010,615

17,305,028

34,336,744

121,695

4,182,338

(2,152,365)

17,010,615

17,305,028

34,336,744

5,225,172

(3,155,684)

2,069,488

2,069,488

18,665,161

10,383

243,575

405,389

52,748

38,000

19,687

13,545

50,000

833,327

10,383

243,575

405,389

52,748

38,000

19,687

13,545

50,000

833,327

358,561

599,670

198,463

94,000

203,745

2,400,000

3,854,439

88,720

350,000

12,187,538

88,720

350,000

12,187,538

475,404

2,849,000

1,930,354

14,556,612

15,389,939

1,930,354

14,556,612

15,389,939

3,324,404

7,178,843

4,389,846

4,300,259

10,256,700

$ 18,946,805

4,389,846

4,300,259

10,256,700

$ 18,946,805

2,069,488

9,416,830

$ 11,486,318

21

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS

PROPRIETARY FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Landfill Total

Governmental

Activities

Internal Service

Funds

OPERATING REVENUES

Charges for services

Landfill fees

Other revenue

Total operating revenues

$ -

5,955,979

25,616

5,981,595

$

5,955,979

5,981,595

-

25,616

$ 21,326,747

7,546,767

28,873,514

OPERATING EXPENSES

Salaries and employee benefits

Service and supplies

Claims and judgments

Operation and maintenance

Depreciation

Other expenses

Landfill closure/post-closure care cost

Total operating expenses

Operating income (loss)

1,440,171

3,315,540

536,559

(286,071)

5,006,199

975,396

1,440,171

3,315,540

536,559

(286,071)

5,006,199

5,558,704

8,196,903

7,483,413

485,302

602,450

22,326,772

975,396 6,546,742

NONOPERATING REVENUES (EXPENSES)

Intergovernmental 108,566

Interest income

Loss on disposal of capital assets

1,004,069

Interest expense

Total nonoperating revenues (expenses)

(480,049)

632,586

Net income (loss) before contributions

and transfers 1,607,982

108,566

1,004,069

(480,049)

632,586

23,541

384,087

(4,026)

403,602

1,607,982 6,950,344

Capital contributions

Transfers in

Transfers out

Change in net assets

Total net assets, beginning

1,607,982

17,338,823

1,607,982

17,338,823

56,044

28,548

(719,307)

6,315,629

5,170,689

Net assets, ending

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

22

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Landfill Total

Governmental

Activities

Internal

Service

Funds

CASH FLOWS FROM

OPERATING ACTIVITIES:

Cash receipt from customers

Cash paid to suppliers for goods and services

Cash paid to employees for services

Internal activities - payments from (to) other funds

Net cash provided (used) by operating activities

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES:

Aid from other governmental agencies

Transfers in

Transfers out

Net cash provided (used) by noncapital

financing activities

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES:

Payments related to the acquisition of capital assets

Principal paid on COP payable

Principal paid on capital lease

Principal paid on loans payable

Interest paid

Net cash provided (used) by capital and related

financing activities

$ 6,223,066

(3,396,112)

(1,411,259)

(45,392)

1,370,303

108,566

$ 6,223,066

(3,396,112)

(1,411,259)

(45,392)

$ 28,754,966

(16,012,962)

(5,430,284)

(481,197)

1,370,303

108,566

6,830,523

23,541

28,548

(719,307)

108,566

(2,787,197)

(13,545)

(283,155)

(50,000)

(521,266)

(3,655,163)

108,566 (667,218)

(2,787,197)

(13,545)

(283,155)

(50,000)

(521,266)

(463,165)

(3,655,163) (463,165)

CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received

Net cash provided (used) by investing activities

1,040,606

1,040,606

Net increase (decrease) in cash and cash equivalents (1,135,688)

Cash and cash equivalents, beginning 17,844,756

Cash and cash equivalents, ending

RECONCILIATION OF CASH AND CASH

EQUIVALENTS TO STATEMENT OF NET ASSETS:

Cash and investments

Cash and investments with fiscal agent

Imprest cash

$ 15,201,961

1,504,307

2,800

Total cash and investments

1,040,606

1,040,606

(1,135,688)

313,008

6,013,148

17,844,756

$ 15,201,961

1,504,307

2,800

313,008

8,856,057

$ 14,782,499

46,706

40,000

(continued)

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

23

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF CASH FLOWS (continued)

PROPRIETARY FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Landfill Total

Governmental

Activities

Internal

Service

Funds

Reconciliation of Operating Income (Loss)

to Net Cash Provided (Used) by Operating Activities:

Operating income (loss)

Adjustment to reconcile operating income (loss)

to net cash provided (used) by

operating activities:

Depreciation

Changes in assets and liabilities:

(Increase) decrease in:

Accounts receivable

Due from external parties

Due from other funds

Inventory

Prepaid items

Increase (decrease) in:

Accounts payable

Due to other funds

Accrued salaries and benefits

Deposits payable

Compensated absences

Landfill closure/post-closure cost

Claims and judgments

Net cash provided (used) by

operating activities

$ 975,396

536,559

$ 1,370,303

$

241,467

4

(7,688)

(80,572)

(37,704)

8,706

20,206

(286,071)

241,467

4

(7,688)

(80,572)

(37,704)

8,706

20,206

(286,071)

(119,210)

662

(394,048)

47,937

(53,137)

(5,996)

(87,149)

40,762

94,000

87,658

187,000

$

975,396

536,559

1,370,303

$

$

6,546,742

485,302

6,830,523

Noncash investing, capital, and financing

activities:

Contributions of capital assets from government

Trade in of capital assets

$ $ $ 56,044

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

24

ASSETS

Cash and investments

Imprest cash

Interest receivable

Accounts receivable

Due from other governments

Prepaid items

Deposits with others

Property tax receivable

Total assets

LIABILITIES

Due to other governments

Accounts payable

Salaries and benefits payable

Interest payable

Deferred revenue

Agency funds held for others

Total liabilities

NET ASSETS

Held in trust for pool participants

Total net assets

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

JUNE 30, 2008

Investment

Trust

$ 269,437,315

10,596

1,917,754

6,039,888

2,689

17,244

400,000

277,825,486

5,954

6,890,755

48,009

3,711,838

10,656,556

267,168,930

$ 267,168,930

Agency

Funds

$ 23,473,769

386,172

2,183,312

12,078,026

$ 38,121,279

$ 2,046,122

274,213

3,198,701

32,602,243

$ 38,121,279

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

25

COUNTY OF BUTTE, CALIFORNIA

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

INVESTMENT TRUST FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Additions:

Contributions to pooled investments

Interest and investment income

Total additions

Deductions:

Distribution from investment pool

Total deductions

Net increase

Net assets, beginning

Net assets, ending

$ 1,400,435,258

7,320,806

1,407,756,064

(1,374,545,935)

(1,374,545,935)

33,210,129

233,958,801

$ 267,168,930

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

26

Basic Financial Statement-

Notes to the Basic Financial Statements

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies

A. The Financial Reporting Entity

The County of Butte (the County), which was incorporated as a County in 1850 as one of the

State’s original 27 counties, is a legal subdivision of the State of California charged with governmental powers. The County’s powers are exercised through a Board of Supervisors, which, as the governing body of the County, is responsible for the legislative and executive control of the County. As required by accounting principles generally accepted in the United

States of America, these financial statements present the government and its component units; legally separate entities for which the County is considered to be financially accountable.

Financial accountability is demonstrated by the County Board of Supervisors acting as the governing board for each of the component units.

Blended component units, although legally separate entities are, in substance, part of the

County’s operations: therefore data from these units are combined with data of the primary government. Each blended component unit has a June 30, 2008 fiscal year-end.

In evaluating how to define the County for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in Governmental

Accounting Standards Board (GASB) Statement No. 14 “The Financial Reporting Entity.”

The Butte County Air Quality Management District (the District) is a blended component unit of the County. The District’s Board is composed of seven members, of which five members are the County’s Board of Supervisors. Financial statements of the District may be obtained by contacting the District or the County Auditor-Controller’s Office.

Based on the criteria established by GASB 14, as amended by GASB Statement No. 39, the reporting entity also includes the following blended component units, which are Special

Districts under control of the Board of Supervisors:

County Service Area (CSA) – Lighting

CSA #11 Durham CSA #14 East Chico

CSA #17 South Oroville – Las Plumas Park CSA #16 West Chico

CSA #12 Stirling City Lighting

CSA #27 Richvale

CSA #33 Oro-Wyandotte

CSA #62 Rancho De Thunder

CSA #75 North Park

CSA #36 Glen Haven

CSA #92 Rosewood Subdivision

CSA #78 Woodside

CSA #67 Vista Del Cerro

CSA #103 Morris Subdivision

CSA #85 Carriage Manor

CSA #161 Mulberry Street

27

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

1. Summary of Significant Accounting Policies (continued)

A. The Financial Reporting Entity (continued)

CSA – Drainage & Lighting

CSA #47 East and Guynn

CSA #76 Quail Run

CSA #79Big Chico Creek Estates

CSA #154 Forebay Vista

CSA #96 Silvertree Subdivision

CSA #97 Stoney Brook

CSA #101 Carriage Estates Subdivision

CSA #102 Meadowlark Acres

CSA #116 Pistachio Grove Estates

CSA #119 South Fork Estates

CSA #125 Willow Bend Subdivision

CSA #128 Wildflower Estates Subdivision

CSA #129 Orchard House Estates

CSA #133 Ceres Avenue Subdivision

CSA #120 Oak Way Park

CSA #177 Blossom Estates

CSA #181 Palm Crest Village Subdivision

CSA – Drainage

CSA #4 Sierra Del Oro

CSA #87 Keefer Road/Rock Creek

CSA #23 Pleasant Valley

CSA #24 Chico – Mud Creek

CSA #25 Shasta Union

CSA #92 Copley Acres

CSA #98 Oro Monte Estates

CSA – Sewer

CSA #21 Oakridge

CSA #82 Stirling City

CSA #141 Mountain Oaks Subdivision

CSA – Lighting & Maintenance

CSA #68 Crestwood

CSA #69 Lindo Gardens

CSA #71 Joshua Tree #2

28

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

A. The Financial Reporting Entity (continued)

CSA – Other

CSA #90 Southgate Acres Drainage and Fire Protection

CSA #26 Thermalito Sewer and Drainage

CSA #94 Sycamore Valley Sewer, Lighting, and Drainage

CSA #37 Gridley – Biggs Ambulance

CSA #31 Biggs (Schohr’s) Swimming Pool – Recreation

CSA #34 Gridley Swimming Pool – Recreation

CSA #114 County of Butte – Nitrate Study Plan

CSA #131 Walnut Manor – Lighting, Drainage, and Landscape

CSA #137 Durham-Dayton Industrial Partners for Extended Structural Fire Protection

CSA #149 Biggers Subdivision – Lighting, Drainage, and Snow removal

CSA #158 Ishi Valley Estates– Lighting, Drainage, and Fire

CSA #164 County of Butte – Animal Control

CSA #165 Justin Manor Subdivision – Lighting, Drainage, and Fire

CSA #135 Keefer Creek Estates – Lighting, Drainage, and Sewer

CSA #172 Autumn Park – Lighting, Drainage, and Fire

CSA #173 Melrose Estates – Lighting, Drainage, and Fire

CSA #174 Durham Land Estates – Lighting, Drainage, and Fire

CSA #169 Pheasant Landing #1 Subdivision and #2 – Lighting, Drainage, and Fire

CSA #169 Pheasant Landing #3 Subdivision – Lighting, Drainage, and Fire

Zone #4 of CSA #169 Sierra Moon Subdivision #1 – Lighting and Drainage

CSA #178 Twin Palms Subdivision – Lighting, Drainage, and Fire

CSA #179 Chambers & Speedway Subdivision – Lighting, Drainage, and Fire

CSA #163 Thorntee Industrial Park – Lighting, Drainage, and Fire

CSA #176 Pheasant Landing Estates #3 – Lighting, Drainage, and Fire

CSA #180 Red Hawk Ranch Subdivision – Lighting, Drainage, and Fire

CSA #183 Rare Earth Estates – Lighting, Drainage, and Fire

Excluded from the Reporting Entity

Local Board Governed Districts and School Districts: These potential component units have been excluded from the reporting entity. They are legally separate primary governmental units. The financial reporting for these governmental entities, which are independent of the

County, are limited to the total amount for cash and investments and the related fiduciary responsibilities of the County for disbursement of these assets. Activities of school districts and local board governed districts are administered by boards which are separately elected and which are independent of the County Board of Supervisors. The following local board governed districts and school districts have been excluded from the County’s financial statements:

29

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

A. The Financial Reporting Entity (continued)

Protection to Persons & Property Cemetery

El Medio Fire District

DWR – Maintenance Area #5

DWR – Maintenance Area #7

DWR – Maintenance Area #13

Bangor Cemetery

Gridley-Biggs Cemetery

Kimshew Cemetery

Oroville Cemetery

DWR – Maintenance Area #16 Paradise Cemetery

Pine Creek Cemetery

Thompson Flat Cemetery

Recreation Drainage

Chico Area Recreation & Park

Durham Recreation & Park

Feather River Recreation & Park

Paradise Recreation & Park

Richvale Recreation & Park

Butte Creek Drainage

Drainage District #1

Drainage District #2

Drainage District #100

Drainage District #200

Reclamation District #833

Rock Creek Reclamation District

Sacramento River Reclamation District

Health & Sanitation Other Districts

Butte County Association of Governments

Butte County Resource Conservation

School Districts

Butte County Fair

Buzztail Community Services

Berry Creek Community Services

Butte County Mosquito Abatement

Durham Mosquito Abatement

Oroville Mosquito Abatement

Richvale Sanitary Operating

Richardson Springs Community Services

These entities have separate elected boards and provide services to residents, generally within the geographic boundaries of the County. In addition, these entities are excluded from the reporting entity because they are not financially accountable to the County.

30

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

B. Basis of Presentation

Government-Wide Financial Statements

The statement of net assets and statement of activities display information about the primary government (the County) and its blended component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the County.

Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties.

The statement of activities demonstrates the degree to which the program expenses of a given function are offset by program revenues. Program expenses include direct expenses, which are clearly identifiable with a specific function, and allocated indirect expenses. Program revenues include 1) fees, fines, and charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues.

Fund Financial Statements

The fund financial statements provide information about the County’s funds, including fiduciary funds and blended component units. Separate statements for each fund category –

governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are separately aggregated and reported as other governmental funds.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities.

GASB Statement No. 34 defines major funds and requires that the County’s major governmental and proprietary funds are identified and presented separately in the fund financial statements. All other funds, called nonmajor funds, are combined and reported in a single column, regardless of their fund-type.

Major funds are defined as funds that have assets, liabilities, revenues, or expenditures/expenses equal to or greater than ten percent of their fund-type total and five percent of all fund-type totals. The General Fund is always a major fund. The County may also select other funds it believes should be presented as major funds.

31

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

B. Basis of Presentation (continued)

The County reports the following major governmental funds:

• The General Fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the County that are not accounted for through other funds. For the County, the General Fund includes such activities as public protection, public ways and facilities, health and sanitation, public assistance, education and recreation services.

• The Welfare Fund was established to account for the activities of the Butte County Department of

Employment and Social Services. The department administers the CalWorks program, Adult and

Children’s Protection Services and various other State, Federal and local assistance programs.

• The Public Health Fund was established to account for the activities of the Butte County Department of

Public Health. The department provides a wide range of services designed to protect and enhance the well being of the community.

• The Behavioral Health Fund was established to account for the activities of the Butte County

Department of Behavioral Health. The department provides a comprehensive continuum of services meeting community needs related to mental health and substance abuse problems.

• The Road Fund provides for planning, design, construction, maintenance, and administration of County transportation planning activities. Revenues consist primarily of the County’s share of state highway user taxes and are supplemented by federal funds.

The County reports the following major enterprise funds:

• The Landfill Fund was established to account for the County’s costs of providing landfill and related waste disposal services to the citizens of Butte County in both the unincorporated and incorporated areas of the County.

The County reports the following additional fund types:

Internal Service Funds account for the County’s information services, printing services, utilities, risk management, facilities services, and equipment on a cost-reimbursement basis. Internal Service Funds are presented in summary form as part of the proprietary fund financial statements. In the governmentwide financial statements, the changes in net assets at the end of the fiscal year, as presented in the statements of activities, were allocated to the user functions of the governmental activities, to reflect the entire activity for the year. Since the predominant users of the internal services are the County’s governmental activities, the asset and liability balances of the internal service funds are consolidated into the governmental activities column at the government-wide level.

32

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

B. Basis of Presentation (continued)

• The Investment Trust Fund accounts for the assets of legally separate entities that deposit cash with the

County Treasurer in an investment pool, which commingles resources in the investment portfolio for the benefit of all participants. These entities include school and community college districts, other special districts governed by local boards, regional boards and authorities and pass through funds for tax collections for cities.

• The Agency Funds are custodial in nature and do not involve measurement of the results of operations.

Such funds have no equity accounts since all assets are due to individuals or entities at some future time. These funds account for assets held by the County as an agent for other government units. These units include Butte County SB-325 and SB-620, and other special districts governed by local boards, regional boards and authorities and pass through funds for tax collections for cities.

C. Basis of Accounting

The government-wide financial statements are reported using the economic resources

measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements.

Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the County gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place. Revenues from grants, entitlements, and donations are recognized in the fiscal year in which all eligible requirements have been satisfied.

Governmental funds are reported using the current financial measurement focus and modified accrual basis of accounting. Under this method, revenues are recognized when “susceptible to accrual” (i.e., when they become both measurable and available). “Measurable” means the amount of the transaction can be determined and “available” means that revenues are collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Property tax revenues are recognized in the current year if they are collected within 60 days of fiscal year end. For all other revenues, the County considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Revenues not considered available are recorded as deferred revenue. The County’s other primary revenue sources: investment income, intergovernmental revenues and charges for services have been treated as “susceptible to accrual” under the modified accrual basis.

Licenses and permits, fines, forfeitures and penalties, and other revenue are not considered

“susceptible to accrual” under the modified accrual basis and are recorded as revenues when received. Expenditures generally are recorded when a liability is incurred. However, debt service expenditures, as well as expenditures related to compensated absences and claims and

Judgments, are recorded when payment is due.

33

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

C. Basis of Accounting (continued)

When both restricted and unrestricted net assets are available, unrestricted resources are used only after the restricted resources are depleted.

For its proprietary funds, the County has elected under GASB Statement No. 20, Accounting

and Financial Reporting for Proprietary Funds and Other Governmental Entities that Use

Proprietary Fund Accounting, to apply all applicable GASB pronouncements as well as any applicable pronouncements of the Financial Accounting Standards Board, the Accounting

Principles Board or any Accounting Research Bulletins issued on or before November 30,

1989 unless those pronouncements conflict with or contradict GASB pronouncements. The

GASB periodically updates its codification of the existing Governmental Accounting and

Financial Reporting Standards which, along with subsequent GASB pronouncements

(Statements and Interpretations), are accounting principles generally accepted in the United

States of America.

D. Cash and Cash Equivalents

The County maintains a Cash and Investment Pool (Pool) that is available for use by all

County funds and agencies outside of the County reporting entity may participate in the Pool.

The participation of these agencies is involuntary, except for the Butte County Fair. The agencies participating in the Investment Trust Fund are Superior Court, Butte County Fair,

Autonomous Special Districts, Schools, Community College Districts, and the Butte County

Association of Governments.

The pool is not registered as an investment company with the Securities and Exchange

Commission (SEC) nor is it an SEC Rule 2a7-like pool. California Government Code, the

County’s Treasury Oversight Committee, and the Board of Supervisors annually set forth the investment policy that the County Treasurer must follow.

State statutes and the County’s investment policy authorize the County Treasurer to invest in instruments described in California Government Code Section 53601 and 53635, including but not limited to: U.S. Government Treasury and Agency Securities, bankers’ acceptances, commercial paper, corporate bonds and notes, repurchase agreements and the State

Treasurer’s Local Agency Investment Fund (LAIF). In accordance with GASB Statement

No. 31, Accounting and Financial Reporting for Certain Investments and External Investment

Pools, investments held by the County Treasurer are stated at fair value.

The fair value of investments in the Pool is determined monthly based upon quoted market prices. The County has not provided nor obtained any legally binding guarantees during the fiscal year ended June 30, 2008 to support the values of shares in the Pool. However, management believes that the investments in the Pool are of high quality and that the risk of participation in the Pool is negligible. The Pool is subject to oversight by the Treasury

Oversight Committee, as recommended by the California Debt and Investment Advisory

Commission.

34

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

D. Cash and Cash Equivalents (continued)

The Pool values participants’ shares on an amortized cost basis. Specifically, the Pool distributes income to participants quarterly based on their relative participation during the month, which is calculated based on (1) realized investment gains and losses computed on an amortized cost basis, (2) interest income based on stated rates (both paid and accrued), (3) amortization of discounts and premiums on a straight-line basis, and (4) investment and administrative expenses. This method differs from the fair value method used to value investments in these financial statements because the amortized cost method is not designed to distribute to participants all unrealized gains and losses in the fair value of the Pool’s investments. Investment income related to investments reported in certain funds is assigned to other funds based upon legal or contractual provisions.

State law requires that the County Treasurer hold all operating monies of the County, school districts and certain special districts. Collectively, these mandatory deposits constituted approximately 92.2% of the funds on deposit in the County Treasury.

For purposes of the accompanying statement of cash flows – Proprietary Funds, the County considers all highly liquid investments with a maturity of three months or less when purchased, and their equity in the County Treasurer’s investment pool, to be cash equivalents.

Inventories are valued at cost, which is determined on a first-in, first-out basis, and consist primarily of expendable supplies held for consumption. The cost is recorded as an expenditure when the items are used. In the governmental funds balance sheet, there is a reservation of fund balance equal to the inventory balance as these amounts are not available for appropriation.

Payments made for services that will benefit future accounting periods are recorded as prepaid items. In the governmental fund types, there is a reservation of fund balance equal to the amount of prepaid items, since these amounts are not available for appropriation.

Property taxes attach as an enforceable lien on January 1. Secured taxes are levied on July 1 and are payable in two installments due by December 10 and April 10. All general property taxes are then allocated by the County Auditor-Controller’s Office to the various taxing entities per the legislation-implementing Proposition 13. The method of allocation used by the County is subject to review by the State of California.

35

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

F. Property Taxes (continued)

Alternative Method of Distribution of Tax Levies

The County utilizes the alternative method of property tax distribution, whereby the County, through the legally required Tax Resource Agency Fund purchases the current secured unpaid taxes remaining at year-end from participating agencies. In return, the Tax Resource Agency

Fund records a tax receivable and receives the delinquent secured taxes. The Tax Loss

Reserve Agency Fund receives delinquent penalties and redemption interest accruing to delinquent collections related to participating agencies. The participating agencies, including the County, the special districts, and the school districts, in turn, receive their full tax distribution with no liability for uncollected taxes to the Tax Resource Agency Fund.

Therefore, for participating agencies, revenue is measurable and available and is recorded in the period the payment of current secured unpaid taxes is received.

The County is required to create a tax loss reserve fund (an agency fund) under one of two alternative methods: 1) one percent of the total amount of taxes and assessments levied on the secured roll for the year or 2) twenty-five percent of the total delinquent secured taxes and assessments as calculated at the end of the fiscal year. The County is using one percent of the total amount of taxes and assessments levied on the secured roll for the year to establish its tax loss reserve.

G. Loans Receivable

Loans receivable relate to the Housing and Community Development Program funded by federal and state monies. Loans receivable are collateralized by deeds of trust. Proceeds from the collection of the loans receivable and resale of assets held for sale are restricted by the terms of the grant and, accordingly, are offset by a fund balance reserve which indicates that they do not constitute available spendable resources. No amount has been provided as an allowance for doubtful accounts because in the opinion of management all material amounts are fully collectible.

H. Capital Assets

Capital assets (including infrastructure) are recorded at historical cost or estimated historical cost if actual historical cost is not available. Contributed fixed assets are valued at their estimated fair market value on the date contributed. Capital assets include public domain

(infrastructure) general fixed assets consisting of certain improvements including roads, bridges, water/sewer, lighting system, drainage systems, and flood control. The County defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Capital assets used in operations are depreciated or amortized (assets under capital leases) using the straight-line method over the lesser of the capital lease period or their estimated useful lives in the government-wide statements and the proprietary funds.

36

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

H. Capital Assets (continued)

The estimated useful lives are as follows:

Infrastructure

Structures and improvements

20 to 50 years

20 to 50 years

Equipment 3 to 25 years

The County has five networks of infrastructure assets – roads, water/sewer, lighting, drainage, and flood control. The County has the option of phasing in the historical costs related to its infrastructure. Currently, the road network has been included in the County’s capital assets at historical cost and related depreciation. In future years, the remaining networks will be added to capital assets. All current year acquisition costs identified for infrastructure have been included.

I. Compensated Absences

The liability for compensated absences reported in the government-wide and proprietary fund statements consists of unpaid, accumulated leave balances. The liability has been calculated using the vesting method, in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included.

J. Interfund Receivables and Payables

Interfund transactions are reflected as either loans, services provided, reimbursements, or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as “internal balances”. Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.

Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

37

1.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued)

K. Use of Estimates

The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

L. Implementation of Governmental Accounting Standards Board Statements and

Standards

Governmental Accounting Standards Board Statement No. 45

In August 2006, the GASB issued Statement No. 45, Accounting and Financial Reporting by

Employers for Postemployment Benefits Other Than Pensions. This statement is effective for periods beginning after December 15, 2006. The Statement generally requires that state and local governmental employers account for and report the annual cost of other nonpension benefits (OPEB) and the outstanding obligations and commitments related to OPEB in essentially the same manner as they currently do for pensions. The statement also establishes disclosure requirements for information about the plans in which an employer participates, the funding policy followed, the actuarial valuation process and assumptions, and, for certain employers, the extent to which the plan has been funded over time. As of June 30, 2008,

Butte County is in compliance with GASB No. 45.

Governmental Accounting Standards Board Statement No. 48

In September of 2006, GASB issued Statement No. 48, Sales and Pledges of Receivables and

Future Revenues and Intra-Entity Transfers of Assets and Future Revenues. This statement establishes criteria that governments will use to ascertain whether certain transactions should be regarded as sales or a collateralized borrowings. The statement also includes disclosure requirements for future revenues that are pledged or sold. As of June 30, 2008, Butte County is in compliance with GASB No. 48.

Governmental Accounting Standards Board Statement No. 50

In May of 2008, GASB issued Statement No. 50, Pension Disclosures. This statement more closely aligns the financial reporting requirements for pensions with those for other postemployment benefits (OPEB). The requirements of the new statement become effective for fiscal periods beginning after June 15, 2007 except for the requirement for plans that use the aggregate actuarial cost method to present a schedule of funding progress using the entry age actuarial cost method which is effective for the actuarial valuations as of June 15, 2007.

As of June 30, 2008, Butte County is in compliance with GASB No. 50.

38

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued) 1.

M. Future Governmental Accounting Standards Board Statements

These statements are not effective until June 30, 2009. The County has not determined its effect on the financial statements.

Governmental Accounting Standards Board Statement No. 49

In November of 2006, GASB issued Statement No. 49, Accounting and Financial Reporting for

Pollution Remediation Obligations. This Statement provides guidance on how to calculate and report the costs and obligations associated with pollution cleanup efforts. The requirements of the new statement become effective for fiscal periods beginning after December 15, 2007. The

County has elected not to early implement GASB No. 49 and has not determined its effect on the

County’s financial statements.

Governmental Accounting Standards Board Statement No. 51

In June of 2008, GASB issued Statement No. 51, Accounting and Financial Reporting for

Intangible Assets. This statement establishes accounting and financial reporting requirements for intangible assets including easements, water rights, timber rights, patents, trademarks, and computer software. The requirements of this Statement are effective for financial statements for periods beginning after June 15, 2009. The County has elected not to early implement GASB No.

51 and has not determined its effect on the County’s financial statements.

Governmental Accounting Standards Board Statement No. 52

On November 2008, GASB issued Statement No. 52, Land and Other Real Estate Held as

Investments by Endowments. The statement improves the quality of financial reporting by requiring endowments to report their land and other real estate investments at fair value, creating consistency in reporting among similar entities that exist to invest resources for the purpose of generating income. The County has elected not to early implement GASB No. 52 and has not determined its effect on the County’s financial statements.

N. Presentation of financial information related to County fiduciary responsibilities

The basic financial statements also include an Investment Trust fund to account for cash and investments held by the County Treasurer for numerous self-governed school and special districts.

The financial reporting for these governmental entities, which are independent of the County, is limited to the total amount of cash and investments and other assets, and the related fiduciary responsibility of the County for disbursement of these assets. School and special district boards that are separately elected and that are independent of the County Board of Supervisors, administer activities of the school districts and special districts. The County Auditor-Controller makes disbursements upon the request of the responsible self-governed special district officers.

The Board has no effective authority to govern, manage, approve budgets, assume financial accountability, establish revenue limits, or appropriate surplus funds available in these entities.

Therefore, these entities are fiscally independent of the County. Five cities and numerous selfgoverned special districts provide services to the residents of the County. The operations of these entities have been excluded from the basic financial statements since each entity conducts its own day-to-day operations and is controlled by its own governing board.

39

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Significant Accounting Policies (continued) 1.

O. Net Assets

The government-wide financial statements and proprietary fund financial statements utilize a net assets presentation. Net assets are categorized as invested in capital assets (net of related debt), restricted net assets, or unrestricted net assets. Invested In Capital Assets, Net of Related Debt

This category groups all capital assets, including infrastructure, into one component of net assets.

Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of these assets reduce the balance in this category.

Restricted Net Assets– This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or legislation. Unrestricted Net Assets– This category represents net assets of the County, not restricted for any project or other purpose.

P. Fund Equity

In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not appropriable or legally restricted for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change.

Cash and Investments 2.

Cash and investments as of June 30, 2008 are classified in the accompanying financial statements as follows:

Statement of net assets:

Cash and investments

Cash and investments with fiscal agents

$ 95,734,954

5,276,171

88,645

Cash and investments 292,911,084

10,596

Total cash and investments

Cash and investments as of June 30, 2008 consist of the following:

Cash on hand

Deposits with financial institutions

Investments

Cash deposits – outside accounts

$ 394,021,450

$ 145,390

8,666,624

401,883,150

(16,962,252)

288,538

Total cash and investments $ 394,021,450

40

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

2.

Cash and Investments (continued)

Investments Authorized by the California Government Code and the County’s Investment Policy

The table below identifies the investment types that are authorized for the County by the California

Government Code (or the County’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the County’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the County, rather than the general provisions of the California Government Code or the

County’s investment policy.

Maximum Maximum

Of Portfolio in One Issuer

Local Agency Bonds

U.S. Treasury Obligations

U.S. Agency Securities

Banker’s Acceptances

Commercial Paper

Negotiable Certificates of Deposit

Repurchase Agreements

Reverse Repurchase Agreements

Medium-Term Notes

Mutual Funds

Money Market Mutual Funds

Mortgage Pass-Through Securities

County Pooled Investment Funds

Local Agency Investment Fund (LAIF)

5 years

5 years

5 years

180 days

270 days

5 years

1 year

92 days

5 years

N/A

N/A

5 years

N/A

N/A

None

None

None

40%

25%

30%

None

20% of base value

30%

20%

20%

20%

None

None

None

None

None

30%

10%

None

None

None

None

10%

10%

None

None

None

JPA Pools (other investment pools) N/A None None

*Excluding amounts held by bond trustee that are not subject to California Government Code restrictions.

Investments Authorized by Debt Agreements

Investment of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the County’s investment policy.

The table below identifies the investment types that are authorized for investments held by bond trustee.

The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Authorized Maximum Percentage Investment in One Issuer

U.S. Treasury Obligations

Money Market Mutual Funds

LAIF

None None None

None None None

None

None

None

None

N/A None

None

None

None

None None None

41

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

2.

Cash and Investments (continued)

Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the County manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the County’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the

County’s investments by maturity:

Investment Fair Less than One to

Rema ining Maturity

Two to Three to Four to

Type Value One yea r Two years Three ye ars Four years Five years

With Trea surer:

FAM CA

FF CB

FHLB

FHLMC

FNM A

TVA

C D

C al Tr ust

LAIF

Tota l with Trea surer

With fiscal a gents:

M oney M arket

FHLB

B usiness c hec king

LAIF

Tota l with fiscal a gent

Tota l investments

$ 5,059,078

49,536,229

100,261,819

57,223,449

19,201,251

3,301,080

500,000

15,072,321

146,451,752

396,606,979

$ -

8,065,625

24,058,408

10,081,250

$ -

9,178,166

3,060,000

29,725,302

$ 5,059,078

9,263,438

18,645,000

7,338,115

6,149,063

$ -

12,054,000

38,208,725

1,096,250

3,301,080

15,072,321

146,451,752

203,729,356 41,963,468 46,454,694 54,660,055

$ -

10,975,000

16,289,686

19,063,782

2,970,938

500,000

49,799,406

2,476,112

1,003,440

46,706

1,749,913

5,276,171

2,476,112

46,706

1,749,913

4,272,731

1,003,440

1,003,440

$ 401,883,150 $ 208,002,087 $ 41,963,468 $ 46,454,694 $ 54,660,055 $ 50,802,846

Disclosures Relating to Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California

Government Code, the County’s investment policy, or debt agreements, and the actual rating as of fiscal year end for each investment type.

42

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

2.

Cash and Investments (continued)

Disclosures Relating to Credit Risk (continued)

Investment

Type

Fair

Value

Minimum Exempt

Legal From

Rating Disclosure AAA

Rating as of Fiscal Year End

Aa A1/P1

Not

Rated

$ $ $ 1,973,632 FAMCA

FFCB

FHLB

$ 5,059,078

49,536,229

100,261,819

FHLMC

FNMA

TVA

CD

Cal Trust

LAIF

57,223,449

19,201,251

3,301,080

500,000

Held by bond trustee:

Money Market 2,476,112

FHLB 1,003,440

Business checking

LAIF

15,072,321

146,451,752

46,706

1,749,913

Total $ 401,883,150

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

A

N/A

N/A

N/A

$ -

$ 3,085,446

49,536,229

100,261,819

57,223,449

19,201,251

3,301,080

$ -

2,476,112

1,003,440

$ 236,088,826 $ $ -

500,000

15,072,321

146,451,752

46,706

1,749,913

$ 165,794,324

Concentration of Credit Risk

The investment policy of the County contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer

(other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total County investments are as follows:

Issuer Type Amount

Federal Home Loan Bank

Federal Farm Credit Bank

Federal agency securities

Federal agency securities

$ 101,265,259

49,536,229

Federal Home Loan Mortgage Corp.

Federal National Mortgage Assn.

Federal agency securities

Federal agency securities

57,223,449

19,201,251

43

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

2.

Cash and Investments (continued)

Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the County’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least

110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure County deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

Investment in State Investment Pool

The County is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. This fund is not registered with the Securities and Exchange Commission as an investment company, but is required to invest according to California State Code. Participants in the pool include voluntary and involuntary participants, such as special districts and school districts for which there are legal provisions regarding their investments. 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 County’s investment in this pool is reported in the accompanying financial statements at amounts based upon the

County’s 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.

Treasury Investment Pool

Investment

Type

FAMCA

FFCB

FHLB

FHLMC

FNMA

TVA

CD

Cal Trust

LAIF

Total

Fair

Value

$ 5,059,078

49,536,229

100,261,819

57,223,449

19,201,251

3,301,080

500,000

15,072,321

146,451,752

$ 396,606,979

Minimum Exempt

Legal From

Rating Disclosure

$ N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

$ -

AAA

Rating as of Fiscal Year End

$ 3,085,446

49,536,229

100,261,819

57,223,449

19,201,251

3,301,080

Aa

$ -

A1/P1

Not

Rated

$ 1,973,632

500,000

15,072,321

146,451,752

$ 232,609,274 $ $ 163,997,705

44

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

2.

Cash and Investments (continued)

Treasury Investment Pool (continued)

Condensed Financial Information for the Treasurer’s Investment Pool

In lieu of separately issued financial statements for the Treasurer’s investment pool, condensed financial information is presented below as of and for the fiscal year ended June 30, 2008:

Statement of Net Assets

Net Assets held for pool participants $

394,021,450

Equity of internal pool participants $ 126,852,520

Equity of external pool participants (voluntary and involuntary) 267,168,930

Statement of Changes in Net Assets

Net Assets held for pool participants at July 1, 2007

Net change in investments by pool participants

Net Assets held for pool participants at June 30, 2008

$ 371,419,151

22,602,299

$ 394,021,450

3.

Receivables

Receivables at fiscal year end of the County’s major individual funds, nonmajor funds, and internal service funds in the aggregate are as follows:

Public Behavioral Nonmajor I nter nal Total

Re ceivable s

Government al Ac tivities:

Ge ner al

Fund

We lf are

Fund

Health

Fund

He alth

Fund

Road

Fund

Gove rnmental Service

Funds Funds

Gove rnmental

A ctivities

Acc ounts

Due fr om

other gover nments

$ 2,475,676 $ 91,139 $ 614,129 $ 833 $ 338,041 $ 309,560 $ 4,722,264

4,247,698

$ 6,723,374

8,878,128

$ 8,969,267

1,573,272

$ 2,466,158

2,371,612

$ 2,985,741

1,302,212

$ 1,303,045

657,120

$ 995,161 $ 309,560

19,030,042

$ 23,752,306

Re ceivable s

Business-Type Activitie s:

Acc ounts

La ndfill

Fund

T ota l

Business- Type

Ac tivities

$ 162,398

$ 162,398

$ 162,398

$ 162,398

Management believes all of its receivables are collectible.

45

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Governmental funds report deferred revenue in connection with receivables for revenue not considered available to liquidate liabilities of the current period. Governmental and enterprise funds also defer revenue recognition in connection with resources that have been received, but not yet earned.

G overnmental Acti vities:

Unavailable Unearned

General Fund :

Resou rces received t hat d o not meet th e crit eria for revenu e

Welfare Fu nd:

Resou rces received t hat d o not meet th e crit eria for revenu e

Publ ic Healt h Fund:

Resou rces received t hat d o not meet th e crit eria for revenu e

Beh av ioral Heal th Fund :

Resou rces received t hat d o not meet th e crit eria for revenu e

Ot her Governm ent al Fu nds:

Resou rces un av ai lable for cu rrent exp end itu res

$ -

1,6 88,6 37

$ 1,6 88,6 37

$ 23 8,110

2,59 5,650

28 9,634

3,75 8,797

80 7,921

$ 7,69 0,112

Interfund Receivables/Payables

The composition of interfund balances as of June 30, 2008 are as follows:

(This Part of the Page Intentionally Left Blank)

46

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

4. Interfund Transactions (continued)

Balances due to/from other funds:

Receivabl e Fund Payabl e Fund Amou nt

General Fund Welfare Fu nd

Publ ic Healt h Fund

Beh av ioral Heal th Fund

Road Fund

Non major Government al Fu nds

Internal Servi ce Funds

Landfil l Fund

$ 1,0 43,68 3

21,27 6

5,3 69,74 9

25,30 4

4 87,85 5

52,14 6

3,68 0

7,0 03,69 3

Welfare Fu nd General Fund

Non major Government al Fu nds

Publ ic Healt h Fund General Fund

Internal Servi ce Funds

1 81,40 5

24,39 2

2 05,79 7

2 49,05 7

50 2

2 49,55 9

Beh av ioral Heal th Fund

Road Fund

General Fund

Internal Servi ce Funds

General Fund

Non major Government al Fu nds

Internal Servi ce Funds

44,80 2

91 8

45,72 0

22,46 5

7 1

2,32 2

24,85 8

Non major Government al Fu nds General Fund

Non major Government al Fu nds

Internal Servi ce Funds

1,4 82,64 6

2 89,98 2

2 00,90 2

1,9 73,53 0

Internal Servi ce Funds

Landfil l Fund

General Fund

Welfare Fu nd

Publ ic Healt h Fund

Beh av ioral Heal th Fund

Road Fund

Non major Government al Fu nds

Internal Servi ce Funds

Landfil l Fund

General Fund

Road Fund

3 96,59 6

1 67,22 0

24,83 9

48,49 5

29,70 3

2 54,56 7

1 01,77 1

6,70 3

1,0 29,89 4

14,13 6

7,36 0

21,49 6

To tal $ 10,5 54,54 7

These interfund balances result from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, and (2) payments between funds are made.

47

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Interfund Transactions (continued) 4.

Transfers to/ from other funds:

Transfers are indicative of funding for capital projects, lease payments or debt service, subsidies of various County operations and re-allocations of special revenue. The following schedule briefly summarizes the County’s transfer activity:

Between Funds within the Governmental Activities*:

Transfers From

General Fund

Tran sfers To

Welfare Fund

Pu bli c Health Fu nd

Behavi oral Healt h Fu nd

Ro ad Fun d

Nonm aj or Govern mental Fund s

Nonm aj or Govern mental Fund s

Nonm aj or Govern mental Fund s

Nonm aj or Govern mental Fund s

Nonm aj or Govern mental Fund s

Nonm aj or Govern mental Fund s

Amou nt Reason

$ 47,74 6

8 68,70 8

4 64,36 4

11,71 0

52 0

13,7 08,20 7

2,0 04,89 5

6 28,86 0

2,4 69,80 1

8 57,32 0

21,0 62,13 1

Transfer for operatin g sub sidy

Transfer for count y mat ch

Transfer for count y mat ch

Transfer for road operatin g sub sidy

CSA reim bursement

Fire p ro tect ion

Equ ipm en t replacem en t

Transfer for water operati ng s ubsi dy

Transfer for li brary op erati ng su bsid y

Debt s ervi ce paym ent s

Non major Government al Fu nds

Internal Servi ce Funds

Gen eral Fund

Ro ad Fun d

Nonm aj or Govern mental Fund s

Nonm aj or Govern mental Fund s

1 31,44 7

2,1 41,46 2

3 03,00 0

2,5 75,90 9

Cap ital reim bursement

Transfer for road operatin g sub sidy

Debt s ervi ce paym ent s

6 90,75 9

6 90,75 9

Equ ipm en t replacem en t

Internal Servi ce Funds In tern al Service Fun ds 28,54 8 To t rans fer shared costs

To tal $ 24,3 57,34 7

___________________

* These transfers were eliminated in the consolidation, by column, for the Governmental and Business-type activities.

48

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Capital asset activity for the fiscal year ended June 30, 2008 was as follows:

Balance

July 1, 2007 Additi ons Reti rement s

Governmental Acti viti es

Capi tal assets, not being depreciated:

Land

Construct ion in progres s

Tot al capit al assets, not being

depreciated

Capi tal assets, being depr eciated:

Infrastruct ure

Struct ures and i mprovement s

Equi pment

Tot al capit al assets, bei ng depreciat ed

Less: accumulated depreciat ion for:

Infrastruct ure

Struct ures and i mprovement s

Equi pment

Tot al accumulat ed depreci ati on

Tot al capit al assets, bei ng depreciat ed, net

Governmental activit ies capital assets, net

Business-Type Activities:

Capi tal assets, not being depreciated:

Land

Construct ion in progres s

Tot al capit al assets, not being

depreciated

Capi tal assets, being depr eciated:

Struct ures and i mprovement s

Equi pment

Tot al capit al assets, bei ng depreciat ed

Less: accumulated depreciat ion for:

Struct ures and i mprovement s

Equi pment

Tot al accumulat ed depreci ati on

Tot al capit al assets, bei ng depreciat ed, net

Business-type acti vities capital as sets , net

Transfers

$ 1,922,563

601,169

$ 1,845,380

1,676,894

$ -

(778,350)

$ 3,406,451

1,499,713

2,523,732 3,522,274 (361,492) (778,350) 4,906,164

583,100,517

61,652,667

44,999,236

689,752,420

522,055

428,805

4,539,955

5,490,815

(2,410,206)

(517,066)

(1,888,183)

649,143

133,863

(4,815,455) 783,006

581,212,366

62,213,549

47,784,871

691,210,786

(337,106,765)

(17,083,562)

(31,709,270)

(385,899,597)

303,852,823

$ 306,376,555

(23,572,810)

(1,330,031)

(3,342,700)

(28,245,541)

$

(22,754,726)

(19,232,452)

2,410,206

372,288

1,862,877

4,645,371

(170,084)

$ (531,576)

10,018

(14,674)

(4,656)

(358,269,369)

(18,031,287)

(33,203,767)

(409,504,423)

778,350

$ -

281,706,363

$ 286,612,527

$ 488,133

11,817,354

$ -

2,553,460

$ -

12,305,487 2,553,460

$ -

121,695

3,953,257

4,074,952

233,737

233,737

(4,656)

(4,656)

(22,607)

(1,597,855)

(1,620,462)

2,454,490

$ 14,759,977

(3,125)

(533,434)

(536,559)

(302,822)

$ 2,250,638

4,656

4,656

$ $ -

Balance

June 30, 2008

$ 488,133

14,370,814

14,858,947

121,695

4,182,338

4,304,033

(25,732)

(2,126,633)

(2,152,365)

2,151,668

49

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Capital Assets (continued)

5.

Depreciation expense was changed to functions as follows

:

Governmental Activities:

General government

Public protection

Public ways

Health and sanitation

Public assistance

Education

Recreation and cultural services

$ 1,169,105

2,862,723

23,525,728

236,765

160,100

89,994

201,126

$ 28,245,541

Business-Type Activities:

Sanitation $ 536,559

$ 536,559

Tax and Revenue Anticipation Notes

In July 2007, the County issued $17,200,000 in tax anticipation notes in advance of property tax collections, depositing the proceeds in the general fund. These notes are necessary in order to fund operations prior to receipt of tax collections. During the fiscal year, the County satisfied the requirements of the notes.

Short-term debt activity for the fiscal year ended June 30, 2008, was as follows:

Balance

J uly 1, 2007 Addi tion s Reti rem ent s

Balance

J une 30, 2008

$ 17,20 0,00 0

$ 17,20 0,00 0

$ 17,2 00,0 00

$ 17,2 00,0 00

$ -

$ -

G overnmental Acti vities:

FY 2 006-07 TRANs

Total g overnm ental acti viti es

50

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Long-term obligations of the County consist of capital lease obligations, bonds, certificates of participation, notes, and other liabilities, which are payable from the General, Debt Service, Capital

Projects, Enterprise, and Internal Service Funds. The calculated legal debt limit for the County is

$225,434,224.

A summary of long-term obligations follows:

Mat urity

In terest

Rat es

An nual

Prin ci pal

Inst allm ent s

Ori ginal

Is sue

Amoun t

Outs tandi ng at

June 30 , 200 8

Type of i ndebtedness

(purpo se)

G overnmental Acti vities:

Bonds Pa ya ble

Bu tte Count y Service Area No. 2 6 Bonds :

1 974 Sewer Bonds

1 975 Sewer Bonds , Series A

1 975 Sewer Bonds , Series B

1 975 Sewer Bonds , Series C

7/1/ 80-1/ 1/1 5

7/1/ 80-1/ 1/1 5

7/1/ 80-1/ 1/1 5

7/1/ 80-1/ 1/1 5

5%

5%

5%

5%

$10 ,000-$4 0,00 0

$10 ,000-$4 5,00 0

$5, 000-$2 0,000

$9 56-$4, 878

$ 68 0,00 0

79 0,00 0

38 0,00 0

8 6,39 6

1,93 6,39 6

$ 2 35,00 0

2 80,00 0

1 35,00 0

30,34 0

6 80,34 0

Pens ion Ob ligat ion Bond s:

Seri es A

Seri es B

Seri es C

To ta l Bonds Paya bl e

6 /30/ 14-6/ 30/ 34

6 /30/ 14-6/ 30/ 34

6 /30/ 05-6/ 30/ 14

Vari able

Vari able

Vari able

$ 55,0 00 -$3, 440,0 00

$ 295,0 00-$2, 105,0 00

$690 ,000-$9 10,0 00

28,02 0,00 0

21,87 5,00 0

7,86 5,00 0

57,76 0,00 0

28,0 20,00 0

21,8 75,00 0

49,8 95,00 0

59,69 6,39 6 50,5 75,34 0

Certi fi ca tes of Pa rti ci pat ion

200 3 Certi fi cat es of Parti ci patio n

To ta l Certi ficates of Pa rtici pati on

7/1/ 04-7/ 1/1 4 2%-3.4% $415 ,000-$6 50,0 00 5,15 0,00 0 2,6 50,00 0

5,15 0,00 0 2,6 50,00 0

Not es Payab le

Cali forn ia Energy Comm iss ion

Solar Pro ject - phase 1

Solar Pro ject - phase 2

To ta l Notes Pa yable

To tal Gover nm ent al Acti vi ti es

6/ 22/ 06-12/ 22/ 18

6 /22/ 06-6/ 22/ 20

4.9%

4.9%

$63, 794-$1 35,89 9

$8, 057-$1 7,545

2,77 7,00 0

39 0,00 0

2,3 63,26 1

3 39,34 1

3,16 7,00 0 2,7 02,60 2

$ 68,01 3,39 6 $ 55,9 27,94 2

51

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Summary of Long-Term Debt

The following is a summary of changes in long-term debt:

Balance

July 1, 2007 Addition s

Gov ernmental A ctiv ities:

Capital lease obligations

Bonds payable

Notes payab le

Certificates of p articipation

Claims and judg ments

Supplemental retirement

benefits payab le

Compensated absences

Retiremen ts

Balance

June 30, 2008

Amounts

Due Within

One Year

$ 1 23,162

56,42 3,916

2,90 2,565

3,29 0,000

5,06 2,000 7,4 83,413

$ 86,41 5

5,8 48,57 6

1 99,96 3

6 40,00 0

7,2 96,41 3

$ 1,133,68 0

50,575,34 0

2,702,60 2

2,650,00 0

5,249,00 0

$ 104,5 64

83,7 55

208,2 42

350,0 00

2,400,0 00

3,03 7,018

12,68 0,079 21,4 72,517

1,5 18,50 9

17,5 94,20 5

1,518,50 9

16,558,39 1

1,518,5 09

1,703,7 45

Subtotal

Other postemployment benefits

Total governmen tal activities

Business-Type Activities:

Capital lease obligations

Certificates of p articipation

Premium on debt

Landfill closure/post-

-closure care costs

Loan p ayable

Compensated absences

Total business-type activ ities

Capital Leases

12,02 5,000

18 9,628

$ 29,0 79,092 $ 33,1 84,08 1 80,387,52 2 $ 6,368,8 15

3,067,31 2

$ 83,454,83 4

$ $ 2 83,15 5

13,54 5

$ 19,68 7

12,025,00 0

176,08 3

$ 19,6 87

13,5 45

2,21 6,425

45 0,000

10 6,514

$ 15,29 0,409

1 45,794

$ 1 45,794

2 86,07 1

50,00 0

1 25,58 8

$ 7 58,35 9

1,930,35 4

400,00 0

126,72 0

50,0 00

38,0 00

$ 14,677,84 4 $ 121,2 32

The County leases equipment under capital leases. The following is a summary, by year, of future minimum lease payments, together with the present value of the minimum lease payments, as of

June 30, 2008:

Fiscal Year Ending

June 30,

2009

2010

2011

2012

2013

2014-2018

2019-2020

Total minimum lease payments

Less: Amount represe nting interest

Present value of minimum lease payments

Governmental

Activities

$ 175,525

170,518

146,974

124,979

123,431

617,155

246,862

1,605,444

471,764

$ 1,133,680

Business-Type

Activities

$ 21,138

$

21,138

1,451

19,687

52

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Capital Lease (continued)

The following is a schedule of net remaining property leased under capital leases at June 30, 2008:

Acquisitio n

Va lue

Accumulated

Depreciatio n

Govern mental Activities:

Chico M emorial Halls

File management system

Vehicles

1,25 4,3 00

9 0,5 81

13 1,0 02

12,900

12,940

88,412

Bonds Payable

Bu sin ess-Type Activities:

Tarpomatic 7 6,2 37 12,416

At June 30, 2008, bonds outstanding consist of the following:

Sewer Bonds:

The sewer bonds bear interest at the rate of 5% per annum which is payable semi-annually. Principal payments are due January 1 of each year through 2015. The bonds were issued to provide sewer in the

County Service Area No. 26.

Pension Obligation Bonds:

The pension obligation bonds were issued in three series (A,B, and C). These bonds were issued to save future interest costs associated with the County’s pension obligations. Series A has a fixed interest rate of

6.03%, while Series B and C have rates that are variable, based on the one month LIBOR plus a margin of

.30%. For fiscal year 2007/2008, the average rate paid for Series B was 4.5%. The County elected to exercise its option to prepay Series C on September 1, 2007. The next payment of interest for Series A is due December 1, 2008, while the interest payments for Series B are calculated and paid the first business day of each month. Principal payments for both Series A and B are due beginning in fiscal year 2014 and ending in fiscal year 2034.

53

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Bonds Payable (continued)

As of June 30, 2008, annual debt service requirements to maturity are as follows:

Notes Payable

20 09

20 10

20 11

20 12

20 13

20 14-2 018

20 19-2 023

20 24-2 028

20 29-2 033

20 34

Fiscal Year Ending

June 30 ,

Total

Principa l

$ 8 3,7 55

8 8,9 43

9 4,1 40

9 9,3 47

9 9,4 85

3,20 4,6 70

7,12 0,0 00

12,94 5,0 00

21,29 5,0 00

5,54 5,0 00

$ 50,57 5,3 40

Interest

$ 2,762,783

2,758,466

2,753,889

2,749,052

2,744,079

1 3,423,563

1 2,211,689

9,699,913

5,288,701

307,630

$ 5 4,699,765

Total

$ 2,846,53 8

2,847,40 9

2,848,02 9

2,848,39 9

2,843,56 4

16,628,23 3

19,331,68 9

22,644,91 3

26,583,70 1

5,852,63 0

$ 1 05,275,10 5

At June 30, 2008, notes outstanding consist of the following:

The County has in operation solar panels to generate power for certain county buildings. This solar project was funded, in part, through notes from the California Energy Commission of $3,167,000.

Principal and interest, at a fixed rate of 3.95%, are due semi-annually beginning in fiscal year 2005-06.

As of June 30, 2008, annual debt service requirements to maturity are as follows:

20 09

20 10

20 11

20 12

20 13

20 14-2 018

20 19-2 020

Fiscal Year Ending

June 30 ,

Total

Principa l

$ 20 8,2 42

21 6,5 49

22 5,1 87

23 3,9 62

24 3,5 03

1,37 1,0 90

20 4,0 69

$ 2,70 2,6 02

Interest

$ 104,725

96,419

87,780

79,006

69,465

193,747

3,403

$ 634,545

Total

$ 312,96 7

312,96 8

312,96 7

312,96 8

312,96 8

1,564,83 7

207,47 2

$ 3,337,14 7

54

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Compensated Absences

Upon termination, an employee may be compensated for sick leave amounts accrued over 240 hours at half the normal pay rate not to exceed $3,000. Upon retirement, County employees have a one-time option of cashing out their accrued sick leave or electing post retirement health insurance benefits up to age 65. If an employee has 10 years of cumulative service, the County will pay health insurance benefits for 12 months plus 1 month for every 8 hours in excess of 240 hours accrued sick leave (employee coverage only). Vacation is accrued at varying rates depending on an employee’s years of services.

Upon termination, an employee is paid at 100% of the amount accrued. Compensated absences for vacation are paid out at the employee’s current rate of pay. Administrative leave is accrued by employees exempt from paid overtime and may be accrued up to a maximum of 352 hours.

The County does not accrue for compensated absences in its governmental fund statements and recognizes liabilities for compensated absences only if they are due and payable in an event such as termination. However, in the statement of activities the expense is allocated to each function based on usage.

The compensated absences liability attributable to the governmental activities will be liquidated as follows: General Fund 57%, Welfare Fund 12%, Public Health Fund 9%, Behavioral Health Fund 9%,

Road Fund 6%, and Nonmajor funds 7%.

Certificates of Participation

Governmental Activities

On June 30, 2003, the County issued $5,150,000 in Certificates of Participation (COP’s) with interest rates ranging from 2.0% to 3.4% to refund $4,195,000 of outstanding 1993 COP’s and $1,026,882 of outstanding lease obligations for fire trucks with interest rates ranging from 3.8% to 5.5%. The net proceeds of $5,091,245 (after payment of $166,950 in underwriting fees, insurance, and other issuance costs) plus an additional $883,208 of 1993 COP’s reserve fund monies were used to payoff the 1993

COP’s and lease obligations.

Fiscal Year Ending

June 30 ,

20 09

20 10

20 11

20 12

20 13

20 14-2 015

P rincipa l

$ 35 0,0 00

35 5,0 00

36 5,0 00

37 5,0 00

39 0,0 00

81 5,0 00

Interest

$ 73,148

64,335

54,879

44,235

32,760

27,565

Total

$ 423,14 8

419,33 5

419,87 9

419,23 5

422,76 0

842,56 5

T otal $ 2,65 0,0 00 $ 296,922 $ 2,946,92 2

55

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Certificates of Participation (continued)

Business-Type Activities

Certificates of Participation in the amount of $12,025,000, dated November 1, 2006, were issued to finance certain capital improvements for the expansion of the County’s solid waste facility at Neal Road

Landfill. The improvements include module closures and improvements related to environmental mitigation. Interest ranging from 3.4% to 4.5% on the Series 2006 Certificates is payable semiannually on January 1 and July 1 of each year, commencing July 1, 2008. The average rate of interest for the certificates is 3.995%. Principal is payable annually, commencing on July 1, 2009.

Fiscal Year Ending

20 09

June 30 , Principa l

$ -

Interest

$ 487,150

Total

$ 487,15 0

20 10

20 11

20 12

20 13

20 14-2 018

20 19-2 022

72 5,0 00

75 0,0 00

78 0,0 00

81 0,0 00

4,57 5,0 00

4,38 5,0 00

474,825

447,500

416,900

385,100

1,401,000

370,725

1,199,82 5

1,197,50 0

1,196,90 0

1,195,10 0

5,976,00 0

4,755,72 5

Total $ 12,02 5,0 00 $ 3,983,200 $ 16,008,20 0

Loan Payable

At June 30, 2008, the loan outstanding consist of the following:

The County has received a zero interest loan from the California Integrated Waste Management Board in the amount of $500,000 for operations at the Neal Road Landfill. Principal payments of $50,000 are due annually beginning June 1, 2007 and ending June 1, 2016.

As of June 30, 2008, annual debt service requirements to maturity are as follows:

20 09

20 10

20 11

20 12

20 13

20 14-2 016

Fiscal Year Ending

June 30 ,

Total

Principa l

$ 5 0,0 00

5 0,0 00

5 0,0 00

5 0,0 00

5 0,0 00

15 0,0 00

$ 40 0,0 00

Interest

$ -

Total

$ 50,00 0

50,00 0

50,00 0

50,00 0

50,00 0

150,00 0

$ 400,00 0

56

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Landfill Closure and Post-closure Costs

State and federal laws and regulations require the County to place a final cover on its Neal Road landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and post-closure care costs will be paid only near or after the date that the landfill stops accepting waste, the County reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The $1,930,354 reported as landfill closure and post-closure care liability at

June 30, 2008, represents the cumulative amount reported to date based on the use of 16.51 percent of the estimated capacity of the landfill. The County will recognize the remaining estimated cost of closure and post-closure care of $9,759,030 as the remaining estimated capacity is filled. These amounts are based on what it would cost to perform all closure and post-closure care in 2008. The County expects to close the landfill in the fiscal year 2031. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

The County is required by state and federal laws and regulations to make annual contributions to a separate fund to finance closure and post-closure care. The County is in compliance with these requirements, and at June 30, 2008, investments of $4,300,259 are held for these purposes. The County expects the future inflation costs will be paid from interest earnings on these annual contributions.

However, if interest earnings are inadequate or additional post-closure care requirements are determined, these costs may need to be covered by charges to future landfill users or from future tax revenue.

Annually, the Landfill adjusts the estimated closure and post-closure costs due to changes in inflation and capacity. The remaining capacity of the landfill increased from 15.14 percent to 16.51 percent at

June 30, 2007 and 2008, respectively. The capacity percentage increased due to normal landfill use.

The closure/post-closure liability will be liquidated in the Landfill Fund.

Supplemental Retirement Benefits Payable

The County of Butte has adopted a tax qualified governmental defined benefit plan for the benefit of its eligible employees to provide supplemental retirement benefits to eligible employees in addition to the benefits employees will receive from the California Public Employees’ Retirement System (CalPERS). At the time this incentive was offered, the eligibility requirements were: the employee must be a current

Butte County employee with at least 5 years of service and at least 50 years of age as of January 1, 2006, with the condition that they agreed to terminate employment with the County on or before

January 1, 2005, with the benefits beginning the first day after separation. The County will have

5 disbursements of approximately $1,518,509, spanning over the next 5 years with the first remitted

August 10, 2004. On September 8, 2004, the County of Butte requested a “Letter of Determination” from the IRS to ensure the plan’s compliance. At June 30, 2008, the total supplemental retirement benefits payable balance was $1,518,509.

57

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Limitations and Restrictions

There are a number of limitations and restrictions contained in the various debt indentures. The

County’s management believes that the County is in compliance with all significant limitations and restrictions.

Deferred Debt Issuance Costs

Bond issuance costs are capitalized and amortized over the terms of the respective bonds using a method that approximates the effective interest method.

Rebatable Arbitrage Earnings

The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of taxexempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of all tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service at least every five years. During the current year, the County performed calculations of excess investment earnings on various bonds and financings and at

June 30, 2008 does not expect to incur a liability.

8. Restricted Net Assets/Reserved and Designated Fund Balances

Fund Balances

Fund balances that are not available for appropriation or are not considered “expendable available financial resources” are reserved. Unreserved fund balances that have been earmarked by the Board for a specified purpose are considered designated. Such reserved and designated fund balances at June 30, 2008 are as follows:

58

8.

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Restricted Net Assets/Reserved and Designated Fund Balances (continued)

Gener al

Fund

We lfare

F und

Maj or F unds

Public

Health

Fund

Be havior al

Health

F und

R oad

F und

Other

Governme nt al

Funds

Total

Governme nt al

Funds

Re se rved for:

Encumbr anc es

Impre st c ash

Deposits with others

Genera l r estrictions

Debt service

Inventor y

T ota l r eserved fund balances

$ 4,164,873

44,095

2,500

10,611,120

801,259

484,315

$ 1,314,475

500

$ 3,506,554

16,307,697 343,325

15,623,847 2,083,570 17,622,672

50

3,377,717

3,849,879

293,954

13,141,387

$ 1,960,148

1,200

297

1,450,264

5,522,525

8,934,434

45,845

2,797

32,574,438

6,323,784

293,954

61,255,789

De signated f or:

Var ious

T ota l designated fund ba la nce s

Unre served-U nde signated

Fund Balances

Tot al F und Balanc es

91,826

91,826

10,160,457 1,237,262 597,765

$ 18,220,437

( 9,543,985) (1,624,777) 11,432,056

$ 11,516,610 $ 20,366,490

91,826

91,826

12,258,778

Net Assets

The government-wide statement of net assets reports $46 million of restricted net assets, of which $39.7 million is restricted by enabling legislation.

9. County Employees Retirement Plan (Defined Benefit Pension Plan)

Plan Description

The County contributes to the California Public Employees Retirement System (CalPERS), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for participating public entities within the State of California. CalPERS provides retirement and disability benefits, and death benefits to plan members and beneficiaries. Benefit provisions and all other requirements are established by state statute and County ordinance. Copies of

CalPERS’ annual financial report may be obtained from their executive office: 400 Q Street, Sacramento,

CA 95811.

59

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

County Employees Retirement Plan (Defined Benefit Pension Plan) (continued) 9.

Funding Policy

Employees under the Miscellaneous Plan are required to contribute 7% and employees under the Safety

Plan are required to contribute 9% of their annual covered salary. The County is required to contribute at an actuarially determined rate of annual covered payroll; the current rate is 8.988% for non-safety employees and 12.803% for safety employees. The contribution requirements of plan members and the

County are established and may be amended annually by CalPERS.

Annual Pension Cost

For the fiscal year ended June 30, 2008, the County’s annual pension cost of $8,803,522 for CalPERS was equal to the County’s required and actual contributions. The required contribution was determined as part of the June 30, 2007 actuarial valuation using the entry age actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a) 7.75% investment rate of return

(net of administrative expenses), (b) projected annual merit or seniority salary increases that vary by length of service, and (c) no post retirement benefit increases. Both (a) and (b) included an inflation component of 3.0%. The actuarial value of the County’s CalPERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a thirtyyear period (smoothed market value). The County’s CalPERS unfunded actuarial accrued liability is being amortized as a level of percentage of projected payroll on a closed basis. The remaining amortization period at June 30, 2007 was 30 years for the Miscellaneous Plan and 30 years for the Safety

Plan.

The County’s annual pension cost and pension asset for the fiscal year ended June 30, 2008 were as follows:

Annual required contribution

Interest on beginning net pension asset

$ 9,808,216

(3,581,906)

Adjustment to the annual required contribution 3,169,490

Annual pension cost 9,395,800

Contributions made

Decrease in net pension asset

Net pension asset, beginning of year

Net pension asset, ending of year

8,803,522

(592,278)

52,015,136

$ 51,422,858

Three-Year Trend Information for PERS

Fiscal Year Annual Pension

Ending

06/30/06

06/30/07

06/30/08

Cost (APC)

$8,804,562

$8,675,039

$9,395,800

Contribution

$9,637,849

$9,782,823

$8,803,522

APC

Contributed

109%

112%

94%

Net Pension

Asset

$50,907,352

$52,015,136

$51,422,858

60

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

10.

Post-Retirement Health Benefits

In addition to the pension benefits described in Note 9 the County provides post-retirement health insurance benefits, in accordance with County ordinance, to employees who retire from the County before attaining age 65 with at least 10 years of continuous service who have accrued sick leave in excess of 240 hours and elect the post-retirement insurance benefits rather than the sick leave payout option. Refer to

Note 7, compensated absences, for specific details. The County pays the full premium for health and dental coverage incurred by retirees under 65 years of age or not covered by another governmental or employer-paid health plan. Expenditures for post-retirement health care benefits are recognized as retirees report premiums paid for reimbursement. During the fiscal year, expenditures of $1,180,848 were recognized for post-retirement health care covering 341 retirees.

11.

Other Post Employment Benefits (OPEB)

Plan Description

The County sponsors healthcare coverage under the California Public Employees Medical and Hospital

Care Act ("PEMHCA"), commonly referred to as PERS Health. PEMHCA provides health insurance through a variety of Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) options. Participation in PEMHCA is financed in part by the County through a contribution to PEMHCA of $80.80 per employee per month. The $80.80 per month is scheduled by law to increase to $97.00 on

January 1, 2008, and to be indexed with medical inflation (CPI) for years 2009 and thereafter. Delta

Dental (Premier and DPO), vision and life insurance are also available

.

Post-Retirement Coverage

The County also offers medical, dental and vision coverage (but not life insurance) to its retirees. The

County makes the required statutory PEMHCA contribution as described above, subject to the "Unequal

Contribution Method" under which the County's contribution for retirees increases each year to 5% of its contribution for active employees multiplied by years the County has participated in PEMHCA until the two amounts are equal, except that Elected, Appointed, and Assistant Department Heads are covered under the Equal Contribution Method. Furthermore, the County will make additional contributions towards certain eligible retirees' premiums until age 65 according to the County's agreements with its various employee groups, as described below.

Retirees who have completed at least 10 continuous years of service with the County, have accrued sick leave in excess of 240 hours, and elect retiree health insurance rather than the sick leave payout option, are eligible to receive reimbursements from the County for the cost of medical, dental and vision insurance (offset by the County's statutory contribution to PEMHCA.)

For BCEA, BCMEA, CWA, BCPPOA, BCCOA (General and Management), Supervisor's Administrative

Services Assistants, and Miscellaneous and Assistant Probation Officer positions within the "Assistant

Department Heads and Non-Represented" group, the retiree may make an irrevocable election at the time of retirement to receive one of the following benefit options in addition to 12 months of County-paid health insurance:

61

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

11.

Other Post Employment Benefits (OPEB) (continued)

Post-Retirement Coverage (continued)

(1) One month of retiree-only premiums for each day of accrued sick leave at retirement;

(2) One month of 2-party premiums (employee and spouse) for each 2 1/2 days in excess of 30 days accrued sick leave to cover both employee and spouse until age 65; or

(3) One month of retiree-only premiums for each day of accrued sick leave until the sick leave credit is exhausted or the retiree reaches age 65, and one month of premiums for spousal coverage for each day of accrued sick leave in excess of thirty days until the sick leave credit is exhausted or the spouse reaches age 65.

For DSA General, DSA Management, Under Sheriffs, and BCPEA, the retiree will receive 12 months of

County-paid retiree-only health coverage. In addition, each one day of accrued sick leave is converted to one month of retiree-only health insurance premiums and credited to an account for the retiree. Premiums for the retiree and dependents, if applicable, are deducted from the account until it is depleted, or until the retiree reaches age 65, if earlier.

Elected and appointed department heads or officials retiring in good standing before age 65 under the provisions of the County's contract with PERS may continue to cover themselves and eligible dependents under the health plans. The County shall pay the full premium for such coverage until age 65.

In all cases, once the additional County contributions (as described above) end, the County pays the applicable PEMHCA statutory contribution for the remainder of the retiree's lifetime.

The County pays a 0.29%-of-premium administrative fee to PEMHCA for each retiree. For 2007, the monthly County contributions are $19.50 and $80.80 for Unequal and Equal Contribution Methods, respectively. For 2008, those amounts will increase to $72.75 and $97.00, respectively.

The following table shows January 1, 2007 monthly PERS Health (PEMHCA) premiums for retirees within the Other Northern California region (Bay Area/Sacramento for Kaiser). Dental and vision rates applicable to both 2007 and 2008 are also included.

Blue PERS PERS Delta Delta

Shield

HMO

Kaiser

HMO

Choice

PPO

Care

PPO

Premier Dental

Dental PPO Vision

Basic Plan

Retiree

Retiree+1

Family

Medicare Supplement

Retiree

Retiree+1

Family

$ 491.50

983.00

1,277.90

318.95

637.90

956.85

$ 431.17

862.34

1,121.04

289.68

579.36

869.04

$ 473.20

946.40

341.75

683.50

$ 799.97

371.68

743.36

N/A

N/A

59.51

92.58

N/A

N/A

N/A

$ 10.24

10.24

10.24

N/A

N/A

N/A

62

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

11.

Other Post Employment Benefits (OPEB) (continued)

Annual OPEB Cost and Net OPEB Obligation: For fiscal year 2008, the County’s annual OPEB cost was

$4,248,160. The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal year ended June 30, 2008 were as follows:

Annual required contribution

Interest on net OPEB obligation

Adjustment of annual required contribution

Annual OPEB cost

$ 4,248,160

-

-

4,248,160

Contributions made

Change in net OPEB obligation (asset)

Net OPEB obligation

(asset) beginning of year

Net OPEB obligation

(asset) end of year

1,180,848

3,067,312

-

$ 3,067,312

Year ended Annual OPEB cost

June 30, 2008 $ 4,248,160

Actual Employer

Contribution

$ 1,180,848

Percentage

Contributed

27.80%

Net Ending

OPEB

Obligation

(Asset)

$ 3,067,312

In future years, three year trend information will be presented. Fiscal year 2008 was the year of implementation of GASB 45, and the County elected to implement prospectively; therefore prior year comparative data is not available.

63

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

11.

Other Post Employment Benefits (OPEB) (continued)

Funded Status and Funding Progress

The funded status of the plan based on an actuarial valuation as of July 1, 2007, was as follows:

Actuarial accrued liability (AAL)

Actuarial value of plan assets

Unfunded actuarial accrued liability (UAAL)

$ 27,660,497

-

$ 27,660,497

Funded ratio (actuarial value of plan assets/AAL

Covered payroll

0.00%

101,759,340

UAAL as percentage of covered payroll

27.18%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future.

In the June 30, 2007 actuarial valuation, the Projected Unit Credit actuarial cost method was used. The actuarial assumptions include a 6% discount rate. The actuarial value of assets is “Not Applicable” since the plan holds no qualifying trust assets. The Unfunded Actuarial Accrued Liability (UAAL) is being amortized as a level dollar amount over an open 30-year period. The remaining amortization period at

June 30, 2008 was 30 years.

The required schedule of funding progress, presented as required supplementary information following the notes to the financial statements, will present multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. As fiscal year 2008 was the year of implementation of GASB Statement 45, and the County elected to apply the statement prospectively, only one year is shown. In future years, required trend data will be presented.

64

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

The County is exposed to various risk of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

The County has three risk management funds (Internal Service Funds) to consolidate the County’s insurance programs that are partially self-insured. Fund revenues are primarily premium charges to other funds and are planned to equal estimated expenses resulting from self-insurance programs, liability insurance coverage in excess of the self-insured amount, and operating expenses. The primary activities of the funds consist of risk management programs related to the following:

General Liability Insurance

Worker’s Compensation Insurance

For general liability and workers’ compensation claims, the County is a participant in the California State

Association of Counties (CSAC) – Excess Insurance Authority excess liability insurance program. The

County maintains a self-insured retention (SIR) of $100,000 per occurrence for its general liability program and $125,000 for its workers’ compensation program. The purpose of the pool is to spread the adverse effects of losses among the member agencies. The County pays an annual basic premium for excess coverage and is assessed an annual risk premium based on an actuarial review that estimates each of the program’s participant’s ultimate liabilities. Should actual losses among participants be greater than anticipated, the County will be assessed its pro rata share of that deficiency. Conversely, if the actual losses are less than anticipated, the County will be refunded its pro rata share of the excess. Commercial insurance covers claims between $100,000 and $20,000,000 for general liability. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years.

The County is fully self-insured for its unemployment insurance program. Quarterly billings from the

State Employment Development Department are sent to the County’s claims reviewers, R.E. Harrington,

Inc. After the claims are reviewed by R.E. Harrington, Inc., they are turned over to the County for payment.

It is the County’s policy to accrue to the Internal Service Fund the estimated liability, as determined with the assistance of independent actuaries, for claims in cases where such amounts are reasonably determinable and where the likelihood of liability exists.

All operating funds participate in the program and make payments to the insurance funds based on actuarial estimates of the amounts needed to pay prior and current year claims, and to allow accrual of estimated incurred but not reported claims. These claims liability estimates are based on the requirements of GASB Statements No. 10 and 30 and include estimate claims incurred but not yet reported as of June

30, 2008. The claims liability includes all allocated loss adjustment expenses. Changes in the insurance funds’ claims liability amount during the fiscal years ended June 30, 2007 and 2008 were as follows:

65

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

12. Risk Management (continued)

Fiscal Year

2006-2007

2007-2008

Claims

Liability

July 1

Current Year

Claims and Changes in Estimates

Current Year

Claim

Claims

Liability

June 30

$ 4,009,000 $ (427,361) $ 1,480,361 $ 5,062,000

$ 5,062,000 $ (7,296,413) $ 7,483,413 $ 5,249,000

13. Contingencies

Grants

The County participates in a number of grant programs funded, in whole or part, by federal, state and other sources. These programs are subject to program compliance audits by the grantors or their representatives. The audits of these programs for or including the fiscal year ended June 30, 2008, have not yet been conducted. Additionally, certain audits related to prior fiscal years have not been finalized.

Accordingly, the County’s compliance with applicable grant requirements will be established at some future date. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although, the County expects such amounts, if any, to be immaterial.

Litigation

The County is a defendant in various matters of litigation. Of these matters, management and County’s legal counsel do not anticipate any material effect on the June 30, 2008 financial statements.

Tax and Revenue Anticipation Notes

In July 2008, the County issued $25,200,000 in notes in anticipation of operation expenditures during the

2008-2009 fiscal year. The notes will be redeemed June 30, 2009.

66

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

15.

Stewardship, Compliance, and Accountability

Budgetary Data

In accordance with the provisions of Sections 29000 and 29143, inclusive, of the California Government

Code and other statutory provisions, commonly known as the County Budget Act, the County prepares a budget for each fiscal year on or before August 30. Budgeted expenditures are enacted into law through the passage of an Appropriation Ordinance. This ordinance mandates the maximum authorized expenditures for the fiscal year and cannot be exceeded except by subsequent amendments to the budget by the County’s Board of Supervisors.

An operating budget is adopted each fiscal year for all Governmental Funds except for the Air Quality

Management District. Expenditures are controlled at the object level within budget units for the County.

The object level within a budget unit is the level at which expenditures may not legally exceed appropriations. Any amendments or transfers of appropriations between object levels within the same budget unit or between departments or funds are authorized by the County Administrative Officer’s office and must be approved by the Board of Supervisors. The Board of Supervisors must approve supplementary appropriations normally financed by unanticipated revenues during the year. Pursuant to

Board Resolution, the County Administrative Officer is authorized to approve transfers and revision of appropriations under $50,000 within a single budget unit as deemed necessary and appropriate. Budgeted amounts in the budgetary financial schedules are reported as originally adopted and as amended during the fiscal year by resolutions approved by the Board of Supervisors.

The County uses an encumbrances system as an extension of normal budgetary accounting for the general, special revenue, and other debt service funds and to assist in controlling expenditures of the capital projects funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations.

Encumbrances outstanding at year-end are recorded as reservations of fund balance since they do not constitute expenditures or liabilities. Encumbrances are combined with expenditures for budgetary comparison purposes. Unencumbered appropriations lapse at fiscal year-end. Encumbered appropriations are carried forward in the ensuing fiscal year’s budget.

The budget approved by the Board of Supervisors for the general fund includes budgeted expenditures and reimbursements for amounts disbursed on behalf of other Governmental Funds. Actual reimbursements for these items have been eliminated in the accompanying budgetary financial schedules.

Accordingly, the related budgets for these items have also been eliminated in order to provide a meaningful comparison of actual and budgeted results of operations.

The budgets for the governmental funds may include an object level known as “intrafund transfers” in the charges for appropriations. This object level is an accounting mechanism used by the County to show reimbursements between operations within the same fund (an example would be the General Fund).

67

COUNTY OF BUTTE, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

15.

Stewardship, Compliance, and Accountability (continued)

Deficit Fund Balance

The following funds had deficit fund balances at June 30, 2008:

Deficit Fund Balance

Behavioral Health Fund

IHSS Public Authority Fund

$

$

5,694,106

113,679

Behavioral Health Fund had deficit net assets of $5,694,106 at June 30, 2008. The deficit fund balance for Behavioral Health Fund primarily resulted from reimbursement delays and a decrease in funding from the State of California. The County has implemented expenditure reductions to eliminate the deficit net assets.

IHSS Public Authority had deficit net assets of $113,679 at June 30, 2008. The deficit fund balance for

Behavioral Health Fund primarily resulted from a decrease in funding from the State of California. The

County has implemented expenditure reductions to eliminate the deficit net assets

.

68

Required Supplementary Information

Actuarial

Valuation

Date

6/30/2005:

Misc.

Safety

Total

6/30/2006:

Misc.

Safety

Total

6/30/2007:

Misc.

Safety

Total

COUNTY OF BUTTE, CALIFORNIA

County Employee’s Retirement Plan

(Defined Benefit Pension Plan)

Schedule of Funding Progress

For the Fiscal Year Ended June 30, 2008

The tables below shows a three-year analysis of the actuarial value of assets as a percentage of the actuarial accrued liability and the unfunded actuarial accrued liability as a percentage of the annual covered payroll as of

June 30:

Actuarial

Value of

Assets

(A)

Entry Age

Actuarial

Accrued

Liability

(B)

Unfunded

Actuarial Funded

Accrued

Liability

(B-A)

(UAAL)

Ratio

(A/B)

Covered

Payroll

( C)

UAAL as

Percentage of Covered

Payroll

((B-A)/C)

$ 289,731,107

72,647,313

$ 362,378,420

$ 305,981,838

70,897,375

$ 376,879,213

(1,749,938)

$ 314,637,165

78,272,745

$ 392,909,910

$ 338,623,312

81,150,894

$ 419,774,206

2,878,149

$ 343,569,266

85,517,599

$ 429,086,865

$ 373,069,727

89,635,795

$ 462,705,522

4,118,196

94.7%

102.5%

96.2%

$ 74,650,612

12,442,942

$ 87,093,554

21.8%

(14.1%)

16.6%

92.9%

96.5%

93.6%

$ 83,528,481

14,895,548

$ 98,424,029

92.1%

95.4%

92.7%

$ 89,029,277

16,019,327

$ 105,048,604

28.7%

19.3%

27.3%

33.1%

25.7%

32.0%

69

Other Post Employment Benefits (OPEB) Plan - Schedule of Funding Progress

(4)

Actuarial

(1)

Actuarial

(2)

Actuarial (3)

Unfunded

Actuarial

Accrued

Liability (5)

Valuation

Date

Value of

Plan Assets

Accrued

Liability (AAL)

Funded ratio

(UAAL) Annual Covered

(2) - (1) Payroll

(6)

UAAL as a

Percentage of

Covered

Payroll

(4) ÷ (5)

7/1/2007 $ $ 27,660,497 0.00% $ 27,660,497 $ 101,759,340 27.18%

Notes to Required Supplementary Information

1. This information is intended to help users assess the County’s OPEB plan’s status on a going-concern basis, assess progress made in accumulating assets to pay benefits when due, and make comparisons with other public employers.

2. Because this is the first valuation under GASB 45, there is no historical information provided. In the future, information from the three most recent valuations will be presented.

70

COUNTY OF BUTTE

General Fund

The General Fund is the general operations fund of the County. It accounts for all financial activities except those required to be accounted for in another fund. The accompanying Budgetary Comparison Schedule represents the primary expenditure classification of services provided by the County through the General Fund.

71

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND- BUDGETARY BASIS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original

$ 30,025,768

Final

$ 30,025,768

Amounts

$ 30,025,768

Variance with

Final Budget

Actual Positive

(Negative)

Budgetary fund balance, beginning of year

RESOURCES (inflows):

Taxes

Licenses and permits

Fines, forfeitures, and penalties

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Other financing sources

Amounts available for appropriation

CHANGES TO APPROPRIATIONS (outflows):

General Government:

Board of Supervisors:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Board of Supervisors

Administrative Office:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Administrative Office

Clerk of the Board:

Services and supplies

Total Clerk of the Board

General Service Administration:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total General Service Administration

Auditor-Controller:

Salaries and employee benefits

Services and supplies

Capital assets

Other financing uses

Total Auditor-Controller

52,938,000

5,156,711

1,504,465

2,404,669

30,034,571

17,883,623

2,943,758

693,751

113,559,548

53,184,723

5,448,711

1,504,465

2,404,669

32,154,338

17,806,937

3,283,993

751,336

116,539,172

52,924,998

3,588,532

2,446,684

2,702,932

30,115,180

17,573,082

4,045,587

273,431

113,670,426

(259,725)

(1,860,179)

942,219

298,263

(2,039,158)

(233,855)

761,594

(477,905)

(2,868,746)

717,810

219,139

4,455

1,091,447

2,032,851

717,810

221,300

1,536

4,455

1,091,447

2,036,548

699,236

169,307

4,455

934,843

1,807,841

18,574

51,993

1,536

156,604

228,707

1,794,760

1,425,266

5,900

(130,021)

3,095,905

1,821,439

1,276,588

225,605

130,900

(130,021)

3,324,511

1,821,439

706,398

8,216

44,703

(130,389)

2,450,367

570,190

217,389

86,197

368

874,144

5,009

5,009

438

438

4,571

4,571

745,832

456,719

2,000

310

2,839

1,207,700

713,283

456,719

2,417

310

35,388

1,208,117

624,352

56,876

988

310

33,187

715,713

88,931

399,843

1,429

2,201

492,404

2,705,875

335,330

10,046

(752,349)

2,298,902

2,281,268

426,611

10,046

(526,742)

2,191,183

2,038,057

335,043

10,046

(526,743)

1,856,403

243,211

91,568

1

334,780

(continued)

72

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND - BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

General Government (continued):

Purchasing:

Salaries and employee benefits

Services and supplies

Capital assets

Other financing uses

Total Purchasing

Treasurer-Tax Collector:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Treasurer-Tax Collector

Assessor:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Assessor

Human Resources:

Salaries and employee benefits

Services and supplies

Capital assets

Other financing uses

Total Human Resources

County Counsel:

Salaries and employee benefits

Services and supplies

Capital assets

Other financing uses

Total County Counsel

Elections:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Elections

$ 356,215

50,722

758

(138,765)

268,930

$ 336,215

70,722

758

(138,765)

268,930

$ 297,649

56,382

758

(144,192)

210,597

$ 38,566

14,340

5,427

58,333

1,866,937

975,648

6,335

31,657

2,880,577

1,849,809

1,089,940

132

6,335

48,753

2,994,969

1,576,435

823,379

132

6,335

48,753

2,455,034

273,374

266,561

539,935

3,321,526

524,329

2,500

19,951

67,264

3,935,570

3,313,517

555,453

9,453

19,951

68,320

3,966,694

3,125,600

439,311

9,452

19,951

68,320

3,662,634

187,917

116,142

1

304,060

1,218,644

302,323

6,500

(487,231)

1,040,236

1,412,644

356,583

6,500

(487,231)

1,288,496

1,286,397

264,774

6,500

(493,907)

1,063,764

126,247

91,809

6,676

224,732

1,417,015

921,392

4,464

(1,696,359)

646,512

1,095,432

1,000,397

4,464

(1,399,570)

700,723

1,095,432

922,014

4,464

(1,399,570)

622,340

78,383

78,383

998,347

950,886

528,026

55,519

2,532,778

947,427

1,243,546

56

485,051

54,930

2,731,010

947,426

1,185,153

56

43,134

54,929

2,230,698

1

58,393

441,917

1

500,312

(continued)

73

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND - BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

General Government (continued):

Public Works General Services:

Services and supplies

Other charges

Other financing uses

Total Public Works General Services

SPCL Grant Requirement:

Services and supplies

Other charges

Other financing uses

Total SPCL Grant Requirement

Tax and Revenue Anticipation Notes:

Other charges

Total Tax and Revenue Anticipation Notes

$ 9,340

116,109

561

126,010

$ 7,994

211,022

387

219,403

$ 7,993

211,022

386

219,401

$ 1

1

2

25,188

344

100

25,632

25,188

344

100

25,632

19,414

344

73

19,831

5,774

27

5,801

460,500

460,500

460,500

460,500

460,500

460,500

Retired Employee Benefits:

Salaries and employee benefits

Total Retired Employee Benefits

Unallocated A-87:

Salaries and employee benefits

Services and supplies

Capital assets

Other financing uses

Total Unallocated A-87

General Revenue and Transfers:

Other financing uses

Total General Revenue and Transfers

Total General Government

Public Protection:

Emergency Services:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Emergency Services

Grand Jury:

Services and supplies

Other financing uses

Total Grand Jury

110,000

110,000

227,113

227,113

227,112

227,112

1

1

473,713

10,231

102,361

586,305

5,130

382,602

10,231

196,087

594,050

5,130

323,529

10,231

196,086

534,976

59,073

1

59,074

22,384,174

22,384,174

22,721,674

22,721,674

21,062,131

21,062,131

1,659,543

1,659,543

43,632,582 44,964,562 39,599,780 5,364,782

160,431

81,036

3,000

658

41,700

286,825

160,431

325,313

1,575,429

64,938

39,055

2,165,166

156,624

217,241

1,562,065

64,937

12,637

2,013,504

3,807

108,072

13,364

1

26,418

151,662

85,827

24,851

110,678

86,228

24,450

110,678

86,227

9,301

95,528

1

15,149

15,150

(continued)

74

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND - BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Public Protection (continued):

County Share Trial Courts:

Services and supplies

Other charges

Other financing uses

Total County Share Trial Courts

$ 642,308

1,330,000

28,413

2,000,721

$ 536,808

1,583,677

28,413

2,148,898

$ 524,169

1,583,676

22,959

2,130,804

$ 12,639

1

5,454

18,094

District Attorney - Criminal:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total District Attorney - Criminal

District Attorney - Child Abduction Unit:

Salaries and employee benefits

Services and supplies

Other charges

Other financing uses

Total District Attorney - Child Abduction Unit

District Attorney - Welfare Fraud Investigation:

Salaries and employee benefits

Services and supplies

Other charges

Other financing uses

Total District Attorney - Welfare Fraud Investigation

8,846,428

1,297,702

29,700

93,053

(70,430)

10,196,453

8,774,219

1,503,831

66,557

245,107

(77,293)

10,512,421

8,555,130

1,301,982

66,557

201,714

(105,853)

10,019,530

219,089

201,849

43,393

28,560

492,891

222,865

20,864

1,060

59,263

304,052

222,865

21,924

59,263

304,052

166,628

8,070

44,582

219,280

56,237

13,854

14,681

84,772

462,500

94,866

4,658

137,977

700,001

489,285

72,739

137,977

700,001

489,284

67,742

120,505

677,531

1

4,997

17,472

22,470

Public Defender:

Services and supplies

Other financing uses

Total Public Defender

Sheriff - Coroner Administration:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Sheriff - Coroner Administration

Sheriff - Coroner Operation:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Sheriff - Coroner Operation

2,570,000

24,078

2,594,078

2,570,000

24,078

2,594,078

2,421,884

22,213

2,444,097

148,116

1,865

149,981

5,044,589

548,772

12,185

249,534

5,855,080

5,046,438

628,888

1,628

18,711

243,008

5,938,673

4,963,013

525,499

1,628

18,711

192,421

5,701,272

83,425

103,389

50,587

237,401

8,484,381

2,025,356

220,000

407,058

675,190

11,811,985

8,874,529

2,123,433

377,784

511,289

642,383

12,529,418

8,874,529

2,117,810

377,067

168,947

642,382

12,180,735

5,623

717

342,342

1

348,683

(continued)

75

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND - BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Public Protection (continued):

Sheriff - Coroner Incarc.:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Sheriff - Coroner Incarc.

$ 9,252,136

6,794,093

15,000

265,779

214,783

16,541,791

$ 8,892,661

7,363,427

23,878

308,893

214,783

16,803,642

$ 8,551,884

5,761,385

23,877

280,952

158,024

14,776,122

$ 340,777

1,602,042

1

27,941

56,759

2,027,520

Sheriff - MIOCR Grant

Salaries and employee benefits

Total Sheriff - MIOCR Grant

Sheriff - Rural County Supplement:

Salaries and employee benefits

Services and supplies

Capital assets

Other financing uses

Total Sheriff - Rural County Supplement

Sheriff - Special Enforcement:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Sheriff - Special Enforcement

Sheriff - Narcotics Task Force:

Salaries and employee benefits

Services and supplies

Other charges

Other financing uses

Total Sheriff - Narcotics Task Force

Jail - Consent Decree:

Salaries and employee benefits

Services and supplies

Other financing uses

Total Jail - Consent Decree

Juvenile Hall General:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Juvenile Hall General

1,755

1,755

1,754

1,754

1

1

500,762

177,451

7,380

685,593

500,762

140,907

65,000

11,906

718,575

134,461

37,708

8,696

180,865

366,301

103,199

65,000

3,210

537,710

803,681

393,762

10,000

96,526

1,303,969

803,681

511,360

44,248

184,171

96,526

1,639,986

801,041

440,191

44,248

182,876

74,206

1,542,562

2,640

71,169

1,295

22,320

97,424

302,744

10,605

15,500

(4,752)

324,097

304,646

14,860

17,022

(4,510)

332,018

304,646

14,859

17,022

(4,510)

332,017

1

1

104,476

112,008

4,302

220,786

104,476

125,124

4,302

233,902

100,270

55,545

2,455

158,270

4,206

69,579

1,847

75,632

3,571,528

1,280,041

5,000

40,992

84,363

4,981,924

3,610,471

1,433,367

5,000

40,992

84,363

5,174,193

3,610,470

1,128,247

1,760

40,992

69,782

4,851,251

1

305,120

3,240

14,581

322,942

(continued)

76

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND - BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Public Protection (continued):

Probation Victim Witness:

Salaries and employee benefits

Services and supplies

Other financing uses

Total Probation Victim Witness

Probation General Services:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Probation General Services

$ 231,830

36,458

6,291

274,579

7,875,455

1,940,655

76,075

56,889

270,600

10,219,674

$ 231,830

36,458

6,291

274,579

7,783,385

2,206,991

95,798

56,889

284,326

10,427,389

$ 218,668

26,294

5,371

250,333

$ 13,162

10,164

920

24,246

7,536,539

1,693,090

65,209

52,211

246,961

9,594,010

246,846

513,901

30,589

4,678

37,365

833,379

Probation BD/CON:

Salaries and employee benefits

Services and supplies

Other financing uses

Total Probation BD/CON

Development Services:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Development Services

Subdivision Inspection:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Subdivision Inspection

148,096

127,962

4,039

280,097

148,061

127,962

4,074

280,097

143,751

86,882

4,074

234,707

4,310

41,080

45,390

4,067,273

1,765,596

16,000

104,454

388,210

6,341,533

4,062,706

2,580,174

20,567

104,454

388,210

7,156,111

3,691,774

1,131,309

20,567

71,003

231,052

5,145,705

370,932

1,448,865

33,451

157,158

2,010,406

860,116

89,555

160,000

8,435

12,977

1,131,083

796,538

89,669

220,221

8,435

16,334

1,131,197

651,436

44,391

220,220

635

16,334

933,016

145,102

45,278

1

7,800

198,181

Agriculture General Services:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Agriculture General Services

1,753,253

327,427

15,000

45,750

40,061

2,181,491

1,739,771

393,496

28,482

62,966

40,061

2,264,776

1,695,972

299,681

28,481

46,510

36,125

2,106,769

43,799

93,815

1

16,456

3,936

158,007

(continued)

77

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND - BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Public Protection (continued):

Recorder:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Recorder

Planning Comm. Loc. Ag. Formation:

Other charges

Total Planning Comm. Loc. Ag. Formation

$ 1,103,191

370,734

7,828

44,443

1,526,196

$ 1,102,199

482,029

992

7,828

44,443

1,637,491

$ 927,927

287,783

991

7,828

44,320

1,268,849

$ 174,272

194,246

1

123

368,642

200,000

200,000

200,000

200,000

198,753

198,753

1,247

1,247

Total Public Protection

Public Assistance:

Children's' Trust Fund - AB2994:

Services and supplies

Total Children's' Trust Fund - AB2994

Welfare Domestic Violence:

Services and supplies

Total Welfare Domestic Violence

Institutional/ Correction:

Services and supplies

Other charges

Other financing uses

Total Institutional/ Correction

Juvenile Court Wards:

Other charges

Other financing uses

Total Juvenile Court Wards

Veteran's Service Officer:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Veteran's Service Officer

Total Public Assistance

80,072,686 85,279,096 77,057,264 8,221,832

80,000

80,000

80,000

80,000

32,494

32,494

47,506

47,506

30,000

30,000

30,000

30,000

30,000

30,000

228,672

1,382

230,054

119,232

228,672

1,382

349,286

115,885

756

116,641

119,232

112,787

626

232,645

1,498

3

1,501

1,498

3

1,501

556

2

558

942

1

943

152,617

46,229

266

17,393

216,505

162,365

46,229

509

266

7,136

216,505

162,364

37,521

509

266

4,706

205,366

1

8,708

2,430

11,139

558,060 677,292 385,059 292,233

(continued)

78

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND - BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Education:

Farm, Home, and 4H Department:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Farm, Home, and 4H Department

Total Education

Recreation and cultural services:

Butte Meadows Recreation Grant:

Services and supplies

Other financing uses

Total Butte Meadows Recreation Grant

Veteran's Memorial Halls:

Services and supplies

Capital assets

Other financing uses

Total Veteran's Memorial Halls

Total Recreation and Cultural Services

Provisions for Contingencies:

Appropriation Contingencies

Total Charges to appropriations

Budgetary Fund balances, ending

$ 153,882

137,727

6,000

27,659

4,759

330,027

$ 153,882

135,204

8,118

27,659

5,164

330,027

$ 152,221

109,169

8,117

27,658

5,164

302,329

$ 1,661

26,035

1

1

27,698

330,027 330,027 302,329 27,698

50,000

8,162

58,162

107,307

8,162

115,469

69,201

499

69,700

38,106

7,663

45,769

347,475

25,535

1,967

374,977

464,529

25,535

4,499

494,563

375,898

25,535

4,499

405,932

88,631

88,631

433,139 610,032 475,632 134,400

5,954,338 5,331,023 5,331,023

130,980,832 137,192,032 117,820,064 19,371,968

$ 12,604,484 $ 9,372,908 $ 25,876,130 $ 16,503,222

(continued)

79

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-GENERAL FUND - BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Proceeds from sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes

$ 113,670,426

(18,822)

Transfers in are inflows of budgetary resources but are not revenues for financial reporting purposes

Proceeds from inception of capital lease are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - general fund $

(131,447)

(123,162)

113,396,995

Uses/outflows of resources:

Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 117,820,064

Differences - budget to USGAAP:

Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes

Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balance - general fund

(21,062,131)

$ 96,757,933

80

COUNTY OF BUTTE

Welfare Fund

The Welfare Fund was established to provide social and employment services to the residents of Butte County.

Services are provided through two Community Employment Centers in Oroville and Chico.

81

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-WELFARE FUND-BUDGETARY BASIS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

$ 1,754,341 $ 1,754,341 Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Other financing sources

Amounts available for appropriation

CHANGES TO APPROPRIATIONS (outflows):

Public Protection:

Welfare - Public Guardian:

Salaries and employee benefits

Services and supplies

Other charges

Other financing uses

Total Welfare - Public Guardian

405,836

5,783

59,500

390,492

861,611

861,611 Total Public Protection

Public Assistance:

Welfare Administration:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Other financing uses

Total Welfare Administration

12,362,061

5,996,626

1,606,146

55,500

(20,020,542)

(209)

Welfare - Eligibility:

Salaries and employee benefits

Services and supplies

Other charges

Other financing uses

Total Welfare - Eligibility

Welfare Protective Services:

Salaries and employee benefits

Services and supplies

Other charges

Other financing uses

Total Welfare Protective Services

137,769,460

653,189

255,562

138,678,211

11,007,285

52,078

220,000

2,125,964

13,405,327

8,933,246

1,739,049

1,250,665

6,717,430

18,640,390

140,340,799

683,029

686,602

47,400

141,757,830

403,581

8,783

59,500

389,747

861,611

861,611

11,907,685

5,863,761

1,235,944

(18,109,744)

897,646

10,763,453

54,878

220,000

1,970,060

13,008,391

8,933,246

2,439,169

1,330,505

6,717,430

19,420,350

Actual Positive

Amounts

$ 1,754,341

134,580,920

(17,661)

685,684

1,297,288

47,746

136,593,977

403,581

5,281

57,918

351,329

818,109

818,109

11,907,684

5,739,144

1,235,944

(18,109,744)

773,028

10,649,073

51,317

190,170

1,776,566

12,667,126

8,884,769

1,447,099

918,517

6,059,521

17,309,906

Variance with

Final Budget

(Negative)

$ -

(17,661)

(5,759,879)

2,655

610,686

346

(5,163,853)

3,502

1,582

38,418

43,502

43,502

1

124,617

124,618

114,380

3,561

29,830

193,494

341,265

48,477

992,070

411,988

657,909

2,110,444

(continued)

82

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-WELFARE FUND-BUDGETARY BASIS (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Welfare CALWORKS Program:

Salaries and employee benefits

Services and supplies

Other charges

Other financing uses

Total Welfare CALWORKS Program

Welfare Aids:

Other charges

Total Welfare Aids

Welfare Sed-Foster Care:

Other charges

Total Welfare Sed-Foster Care

Welfare General Relief:

Services and supplies

Other charges

Total Welfare General Relief

Total Public Assistance

Total Charges to appropriations

Budgetary Fund balances, ending

$ 4,281,445

2,631,869

1,449,953

10,786,656

19,149,923

85,250,726

85,250,726

85,671,712

85,671,712

81,929,782

81,929,782

3,741,930

3,741,930

651,538

651,538

69,600

649,305

$

718,905

137,816,600

138,678,211

1,754,341

$ 4,281,168

3,924,734

1,834,649

10,783,071

20,823,622

685,816

685,816

52,916

1,189,745

1,242,661

141,750,198

142,611,809

$ 900,362

$ 4,281,167

3,643,542

1,777,650

9,922,328

19,624,687

685,816

685,816

$

42,088

1,176,944

1,219,032

134,209,377

135,027,486

3,320,832

$

281,192

860,743

1,198,935

$

1

56,999

10,828

12,801

23,629

7,540,821

7,584,323

2,420,470

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

$ 136,593,977

Transfers in are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - welfare fund $

(47,746)

136,546,231

83

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84

COUNTY OF BUTTE

Public Health Fund

The Public Health Fund was established to provide public health services to the residents of Butte County.

85

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE-PUBLIC HEALTH FUND-BUDGETARY BASIS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original

Budgetary fund balance, beginning of year

RESOURCES (inflows):

Licenses and permits

Fines, forfeitures, and penalties

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Other financing sources

Amounts available for appropriation

418,447

312,000

22,794,313

3,200,784

15,035

911,867

27,652,446

CHANGES TO APPROPRIATIONS (outflows):

Health and Sanitation:

Public Health General Services:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Total Public Health General Services

12,927,117

4,217,921

755,788

297,657

18,198,483

Public Health County Medical Services:

Services and supplies 6,410,339

Other charges

Total Public Health County Medical Services

12,251

6,422,590

Public Health Environmental Health:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Total Public Health Environmental Health

2,346,619

553,313

72,396

59,045

3,031,373

Total Health and Sanitation

Total Charges to appropriations

Budgetary Fund balances, ending

27,652,446

27,652,446

$

3,314,416

1,056,267

27,966,066

17,344,026

418,447

312,000

22,849,901

15,035

12,944,083

5,442,283

762,788

317,657

19,466,811

6,410,339

12,251

6,422,590

2,307,377

789,181

117,138

59,861

3,273,557

29,162,958

29,162,958

$ 16,147,134

$ 17,344,026

452,964

376,369

357,310

18,344,929

2,712,658

54,736

871,439

23,170,405

11,076,955

3,518,277

520,746

110,804

15,226,782

4,262,891

6,965

4,269,856

2,188,657

471,700

117,138

19,861

2,797,356

$

22,293,994

22,293,994

18,220,437

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers in are inflows of budgetary resources but are not revenues for financial reporting purposes

$ 23,170,405

(868,708)

$ -

34,517

64,369

357,310

(4,504,972)

(601,758)

39,701

(184,828)

(4,795,661)

1,867,128

1,924,006

242,042

206,853

4,240,029

2,147,448

5,286

2,152,734

118,720

317,481

40,000

476,201

6,868,964

6,868,964

$ 2,073,303

Proceeds from sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - public health fund

Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$

(2,731)

22,298,966

86

COUNTY OF BUTTE

Behavioral Health Fund

The Behavioral Health Fund was established to provide behavioral health services to the residents of Butte

County.

87

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BEHAVIORAL HEALTH FUND-BUDGETARY BASIS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

$ (177,099) $ (177,099)

51,429,685

2,298,636

1,127

450,519

54,179,967

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ (177,099) $ Budgetary fund balance, beginning of year

RESOURCES (inflows):

Fines, forfeitures, and penalties

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Other financing sources

Amounts available for appropriation

CHANGES TO APPROPRIATIONS (outflows):

Health and Sanitation:

Behavioral Health General Services:

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Total Mental Health General Services

Mental Health Substance Abuse:

Salaries and employee benefits

Services and supplies

Other charges

Total Mental Health Substance Abuse

Behavioral Health Proposition 36:

Salaries and employee benefits

Services and supplies

Other charges

Total Behavioral Health Proposition 36

Total Health and Sanitation

46,992,896

1,976,520

382,996

49,802,931

26,511,420

16,319,749

2,156,153

3,239

44,990,561

2,037,473

1,305,404

450,519

174,426

3,517,303

25,464,921

22,952,813

2,370,969

537,374

51,326,077

1,969,553

2,062,704

195,229

4,227,486

113,678

41,359

39,060,480

2,524,419

7,298

464,501

42,211,735

23,630,046

17,212,367

1,900,333

379,543

43,122,289

1,892,960

1,361,615

185,103

3,439,678

113,678

41,359

(12,369,205)

225,783

6,171

13,982

(11,968,232)

1,834,875

5,740,446

470,636

157,831

8,203,788

76,593

701,089

10,126

787,808

586,896

269,940

438,231

1,295,067

49,802,931

628,694

290,077

342,001

1,260,772

56,814,335

628,694

254,098

283,983

1,166,775

47,728,742

35,979

58,018

93,997

9,085,593

Total Charges to appropriations

Budgetary Fund balances, ending

49,802,931

$ (177,099) $

56,814,335

(2,811,467) $

47,728,742

(5,694,106)

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers in are inflows of budgetary resources but are not revenues for financial reporting purposes (464,364)

9,085,593

$ (2,882,639)

Proceeds from sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - behavioral health fund

(137)

88

COUNTY OF BUTTE

Road Fund

The Road Fund provides for planning, design, construction, maintenance, and administration of County transportation planning activities. Revenues consist primarily of the County’s share of state highway user taxes and are supplemented by federal funds.

89

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - ROAD FUND - BUDGETARY BASIS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Budgetary fund balance, beginning of year

RESOURCES (inflows):

Licenses and permits

Fines, forfeitures, and penalties

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Other financing sources

Amounts available for appropriation

66,000

275,000

20,114,870

4,095,136

373,000

1,708,351

26,632,357

CHANGES TO APPROPRIATIONS (outflows):

Public Ways and Facilities:

Road Operations:

Salaries and employee benefits 7,901,363

Services and supplies

Other charges

Capital assets

Total Road Operations

19,264,371

1,116,557

870,517

29,152,808

Public Works - Construction and Maintentance:

Services and supplies

Total PW-Contstruction and Maint.

Total Public Assistance 29,152,808

Provisions for Contingencies:

Appropriation Contingencies

Total Charges to appropriations

Budgetary Fund balances, ending

1,000,000

30,152,808

$ 7,310,616

$ 10,831,067

66,000

275,000

21,252,870

4,095,136

373,000

2,564,807

28,626,813

7,901,363

23,944,269

1,116,557

870,517

33,832,706

138,691

138,691

33,971,397

1,000,000

34,971,397

$ 4,486,483

51,539

78,531

564,316

11,919,290

2,620,451

637,031

2,161,353

18,032,511

(14,461)

78,531

289,316

(9,333,580)

(1,474,685)

264,031

(403,454)

(10,594,302)

7,800,772

8,250,715

551,589

734,627

17,337,703

100,591

15,693,554

564,968

135,890

16,495,003

9,265

9,265

17,346,968

129,426

129,426

16,624,429

17,346,968

1,000,000

17,624,429

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers in are inflows of budgetary resources but are not revenues for financial reporting purposes

Proceeds from sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - road fund

$

$

18,032,511

(2,153,172)

(8,181)

15,871,158

90

COUNTY OF BUTTE, CALIFORNIA

Note to Required Supplementary Information

For the Fiscal Year Ended June 30, 2008

BUDGETARY BASIS OF ACCOUNTING

In accordance with the provisions of Sections 29000 and 29143, inclusive, of the California Government Code and other statutory provisions, commonly known as the County Budget Act, the County prepares a budget for each fiscal year on or before August 30. Budgeted expenditures are enacted into law through the passage of an

Appropriation Ordinance. This ordinance mandates the maximum authorized expenditures for the fiscal year and cannot be exceeded except by subsequent amendments to the budget by the County’s Board of Supervisors.

An operating budget is adopted each fiscal year for all Governmental Funds except for the JPFA. Expenditures are controlled at the object level within budget units for the County. The object level within a budget unit is the level at which expenditures may not legally exceed appropriations. Any amendments or transfers of appropriations between object levels within the same budget unit or between departments or funds are authorized by the County Administrative Officer’s office and must be approved by the Board of Supervisors. The Board of

Supervisors must approve supplementary appropriations normally financed by unanticipated revenues during the year. Pursuant to Board Resolution, the County Administrative Officer is authorized to approve transfers and revision of appropriations under $50,000 within a single budget unit as deemed necessary and appropriate.

Budgeted amounts in the budgetary financial schedules are reported as originally adopted and as amended during the fiscal year by resolutions approved by the Board of Supervisors.

The County uses an encumbrances system as an extension of normal budgetary accounting for the general, special revenue, and other debt service funds and to assist in controlling expenditures of the capital projects funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as reservations of fund balance since they do not constitute expenditures or liabilities. Unencumbered appropriations lapse at fiscal year-end. Encumbered appropriations are carried forward in the ensuing fiscal year’s budget.

The budget approved by the Board of Supervisors for the general fund includes budgeted expenditures and reimbursements for amounts disbursed on behalf of other Governmental Funds. Actual reimbursements for these items have been eliminated in the accompanying budgetary financial schedules. Accordingly, the related budgets for these items have also been eliminated in order to provide a meaningful comparison of actual and budgeted results of operations.

The budgets for the governmental funds may include an object level known as “intrafund transfers” in the charges for appropriations. This object level is an accounting mechanism used by the County to show reimbursements between operations within the same fund (an example would be the General Fund).

91

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92

Combining Nonmajor

Governmental Funds Statements

COUNTY OF BUTTE

Nonmajor Governmental Funds

CAPITAL PROJECTS FUND

Capital Project Fund is used to account for financial resources to be used for the acquisition of land or acquisition and construction of major facilities other than those financed by the proprietary fund types.

SPECIAL REVENUE FUNDS

Special Revenue funds are established to finance particular governmental activities and are financed by specific taxes or other revenues. Such funds are authorized by statutory provisions to pay for certain activities of a continuing nature. The nonmajor Special Revenue funds are listed below:

The Equipment Replacement Fund was established to provide financing for equipment replacement.

The Equipment Fund was established to provide financing for equipment purchases.

The State COPS Fund was established to account for the State COPS monies received by the

County.

The Water Resources Fund accounts for revenues and expenditures relating to water and other resources management and conservation.

The Fire Protection Fund provides fire protection services to both cities and unincorporated areas in the County.

The Library Fund accounts for the revenues and expenditures relating to libraries.

The Transit Fund was established to account for the local transportation tax funds.

The Housing and Community Development Fund accounts for revenues and expenditures relating to housing and community improvement and development.

The Fish and Game Fund is used to account for fines and forfeitures received under Section

13003 of the State of California Fish and Game Code and for other revenue and expenditures for the propagation and conservation of fish and game. The Board of Supervisors authorizes expenditures on the advice of the Fish and Game Commission.

93

COUNTY OF BUTTE

Nonmajor Governmental Funds

(Continued)

SPECIAL REVENUE FUNDS (Continued)

The Child Support Services Fund was established by AB 196, AB 150, and SB 542 during fiscal year 2000-01 to provide separate fund accountability as required. These legislative bills mandated that all Family Support Divisions located in the District Attorney’s Offices become separate and independent departments. Child Support Services establishes paternity, obtains and enforces court orders for child support, collects and distributes payments, and provides community outreach about those services for the benefit of minor children.

The County Service Areas Fund accounts for special district funds that provide sewer, drainage, fire, and street lighting and maintenance to specific areas in the County and are financed by property taxes and user charges.

The IHSS Public Authority Fund allows for the maintenance of a registry and referral system to assist consumers in finding qualified in-home supportive services (IHSS) personnel as well as training of and support for providers and recipients of IHSS. Revenues primarily come from grants.

The Air Quality Management District Fund accounts for the share the County receives through a subvention/ allocation process from motor vehicles fees levied by the State of California, the usage of which is restricted to reducing air pollution.

DEBT SERVICE FUND

Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general long-term debt.

94

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95

ASSETS

Cash and investments

Cash and investments with fiscal agent

Imprest cash

Due from other funds

Interest receivable

Accounts receivable

Due from other governments

Deposits from others

Loans receivable

Total assets

LIABILITIES AND FUND BALANCES

Liabilities:

Due to other funds

Accounts payable

Salaries and benefits payable

Deposits payable

Deferred revenue

Total liabilities

Fund balances:

Reserved for:

Encumbrances

Imprest cash

Deposits with others

Legislative/Grant restrictions

Debt service

Unreserved:

Undesignated, reported in:

Special revenue funds

Capital project funds

Total fund balances

Total liabilities and fund balances

COUNTY OF BUTTE, CALIFORNIA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS

JUNE 30, 2008

Capital

Projects

Fund

Special Revenue Funds

Equipment

Replacement Equipment

$ 1,293,667

26,942

21,371

$ 1,341,980

$ 15,012

202,278

3,392

220,682

272,711

848,587

1,121,298

$ 1,341,980

136,558

20,047

$ 2,706,771

55,472

57,149

416,121

136,558

2,096,943

2,649,622

$ 2,706,771

$ 1,299,799

392,489

12,112

$ 1,704,400

$ 62

30,447

30,509

288,869

1,385,022

1,673,891

$ 1,704,400

96

Water

Resources

Special Revenue Funds

Fire

Protection State COPS Library Transit

$ 835,909

2,225

8,413

$ 296,400

2,788

3,898

62,839

35,014

$

1,235,342

(3,938)

511

$

896,565

2,128,480

$ 90,484

150

126,595

269

524

297

$ 218,319 $ 846,547

$ 100,003

2,413

$ 400,939

$ 371,293

4,798

18,159

$ 43,000

761,242

830

$ 24,973

14,548

78,482

135,065

3,715

274,167

$ 412,947

$ 1,572

574

102,416

16,560

394,250 805,072 118,003

1,456 398,203

925,205

56,410

150

297

98,995

2,146

727,571

744,131

$ 846,547

5,233

6,689

$ 400,939

1,323,408

$ 2,128,480

(55,536)

100,316

$ 218,319

410,801

410,801

$ 412,947

(continued)

97

ASSETS

Cash and investments

Cash and investments with fiscal agent

Imprest cash

Due from other funds

Interest receivable

Accounts receivable

Due from other governments

Deposits from others

Loans receivable

Total assets

LIABILITIES AND FUND BALANCES

Liabilities:

Due to other funds

Accounts payable

Salaries and benefits payable

Deposits payable

Deferred revenue

Total liabilities

COUNTY OF BUTTE, CALIFORNIA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS

JUNE 30, 2008

Housing and

Community

Development

Special Revenue Funds

Fish and

Game

$ 467,040

16,478

4,721

134,710

1,688,637

$ 2,311,586

$ 76,539

22,195

1,688,637

1,787,371

$ 234,748

442

2,122

$ 237,312

$ 18

2,549

2,567

Child

Support

Services

$ 1,144,013

1,000

15,032

13,892

$ 1,173,937

$ 24,392

1,474

219,510

807,921

1,053,297

Fund balances:

Reserved for:

Encumbrances

Imprest cash

Deposits with others

Legislative/Grant restrictions

Debt service

Unreserved:

Undesignated, reported in:

Special revenue funds

Capital project funds

Total fund balances

Total liabilities and fund balances

401,820

122,395

524,215

$ 2,311,586

39,022

1,000

29,464

195,723

234,745

$ 237,312

90,176

120,640

$ 1,173,937

98

County

Service

Areas

IHSS Public

Authority

Air Quality

Management

District

Debt

Service

Fund

TOTAL

Nonmajor

Governmental

Funds

$ 5,712,160 $ -

18,877

51,321

1,255

768

$ 5,782,358 $ 2,023

$ 288,488

50

487,396

$ 775,934

$ 2,873,386

2,787,341

11,336

$ 5,672,063

$ 17,982,825

2,923,899

1,200

1,973,530

150,047

338,041

657,120

297

1,688,637

$ 25,715,596

$ 10,141

8,758

$ 104,864

51

10,787

18,899 115,702

68,976

$ -

320,241

34,706

354,947

50

396,600

$ 283,321

2,775

286,096

5,385,967

$ 1,056,867

1,407,620

384,669

3,392

2,496,558

5,349,106

1,960,148

1,200

297

1,450,264

5,522,525

5,694,483

5,763,459

$ 5,782,358

(113,679) 24,337

(113,679)

$ 2,023

420,987

$ 775,934

5,385,967

$ 5,672,063

10,583,469

848,587

20,366,490

$ 25,715,596

99

COUNTY OF BUTTE, CALIFORNIA

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

NONMAJOR GOVERNMENTAL FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Capital

Projects

Fund

Special Revenue Funds

Equipment

Replacement Equipment

REVENUES

Taxes

Licenses and permits

Fines, forfeitures, and penalties

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Total revenues

EXPENDITURES:

Current:

General government

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Education

Recreation and cultural services

Debt Service:

Principal

Interest

Total expenditures

Excess (deficiency) of revenues

over expenditures

OTHER FINANCING SOURCES (USES):

Sales of capital asset

Transfers in

Transfer out

Total other financing sources (uses)

Net change in fund balances

Fund balances, beginning

Fund balances, ending

$ -

112,249

326,890

997,584

63,501

1,500,224

150,093

14,973

931,700

1,096,766

76,059

76,059

2,014,345

729,583

103,810

$ -

1,071,755

$ -

465,323

2,847,738

(1,347,514)

410,134

1,732,764

(131,447)

2,011,451

663,937

457,361

$ 1,121,298

1,071,755

25,011

299,252

(303,000)

(3,748)

21,263

2,628,359

$ 2,649,622

465,323

(389,264)

6,329

663,638

669,967

280,703

1,393,188

$ 1,673,891

100

State COPS

$ -

Water

Resources

$ -

Special Revenue Funds

Fire

Protection

$ -

Library

$ -

Transit

50,705

992,803

1,043,508

9,521

471,442

104,264

585,227

59,677

226,347

162,891

286,501

735,416

4,498

350,604

93,452

122,021

570,575

37,838

3,007,891

3,045,729

665,251 1,223,432 15,466,823

1,200,457

3,094,988

665,251

378,257

378,257

365,874

$ 744,131

1,223,432 15,466,823 3,094,988 1,200,457

(638,205) (14,731,407) (2,524,413) 1,845,272

628,860

628,860

(9,345)

16,034

$ 6,689

10,902

13,708,207

13,719,109

(1,012,298)

2,335,706

$ 1,323,408

2,469,801

2,469,801

(54,612)

154,928

$ 100,316

(2,141,462)

(2,141,462)

(296,190)

706,991

$ 410,801

(continued)

101

COUNTY OF BUTTE, CALIFORNIA

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

NONMAJOR GOVERNMENTAL FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Housing and

Community

Development

Special Revenue Funds

Fish and

Game

Child

Support

Services

REVENUES

Taxes

Licenses and permits

Fines, forfeitures, and penalties

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Total revenues

EXPENDITURES:

Current:

General government

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Education

Recreation and cultural services

Debt Service:

Principal

Interest

Total expenditures

Excess (deficiency) of revenues

over expenditures

OTHER FINANCING SOURCES (USES):

Sales of capital asset

Transfers in

Transfer out

Total other financing sources (uses)

Net change in fund balances

Fund balances, beginning

Fund balances, ending

$ -

40,747

618,323

182,593

841,663

1,061,485

1,061,485

(219,822)

(219,822)

744,037

$ 524,215

$ -

30,422

13,746

44,168

32,217

32,217

11,951

11,951

222,794

$ 234,745

$ -

84,686

6,615,553

29,383

1,155

6,730,777

7,618,478

7,618,478

(887,701)

(887,701)

1,008,341

$ 120,640

102

County

Service

Areas

IHSS Public

Authority

Air Quality

Management

District

Debt

Service

Fund

TOTAL

Nonmajor

Governmental

Funds

$ 872,240 $ -

327,259

220,777

343,362

5,178

1,768,816

714

269,503

270,217

$ -

511,463

94,132

704

1,255,929

89,542

1,951,770

$ -

366,217

5,103,726

5,469,943

$ 872,240

511,463

124,554

1,334,713

14,356,062

1,641,645

6,890,181

25,730,858

484,338

522,244

384,767

99,363

83,576

36,105

1,225,626 384,767

2,317,509

2,317,509

22,398

6,661,359

3,097,066

9,780,823

3,563,551

19,673,399

1,200,457

2,943,563

8,003,245

3,094,988

99,363

6,744,935

3,133,171

48,456,672

543,190 (114,550) (365,739) (4,310,880) (22,725,814)

1,456

520

1,976

545,166

5,218,293

$ 5,763,459

(114,550)

4,815

4,815

1,160,320

1,160,320

433,636

20,663,362

(2,575,909)

18,521,089

(360,924) (3,150,560) (4,204,725)

871

$ (113,679)

781,911

$ 420,987

8,536,527

$ 5,385,967

24,571,215

$ 20,366,490

103

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

CAPITAL PROJECTS FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

$ 457,361

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Other financing sources

Amounts available for appropriation

410,342

392,752

5,100,000

2,124,913

8,028,007

457,342

452,752

5,510,134

2,162,913

8,583,141

112,249

326,890

997,584

63,501

2,142,898

3,643,122

112,249

(130,452)

544,832

(5,446,633)

(20,015)

(4,940,019)

CHANGES TO APPROPRIATIONS (outflows):

General Government:

Paradise ADA Improvement:

Other charges

Capital assets

Total Paradise ADA Improvement

6,498

187,121

193,619

7,824

223,795

231,619

7,823

186,866

194,689

1

36,929

36,930

Gridley ADA Improvement:

Services and supplies

Other charges

Capital assets

Total Gridley ADA Improvement

8,086

176,547

184,633

165

10,325

258,538

269,028

164

10,325

232,273

242,762

1

26,265

26,266

Admin - Covered Smoking Area:

Other charges

Capital assets

Total Admin-Covered Smoking Area

Oroville Veterans Hall ADA:

Other charges

Capital assets

Total Oroville Veterans Hall ADA

Solar Energy Project:

Other charges

Capital assets

Total Solar Energy Project

General Services Building:

Services and supplies

Other charges

Capital assets

Total General Services Building

4,405

39,600

44,005

100

14,400

14,500

841

43,164

44,005

354

74,146

74,500

1

1

840

840

354

354

(190)

(190)

11,356

356

1,602,438

1,614,150

11,355

355

1,529,064

1,540,774

1

43,164

74,146

43,165

74,146

1

190

191

1

1

73,374

73,376

(continued)

104

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

CAPITAL PROJECTS FUND (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

General Government (continued):

Chico Veterans Hall:

Other charges

Capital assets

Total Chico Veterans Hall

Total General Government

Public Protection:

New Juvenile Hall:

Other charges

Capital assets

Total New Juvenile Hall

Butte College Fire Station:

Other charges

Capital assets

Total Butte College Fire Station

Court House Expansion:

Other charges

Capital assets

Total Court House Expansion

No. Chico Fire Consolidation:

Other charges

Capital assets

Total No. Chico Fire Consolidation

Bangor Fire Station #55:

Other charges

Capital assets

Total Bangor Fire Station #55

So. Chico Fire Station #44:

Other charges

Capital assets

Total So. Chico Fire Station #44

Fire Station #42 Relocation:

Other charges

Total Fire Station #42 Relocation

Total Public Protection

801

$ 124,016

19,944

143,960

$ 34,891

225

35,116

$ 89,125

19,719

108,844

437,558 2,377,263 2,014,345 362,918

1

33,024

33,025

1

33,024

33,025

20,710

345,158

365,868

20,710

345,158

365,868

2,891

2,891

17,819

345,158

362,977

5,093

405,249

410,342

22,970

443,432

466,402

21,460

310,242

331,702

1,510

133,190

134,700

962

409,172

410,134

961

332,357

333,318

1

76,815

76,816

89,310

1,030,165

1,119,475

124,093

1,030,165

1,154,258

4,373

46,200

50,573

119,720

983,965

1,103,685

1,781

10,013

11,794

1,085

10,014

11,099

696

(1)

695

5,206

5,206

5,206

5,206

1,895,685 2,446,687 729,583 1,717,104

(continued)

105

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

CAPITAL PROJECTS FUND (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Health and Sanitation:

Public Health Services Building

Other charges

Capital assets

Total Public Health Services Building

Total Health and Sanitation

Transfers:

Other financing uses

Total Transfers

Total Charges to appropriations

Budgetary Fund balances, ending

3,990,000

4,000,000

$ 75,810

3,988,751

4,064,561

$ 75,810

28,000

103,810

$ -

3,960,751

3,960,751

4,000,000 4,064,561 103,810 3,960,751

6,333,243 8,888,511

131,447

131,447

2,979,185

(131,447)

(131,447)

5,909,326

$ 2,152,125 $ 151,991 $ 1,121,298 $ 969,307

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule $ 3,643,122

Differences - budget to USGAAP:

Proceeds from sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes

(410,134)

(1,732,764)

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - capital projects fund $ 1,500,224

Uses/outflows of resources:

Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes

Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balance - capital projects fund

$

$

2,979,185

(131,447)

2,847,738

106

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

EQUIPMENT REPLACEMENT SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ 2,628,359 $ 2,628,359 $ Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Charges for services

Other

Other financing sources

Amounts available for appropriation

CHANGES TO APPROPRIATIONS (outflows):

Public Protection:

Sheriff Equipment Replacement:

Services and supplies

Other charges

Capital assets

Total Sheriff Equipment Replacement

Fire Equipment Replacement:

Services and supplies

Other charges

Capital assets

Other financing uses

Total Fire Equipment Replacement

50,000

1,231,252

1,281,252

57

696,000

696,057

2,786

500,000

303,000

805,786

50,000

1,231,252

1,281,252

30,000

30,057

636,000

696,057

379,672

3,574

499,212

303,000

1,185,458

150,093

14,973

931,700

299,252

1,396,018

6,964

4,015

628,856

639,835

179,906

3,574

248,440

303,000

734,920

100,093

14,973

931,700

(932,000)

114,766

23,036

26,042

7,144

56,222

199,766

250,772

450,538

Total Public Protection

Total Charges to appropriations

Budgetary Fund balances, ending

1,501,843

1,501,843

$ 2,407,768

1,881,515

1,881,515

$ 2,028,096

1,374,755

1,374,755

$ 2,649,622

506,760

506,760

$ (391,994)

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - equipment replacement fund

$

$

1,396,018

(299,252)

1,096,766

Uses/outflows of resources:

Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes

Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balance - capital projects fund

$

$

1,374,755

(303,000)

1,071,755

107

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

EQUIPMENT SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ Budgetary fund balance, beginning of year $ 1,393,188

RESOURCES (inflows):

Revenues from uses of money and property

Other financing sources

Amounts available for appropriation

235,535

235,535

235,535

235,535

CHANGES TO APPROPRIATIONS (outflows):

General Government:

ISF Equipment Replacement:

Other charges

Total ISF Equipment Replacement

533,478

533,478

843,704

843,704

76,059

669,967

746,026

465,323

465,323

76,059

434,432

510,491

378,381

378,381

Total General Government

Total Charges to appropriations

Budgetary Fund balances, ending

533,478 843,704 465,323

533,478 843,704 465,323

$ 1,095,245 $ 785,019 $

378,381

378,381

888,872

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Proceeds from sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes (6,329)

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - equipment fund

(663,638)

108

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

STATE COPS SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgetary fund balance, beginning of year

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ 365,874 $ -

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Amounts available for appropriation

CHANGES TO APPROPRIATIONS (outflows):

Public Protection:

District Attorney - State COPS:

Services and supplies

Other charges

Total District Attorney - State COPS

Sheriff - State COPS - Jail:

Services and supplies

Other charges

Other financing uses

Total Sheriff - State COPS - Jail

Juvenile Justice Plan:

Services and supplies

Other financing uses

Total Juvenile Justice Plan

Total Public Protection

Total Charges to appropriations

Budgetary Fund balances, ending $

999,466

999,466

56,910

3,003

59,913

Sheriff - State COPS - Enforcement:

Services and supplies

Other charges

Capital assets

Total Sheriff - State COPS - Enforcement

64,802

100,000

11,000

175,802

42,000

28,000

70,000

693,751

693,751

999,466

999,466

365,874

1,010,522

1,010,522

$

82,875

64,802

100,000

3,003

85,878

11,000

175,802

41,000

441

28,559

70,000

26,489

751,552

778,041

1,109,721

1,109,721

266,675

50,705

992,803

1,043,508

52,199

52,807

25,067

100,000

125,067

33,444

27,537

61,421

$

608

440

216

425,740

425,956

665,251

665,251

744,131

(17,719)

32,986

30,676

$

50,705

2,395

33,071

39,735

11,000

50,735

7,556

1

1,022

8,579

26,273

325,812

352,085

444,470

444,470

477,456

109

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

WATER RESOURCES SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments 394,072 720,114

Charges for services

Other

Other financing sources

Amounts available for appropriation

35,000

472,698

901,770

725,000

35,000

472,698

1,952,812

9,521

471,442

104,264

628,860

1,214,087

9,521

(248,672)

(725,000)

69,264

156,162

(738,725)

CHANGES TO APPROPRIATIONS (outflows):

Public Protection:

Water Services:

Salaries and employee benefits 477,457

Services and supplies

Other charges

Capital assets

Total Water Services

Total Public Protection

Total Charges to appropriations

Budgetary Fund balances, ending

383,082

40,141

1,090

901,770

901,770

901,770

$ 16,034

463,176

1,514,238

54,422

1,090

2,032,926

2,032,926

2,032,926

$ (64,080)

411,241

784,309

26,792

1,090

1,223,432

1,223,432

1,223,432

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - water fund

(628,860)

51,935

729,929

27,630

809,494

809,494

809,494

$ 70,769

110

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

FIRE PROTECTION SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Other financing sources

Amounts available for appropriation

217,861

216,000

29,674

15,174,645

15,638,180

414,956

216,000

33,199

15,174,645

15,838,800

CHANGES TO APPROPRIATIONS (outflows):

Public Protection:

Fire Protection - Regular Service:

Services and supplies

Other charges

Capital assets

Other financing uses

Total Fire Protection - Regular Service

Fire Protection - Voluntary Program:

Salaries and employee benefits

Services and supplies

Other charges

Total Fire Protection - Voluntary Program

76,721

443,630

21,800

542,151

Fire Protection - Ancillary Services:

Services and supplies

Other charges

Capital assets

Total Fire Protection - Ancillary Services

14,544,298

15,291,575

132,835

194,442

420,000

213,261

213,261

15,747,723

132,835

94,442

420,000

16,395,000

76,721

499,087

21,800

597,608

491,771

252

31,112

523,135

Final Budget

Actual Positive

Amounts

$ 2,335,706

Variance with

(Negative)

$ -

59,677

226,347

162,891

286,501

13,719,109

14,454,525

59,677

(188,609)

(53,109)

253,302

(1,455,536)

(1,384,275)

14,174,137

95,137

61,681

14,750,955

420,000

72,812

433,636

7,976

514,424

170,090

251

31,103

201,444

37,698

32,761

1,573,586

1,644,045

3,909

65,451

13,824

83,184

321,681

1

9

321,691

Total Public Protection

Total Charges to appropriations

Budgetary Fund balances, ending

16,046,987

16,046,987

17,515,743

17,515,743

$ 1,926,899 $ 658,763

15,466,823 2,048,920

15,466,823

$ 1,323,408

2,048,920

$ 664,645

(continued)

111

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

FIRE PROTECTION SPECIAL REVENUE FUND (continued)

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule $ 14,454,525

Differences - budget to USGAAP:

Proceeds from sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - fire fund

(13,708,207)

$

(10,902)

735,416

112

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

LIBRARY SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgetary fund balance, beginning of year

Budgeted Amounts

Original

$ 154,928

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Interfund transfers

Amounts available for appropriation

350,605

89,000

56,000

2,580,911

3,076,516

CHANGES TO APPROPRIATIONS (outflows):

Education:

Libraries - Literacy Grant:

Salaries and employee benefits

Services and supplies

Other charges

Total Libraries - Literacy Grant

213,084

28,813

8,904

250,801

Libraries

Salaries and employee benefits

Services and supplies

Other charges

Capital assets

Total Libraries

1,965,841

728,719

59,735

71,420

2,825,715

Total Education

Total Charges to appropriations

Budgetary Fund balances, ending

3,076,516

3,076,516

$ 154,928

Final

$ 154,928

386,772

109,600

70,625

2,580,911

3,147,908

223,214

42,644

9,866

275,724

1,968,277

825,130

68,941

71,420

2,933,768

3,209,492

3,209,492

$ 93,344

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$

2,469,801

3,040,376

42,294

9,865

2,830,140

3,094,988

3,094,988

$

154,928

350,604

4,498

93,452

122,021

212,689

264,848

1,943,142

746,637

68,941

71,420

100,316

$

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule $ 3,040,376

Differences - budget to USGAAP:

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - library fund

(2,469,801)

$ 570,575

-

4,498

(36,168)

(16,148)

51,396

(111,110)

(107,532)

10,525

350

1

10,876

25,135

78,493

103,628

114,504

114,504

$ 6,972

113

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

TRANSIT SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original

2,967,992

2,967,992

$ 1,447,977

Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ 706,991 $ Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Amounts available for appropriation

Total Public Ways and Facilities

Total Charges to appropriations

Budgetary Fund balances, ending

$ 706,991

3,708,978

3,708,978

4,867

3,708,978

3,713,845

37,838

3,007,891

3,045,729

32,971

(701,087)

(668,116)

CHANGES TO APPROPRIATIONS (outflows):

Public Ways and Facilities:

Transit - System Operations

Other charges

Total Transit - System Operations

2,967,992

2,967,992

4,426,657

4,426,657

3,341,919

3,341,919

1,084,738

1,084,738

4,426,657 3,341,919 1,084,738

1,084,738 4,426,657 3,341,919

$ (5,821) $ 410,801 $ 416,622

Uses/outflows of resources:

Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes

Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balance - transit fund

$ 3,341,919

(2,141,462)

114

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

HOUSING AND COMMUNITY DEVELOPMENT SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Final

$ 744,037

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ 744,037 $ Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Other

Amounts available for appropriation

Original

$ 744,037

997,234

280,049

1,277,283

CHANGES TO APPROPRIATIONS (outflows):

General Government:

04-EDBG-1027:

Services and supplies

Other charges

Total 04-EDBG-1027

145,000

3,502

148,502

05-STBG-1621:

Services and supplies

Other charges

Total 05-STBG-1621

04-PTAA-0303:

Services and supplies

Other charges

Total 04-PTAA-0303

05-PTAA-1432:

Services and supplies

Other charges

Total 05-PTAA-1432

06-EDBG-2616:

Services and supplies

Other charges

Total 06-EDBG-2616

04-EDBG-0632:

Services and supplies

Other charges

Total 04-EDBG-0632

06-EDBG-2769:

Services and supplies

Other charges

Total 06-EDBG-2769

HCD - Revolving Loan:

Services and supplies

Other charges

Total HCD - Revolving Loan

Total General Government

Total Charges to appropriations

Budgetary Fund balances, ending

435,377

502,854

938,231

131,502

75,000

56,502

20,000

501

20,501

262,047

18,002

280,049

1,518,785

1,518,785

$ 502,535

1,531,839

280,049

1,811,888

275,287

3,502

278,789

451,340

826,891

1,278,231

160

160

172,778

56,502

229,280

33,460

1,145

34,605

18,983

1,518

20,501

490,000

10,000

500,000

130,416

18,796

149,212

2,490,778

2,490,778

$ 65,147

40,747

618,323

182,593

841,663

130,287

1,499

131,786

92,161

418,334

510,495

160

160

96,903

31,873

128,776

12,926

175

13,101

1,517

1,517

127,252

1,024

128,276

128,579

18,795

147,374

1,061,485

1,061,485

$ 524,215

40,747

(913,516)

(97,456)

(970,225)

145,000

2,003

147,003

359,179

408,557

767,736

75,875

24,629

100,504

20,534

970

21,504

18,983

1

18,984

362,748

8,976

371,724

1,837

1

1,838

1,429,293

1,429,293

$ 459,068

115

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

FISH AND GAME SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Budgetary fund balance, beginning of year

RESOURCES (inflows):

Fines, forfeitures, and penalties

Revenues from uses of money and property

Amounts available for appropriation

30,000

6,000

36,000

30,000

6,000

36,000

Final Budget

Actual Positive

Amounts

30,422

13,746

44,168

Variance with

(Negative)

$

422

-

7,746

8,168

CHANGES TO APPROPRIATIONS (outflows):

Public Protection:

Fish and Game:

Services and supplies

Other charges

Total Fish and Game

45,154

2,740

47,894

Total Public Protection

Total Charges to appropriations

Budgetary Fund balances, ending $

47,894

47,894

210,900

75,733

2,740

78,473

78,473

78,473

$ 180,321

31,072

1,145

32,217

44,661

1,595

46,256

32,217 46,256

32,217 46,256

$ 54,424

116

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

CHILD SUPPORT SERVICES SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Amounts available for appropriation

Budgeted Amounts

Original

45,000

9,081,365

29,000

100

9,155,465

Final

45,000

9,081,365

29,000

100

9,155,465

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ -

84,686

6,615,553

29,383

1,155

6,730,777

39,686

(2,465,812)

383

1,055

(2,424,688)

CHANGES TO APPROPRIATIONS (outflows):

Public Assistance:

Child Support Services:

Salaries and employee benefits

Services and supplies

Other charges

Total Child Support Services

7,682,583

1,088,974

383,908

9,155,465

Total Public Assistance

Total Charges to appropriations

Budgetary Fund balances, ending $

9,155,465

9,155,465

1,008,341

7,682,583

1,088,974

383,908

9,155,465

9,155,465

9,155,465

$ 1,008,341

6,487,621

798,944

331,913

7,618,478

1,194,962

290,030

51,995

1,536,987

7,618,478

7,618,478

1,536,987

1,536,987

$ (887,701)

117

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

COUNTY SERVICE AREAS SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

$ 5,218,293 Budgetary fund balance, beginning of year

RESOURCES (inflows):

Taxes

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Amounts available for appropriation

754,589

118,640

220,460

341,412

1,435,101

754,589

118,640

220,460

341,412

1,435,101

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ 5,218,293 $ -

872,240

327,259

220,777

343,362

5,178

1,976

1,770,792

117,651

208,619

317

1,950

5,178

1,976

335,691

CHANGES TO APPROPRIATIONS (outflows):

Public protection

Health and sanitation

749,863

753,793

Recreation and cultural services

Total Charges to appropriations

133,148

1,636,804

Budgetary Fund balances, ending $ 5,016,590

1,018,678

982,623

139,889

2,141,190

$ 4,512,204

484,338

641,925

99,363

1,225,626

$ 5,763,459

534,340

340,698

40,526

915,564

$ 1,251,255

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Proceeds from sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes

$ 1,770,792

(1,456)

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance -County service areas fund $

(520)

1,768,816

118

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

IHSS PUBLIC AUTHORITY SPECIAL REVENUE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ Budgetary fund balance, beginning of year

RESOURCES (inflows):

Revenues from uses of money and property

Aid from other governments

Amounts available for appropriation

422,524

422,524

422,524

422,524

714

269,503

270,217

714

(153,021)

(152,307)

CHANGES TO APPROPRIATIONS (outflows):

Public Assistance:

IHSS Public Authority:

Salaries and employee benefits

Services and supplies

Other charges

Total IHSS Public Authority

331,297

74,034

18,516

423,847

Total Public Assistance 423,847

Total Charges to appropriations

Budgetary Fund balances, ending

423,847

$ (452)

331,297

74,659

18,516

424,472

424,472

424,472

$ (1,077)

305,436

66,667

12,664

384,767

384,767

384,767

$ (113,679)

25,861

7,992

5,852

39,705

39,705

39,705

(112,602)

119

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS

DEBT SERVICE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

$ 8,536,527

Variance with

Final Budget

Actual Positive

Amounts (Negative)

$ Budgetary fund balance, beginning of year

RESOURCES (inflows):

Fines, forfeitures, and penalties

Revenues from uses of money and property

Other

Other financing sources

Amounts available for appropriation

422,923

4,062,244

749,983

5,235,150

422,923

4,062,244

749,983

5,235,150

366,217

5,103,726

1,160,320

6,630,263

(422,923)

366,217

1,041,482

410,337

1,395,113

CHANGES TO APPROPRIATIONS (outflows):

General Government:

POB Series A:

Services and supplies

Other charges

Total POB Series A

6,802

1,690,992

1,697,794

POB Series B:

Services and supplies

Other charges

Total POB Series B

POB Series C:

Other charges

Total POB Series C

2,500

1,251,250

1,253,750

1,110,700

1,110,700

Chico Memorial Hall 492 Rio Lindo:

Other charges

Total Chico Memorial Hall 492 Rio L.

61,156

61,156

Chico Memorial Hall 554 Rio Lindo:

Other charges

Total Chico Memorial Hall 554 Rio L.

62,275

62,275

CEC Solar:

Other charges

Total CEC Solar

Total General Government

312,967

312,967

4,498,642

6,801

1,690,993

1,697,794

2,500

1,251,250

1,253,750

62,275

62,275

1,690,992

1,697,695

1,065,810

1,068,310

6,703

2,500

62,275

62,275

98

1

99

185,440

185,440

5,850,499

5,850,499

5,850,498

5,850,498

1

1

61,157

61,157

312,967

312,967

9,238,442

61,156

61,156

312,967

312,967

9,052,901

1

1

185,541

(continued)

120

COUNTY OF BUTTE, CALIFORNIA

BUDGET COMPARISON SCHEDULE - BUDGETARY BASIS (continued)

DEBT SERVICE FUND

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Budgeted Amounts

Original Final

Variance with

Final Budget

Actual Positive

Amounts (Negative)

Public Protection:

Justice Facility:

Services and supplies

Other charges

Total Justice Facility

DA-Ford Motor Credit x16373:

Other charges

Total DA-Ford Motor Credit x16373

2003 COP Fire Trucks

Services and supplies

Other charges

Total 2003 COP Fire Trucks

Total Public Protection

Total Charges to appropriations

Budgetary Fund balances, ending

$

420,923

422,923

2,000

8,585

8,585

$ 7,775

415,148

422,923

8,585

8,585

415,147

422,922

$

1

1

-

8,585

8,585

2,000

303,000

305,000

736,508

5,235,150

$ 8,536,527

2,000

303,000

305,000

736,508

9,974,950

$ 3,796,727

2,000

303,000

305,000

727,922

9,780,823

$ 5,385,967

8,586

194,127

$ 1,589,240

Explanation of Differences between Budgetary Inflows and Outflows and USGAAP Revenues and Expenditures:

Sources/inflows of resources:

Actual amounts (budgetary basis) "total resources" from the budgetary comparison schedule

Differences - budget to USGAAP:

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balance - debt service fund

$

(1,160,320)

$

6,630,263

5,469,943

121

(This Page Intentionally Left Blank)

122

Internal Service Funds

COUNTY OF BUTTE

Internal Service Funds

These funds were established to account for the goods or services furnished by one County department or agency to other departments or agencies of the County, or to other governments, on a cost-reimbursement basis.

The Data Processing Fund is supported by revenues received from County departments for services from the Data Processing department for software systems support to computer network and data structure design and organization to County computer systems.

The Self-Insurance Fund accounts for the liability claims against the County, the administration of the insurance program, and associated legal and adjustment expenses.

The Worker’s Compensation Insurance Fund accounts for the disability, medical, and rehabilitation expenses and related costs associated with on-the-job injuries.

The Unemployment Insurance Fund accounts for the unemployment compensation claims filed against the County.

The Medical Liability Insurance Fund accounts for the medical compensation claims filed against the County.

The Self-Insurance Transit Fund accounts for the transit claims filed against the County.

The Miscellaneous Insurance Fund accounts for the financing of the County’s miscellaneous selfinsurances.

The Facilities Services Fund accounts for maintenance service provided to County departments.

The Utilities Clearing Fund accounts for the utilities provided to County departments.

The Duplicating Fund accounts for printing service functions such as reproduction, layouts, and related costs provided to County departments.

The Stores Fund accounts for surplus property of the County departments.

The Communications Fund accounts for centralized information management provided to County departments.

123

ASSETS

Current assets:

Cash and investments

Cash and investments with fiscal agent

Imprest cash

Due from other funds

Interest receivable

Accounts receivable

Due from external parties

Inventory

Deposits with others

Prepaid items

Total current assets

Noncurrent assets:

Capital assets:

Depreciable:

Equipment

Less: Accumulated depreciation

Total capital assets, net

Total noncurrent assets

Total assets

LIABILITIES

Current liabilities:

Due to other funds

Accounts payable

Accrued salaries and benefits

Deposits payable

Compensated absences, current portion

Claims and judgments, current portion

Total current liabilities

Noncurrent liabilities:

Compensated absences, less current portion

Claims and judgments, less current portion

Total noncurrent liabilities

Total liabilities

NET ASSETS

Invested in capital assets, net of related debt

Unrestricted

Total net assets

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF FUND NET ASSETS

INTERNAL SERVICE FUNDS

JUNE 30, 2008

Data

Processing

Self

Insurance

Worker's

Compensation

Unemployment

Insurance

$ 1,616,408 $ 10,825,940

46,706

$ 1,404,266

323,137

2,126

776

80,907

14,245

1,518

71,579

35

7,970

589,715

50,000

22,815

1,734,375 10,995,743 1,412,271

3,051,152

(1,699,734)

1,351,418

1,351,418

1,941,133

10,671

(889)

9,782

9,782

1,744,157

8,911

(3,267)

5,644

5,644

11,001,387 1,412,271

31,356

42,907

81,863

1,747

109,106

12,735

62,600

2,523

58

836

113,495

269,621

19,376

400,000

542,964

2,000,000

2,065,123 894

264,823

264,823

534,444

45,210

462,000

507,210

1,050,173

2,387,000

2,387,000

4,452,123 894

1,351,418

55,271

$ 1,406,689

9,782

684,202

$ 693,984

5,644

6,543,620

$ 6,549,264

1,411,377

$ 1,411,377

124

Medical

Liability

Miscellaneous

Insurance

$ 738 $ 31

Facilities

Services

Utilities

Clearing

$ 293,245 $ 334,104

23

7

55

1

205,748

700

50,608

1

4,441

19,836

768 87 550,301 358,382

768 87

904,481

(617,137)

287,344

287,344

837,645 358,382

18 31

18 31

18 31

750

$ 750

56

$ 56

85,176

85,847

74,636

94,000

50,735

390,394

5,537

159,069

164,606

118,381

118,381

508,774 164,606

287,344

41,527

$ 328,871

193,776

$ 193,776

(continued)

125

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF FUND NET ASSETS

INTERNAL SERVICE FUNDS

JUNE 30, 2008

Duplicating Stores

ASSETS

Current assets:

Cash and investments

Cash and investments with fiscal agent

Imprest cash

Due from other funds

Interest receivable

Accounts receivable

Due from external parties

44,713

67

35,939

$ -

40,000

191,419

(550)

39,937

Inventory 156,458

Deposits with others

Prepaid items

Total current assets

55,035

155,500 427,264

Noncurrent assets:

Capital assets:

Depreciable:

Equipment

Less: Accumulated depreciation

Total capital assets, net

Total noncurrent assets

Total assets

74,591

(54,810)

19,781

19,781

175,281

74,264

(62,333)

11,931

11,931

439,195

Communications

$ 24,345

182,338

1,144

162,464

930

46

371,267

1,101,102

(717,514)

383,588

383,588

754,855

Total

46,706

40,000

1,029,894

101,730

309,560

157,388

50,000

77,896

16,595,673

5,225,172

(3,155,684)

2,069,488

2,069,488

18,665,161

LIABILITIES

Current liabilities:

Due to other funds

Accounts payable

Accrued salaries and benefits

Deposits payable

Compensated absences, current portion

Claims and judgments, current portion

Total current liabilities

Noncurrent liabilities:

Compensated absences, less current portion

Claims and judgments, less current portion

Total noncurrent liabilities

Total liabilities

NET ASSETS

Invested in capital assets, net of related debt

Unrestricted

Total net assets

7,083

20,921

5,974

5,983

39,961

13,959

13,959

53,920

19,781

101,580

$ 121,361

144,280

9,769

5,234

1,790

161,073

4,178

4,178

165,251

11,931

262,013

$ 273,944 $

20,675

168,692

18,021

12,366

219,754

28,855

28,855

248,609

383,588

122,658

506,246 $

358,561

599,670

198,463

94,000

203,745

2,400,000

3,854,439

475,404

2,849,000

3,324,404

7,178,843

2,069,488

9,416,830

11,486,318

126

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127

COUNTY OF BUTTE, CALIFORNIA

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

INTERNAL SERVICE FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

OPERATING REVENUES

Charges for services

Other revenue

Total operating revenue

OPERATING EXPENSES

Salaries and employee benefits

Service and supplies

Claims and judgments

Depreciation

Other expenses

Total operating expenses

Operating income (loss)

NONOPERATING REVENUE (EXPENSE)

Intergovernmental

Loss on disposal of capital assets

Interest income

Total nonoperating revenue (expense)

Net income (loss) before contributions

and transfers

Capital contributions

Transfers in

Transfers out

Change in net assets

Total net assets, beginning

Total net assets, ending

Data

Processing

Self

Insurance

Worker's

Compensation

Unemployment

Insurance

535

3,302,708

$ 1,823,671

169,413

1,993,084

$ 4,664,204

7,351,368

12,015,572

$ 1,027,926

1,027,926

1,968,627

764,369

361,479

43,155

3,137,630

360,529

560,842

615,431

711

56,908

1,594,421

146,037

6,867,982

594

275,676

7,290,289

230,609

2,102

965

233,676

165,078 398,663 4,725,283 794,250

18,786

18,786

77,964

77,964

185,195

185,195

54,275

54,275

183,864 476,627 4,910,478 848,525

56,044

(349,025)

1,255

(594)

(109,117) 477,882 4,909,884 848,525

1,515,806 216,102 1,639,380 562,852

$ 693,984 $ 6,549,264 $ 1,411,377

128

Medical

Liability

Miscellaneous

Insurance

182,991

$ 127,888

127,888

Facilities

Services

$ 3,592,686

111

3,592,797

Utilities

Clearing

$ 2,342,774

2,342,774

182,500 127,888

377

182,877

114

424

128,312

(424)

2,187,732

1,224,445

65,797

130,617

3,608,591

1,992,980

1,992,980

(15,794) 349,794

162

162

104

104

15,813

15,813

24,039

24,039

276

276

(320)

(320)

474 376

$ 750 $ 56

19

27,293

373,833

(312,967)

60,866 27,312

301,559 132,910

$ 328,871 $ 193,776

(continued)

129

COUNTY OF BUTTE, CALIFORNIA

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

INTERNAL SERVICE FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

OPERATING REVENUES

Charges for services

Other revenue

Total operating revenue

OPERATING EXPENSES

Salaries and employee benefits

Service and supplies

Claims and judgments

Depreciation

Other expenses

Total operating expenses

Operating income (loss)

NONOPERATING REVENUE (EXPENSE)

Intergovernmental

Loss on disposal of capital assets

Interest income

Total nonoperating revenue (expense)

Net income (loss) before contributions

and transfers

Capital contributions

Transfers in

Transfers out

Change in net assets

Total net assets, beginning

Total net assets, ending

Duplicating

23

701,033

Stores Communications Total

1,128,414

$ 2,433,010

25,317

2,458,327

7,546,767

28,873,514

182,546

436,854

129,136

881,742

2,924

29,924

652,248

4,618

21,716

1,037,212

499,525

1,877,144

49,179

42,688

2,468,536

5,558,704

8,196,903

7,483,413

485,302

602,450

22,326,772

48,785 91,202 (10,209) 6,546,742

23,541

(4,026)

2,788

(1,238)

(128)

(128)

5,089

28,630

23,541

(4,026)

384,087

403,602

47,547

44,623

91,074 18,421 6,950,344

(2,924) (4,618)

86,456

(49,179)

(30,758)

56,044

28,548

(719,307)

6,315,629

76,738 187,488 537,004 5,170,689

$ 273,944 $ 506,246

130

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131

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Data

Processing

Self

Insurance

Worker's

Compensation

Unemployment

Insurance

CASH FLOWS FROM

OPERATING ACTIVITIES:

Cash receipt from customers

Cash paid to suppliers for goods and services

Cash paid to employees for services

Internal activities - payments from (to) other funds

Net cash provided (used) by operating activities

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES:

Aid from other governmental agencies

Transfers in

Transfers out

Net cash provided (used) by noncapital

financing activities

(776,157)

(1,893,394)

(76,204)

556,177

$ 1,993,084

(1,631,225)

(361,295)

(76,795)

(76,231)

$ 12,015,572

(6,728,744)

(181)

57,739

5,344,386

$ 1,027,926

(2,231)

(230,609)

107

795,193

(349,025)

1,255

(594)

(349,025) 1,255 (594)

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES:

Payments related to the acquisition of capital (197,335)

Net cash provided (used) by capital and

related financing activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received

Net cash provided by investing activities

Net increase (decrease) in cash and cash equivalents

(197,335)

16,660

16,660

26,477

79,802

79,802

4,826

114,656

114,656

5,458,448

52,363

52,363

847,556

Cash and cash equivalents, beginning

Cash and cash equivalents, ending

237,199

$ 263,676

1,611,582

$ 1,616,408

5,414,198

$ 10,872,646

556,710

$ 1,404,266

RECONCILIATION OF CASH AND CASH

EQUIVALENTS TO STATEMENT OF NET ASSETS:

Cash and investments

Cash and investments with fiscal agent

Imprest cash

$ 1,616,408 $ 10,825,940

46,706

$ 1,404,266

Total cash and investments $ 263,676 $ 1,616,408 $ 10,872,646 $ 1,404,266

132

Medical

Liability

Miscellaneous

Insurance

Facilities

Services

Utilities

Clearing

(182,877)

1

115

$ 127,888

(128,312)

19

(405)

$ 3,542,189

(1,246,544)

(2,145,620)

(267,256)

(117,231)

27,293

27,293

$ 2,322,938

(1,990,253)

6,297

338,982

(312,967)

(312,967)

(227,108)

162

162

277

107

107

(298)

461

$ 738

329

$ 31

(227,108)

17,287

17,287

(299,759)

$

593,004

293,245

24,038

24,038

50,053

284,051

$ 334,104

$ 738 $ 31

$ 738 $ 31

$ 293,245

$ 293,245

$ 334,104

$ 334,104

(continued)

133

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Duplicating Stores Communications Total

CASH FLOWS FROM

OPERATING ACTIVITIES:

Cash receipt from customers

Cash paid to suppliers for goods and services

Cash paid to employees for services

Internal activities - payments from (to) other funds

Net cash provided (used) by operating activities

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES:

Aid from other governmental agencies

Transfers in

Transfers out

Net cash provided (used) by noncapital

financing activities

(554,718)

(180,279)

5,926

(872,553)

(127,403)

(89,988)

(26,015) 4,525

$ 2,442,921

(1,899,348)

(491,503)

(41,043)

11,027

(16,012,962)

(5,430,284)

(481,197)

6,830,523

(2,924) (4,618)

23,541

(49,179)

23,541

28,548

(719,307)

(2,924) (4,618) (25,638) (667,218)

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES:

Payments related to the acquisition of capital

Net cash provided (used) by capital and

related financing activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received

Net cash provided by investing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning

Cash and cash equivalents, ending

(13,405)

(13,405)

2,884

2,884

(39,460)

59,206

$ 19,746

93

93

40,000

$ 40,000

(25,317) (463,165)

(25,317) (463,165)

4,956

4,956

(34,972)

313,008

313,008

6,013,148

$

59,317

24,345

RECONCILIATION OF CASH AND CASH

EQUIVALENTS TO STATEMENT OF NET ASSETS:

Cash and investments

Cash and investments with fiscal agent

Imprest cash

Total cash and investments

$ $ 24,345

$ 19,746 $

40,000

40,000 $ 24,345

8,856,057

$ 14,869,205

$

46,706

40,000

14,869,205

134

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135

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Reconciliation of Operating Income (Loss)

to Net Cash Provided (Used) by Operating Activities:

Data

Processing

Operating income (loss)

Adjustment to reconcile operating income (loss)

to net cash provided (used) by

operating activities:

Depreciation

Changes in assets and liabilities:

(Increase) decrease in:

Accounts receivable

Due from external parties

Due from other funds

Inventory

Prepaid items

Increase (decrease) in:

Accounts payable

Due to other funds

Accrued salaries and benefits

Deposits payable

Compensated absences

Claims and judgments

Net cash provided (used) by

operating activities $

361,479

(776)

(101,739)

2,499

28,868

25,535

18,199

57,034

556,177

Self

Insurance

$ 398,663

711

(75,980)

(555)

34,511

(815)

1,373

(2,139)

(432,000)

Worker's

Compensation

$ 4,725,283

594

(359)

(58,049)

58,098

(181)

619,000

Unemployment

Insurance

$ 794,250

49

836

58

$ (76,231) $ 5,344,386 $ 795,193

Noncash investing, capital, and financing

activities:

Contributions of capital assets from government $ $ -

136

Medical

Liability

$ 114

Miscellaneous

Insurance

Facilities

Services

Utilities

Clearing

$ (15,794) $ 349,794

65,797

(2)

3

(2)

21

(50,608)

(109,007)

14,518

(158,249)

15,468

94,000

26,644

(19,836)

892

2,727

5,405

$ 115 $ (117,231) $ 338,982

$ $ $ $ -

(continued)

137

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Reconciliation of Operating Income (Loss)

to Net Cash Provided (Used) by Operating Activities:

Duplicating

Operating income (loss)

Adjustment to reconcile operating income (loss)

to net cash provided (used) by

operating activities:

Depreciation

Changes in assets and liabilities:

(Increase) decrease in:

Accounts receivable

Due from external parties

Due from other funds

Inventory

Prepaid items

Increase (decrease) in:

Accounts payable

Due to other funds

Accrued salaries and benefits

Deposits payable

Compensated absences

Claims and judgments

Net cash provided (used) by

operating activities $

2,924

(26,015)

Stores

4,618

$ 4,525

Communications

49,179

2,023 (33,945)

2,922

21,290

(55,035)

(75,303)

26,064

(54,195)

3,004

639

1,628

4,841

(14,685)

963

770

(16,068)

662

(35,519)

583

(46)

19,947

(5,524)

4,301

3,721

(119,210)

662

(394,048)

47,937

(53,137)

(5,996)

(87,149)

40,762

94,000

87,658

187,000

$ 11,027

Total

$

485,302

$

6,546,742

6,830,523

Noncash investing, capital, and financing

activities:

Contributions of capital assets from government $ $ $ 56,044

138

Fiduciary Funds

COUNTY OF BUTTE

Fiduciary Fund Types

Fiduciary Funds account for assets held by the County in a trustee capacity, or as an agent for private organizations, other governmental units, or other funds. The following are the County’s

Fiduciary Funds:

Agency Funds

The Other Agency Fund accounts for assets held for other governmental agencies and governmental units by the Country in a fiduciary capacity.

The Tax Resources Fund accounts for funds reserved for losses and property tax receipts apportioned to other local government agencies participating in the Teeter Plan.

The Butte County SB-325 Fund accounts for funds held for other government agencies.

The Butte County SB-620 Fund accounts for funds held for other government agencies.

139

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES

AGENCY FUNDS

JUNE 30, 2008

Other

ASSETS

Cash and investments

Due from other governments

Interest receivable

Property tax receivable

1,596,638

262,920

Tax

Resources

Butte County

SB-325

123,250

12,078,026

$ -

452,826

2

Butte County

SB-620

$ 3

133,848

Total

$ 23,473,769

2,183,312

386,172

12,078,026

Total assets $ 452,828 $ 133,851 $ 38,121,279

LIABILITIES

Due to other governments $ 1,911,123

Accounts payable

Interest payable

46

3,198,701

Agency funds held for others 14,095,574

$ -

18,329,156

$ 134,999

194,062

123,767

$ -

80,105

53,746

$ 2,046,122

274,213

3,198,701

32,602,243

Total liabilities $ 452,828 $ 133,851 $ 38,121,279

140

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES

AGENCY FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Balance

July 1, 2007 Additions Deductions

Balance

June 30, 2008

Other

ASSETS

Cash and investments

Due from other governments

Interest receivable

Total assets

LIABILITIES

Due to other governments

Accounts payable

Interest payable

Agency funds held for others

Total liabilities

Tax Resources

ASSETS

Cash and investments

Interest receivable

Property tax receivable

Total assets

LIABILITIES

Agency funds held for others

Total liabilities

Butte County SB-325

ASSETS

Cash and investments

Due from other governments

Interest receivable

Total assets

LIABILITIES

Due to other governments

Accounts payable

Agency funds held for others

Total liabilities

$ 21,880,353 $ 4,283,123

1,596,638

262,920

$ 21,880,353 $ 6,142,681

$ 8,817,590

$ 8,817,590

$ 872,724

19,033

3,391,366

17,597,230

$ 1,911,123

46

3,198,701

1,032,811

$ 21,880,353 $ 6,142,681

$ 872,724

19,033

3,391,366

4,534,467

$ 8,817,590

$ 7,331,195

162,980

8,972,777

$ 16,466,952

$ 9,135,757

123,250

12,078,026

$ 21,337,033

$ 10,339,072

162,980

8,972,777

$ 19,474,829

$ 16,466,952

$ 16,466,952

$ 21,337,033

$ 21,337,033

$ 19,474,829

$ 19,474,829

$ 5,222

16,805

257

$ 22,284

$ 17,062

452,826

2

$ 469,890

$ 22,284

16,805

257

$ 39,346

$ 17,345,886

1,596,638

262,920

$ 19,205,444

$ 1,911,123

46

3,198,701

14,095,574

$ 19,205,444

$ 6,127,880

123,250

12,078,026

$ 18,329,156

$ 18,329,156

$ 18,329,156

$ -

452,826

2

$ 452,828

$ -

22,284

$ 22,284

$ 134,999

194,062

140,829

$ 469,890

$ -

39,346

$ 39,346

$ 134,999

194,062

123,767

$ 452,828

(continued)

141

COUNTY OF BUTTE, CALIFORNIA

COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES

AGENCY FUNDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Balance

July 1, 2007 Additions Deductions

Balance

June 30, 2008

Butte County SB-620

ASSETS

Cash and investments

Due from other governments

Total assets

LIABILITIES

Accounts payable

Agency funds held for others

Total liabilities

Total Agency Funds

ASSETS

Cash and investments

Due from other governments

Interest receivable

Property tax receivable

Total assets

LIABILITIES

Due to other governments

Accounts payable

Interest payable

Agency funds held for others

Total liabilities

$ 10

12,910

$ 12,920

$ 12,910

133,848

$ 146,758

$ 12,917

12,910

$ 25,827

$ 3

133,848

$ 133,851

$ -

12,920

$ 12,920

$ 80,105

66,653

$ 146,758

$ -

25,827

$ 25,827

$ 80,105

53,746

$ 133,851

$ 29,216,780

29,715

163,237

8,972,777

$ 38,382,509

$ 13,448,852

2,183,312

386,172

12,078,026

$ 28,096,362

$ 19,191,863

29,715

163,237

8,972,777

$ 28,357,592

$ 23,473,769

2,183,312

386,172

12,078,026

$ 38,121,279

$ 872,724

19,033

3,391,366

34,099,386

$ 38,382,509

$ 2,046,122

274,213

3,198,701

22,577,326

$ 28,096,362

$

$

872,724

19,033

3,391,366

24,074,469

28,357,592

$ 2,046,122

274,213

3,198,701

32,602,243

$ 38,121,279

142

Statistical Section

S

tatistical

S

ection

The information in this section is not covered by the Independent Auditor’s Report, but is presented as supplemental data for the benefit of the readers of the comprehensive annual financial report. The objectives of statistical section information are to provide financial statement users with additional historical perspective, context, and detail to assist in using the information in the financial statements, notes to financial statements, and required supplementary information to understand and assess a government’s economic condition

.

C

ONTENTS

F

INANCIAL

T

RENDS

These schedules contain trend information to help the reader understand how the County’s financial performance and well-being have changed ov er time.

R

EVENUE

C

APACITY

These schedules contain trend information to help the reader assess the County’s most significant local revenue source, the property tax.

D

EBT

C

APACITY

These schedules present information to help the reader assess the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future.

E

CONOMIC AND

D

EMOGRAPHIC

I

NFORMATION

These schedules offer economic and demographic indicators to help the reader understand the environment within which the County’s financial activities take place.

O

PERATING

I

NFORMATION

Theses schedules contain service and infrastructure data to help the reader understand how the information in the County’s financial report relates to the services the County provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

143

COUNTY OF BUTTE, CALIFORNIA

NET ASSETS by COMPONENT

LAST SEVEN FISCAL YEARS

(accrual basis of accounting)

2002 2003

For the Fiscal Year Ended June 30,

2004 2005 2006 2007 2008

Governmental activities:

Invested in capital assets, net of related debt

Restricted

Unrestricted

Total governmental activities net assets

$ 361,051,836

50,627,806

14,396,314

$ 426,075,956

$ 346,872,973

43,991,120

23,109,853

$ 413,973,946

$ 287,229,222

29,106,697

28,188,079

$ 344,523,998

$ 328,573,058

14,971,692

39,547,523

$ 383,092,273

$ 313,955,354

16,696,959

45,147,228

$ 375,799,541

$ 299,087,057

26,321,708

44,293,530

$ 369,702,295

$ 280,126,245

45,999,726

19,565,376

$ 345,691,347

Business-type activities:

Invested in capital assets, net of related debt

Restricted

Unrestricted

Total business-type activities net assets

5,987,239

$ 4,389,868

$

9,311,498

13,701,366

6,196,080

520,516

$ 13,515,906

$ 8,402,774

6,434,145

(313,620)

$ 14,523,299

6,691,502

(753,677)

$ 14,686,366

$ 1,792,507

4,083,228

11,463,088

$ 17,338,823

$ 4,389,846

4,300,259

10,256,700

$ 18,946,805

Primary government:

Invested in capital assets, net of related debt

Restricted

Unrestricted

Total primary government net assets

$ 364,767,651

50,627,806

20,383,553

$ 435,779,010

$ 351,262,841

43,991,120

32,421,351

$ 427,675,312

$ 294,028,532

35,302,777

28,708,595

$ 358,039,904

$ 336,975,832

21,405,837

39,233,903

$ 397,615,572

$ 322,703,895

23,388,461

44,393,551

$ 390,485,907

$ 300,879,564

30,404,936

55,756,618

$ 387,041,118

$ 284,516,091

50,299,985

29,822,076

$ 364,638,152

Source: Auditor-Controller, County of Butte

Note: The Government-wide reporting requirements related to the implementation of GASB 34 were initiated during fiscal

year 2001-02. We therefore only have seven years of data available to report.

144

COUNTY OF BUTTE, CALIFORNIA

CHANGES IN NET ASSETS

LAST SEVEN FISCAL YEARS

(accrual basis of accounting)

2002 2003

For the Fiscal Year Ended June 30,

2004 2005 2006 2007 2008

Governmental activities:

Expenses

General government

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Education

Culture and recreation services

Interest on long-term debt

Total governmental activities expense

Program Revenues

Charges for services:

General government

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Education

Culture and recreation services

Operating grants and contributions

Capital grants and contributions

Total governmental activities

program revenues

Net Expense

1

$ 12,073,217

61,195,775

27,590,645

49,121,198

123,118,708

2,453,904

430,377

275,983,824

6,399,673

12,695,131

1,787,913

5,424,164

834,080

164,024

52,988

197,761,213

11,051,195

236,170,381

$ 13,403,744

67,875,626

28,463,533

55,095,207

127,500,579

2,522,005

533,602

295,394,296

5,856,655

13,731,788

2,631,921

6,391,541

1,157,862

327,068

57,256

205,178,971

2,643,929

237,976,991

$ 19,988,028

69,137,314

28,079,018

55,942,561

126,530,857

2,749,824

393,637

302,821,239

6,461,374

8,021,648

925,783

5,929,611

2,289,201

72,357

58,789

207,564,618

3,151,868

234,475,249

$ 28,108,571

82,634,178

17,520,672

56,395,525

130,935,568

2,723,315

499,967

3,608,601

322,426,397

16,760,879

6,461,794

2,680,446

4,109,596

393,023

72,532

184,501,125

14,939,327

229,918,722

$ 16,617,793

81,999,331

31,531,708

58,593,884

130,966,814

2,905,270

658,741

4,183,940

327,457,481

16,779,891

5,581,142

2,932,837

4,041,916

205,520

118,108

101,775

194,629,899

11,982,196

236,373,284

$

354,261

101,360

19,086,835

87,500,747

34,623,721

64,268,283

135,871,668

3,117,432

604,386

4,315,186

349,388,258

19,903,572

5,285,862

3,439,296

5,011,027

115,716

206,381,946

13,136,901

253,729,941

$ 20,865,771

96,664,267

39,999,631

72,458,490

142,125,227

3,394,070

374,615

3,696,005

379,578,076

20,463,697

6,000,509

3,547,975

5,176,893

543,906

89,362

120,209

214,119,802

12,981,464

263,043,817

(39,813,443) (57,417,305) (68,345,990) (92,507,675) (91,084,197) (95,658,317) (116,534,259)

General Revenues and Transfers

Taxes:

Property taxes

Sales taxes

Other taxes and related revenues

Grants and contributions not restricted

to specific programs

Unrestricted investment earnings

Gain (Loss) on Sale/Disposal of Capital Assets

14,269,289

3,278,612

3,689,600

16,632,649

2,470,163

23,321

Miscellaneous 3,505,351

Transfers

Total general revenues and transfers 43,868,985

17,798,624

3,517,481

2,353,498

15,056,401

1,587,619

5,008,578

(6,906)

45,315,295

18,770,212

3,846,573

2,715,949

34,260,317

4,952,509

1,935,715

12,405,825

1,936,913

(5,569)

8,326,140

18,526,669

3,291,173

(66,147)

19,507,815

47,996,043 82,408,051

41,656,548

3,371,227

1,624,332

25,122,030

1,474,933

19,610

8,327,670

81,596,350

21,030,134

45,641,947

4,551,967

1,356,479

5,558,955

11,430,359

(8,770)

89,561,071

47,928,940

4,006,588

989,470

21,299,136

5,367,056

12,932,121

92,523,311

Change in net assets-

-governmental activities

$ (12,102,010) $ (20,349,947) $ (10,099,624) $ (9,487,847) $ (24,010,948)

1 Net expense is the difference between the expenses and program revenues of a function or program. It indicates the degree to which a function or program supports itself with its own fees and grants versus its reliance upon funding from taxes and other general revenues. Numbers in parentheses are net expenses, indicating that expenses were greater than program revenues and general revenues were needed to finance that function or program.

(continued)

145

COUNTY OF BUTTE, CALIFORNIA

CHANGES IN NET ASSETS

LAST SEVEN FISCAL YEARS

(accrual basis of accounting)

2002 2003

For the Fiscal Year Ended June 30,

2004 2005 2006 2007 2008

Business-Type activities:

Expenses

Sanitation

Transit

Total business-type activities

Program Revenues

Charges for services:

Sanitation

Transit

Operating grants and contributions

Total business-type activities

program revenues

Net Expense

1

General revenues

Unrestricted investment earnings

Gain (Loss) on Sale/Disposal of Capital Assets

Miscellaneous

Transfers

Total general revenues

Change in net assets

-business-type activities

Primary Government

Expenses

Governmental activities

Business-type activities

Total primary government expenses

1,796,178

6,577,033

$ 1,425,942

2,192,068

3,618,010

4,167,002

231,793

1,600,402

4,553,286

314,320

2,097,391

5,999,197 6,964,997

2,243,837

7,373,364

$ 4,664,895

2,528,381

7,193,276

4,373,835

199,588

2,103,588

5,579,396

478,840

1,605,044

6,677,011 7,663,280

(577,836) 3,346,987 (696,353) 470,004

23,907

4,704,102

$ 4,403,172

388,537

4,791,709

$ 5,486,248

5,486,248

6,499,022

71,499

465,263

6,662,729 5,981,595

70,717 108,566

7,035,784 6,733,446 6,090,161

2,331,682 1,941,737 603,913

700,798

(22,132)

209,152

632,463

18,862

887,818 651,325

522,399 384,442

(11,506) 152,947

510,893 537,389

89,643

(2,528,082)

186,366

(2,252,073)

701,950

8,770

710,720

1,004,069

1,004,069

$ (185,460) $ 1,007,393 $ 2,652,457 $ 1,607,982

$ 275,983,824

6,577,033

282,560,857

$ 295,394,296

3,618,010

299,012,306

$ 302,821,239

7,373,364

310,194,603

$ 322,426,397

7,193,276

329,619,673

$ 327,457,481

4,704,102

332,161,583

$ 349,388,258

4,791,709

354,179,967

$ 379,578,076

5,486,248

385,064,324

Program Revenues

Governmental activities

Business-type activities

Total primary government

program revenues

Net Expense

1

Governmental activities

Business-type activities

Total primary government net expense

236,170,381

5,999,197

237,976,991

6,964,997

234,475,249

6,677,011

229,918,722

7,663,280

236,373,284

7,035,784

242,169,578 244,941,988 241,152,260 237,582,002 243,409,068

253,729,941

6,733,446

263,043,817

6,090,161

260,463,387 269,133,978

(39,813,443)

(577,836)

(40,391,279)

(57,417,305)

3,346,987

(54,070,318)

(68,345,990)

(696,353)

(69,042,343)

(92,507,675)

470,004

(92,037,671)

(91,084,197)

2,331,682

(88,752,515)

(95,658,317)

1,941,737

(93,716,580)

(116,534,259)

603,913

(115,930,346)

General revenues

Governmental activities

Business-type activities

Total primary government general revenues

Change in net assets

Governmental activities

Business-type activities

Total primary government

change in net assets

43,868,985

887,818

44,756,803

45,315,295

651,325

45,966,620

47,996,043

510,893

48,506,936

82,408,051

537,389

82,945,440

81,596,350

(2,252,073)

79,344,277

89,561,071

710,720

90,271,791

92,523,311

1,004,069

93,527,380

4,055,542

309,982

(12,102,010)

3,998,312

(20,349,947)

(185,460)

(10,099,624)

1,007,393

(9,487,847)

79,609

(6,097,246)

2,652,457

(24,010,948)

1,607,982

$ (8,103,698) $ (20,535,407) $ (9,092,231) $ (9,408,238)

Source: Auditor-Controller, County of Butte

Note: The Government-wide reporting requirements related to the implementation of GASB 34 were initiated during fiscal year 2001-02

We therefore only have seven years of data available to report.

$ (22,402,966)

146

COUNTY OF BUTTE, CALIFORNIA

FUND BALANCES, GOVERNMENTAL FUNDS

LAST SEVEN FISCAL YEARS

(modified accrual basis of accounting)

2002 2003

For the Fiscal Year Ended June 30,

2004 2005 2006 2007 2008

General Fund:

Reserved for:

Encumbrances

Imprest cash

Prepaid items

Deposits with others

General restrictions

Debt service

Unreserved:

Designated

Undesignated

Total general fund balance

49,695

2,500

15,695,241

1,091,371

44,270

2,500

18,132,280

4,656,265

44,270

1,100

2,500

21,069,956

787,644

$ 5,130,723

45,145

4,140

2,500

3,165,083

787,482

45,095

15,503

2,500

5,196,551

792,978

$ 2,829,192

45,595

1,138

2,500

5,586,824

808,994

$ 4,164,873

44,095

2,500

10,611,120

801,259

2,388,433

16,192,849

$ 42,489,825

2,502,727

16,078,711

$ 48,674,325

2,830,188

8,768,646

$ 39,914,193

24,366,630

10,776,705

$ 44,278,408

19,626,639

15,813,037

$ 47,027,402

3,894,494

16,857,031

$ 30,025,768

91,826

10,160,457

$ 25,876,130

All other Governmental Funds:

Reserved for:

Encumbrances

Imprest cash

Prepaid items

Deposits with others

Long-term loans receivable

1

Legislative/ Grant restrictions

Debt service

Inventories

Unreserved:

Designated, reported in:

Special revenue funds

Undesignated, reported in:

Special revenue funds

Capital projects funds

Total other governmental fund balances

$ 10,347,610

2,940 5,365

3,241,840

4,369,157

95,668

3,134,461

4,006,428

1,150,916

119,333

5,215

2,190

297

2,682,411

3,862,737

417,810

280,034

$ 4,389,886

1,215

297

500

2,226,168

731,130

8,061,829

267,580

1,165

945

297

2,074,395

948,144

7,684,891

310,556

$ 10,563,974

1,815

1,766

297

$ 17,850,098

1,750

297

1,961,755

8,970,613

231,586

21,963,318

5,522,525

293,954

5,937,454 5,594,935 5,356,679 6,053,130 7,102,915

9,327,658

(2,402,568)

$ 30,919,759

7,339,842

(1,331,347)

$ 27,324,310

8,004,013

501,318

$ 26,525,614

10,816,972

90,015

$ 32,638,722

14,336,025

129,562

$ 35,577,078

23,931,864

8,439,849

220,031

$ 54,323,550

1,249,734

848,587

$ 47,730,263

1

During the fiscal year 2006-2007, the County changed the way it accounts for loans receivable by offsetting loans receivable with deferred revenue instead of restricted fund balance.

Source: Auditor-Controller, County of Butte

Note 1: The Government-wide reporting requirements related to the implementation of GASB 34 were initiated during fiscal

year 2001-02. We therefore only have seven years of data available to report.

Note 2: The substantial increase or decrease in fund balance reserved or designated is explained in Management's Discussion and Analysis.

147

REVENUES

Taxes

Licenses and permits

Fines, forfeitures, and penalties

Revenues from uses of money and property

Aid from other governments

Charges for services

Other

Total revenues

EXPENDITURES:

Current:

General government

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Education

Recreation and cultural services

Debt Service: (1)

Principal

Interest

Cost of issuance

Total expenditures

Excess (deficiency) of revenues

over expenditures

OTHER FINANCING SOURCES (USES):

Sale of capital assets

Transfers in

Transfer out

Proceeds from issuance of debt

Total other financing sources (uses)

SPECIAL ITEM:

Payment for unfunded actuarial liability

Net change in fund balances

COUNTY OF BUTTE, CALIFORNIA

CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS

LAST SEVEN FISCAL YEARS

(modified accrual basis of accounting)

2002 2003

For the Fiscal Year Ended June 30,

2004 2005 2006

$ 21,237,501

3,398,347

2,115,318

3,533,053

224,680,201

20,091,942

5,637,472

280,693,834

$ 22,753,793

3,988,539

2,255,129

3,053,170

223,632,528

22,705,240

3,912,473

282,300,872

$ 23,874,775

4,360,823

2,741,657

2,240,655

221,567,801

22,558,577

6,852,202

284,196,490

$ 41,845,457

5,143,170

1,829,081

3,081,942

217,938,378

23,166,702

19,506,239

312,510,969

$ 47,395,136

4,322,084

2,446,572

1,337,150

231,688,344

22,885,477

8,327,670

318,402,433

$ 52,384,206

4,861,476

2,728,930

5,285,289

240,529,554

26,645,205

11,430,359

343,865,019

$ 53,797,238

4,604,498

3,139,816

4,982,969

248,376,861

27,757,939

12,932,121

355,591,442

13,295,361

68,903,950

14,798,252

48,966,706

122,398,997

2,323,995

4,065,679

13,564,592

72,318,779

13,942,349

54,706,422

127,320,047

2,595,937

629,744

23,530,072

73,266,989

15,811,238

55,626,131

126,018,804

2,618,241

455,878

28,041,583

80,974,652

10,943,957

55,683,804

128,551,888

2,604,840

356,178

18,353,948

80,525,118

14,332,609

59,429,613

131,916,991

2,819,417

540,284

20,440,643

89,379,218

17,037,110

65,632,200

137,501,206

3,056,164

475,794

21,640,700

97,512,700

18,547,425

72,966,299

142,597,681

3,397,317

574,995

274,752,940 285,077,870 297,327,353

4,160,315

3,259,717

162,344

314,739,278

5,562,451

4,218,911

19,300

317,718,642

2,854,718

4,226,524

6,774,954

3,599,724

340,603,577 367,611,795

5,940,894 (2,776,998) (13,130,863) (2,228,309)

(49,100,000)

$ (9,558,827) $ 10,909,424

2007 2008

683,791 3,261,442 (12,020,353)

26,488

6,675,214

(6,675,214)

1,428,917

1,455,405

55,949

6,628,970

(6,358,889)

5,040,019

5,366,049

16,283

11,545,776

(11,277,305)

52,387,282

52,672,036

184,210

20,333,417

(22,854,312)

15,474,418

13,137,733

22,973

23,387,710

(19,446,663)

1,254,300

5,218,320

24,014

19,802,941

(19,292,699)

23,535

557,791

463,507

24,328,799

(23,638,040)

123,162

1,277,428

$ 3,819,233 $ (10,742,925)

Debt service as a percentage of noncapital expenditures n/a n/a n/a 2.5%

Source: Auditor-Controller, County of Butte

Note 1: Debt service was shown as a separate function during fiscal year 2004-05.

Note 2: The Government-wide reporting requirements related to the implementation of GASB 34 were initiated during fiscal

year 2001-02. We therefore only have seven years of data available to report.

3.1% 2.1% 2.9%

148

Fiscal

Year

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Total

Secured

Property

Tax Levy

COUNTY OF BUTTE, CALIFORNIA

PROPERTY TAXES LEVIES AND COLLECTIONS

DIRECT AND OVERLAPPING GOVERNMENTS

LAST TEN FISCAL YEARS

(modified accrual basis of accounting)

Current

Tax

Collections

Percent of

Current

Taxes

Collected

Delinquent

Tax

Collections

Total Tax

Collections

June 30 (1)

$ 13,902,009

14,568,472

14,917,329

15,421,306

16,513,410

17,611,617

19,717,336

21,909,684

24,617,283

26,619,209

$ 13,206,909

13,985,733

14,469,809

14,650,240

15,852,874

16,907,152

19,313,601

21,399,946

23,886,338

25,813,325

95.00%

96.00%

97.00%

95.00%

96.00%

96.00%

97.95%

97.67%

97.03%

96.97%

$ 2,686,153

2,796,837

2,662,593

2,908,736

2,990,234

2,687,282

2,449,265

2,901,198

4,710,806

6,792,152

$ 15,893,062

16,782,570

17,132,402

17,558,976

18,843,108

19,594,434

21,762,866

24,301,144

28,597,144

32,605,477

Percent of

Total Tax

Collections to Tax Levy

114.32%

115.20%

114.85%

113.86%

114.11%

111.26%

110.37%

110.92%

116.17%

122.49%

Note 1: Includes current and teeter buy-out, penalties, and interest.

$30,000,000

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$-

1999 2000 2001 2002 2003

Secured Property Tax Levy

2004 2005 2006

Current Tax Collections

2007 2008

Source: Auditor-Controller, County of Butte

149

COUNTY OF BUTTE, CALIFORNIA

ASSESSED VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS

Fiscal

Year

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Secured

Roll

$ 9,041,466,552

9,414,996,955

9,809,069,349

10,210,901,077

10,940,529,305

11,624,793,072

12,720,999,330

14,047,057,479

15,705,066,165

17,253,582,073

Utility

Roll

$ 24,659,031

20,077,633

19,591,858

20,289,420

18,939,397

18,939,909

21,586,369

21,878,301

19,279,234

8,367,262

Unsecured

Roll

$ 497,793,006

523,173,513

572,029,882

596,527,153

622,967,322

635,629,383

628,596,023

671,570,735

728,715,203

772,788,613

Assessed

Value

9,958,248,101

10,400,691,089

10,827,717,650

11,582,436,024

12,279,362,364

13,371,181,722

14,740,506,515

16,453,060,602

18,034,737,948

Note: Total estimated actual value of taxable property was not reasonably estimable.

Source: Auditor-Controller, County of Butte

150

COUNTY OF BUTTE, CALIFORNIA

PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS

LAST TEN FISCAL YEARS

Fiscal Countywide

Year

Basic

Levy

City of City of

Chico Oroville Schools

Butte

Butte

County

College Schools

Richvale

Sewer

Lake

Madrone

Paradise

Irrigation

District

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

1.000%

1.000%

1.000%

0.0000%

0.0000%

1.000% 0.0000% 0.0000% 0.1916% 0.0000% 0.0000% 0.0119%

1.000% 0.0000% 0.0000% 0.2072% 0.0000% 0.0000% 0.0280%

1.000% 0.0000% 0.0000% 0.1810% 0.0188% 0.0000% 0.0175%

1.000% 0.0000% 0.0000% 0.2229% 0.0171% 0.0000% 0.0078%

0.0000%

0.0300%

0.0000%

0.0000%

0.1130%

0.0998%

0.2177%

0.0000%

0.0000%

0.0160%

0.0006%

0.0000%

0.0000%

0.0117%

0.0289%

0.0000%

1.000% 0.0000% 0.0000% 0.2118% 0.0209% 0.0000% 0.0000%

1.000% 0.0000% 0.0000% 0.2518% 0.0209% 0.0000% 0.0000%

1.000% 0.0000% 0.0000% 0.2507% 0.0209% 0.0000% 0.0000%

1.2500%

1.2500%

1.2500%

1.2500%

1.2500%

1.2500%

1.2500%

1.2500%

1.0200%

1.0200%

Total

0.0830% 2.4883%

0.0800% 2.4587%

0.0720% 2.5255%

0.0780% 2.5632%

0.0340% 2.5013%

0.0390% 2.5368%

0.0340% 2.5177%

0.0330% 2.5157%

0.0270% 2.3197%

0.0240% 2.3156%

Note: California voters, on June 6, 1978, approved a constitutional amendment to Article XIIIA of the California

Constitution, commonly known as Proposition 13, which limits the taxing power of the California public agencies.

Legislation enacted by the California Legislature to implement Article XIIIA (Statutes of 1978 Chapter 292, as

amended) provides that not withstanding any other law, local agencies may not levy property tax except to pay debt service on indebtedness approved by voters prior to July 1, 1978, and that each County will levy the maximum tax permitted by Article XIIIA of $1 per $100 of full cash value. Assessed value is equal to full cash value, pursuant to Senate Bill 1656, Statutes of 1978. The rates shown above are percentages of assessed valuation.

1.5000%

1.0000%

0.5000%

0.0000%

1999

City of Chico

Butte County Schools

Source: Auditor-Controller, County of Butte

2001 2003

City of Oroville

Richvale Sewer

2005 2007

Schools

Lake Madrone

Butte College

Paradise Irrigation District

151

COUNTY OF BUTTE, CALIFORNIA

PRINCIPAL PROPERTY TAX PAYERS

CURRENT YEAR AND PRIOR YEAR

Taxpayer Rank

2008

Assessed

Valuation

Pacific Gas and Electric Corporation

Wild Goose Storage, Inc.

Pacific Bell California

Farmland Reserve, Inc.

Chico Mall Partners LP

Carwood Skypark LLC ETAL

Chico Crossroads LP

Sprint Communications Co.

North Valley Mall LLC

Pacific Coast Producers

Pan Pacific Development LLC

Western Investment Real Estate Trust

Largest Secured Property Valuation

Other Secured Taxpayers

Total Secured Property Valuation - net

of exemptions

5

6

3

4

1

2

7

8

9

10

112,607,341

53,086,263

39,932,845

38,122,503

31,500,000

30,000,000

26,485,508

24,388,318

24,029,975

755,285,335

17,279,452,613

$ 18,034,737,948

2005 (1)

Percentage of Total

Assessed Rank

Assessed

Valuation

2.080%

0.624%

0.294%

0.221%

0.211%

0.175%

0.166%

0.147%

0.135%

0.133% 9

7

8

6

10

3

5

4

1

2

4.188%

$ 346,921,754

91,461,818

58,258,685

28,858,611

36,651,410

23,695,716

24,011,550

23,425,271

24,002,189

19,262,765

676,549,769

12,694,631,953

$ 13,371,181,722

Percentage of Total

Assessed

2.595%

0.684%

0.436%

0.216%

0.274%

0.177%

0.180%

0.175%

0.180%

0.144%

5.060%

Note 1: In accordance with GASB Statement No. 44, the following table presents information for the County's principal taxpayers as of June 30, 2007 and should also be presented for June 30, 1998. However, June 30, 1998 information is not available and June 30, 2005 information will be presented until there is a nine year separation.

Source: Auditor-Controller, County of Butte

152

COUNTY OF BUTTE, CALIFORNIA

LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS

Fiscal

Year

2000

2001

2002

2003

2004

2005

2005

2006

2007

2008

Total

Assessed

Valuation (1)

Legal

Debt

Limit (2)

$ 9,563,918,589

9,958,248,101

10,400,691,089

10,827,717,650

11,582,436,024

12,279,362,364

13,371,181,722

14,740,506,515

16,453,060,602

18,034,737,948

$ 119,548,982

124,478,101

130,008,639

135,346,471

144,780,450

153,492,030

167,139,772

184,256,331

205,663,258

225,434,224

Total

Net Debt

Applicable to

Limit

$ -

Legal

Debt

Margin (4)

$ 119,548,982

124,478,101

130,008,639

135,346,471

144,780,450

153,492,030

167,139,772

184,256,331

205,663,258

225,434,224

Note:

(1) Total assessed valuation includes exempt property.

(2)

(3)

(4)

The legal debt limit is set by statute at 1.25 percent of the total assessed valuation.

The County does not have any General Bonded Debt.

The legal debt margin is the legal debt limit reduced by all general bonded debt.

Legal

Debt Margin/

Debt Limit

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

$20,000,000,000

$15,000,000,000

$10,000,000,000

$5,000,000,000

$-

2000

2002

2004

2005

2007

Legal Debt Margin (4)

Source: Auditor-Controller, County of Butte

Total Assessed Valuation (1)

153

COUNTY OF BUTTE, CALIFORNIA

RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO TAXABLE ASSESSED

VALUE AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA

LAST TEN FISCAL YEARS

Fiscal

Year

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

County

Population (1)

Assessed

Value

Gross

Bonded

Debt

201,020

203,064

205,400

207,300

210,800

212,237

214,119

217,209

218,069

220,407

$ 9,563,918,589

9,958,248,101

10,400,691,089

10,827,717,650

11,582,436,024

12,279,362,364

13,371,181,722

14,740,506,515

16,453,060,602

18,034,737,948

$ -

Debt

Payable from

Enterprise

Revenue

$ -

Net

Debt

$ -

Ratio of

Net Bonded

Debt to

Assessed Value

Net

Bonded

Debt per

Capita

0.000% $ -

0.000%

0.000%

0.000%

0.000%

0.000%

0.000%

0.000%

0.000%

0.000%

Source:

(1) State of California, Employment Development Department, Labor Market Information Division

(www.labormarketinfo.edd.ca.gov/cgi/dataanalysis/)

Source: Auditor-Controller, County of Butte

154

COUNTY OF BUTTE, CALIFORNIA

RATIO OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS

(In Thousands, except Per Capita)

Fiscal

Year Bonds

Governmental Activities

Certificates of

Participation

Loans/

Notes

Capital

Leases Loans

Business-type Activities

Certificates of

Participation

Capital

Leases

Total

Primary

Government

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

$ 1,277

1,225

1,167

1,109

1,052

50,879

61,515

57,212

56,424

50,575

$ 5,115

4,900

4,675

4,440

9,345

5,150

4,540

3,920

3,290

2,650

$ -

5,077

2,492

4,111

3,935

2,903

2,703

$ 2,311

2,042

1,809

2,998

2,366

1,019

688

1,479

1,097

1,134

$ $ $ -

500

450

400

12,025

12,025

2,258

1,780

1,289

784

303

20

$ 8,703

8,167

12,728

8,547

15,021

61,320

72,143

67,830

76,491

69,506

Percentage of Assessed

Value

0.0874%

0.0785%

0.1176%

0.0738%

0.1223%

0.4586%

0.4894%

0.4123%

0.4649%

0.3854%

Per

Capita

$ 42

39

60

40

70

282

332

311

351

315

Source: Auditor-Controller, County of Butte

155

COUNTY OF BUTTE, CALIFORNIA

OVERLAPPING BONDED DEBT

JUNE 30, 2008

2007-08 Assessed Valuation:

Redevelopment Incremental Valuation:

$18,337,832,427 (includes unitary utility valuation)

3,850,239,240

$14,487,593,187 Adjusted Assessed Valuation:

Total Debt

OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/08

Butte-Glenn Community College District $62,943,079 85.661%

County’s Share of

$ 53,917,671

Marysville Joint Unified School District

Paradise Unified School District Lease Tax Obligations

Manzanita School District

17,245,000

3,275,000

805,000

1.074

100.

100.

185,211

3,275,000

805,000

City 1915 Act Bonds

TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT

DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Butte County Certificates of Participation

1,655,000

$14,675,000

100.

100. %

1,655,000

$133,537,432

$14,675,000

Butte-Glenn Community College District General Fund Obligations 3,450,000 85.661

Chico Unified School District Certificates of Participation 2,375,000 100.

2,955,305

2,375,000

Paradise Unified School District Certificates of Participation 1,480,000 1,480,000

City of Paradise Certificates of Participation 45,000 100. 45,000

TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT

COMBINED TOTAL DEBT

(1) Percentage of overlapping agency's assessed valuation located within boundaries of the county.

$89,518,459

$223,055,891 (2)

(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.

Ratios to 2007-08 Assessed Valuation:

Total Overlapping Tax and Assessment Debt ...................................0.73%

Ratios to Adjusted Assessed Valuation:

Combined Direct Debt ($64,570,000)............................................0.45%

Combined Total Debt........................................................................1.54%

STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/08: $0

Source: California Municipal Statistics, Inc.

156

COUNTY OF BUTTE, CALIFORNIA

RATIO OF GENERAL BONDED DEBT OUTSTANDING

LAST TEN FISCAL YEARS

General Obligation Bonds

Less:

Amounts Available in Debt Service Fund

Total Net Obligation Bonds Outstanding

$ -

Fiscal Year

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

$ $ $ $ $ $ $ -

$ $ $ $ $ $ -

Percentage of Estimated

Actual Taxable Value of Property

Per Capita

0.0%

$ -

0.0%

$ -

0.0%

$ -

0.0% 0.0% 0.0%

$ -

0.0%

$ -

0.0%

$ -

0.0% 0.00%

$ -

Note: Details regarding the county's outstanding debt can be found in the notes to the financial statements.

Source: Auditor-Controller, County of Butte

157

COUNTY OF BUTTE, CALIFORNIA

DEMOGRAPHICS AND ECONOMIC STATISTICS

LAST TEN FISCAL YEARS

Fiscal

Year

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Population (1)

Personal

Income (2)

Per Capita

Personal

Income

203,064

205,400

207,300

210,800

212,237

214,119

217,209

217,209

218,069

220,407

$ 4,275,291,000

4,570,617,000

4,798,095,000

4,879,434,000

5,025,193,000

5,393,454,000

5,811,000,000

6,099,731,000 n/a n/a

$ 21,054

22,252

23,146

23,147

23,677

25,189

26,753

28,082 n/a n/a

Detail of estimated population, as July, 2007:

Incorporated Cities/Towns:

City of Biggs

City of Chico

City of Gridley

City of Oroville

Town of Paradise

Total of incorporated

Total of unincorporated

Total Population

1,815

64,323

6,250

14,497

26,465

113,350

107,057

220,407

School

Enrollment (3)

35,290

35,083

34,433

34,454

34,260

33,768

33,385

33,192

32,827

32,559

Unemployment

Rate (1)

6.8%

6.1%

6.5%

7.3%

7.4%

7.2%

6.7%

4.9%

6.1%

8.2%

Sources:

(1) State of California, Employment Development Department, Labor Market Information Division

(www.labormarketinfo.edd.ca.gov/cgi/dataanalysis/)

(2) Bureau of Economic Analysis (www.bea.gov/bea/regional/reis/)

(3) Ed-data (www.ed-data.k12.ca.us)

158

Company

Butte County

Chico Csu Research Foundation

Enloe Medical Center, Inc.

Oroville Hospital

Tyme Maidu Tribe of Berry

Feather River Hospital

Associated Students California

Electronic Data Systems Company

Mooretown Rancheria

Butte Glen Community College

Butte County Office of Education

California State University

Nhic, Corp

Wal-Mart Stores, Inc

Raley's

Costco Wholesale Corp.

Addus Healthcare, Inc

Charles D. Gardemeyer General

Association for Retarded

Pacific Coast Producers, Inc

Total

COUNTY OF BUTTE, CALIFORNIA

PRINCIPAL EMPLOYERS

JUNE 30, 2008 and Nine Years Ago

2345

2000

1800

920

410

200

200

185

12,875

400

300

300

280

245

220

200

700

620

600

500

450

Major County Employers

Employees

2008

Rank

1999

Percentage of Total County

Employment Employees Rank

Percentage of Total County

Employment

5

6

7

8

9

10

18

19

20

11

12

13

14

15

16

17

1

2

3

4

2.38%

2.03%

1.82%

0.93%

0.71%

0.63%

0.61%

0.51%

0.46%

0.42%

0.41%

0.30%

0.30%

0.28%

0.25%

0.22%

0.20%

0.20%

0.20%

0.19%

13.04% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Source: Northeastern California Small Business Development Center (NECSBDC)

159

COUNTY OF BUTTE, CALIFORNIA

MISCELLANEOUS STATISTICAL INFORMATION

JUNE 30, 2008

Geographical Location:

One of the State's original 27 counties, Butte County is located in the northern portion of the

Sacramento Valley. Rising from the Sacramento River, its western boundary, to the Sierra

Nevada Mountains, its eastern perimeter, the county's 1,665 square miles range in elevation from sixty feet to over 7,000 feet, resulting in a considerable variation in climate.

Area of County:

1,665 square miles

County Seat:

Date of Incorporation:

Oroville, California

February 18, 1850

Form of Government:

Fiscal Year Begins:

County Employees:

General Law County, governed by a five-member Board of Supervisors

July 1 as of June 30, 2008: 2,345

Employment Distribution (2006 Annual Average)(1):

Agriculture

Information

Other Services

Leisure and Hospitality

Educational and Health Services

Government

Professional & Business Services

Financial Activities

Trade, Transportation, & Utilities

Manufacturing

Natural Resources, Mining, & Construction

Natural Resources, Mining, & Construction

Manufacturing

6%

5%

Agriculture

Information

3%

2%

Other Services

4%

Trade, Transportation, & Utilities

19%

3.3%

1.5%

4.4%

9.9%

16.5%

22.3%

7.4%

5.4%

18.6%

5.2%

5.5%

Leisure and Hospitality

10%

Source:

Financial Activities

5%

Professional & Business Services

7%

Educational and Health Services

17%

Government

22%

State of California, Employment Development Department, Labor Market Information Division, Snap Shot

(http://www.calmis.ca.gov/file/COsnaps/buttesnap.pdf)

160

COUNTY OF BUTTE, CALIFORNIA

OPERATING INDICATORS BY FUNCTION

LAST FIVE FISCAL YEARS

2004

For the Fiscal Year Ended June 30,

2005 2006 2007

Function/Program

Sheriff

Number of Bookings

Coroner Case Load

Calls for Services - Unincorporated Areas

Fire

Medical Assistance

Fires Extinguished

Probation

Juveniles in Detention Facilities (bed days)

Waste Management

Landfill Tonnage

Recycling Tonnage

County Library

Total Circulation

Reference Questions Answered

Patrons

Programs Offered

Program Attendance

Visitor Count

Clerk-Recorder

Official Records Recorded

Vital Records Copies Issued

Official Records Copies Issued

Community Health Agency

Facilities Inspections

Public Social Services

CalWORKS Clients

Food Stamp Clients

Medi-Cal Clients

In-Home Support Services

Foster Care Placements

Child Welfare Services

1,588

45,536

11,356

13,383

905

22,354

209,466

653,985

22,762

49,276

97,023

1,106

20,788

581,194

87,054

12,201

6,942

N/A

134,259

167,912

119,660

32,355

9,682

11,850

1,618

43,585

12,964

13,964

884

19,967

202,189

662,590

20,186

41,672

106,696

975

18,917

628,430

77,545

12,813

7,319

3,200

122,799

206,012

152,590

33,044

9,166

12,193

1,701

43,261

13,543

13,240

740

20,987

191,676

723,178

13,640

37,703

96,049

1,169

22,510

662,302

74,963

13,179

6,665

4,015

115,616

209,550

148,090

30,927

8,859

12,019

1,709

56,131

8,287

13,920

753

21,484

196,153

744,881

26,484

36,948

90,702

1,019

23,439

656,949

77,497

13,903

6,442

4,905

121,734

221,324

144,901

36,416

8,343

11,130

2008

192,073

826,821

723,460

12,693

38,546

93,616

1,632

64,121

8,101

1,311

19,242

23,377

1,214

30,916

61,002

13,629

6,172

5,577

105,953

228,513

159,384

35,951

8,417

12,282

Note: Information was not available for ten years' reporting, but will be accumulated over time as it becomes available.

Source: Auditor-Controller, County of Butte

161

Function/Program

Sheriff

Patrol Stations

Patrol Vehicles

Fire

Stations

Trucks

Waste Management

Landfills

Capacity in Tons

County Libraries

Branch Libraries

Book Mobiles

Books in Collection

COUNTY OF BUTTE, CALIFORNIA

CAPITAL ASSET STATISTICS BY FUNCTION

LAST FIVE FISCAL YEARS

2004

For the Fiscal Year Ended June 30,

2005 2006 2007 2008

4

65

4

65

4

65

4

60

4

60

26

38

26

40

26

40

26

40

26

40

1

13,141,300

1 1 1 1

6

1

284,355

6

1

296,795

6

1

299,262

6

1

309,681

6

1

306,155

Note: Information was not available for ten years' reporting, but will be accumulated over time as it becomes available.

Source: Auditor-Controller, County of Butte

162

COUNTY OF BUTTE, CALIFORNIA

FULL-TIME EQUIVALENT COUNTY GOVERNMENT EMPLOYEES BY FUNCTION/ PROGRAM

LAST THREE FISCAL YEARS

Full-time Equivalent Employees

2006 2007

Function/Program

General government:

Legislative and Administrative

Finance

Purchasing

Treasurer

Assessor

Human Resources

County Counsel

Elections

Development Services

Recorder

Other General

Public Protection:

Judicial

Police Protection

Detention and Correction

Fire Protection

Probation

Water Services

Other Protection

Public ways and Facilities:

Public ways

28

30

3

28

44

12

12

14

44

17

11

167

167

97

3

92

5

7

24

35

4

24

44

13

12

8

45

17

11

97

163

159

102

5

8

106 117

Health and Sanitation:

Health

Agriculture

571

22

565

19

Public Assistance:

Aid Programs

Veterans Services

Other Assistance

Education:

Library Services

Farm Advisor

County Business-type Functions

Landfill

555

1

111

54

3

565

2

122

56

3

25 25

Internal Service Funds

66

2,295

67

2,312

Note: Information was not available for ten years' reporting, but will be accumulated over time as it becomes available.

Source: Human Resources Department, County of Butte

2008

35

19

6

26

44

22

9

13

42

15

14

104

175

168

4

105

4

7

106

591

24

557

3

101

58

3

23

67

2,345

163

(This Page Intentionally Left Blank)

164

Glossary

COUNTY OF BUTTE

Glossary for the Comprehensive Annual Financial Report

ACCOUNTS PAYABLE. A short-term liability account reflecting amounts owed to private persons or organizations for goods and services received by a government.

ACCOUNTS RECEIVABLE. An asset account reflecting amounts due from private persons or organizations for goods and services furnished by a government (but not including amounts due from other funds or other governments).

ACCRUAL BASIS. The recording of the financial effects on a government of transactions and other events and circumstances that have cash consequences for the government in the periods in which those transactions, events and circumstances occur, rather than only in the periods in which cash is received or paid by the government.

ACCUMULATED DEPRECIATION. A contra-asset account used to report the accumulation of periodic credits to reflect the expiration of the estimated service life of capital assets.

ADVANCE FROM OTHER FUNDS. A liability account used to record noncurrent portions of a long-term debt owed by one fund to another fund within the same reporting entity. See DUE TO OTHER FUNDS and INTERFUND RECEIVABLE/PAYABLE.

ADVANCE TO OTHER FUNDS. An asset account used to record noncurrent portions of a long-term loan from one fund to another fund within the same reporting entity. See DUE FROM OTHER FUNDS.

AGENCY FUND. A fund normally used to account for assets held by a government as an agent for individuals, private organizations or other governments and/or other funds.

AMORTIZATION. (1) The portion of the cost of a limited-life or intangible asset charged as an expense during a particular period.

(2) The reduction of debt by regular payments of principal and interest sufficient to retire the debt by maturity.

APPROPRIATION. A legal authorization granted by a legislative body to make expenditures and to incur obligations for specific purposes. An appropriation usually is limited in amount and time it may be expended.

ASSESSED VALUATION. A valuation set upon real estate or other property by a government as a basis for levying taxes.

AUDITOR’S REPORT. In the context of a financial audit, a statement by the auditor describing the scope of the audit and the auditing standards applied in the examination, and setting forth the auditor's opinion on the fairness of presentation of the financial information in conformity with GAAP or some other comprehensive basis of accounting.

BALANCE SHEET. The financial statement disclosing the assets, liabilities and equity of an entity at a specified date in conformity with GAAP.

BASIC FINANCIAL STATEMENTS (BFS). The minimum combination of financial statements and note disclosures required for fair presentation in conformity with GAAP. Basic financial statements have three components: government-wide financial statements, fund financial statements and notes to the financial statements.

BASIS OF ACCOUNTING. A term used to refer to when revenues, expenditures, expenses, and transfers - and the related assets and liabilities are recognized in the accounts and reported in the financial statements. Specifically, it relates to the timing of the measurements made, regardless of the nature of the measurement, on either the cash or the accrual method.

BUDGET. A plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them. Used without any modifier, the term usually indicates a financial plan for a single fiscal year. The term "budget" is used in two senses in practice. Sometimes it designates the financial plan presented to the appropriating governing body for adoption, and sometimes, the plan finally approved by that body.

BUDGETARY CONTROL. The control or management of a government or enterprise in accordance with an approved budget to keep expenditures within the limitations of available appropriations and available revenues.

CAPITAL ASSETS. Long-lived tangible assets obtained or controlled as a result of past transactions, events or circumstances.

Capital assets include buildings, equipment, and improvements other than buildings, land and infrastructure. In the private sector, these assets are referred to most often as property, plant and equipment.

CAPITAL EXPENDITURES. Expenditures resulting in the acquisition of or addition to the government's general capital assets.

CAPITALIZATION POLICY. The criteria used by a government to determine which outlays should be reported as capital assets.

CAPITAL LEASE. An agreement that conveys the right to use property, plant or equipment, usually for a stated period of time. See

LEASE-PURCHASE AGREEMENTS.

CAPITAL PROJECTS FUND. A fund created to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds).

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CASH BASIS. A basis of accounting under which transactions are recognized only when cash is received or disbursed.

CASH WITH FISCAL AGENT. An asset account reflecting deposits with fiscal agents, such as commercial banks, for the payment of bond principal and interest.

CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING PROGRAM. A voluntary program administered by the GFOA to encourage governments to publish efficiently organized and easily readable CAFR’s and to provide technical assistance and peer recognition to the finance officers preparing them.

CHANGE IN THE FAIR VALUE OF INVESTMENTS. The difference between the fair value of investments at the beginning of the year and at the end of the year, taking into consideration investment purchases, sales, and redemptions.

COMPENSATED ABSENCES. Absences, such as vacation, illness and holidays, for which it is expected employees will be paid.

The term does not encompass severance or termination pay, postretirement benefits, deferred compensation or other long-term fringe benefits, such as group insurance and long-term disability pay.

COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR). A financial report that encompasses all funds and component units of the government. The CAFR should contain (a) the basic financial statements and required supplementary information, (b) combining statements to support columns in the basic financial statements that aggregate information from more than one fund or component unit, and (c) individual fund statements as needed. The CAFR is the governmental unit’s official annual report and also should contain introductory information, schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, and statistical data.

CONCENTRATION OF CREDIT RISK. The risk of loss attributed to the magnitude of a government’s investment in a single issuer.

CONTINGENT LIABILITY. Items that may become liabilities as a result of conditions undetermined at a given date, such as guarantees, pending lawsuits, judgments under appeal, unsettled disputed claims, unfilled purchase orders and uncompleted contracts.

Contingent liabilities should be disclosed within the financial statements (including the notes) when there is a reasonable possibility a loss may have been incurred. Guarantees, however, should be disclosed even though the possibility of loss may be remote.

CREDIT RISK. The risk that an issuer or a counter-party to an investment will not fulfill its obligations.

CURRENT FINANCIAL RESOURCES MEASUREMENT FOCUS. Measurement focus according to which the aim of a set of financial statements is to report the near-term (current) inflows, outflows, and balances of expendable (spendable) financial resources.

The current financial resources measurement focus is unique to accounting and financial reporting for state and local governments and is used solely for reporting the financial position and results of operations of governmental funds.

DEBT. An obligation resulting from the borrowing of money or from the purchase of goods and services. Debts of governments include bonds, time warrants and notes.

DEBT SERVICE FUND. A fund established to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.

DEFERRED CHARGES. Expenditures that are not chargeable to the fiscal period in which they were made but that are carried as an asset on the balance sheet, pending amortization or other disposition (e.g. bond issuance costs). Deferred charges differ from prepaid items in that they usually extend over a long period of time (more than five years) and are not regularly recurring costs of operation.

DEFERRED REVENUE. Resource inflows that do not yet meet the criteria for revenue recognition. Unearned amounts are always reported as deferred revenue. In governmental funds, earned amounts also are reported as deferred revenue until they are available to liquidate liabilities of the current period.

DEFICIT. (1) The excess of the liabilities of a fund over its assets. (2) The excess of expenditures over revenues during an accounting period or, in the case of proprietary funds, the excess of expenses over revenues during an accounting period.

DEFINED BENEFIT PENSION PLAN. A pension plan having terms that specify the amount of pension benefits to be provided at a future date or after a certain period of time; the amount specified usually is a function of one or more factors such as age, years of service, and compensation.

DEPRECIATION. (1) Expiration in the service life of capital assets, other than wasting assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy and obsolescence. (2) The portion of the cost of a capital asset, other than a wasting asset, charged as an expense during a particular period. In accounting for depreciation, the cost of a capital asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is charged with a portion of such cost.

Through this process, the entire cost of the asset is ultimately charged off as an expense.

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DESIGNATED FUND BALANCE. A portion of an unreserved fund balance that has been "earmarked" by the chief executive officer or the legislative body for specified purposes.

DUE FROM OTHER FUNDS. An asset account used to indicate amounts owed to a particular fund by another fund for goods sold or services rendered. This account includes only short-term obligations on open account, not interfund loans.

DUE TO OTHER FUNDS. A liability account reflecting amounts owed by a particular fund to another fund for goods sold or services rendered. These amounts include only short-term obligations on open account, not interfund loans.

ECONOMIC RESOURCES MEASUREMENT FOCUS.

Measurement focus under which the aim of a set of financial statements is to report all inflows, outflows, and balances affecting or reflecting an entity’s net assets. The economic resources measurement focus is used for proprietary and fiduciary funds, as well as for government-wide financial reporting. It is also used by business enterprises in the private sector.

ENCUMBRANCES. Commitments related to unperformed (executory) contracts for goods or services. Used in budgeting, encumbrances are not GAAP expenditures or liabilities, but represent the estimated amount of expenditures ultimately to result if unperformed contracts in process are completed.

ENTERPRISE FUND. Proprietary fund type used to report an activity for which a fee is charged to external users for goods and services.

EXPENDITURE-DRIVEN GRANTS. Government-mandated or voluntary nonexchange transactions in which expenditure is the prime factor for determining eligibility. Also referred to as reimbursement grants.

EXCHANGE-LIKE TRANSACTION. Transaction in which there is an identifiable exchange between the reporting government and another party, but the values exchanged may not be quite equal or the direct benefits of the exchange may not be exclusively for the parties to the exchange.

EXPENDITURES. Decreases in net financial resources. Expenditures include current operating expenses requiring the present or future use of net current assets, debt service and capital outlays, and intergovernmental grants, entitlement and shared revenues.

EXPENSES. Outflows or other using up of assets or incurrences of liabilities (or a combination of both) from delivering or producing goods, rendering services or carrying out other activities that constitute the entity's ongoing major or central operations.

EXTERNAL AUDITORS. Independent auditors typically engaged to conduct an audit of a government’s financial statements.

EXTERNAL INVESTMENT POOL. An arrangement that commingles (pools) the moneys of more than one legally separate entity and invests, on the participants’ behalf, in an investment portfolio; one or more of the participants is not part of the sponsors reporting entity. An external investment pool can be sponsored by an individual government, jointly by more than one government, or by a nongovernmental entity. An investment pool that is sponsored by an individual state or local government is an external investment pool if it includes participation by a legally separate entity that is not part of the same reporting entity as the sponsoring government. If a government-sponsored pool includes only the primary government and its component units, it is an internal investment pool and not an external investment pool.

FAIR VALUE. The amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

FEDERAL DEPOSIT INSURANCE CORPORATION. A corporation created by the federal government that insures deposits in banks and savings associations.

FIDUCIARY FUNDS. The trust and agency funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds.

FINANCIAL RESOURCES. Resources that are or will become available for spending. Financial resources include cash and resources ordinarily expected to be converted to cash (e.g. receivables, investments). Financial resources may also include inventories and pre-paids (because they obviate the need to expend current available resources).

FISCAL AGENT. A fiduciary agent, usually a bank or county treasurer, who performs the function of paying debt principal and interest when due.

FOREIGN EXCHANGE RISK. The risk that changes in exchange rate will adversely affect the fair value of an investment or a deposit.

FUND. A fiscal and accounting entity with a self-balancing set of accounts in which cash and other financial resources, all related liabilities and residual equities, or balances, and changes therein, are recorded and segregated to carry on specific activities or attain certain objectives in accordance with special regulations, restrictions or limitations.

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FUND BALANCE. The difference between fund assets and fund liabilities of governmental and similar trust funds.

FUND FINANCIAL STATEMENTS. Basic financial statements presented on the basis of funds. Term used in contrast with

government-wide financial statements.

FUND TYPE. Any one of seven categories into which all funds are classified in governmental accounting. The seven fund types are: general, special revenue, debt service, capital projects, enterprise, internal service, and trust and agency.

GENERAL REVENUES. All revenues that are not required to be reported as program revenues. All taxes, even those that are levied for a specific purpose, are general revenues and should be reported by type of tax – for example, property tax, sales tax, and transient occupancy tax. All other nontax revenues (including interest, grants and contributions) that do not meet the criteria to be reported as program revenues should also be reported as general revenues.

GENERAL FUND. The general fund is one of five governmental fund types and typically serves as the chief operating fund of the government. The general fund is used to account for all financial resources except those required to be accounted for in another fund.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP). The conventions, rules, and procedures that serve as the norm for the fair presentation of financial statements. The various sources of GAAP for state and local governments are set forth by

SAS No. 69, The Meaning of “Present Fairly in Conformity with Generally Accepted Accounting Principles” in the Independent

Auditor’s Report.

GOVERNMENTAL ACCOUNTING. The composite activity of analyzing, recording, summarizing, reporting and interpreting the financial transactions of governments.

GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB). The ultimate authoritative accounting and financial reporting standard-setting body for state and local governments. The GASB was established in June 1984 to replace the National

Council on Governmental Accounting (NCGA).

GOVERNMENTAL FUNDS. Funds generally used to account for tax-supported activities. There are five different types of governmental funds: the general fund, special revenue funds, debt service funds, capital projects funds and permanent funds.

GOVERNMENT-WIDE FINANCIAL STATEMENTS. Financial statements that incorporate all of a government’s governmental and business-type activities, as well as its nonfiduciary component units. There are two basic government-wide financial statements: the statement of net assets and the statement of net activities. Both basic governmental financial statements are presented using the economic resources measurement focus and the accrual basis of accounting.

INFRASTRUCTURE. Long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include roads, bridges, tunnels, drainage systems, water and sewer systems, dams and lighting systems.

INTEREST RATE RISK. The risk that changes in interest rates will adversely affect the fair value of an investment or a deposit.

INTERFUND RECEIVABLE/PAYABLE. Short-term loans made by one fund to another, or the current portion of an advance to or from another fund.

INTERFUND TRANSFERS. Flow of assets (such as cash or goods) between funds and blended component units of the primary government without equivalent flows of assets in return and without a requirement for payment.

INTERNAL SERVICE FUND. A fund used to account for the financing of goods or services provided by one department or agency to other departments or agencies of a government, or to other governments, on a cost-reimbursement basis.

JOINT VENTURE. A legal entity or other contractual arrangement in which a government participates as a separate and specific activity for the benefit of the public or service recipients and in which the government retains an ongoing financial interest.

LAPSE. As applied to appropriations, the automatic termination of an appropriation. Except for indeterminate appropriations and continuing appropriations, an appropriation is made for a certain period of time. At the end of this period, any unexpended or unencumbered balance thereof lapses, unless otherwise provided by law.

LEASE-PURCHASE AGREEMENTS. Contractual agreements that are termed leases, but that in substance are purchase contracts.

LEGAL LEVEL OF BUDGETARY CONTROL. The level at which spending in excess of budgeted amounts would be a violation of law.

LEVEL OF BUDGETARY CONTROL. The level at which a government’s management may not reallocate resources without special approval from the legislative body.

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LIABILITIES. Probable future sacrifices of economic benefits, arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events.

LOANS RECEIVABLE. An asset account reflecting amounts loaned to individuals or organizations external to a government, including notes taken as security for such loans. Loans to other funds and governments should be recorded and reported separately.

MAJOR FUND. A governmental fund or enterprise fund reported as a separate column in the basic fund financial statements. The general fund is always a major fund. Otherwise, major funds are funds whose revenues/expenditures, assets or liabilities are at least 10 percent of corresponding totals for all government or enterprise funds and at least 5 percent of the aggregate amount for all governmental and enterprise funds for the same item. Any other government or enterprise fund may be reported as a major fund if the government’s officials believe that fund is particularly important to financial statement users.

MANAGEMENT’S DISCUSSION AND ANALYSIS. A component of required supplementary information used to introduce the basic financial statements and to provide an analytical overview of the government’s financial activities.

MEASUREMENT FOCUS. A way of presenting an entity’s financial performance and position by considering which resources are measured (financial or economic) and when the effects of transactions or events involving those resources are recognized (the basis of accounting). The measurement focus of government-wide financial statements, proprietary fund financial statements and fiduciary fund financial statements is economic resources. The measurement focus of governmental fund financial statements is current financial resources.

MODIFIED ACCRUAL BASIS. The accrual basis of accounting adapted to the governmental fund-type measurement focus. Under it, revenues and other financial resource increments (e.g. bond issue proceeds) are recognized when they become susceptible to accrual, that is when they become both "measurable" and "available to finance expenditures of the current period." "Available" means collectible in the current period or soon enough thereafter to be used to pay liabilities of the current period. Generally, expenditures are recognized when the fund liability is incurred. All governmental funds, expendable trust funds and agency funds are accounted for using the modified accrual basis of accounting.

OTHER FINANCING SOURCES. An increase in current financial resources that is reported separately from revenues to avoid distorting revenue trends. The use of the other financing sources category is limited to items so classified by GAAP.

OPERATING LEASE. A lease dose not transfer ownership rights, risks and rewards from the lessor to the lessee, the lease is called an operation lease and is similar to a rental.

OTHER FINANCING USES. A decrease in current financial resources that is reported separately from expenditures to avoid distorting expenditure trends. The use of other financing uses category is limited to items so classified by GAAP.

OVERLAPPING DEBT. The proportionate share property within each government must bear of the debts of all local governments located wholly or in part within the geographic boundaries of the reporting government. Except for special assessment debt, the amount of debt of each unit applicable to the reporting unit is arrived at by (1) determining what percentage of the total assessed value of the overlapping jurisdiction lies within the limits of the reporting unit, and (2) applying this percentage to the total debt of the overlapping jurisdiction. Special assessment debt is allocated on the basis of the ratio of assessment receivable in each jurisdiction, which will be used wholly or in part to pay off the debt, to total assessments receivable, which will be used wholly or in part for this purpose.

PROGRAM REVENUES. Term used in connection with the government-wide statement of activities. Revenues that derive directly from the program itself or from parties outside the reporting government’s taxpayers or citizenry, as a whole; they reduce the net cost of the function to be financed from the government’s general revenues.

PROPRIETARY FUNDS. Funds that focus on the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows. There are two different types of proprietary funds: enterprise funds and internal service funds.

REBATABLE ARBITRAGE. A term used in connection with the reinvestment of the proceeds of tax-exempt debt. A requirement to remit to the federal government interest revenue in excess of interest costs when the proceeds from the sale of tax-exempt securities are reinvested in a taxable money market instrument with a materially higher yield.

REPORTING ENTITY. The oversight unit and all of its component units, if any, that are combined in the CAFR/BFS.

REQUIRED SUPPLEMENTARY INFORMATION. Consists of statements, schedules, statistical data or other information which, according to the GASB, is necessary to supplement, although not required to be a part of the basic financial statements.

RESERVED FUND BALANCE. The portion of a governmental fund’s net assets that is not available for appropriation.

RESTRICTED ASSETS. Assets whose use is subject to constraints that are either (a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation.

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RESTRICTED NET ASSETS. A component of net assets calculated by reducing the carrying value of restricted assets by the amount of any related debt outstanding.

RETAINED EARNINGS. An equity account reflecting the accumulated earnings of an enterprise or internal service fund.

REVENUE BONDS. Bonds whose principal and interest are payable exclusively from earnings of an enterprise fund. In addition to a pledge of revenues, such bonds sometimes contain a mortgage on the enterprise fund's property.

RISK MANAGEMENT. All the ways and means used to avoid accidental loss or to reduce its consequences if it does occur.

SELF-INSURANCE. A term often used to describe the retention by an entity of a risk of loss arising out of the ownership of property or from some other cause, instead of transferring that risk to an independent third party through the purchase of an insurance policy. It is sometimes accompanied by the setting aside of assets to fund any related losses. Because no insurance is involved, the term self insurance is a misnomer.

SINGLE AUDIT. An audit performed in accordance with the Single Audit Act of 1997 and Office of Management and Budget’s

(OMB) Circular A-133, Audits of State and Local Governments and Non- Profit Organizations. The Single Audit Act allows or requires governments (depending on the amount of federal assistance received) to have one audit performed to meet the needs of all federal agencies.

SPECIAL DISTRICT. An independent unit of local government organized to perform a single government function or a restricted number of related functions. Special districts usually have the power to incur debt and levy taxes; however, certain types of special districts are entirely dependent upon enterprise earnings and cannot impose taxes. Examples of special districts are water districts, drainage districts, flood control districts, hospital districts, fire protection districts, transit authorities, port authorities and electric power authorities.

SPECIAL REVENUE FUND. A fund used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditure for specified purposes.

TAX AND REVENUE ANTICIPATION NOTES (TRANS). Notes issued in anticipation of the collection of taxes and revenues, usually retirable only from tax collections, and frequently only from the proceeds of the tax and revenues levy whose collection they anticipate.

TRUST FUNDS. Funds used to account for assets held by a government in a trustee capacity for individuals, private organizations, other governments and/or other funds.

UNDESIGNATED UNRESERVED FUND BALANCE. That portion of a fund balance that is available for spending or appropriation and has not been "earmarked" for specified purposes by the chief executive officer or the legislative body.

UNQUALIFIED OPINION. An opinion rendered without reservation by the independent auditor that financial statements are fairly presented.

UNRESERVED FUND BALANCE. That portion of a fund balance available for spending or appropriation in the future.

UNRESTRICTED NET ASSETS. That portion of net assets that is neither restricted not invested in capital assets (net of related debt).

VARIABLE-RATE INVESTMENT. An investment with terms that provide for the adjustment of its interest rate (such as the last day of the month or a calendar quarter) and that, upon each adjustment until the final maturity of the instrument or the period remaining until the principal amount can be recovered through demand, can reasonably be expected to have a fair value that will be unaffected by interest rate changes.

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