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					                                         MEMO
                                  BRIEFING



AC TRANSIT   DISTRICT                         Gll[ Memo No. 04-379
Board of Directore
Executive$ummary                              Meeting             8,
                                                     Date: December 2004
Committeee:
       Committee
Planning                         tr           FinanceCommittee              tr
              Commiftee
ExternalAffairs                  tr                    Committee
                                              Operations                    tr
Board of Directore               m            FinancingCorporation          U

$UBJEGT:                                      30,
                                 REPORT OFJUNE 2004.
                        PERFORMANCE
                FINANCIAL
         YEAR-END                     AS
REQOM EN          :
     II'I DEDAGTION
                    Only El Briefingltem
        I Information                                         lltotion
                                                  E Recommended
                 Year-end
1. Receive 2003-04
         FY                    Statements
                        Financial
2.                                            June30,2004
                            Report theYearEnded
                    Auditor's
   Receive Independent
         the                      for



Fiscal lmpact:
                                                      Basisfor the District's
FY 2003-04Year-endsurplusof $39.9 Millionon a Budgetary
operatingprogram,and $24.5 Million Surplus on a Consolidated  Actual Basis
(Attachment1).

Backqround/Diecussion  :
AC TransitendedFY ?003-04    with a $24.5millionsurplus. The surplusincludesnet
            of
depreciation $2S.0   million,for which the Districtdoes not budget, but which is
reflected the District's
         on             IntemalFinancial Statements (Attachment As a resultof
                                                                5).
GA$B $tatementNo. 33, revenueof $3S.$millionis reportedin the Distrid Financial
Statements. This pronouncement  becameeffective                         the
                                                July 1, 2000,and requires


BOARDACTION:         Approvedas Recommended lxl                Other             t I
                     Approvedwith llllodification(s) t I
                                              (6-0-0-1).
      PEEPLES/KAPLAN receive reportas presented
MOTION:            to       the

Ayes:       DirectorsPeeples,                         Vice       Harper,
                                   Jaquez,Bischofberger, President
                             Kaplan,
            PresidentWallace * 6
Noes:       None-0
Abstain:    None-0
Absent:                    -
                   Hayashi 1
            Director
                                                 Theaboveorderwaspassedon
                                                 DecemberS,2004.

                                                                    Secretary
                                                             District
                                                 RoseMartinez,

                                                 By
GM MemoNo.04-379
SubjectYear-end                  Reportas of June30, 2004
                       Performance
               Financial
             8.
Date:December 2004
Page2 of 7


District reclassify
        to          additions equityfor capitalgrantsto contributed
                             to                                   capitalrevenue.
The expenseadjustments                                              to
                           reportedon the Budget Basis Reconciled Accounting
Basis Report (see below),explainthe differences  betweenthe accounting   system's
internal financial statements(Attachment5) and the budget system presentation
identifiedon the FY 2002-03and FY 2003-04Comparative       Revenueand Expense
Summary    (Attachment 1).

In accordance  with FiscalPolicyNo. 308 Accounting   Policies, annualauditof the
                                                             the
financialstatements  has been completed  and the  reportpreparedby Macias,Gini, &
Companyhas been issued (Attachment      4). The Audit report containsthe General
PurposeFinancial$tatements,SingleAudit Report,MeasureB, MeasureC, Article
XlllB Appropriations  Limit Worksheet, AC Transit FinancingCorporation,    and the
                                                                "foundthe District's
Management    Letter. The audit rendereda clean opinionand
GeneralPurposeFinancial    $tatements presented, all materialrespects, financial
                                                 in                    the
position the District June 30, 2004,and the resultsof its operations
        of            at                                              and the cash
flows of its enterprisefunds for the year then ended in conformity  with accounting
principlesgenerallyaccepted the UnitedStatesof America."
                             in

                        5,
As shownin Attachment revenues,                                    were about
                                            and capitalcontributions
                                   subsidies,
$15.2millionhigherin FY 2003-04thanFY 2002-03.The increase due primarily a
                                                            is            to
$9.7millionincrease property
                   in        taxes(including         from Measure
                                           $6.7million             AA), a $9.7
increasein TDA, a $3.2 millionincreasein fareboxrevenues,   and a $2.7 million
increase in other income, off-set by moderate decreases in subsidies from
supplementary         A81107,federalassistance, Measure
              $ervices,                        and         B.


                             FY 2003-04Year-End
                         Revenueand Expense$ummary

Summary

This reportis dividedinto two majorsections.The first discusses overallpictureof
                                                              the
             financialpositionincluding broaddescription resultsof operations
the District's                         a                  of                   for
FY 2003-04and DistrictEguity. The secondsectionis an analysis     of the resultsof
operations FY 2003-04,including comparison FY 2003-04final revenueand
           for                       a            of
expenses  withthoseof FY 2002-03,                   of
                                   and a comparison FY 2003-04   final revenueand
expense$ the FY 2003-04revised
          to                       budgetas of March31, 2004.

A.    FinancialPosition of the District ae of June 30, 2004

               of
The finalbalance DistrictEquity of June30, 2004is $228.1
                              as                        million(Attachment
                                                                        2),
representing $24.3millionincrease
            a                    overthe prioryear.


                                  Gfi#S#E
GM MemoNo.04-379
SubjectYear-end                  Reportas of June30, 2004
                       Performance
               Financial
Date:December 2004
             8.
Page3 of 7


Resultsof Operationsfor FY 2003-04

Districtoperating revenues,          and
                            subsidies, capitalcontributions totaled$296.7million
for the year, representing $15.2
                          a       millionincrease. Operatingand capitalexpenses
totaled$243.4million,            a
                      representing $22.1milliondecreasefromthe prioryear.

To compare resultsof operations a budgetbasis(Attachment with the internal
           the                 on                         1)
financial                                                       below:
                 (Attachments 7, & 8), the differences summarized
        statements          5,                       are


                                  AG Transit
                            Reeultsof Operations
                  Budget Basis Reconciledto Accounting Basie
                                  FY 2003-04
                                 (Thousands)


FY 2003-04surplus District
                on                budget
                         operations,     basis(Attachment
                                                        1)   $ 39,959
Preventive         revenues
         maintenance        designated Van Hoolbus
                                     for            purchases 13,315
                                                               53.274

          surplusnot in budgetbase(Attachment
Paratransit                                  7)                           253
AC TransitFinancingCorp.surplusnot in budgetbase(Attachment
                                                          8)               50

                       Funds
CapitalOutlayof District                                                  287
Encumbrances                                                                0
Depreciation District
            on                         to         capital
                      assetsnot charged contributed                   (29,327')
Transfer equity
        of                                                                  0

FY 2003-04Surplus          Basis)(Attachment
                 (Accounting               4)                        $ 24,537

Capital          -
       Expenses The FY 2003-04     budgetallocated  $1.1 million capitalprojects,
                                                                for
of which$0.3million                       statements not reflectactualspending
                   was spent. The financial           do
for Federaland Statefundedcapital  projects,but ratherreflectDistrict-funded
                                                                           capital
projectsas requiredby GAAP.

District Equity

Summarized  below are the changesto DistrictEquiff as a result of the operating
                                                                        to
                 basis)for FY 2003-04(Attachment The table reconciles the
surplus(accounting                               5).
       Financial
Internal       Statement the AuditedGeneral
                         and                  Purpose  Financial Statement.




                                 0sssss
GM MemoNo.04-379
SubjectYear-end                  Reportas of June30, 2004
                       Pefformance
               Financial
Date:December 2004
             8,
Page4 ol7


                                 AC Transit
                           $ummary of District EquitY
                             As of June 30, 2004
                                (Thousands)


Beginning Transit
        AC             -
                 Equity June30, 2003(Attachment
                                             5)                      $ 203,863
     FY 2003-04$urplus(accounting
                                basis)                                  24,236

     AC
Ending Transit       -
               Equity June30, 2004                                   $ 228,099
               Services
     Paratransit       (Attachment
                                 7)                                      1,629
             Corporation
     Financing           (Attachment
                                   8)                                    (524)

AuditedConsolidated    -
                  Equity June30, 2004                                $ 229,204

Attachment of this reportsummarizes
          2                                 equitybalances
                                     District                            FY
                                                             commencing 1994-
95 throughFY 2003-04.Equitybalances   were at their lowestpointof the decadein FY
1994-95 FY 1995-96
        and            ($6.Sand $7.0million,  respectively).Equitygrewsignificantly
between 1996-97
        FY          and FY2000-01,  butexperienced            in
                                                      declines 2001-02  and 2002-
                                      and marksthe first increase equity in two
03. The currentyear is up significantly                            to
years.

                                     by
QuickAssetsat June30, 2004decreased $t3.9 million   compared June30, 2003
                                                              to
(Attachment The decrease
          3).             results        from the $20 millionACTIAloan,which
                                 primarily
becomes               2005.
        due in February

B.    Analysis of OperatingResultsfor FY 2003-04

Gomparisonof FY 2003{14Actuals to FY 200243 Actuals

Revenue and $ubsrUl'es;

As shownon the Comparative  Revenue  and ExpenseSummary fiscalyearsended
                                                           for
2QO4 2003
     and                  5),
              (Attachment revenues,    subsidies                       in
                                                and capitalcontributions 2003-
04 were about $15.2 millionhigherthan the   previousyear. The increaseis due
primarily increases propedy
        to         in         taxes,fareboxrevenue$,TDA,and otherincome.

n PropertyTaxes - $g.Z M - The increaseresultsfrom a $2.9 millionincreasein
  regularpropertytaxes from Alamedaand Contra Costa Counties,plus the $6.8
                         for     AA.
  millioninitialcollection Measure



                                      +
                              ffffi#fro
GM MemoNo.04-379
       Year-end
Subject:                         Reportas of June30, 2004
                       Performance
               Financial
             8.
Date:December ?004
Page5 of 7

  Farebox Revenues- $3.? M - The increaseis due mainly to an increasein
  ridership, elimination the 10-ridediscountticket, and the decreasein the time
                        of
  limitsfor usingbus transfers.

  OtherIncome- $2.7 M - The increase primarily
                                        is        attributable the $1.6 million
                                                             to
  receivedfrom the sales leaseback transactionfor buses,and to the $0.7 million
          in
  increase revenue  from parkingcitations.

  TDA - $9.7 M - The increaseresultsfrom the highercollection receipts
                                                            of        from the
  % percentretailsalestax.

  $upplementary   Service/Welfareto Work - ($1.01 - The decrease due primarily
                                                M               is
  to a declinein fundingfor job accessprograms.

                                                                         retail
  AB 1 107* ($g.g M) - The decreaseresultsfrom lower collections the Tzo/o
                                                                of
  salestax.

  Federal             -
         Assistance ADA Set-Aside/              Tires& Tubes* ($t.1) M - The
                                    Bus Deferral/
  decrease due primarily no fundingreceived year for bus deferral, lower
            is            to                 this                   the
                                        programs.
  grantfor tiresand tubesand otherFederal

  MeasureB - ($t.9) M - Decreaseresultsfrom the impactof the Iowereconomic
  trend.


Exoenses

      variances
Expense              FY
              between 2003-04and FY 2002-03weredue to:

tr EmployeeCompensation ($5.t M) - Decreasein salariesand wages is due
                          -
   primarily service
           to       cutsand relatedlay-offs-

tr FringeBenefits ($t8.9) M - The decreaseis due primarily a $14.8 million
                   -                                          to
   deciease in Workers Compensation    expense. In 2003, the Actuarialestimate
   requireda $13.8   millionone-timeadjustment increasethe liabilityaccount-In
                                              to
   2004,therewas a $1.4 milliondownward  adjustment the liability
                                                    to           accountwith no
             variancein routineworkerscompensation
   significant                                        expenses. Also, there were
   mbderateincreasesin healthcare   insurancepremiums,offset by lower usage of
   vacation and othercompensated  absences        from lay-offs.
                                          resulting

o Fuel & Lubricants $0.5 M * The increasereflectsthe highercost per gallon of
                  -
  gasoline oil.
          and



                               #ffi$fio5
GM MemoNo.04-379
       Year-end
Subject:                         Repoftas of June30, 2004
                       Performance
               Financial
             8,
Date:December 2004
Page6 of 7

tr Insurance ($t.9) M - The decreaseis due primarily the lower increasein
             -                                          to
   premiumrates than expected, and to the $0.8 milliondecreasein the reservefor
                 determined the Actuary.
   publicliability        by
                  -
tr OtherExpenses ($0.21 - The decrease
                           M               reflects $0.4 milliongainon disposal
                                                  the
   of assetscompared a gain of less than $0.1 millionin 2003. Gainson asset
                      to
   disposalshave a decreasing                                            to
                               impacton other expenses. Also attributable the
   decreaseis the $0.4 millionBoardof Directorselectionexpensein ?003 compared
                     in
   to no suchexpense 2004-

TransferTo/FromEquitv

              budgetprojected transferto equityin the amountof $0.3 million. The
tr The District                a
   consolidated actualincrease net assetsfor 2003-04is $24.5million(Attach-
                              in                                          4).

Conclusion

Basedon the abovereportand analyses, appears
                                       it                       endedFY 2003-04
                                                that the District
significantly      than the
            stronger        prioryear. However, becauseof the new investments in
capitalassets,unrestricted assetsdecreased $10.1 millionfrom the prior year.
                          net                  by
The impactof the recentrecession continues presentchallenges will require
                                           to                   that        the
District seeknewfundingsources
       to                         and to developmoreefficient austerespending
                                                              but
practices.

Prior RelevantBoard Actione         :

o Board PolicyNo. 308, Accounting   Policies(AdoptedApril 1992, RevisedJanuary
   1994,October  1999,andAugust2004).
n Adopted  Resolution 2090A, approving General
                       No.                  the                        and
                                                       FundOperating Capital
   Budgetfor  FY2003-04   and FY2004-05  (June18,2004).
tr AdoptedResolution    No. 2105 ProvidingNoticeof the Scheduled   Adoptionof an
   Appropriations Limitfor FY 2002-03Pursuant ArticleXlll B of the Constitution
                                                to                             of
   the State of California              the
                          and Disclosing PublicReviewPeriodof Documentation
   Usedin the Determination the District's
                             of                         Limit(August 2003).
                                           Appropriations            6,
tr AdoptedResolution 2106 E$tabli$hing Appropriations
                       No.                  the               Limitfor FY 2003-04
   Pursuant ArticleXlll B of the Constitution the Stateof California
            to                               of                     (September 3,
   2003).
Er AdoptedResolution                       the
                       No.2112 Amending GeneralFund Operating          and Capital
   Budget for FY 2003-04and 2004-05 FirstQuarter(December 2003).
                                     at                        10,
o Adopted  Resolution 2118A Amending General
                       No.                  the        FundOperating Capital
                                                                       and
   Budget FY 2003-04
          for             and 2004-05 SecondQuafter(April7,2002).
                                     at
tr AdoptedResolution 2129Amending GeneralFund Operating
                       No.                 the                         and Capital
   Budget FY 2003-04and 2004-05 ThirdQuarter
          for                        at             (June2,2004).



                                 0{}{r}f}{}fi
    GM MemoNo.04-379
    SubjectYear-end                  Reportas of June30, 2004
                           Performance
                   Financial
    Date:December 2004
                 8,
    Page7 oI7

    Ataehments;
                 Revenue Expense
    1. Comparative       and       Summary
         FY 2003-04and FY 2003-02
       . BudgetBasisReconciled Accounting
                              to        Basis
                           -          throughFY 2003-04
              EquityBalances FY 1994-95
    2. District
       . Summary District
                   of      Equity

    3. Calculation QuickAssets- As of June30, 2004
                 of

    4. AC TransitAuditedFinancial             -
                                   Statements Forthe FYEJune30, 2004
         Prepared Macias,
                    by        Gini& Company,    LLP
    . GeneralPurpose   Financial Statements
    . SingleAuditReport
    . Measure  B
    . Measure  C
    . Atticle                    Limit
             XlllB Appropriations Worksheet
    . AC TransitFinancing  Corporation  FinancialStatements
    . Management    Letter(To be distributed laterdate)
                                           at

                        Internal
    5. AC TransitDistrict                       -
                                       Statements Forthe FYEJune30, 2004
                               Financial

    6. Revenueand Expense Summary by Alameda County Special Transit Service
       Districts the FYEJune30, 2004
               For

                $ervicesInternal
    7. Paratransit                              -
                                       $tatements Forthe FYEJune30, 2004
                               Financial

                         Corporation
    8. AC TransitFinancing                         Statements
                                           Financial
                                    Internal
         Forthe YearEnded  June30, 2004

    Approvedby:                         Manager
                                  General
                     RickFernandez,

    Preparedby:      Deborah                    Officer
                                   ChiefFinancial
                            McClain,

    AccountingDepartment     BudqetDepartment           TreasurvDepartment
    FrankHaywood, Controller Hernan
                  Jr.,             Vargas,BdgtMgr.               Treasury
                                                        DanLillin,       Mgr.
    Ted Agcaoili             DapoAgoro                  FthelCastro
    ClaudiaWhite             CandyWilliams-scarlett     BeverlyAbad-Fitzgerald
    AdelleFoley                                         NinaRideout
    MarshallLeung
    $ue Lee
    MarieWang

                         26,2Q04
    DatePrepared: November
t

                                        s00{:}$?
                    ALAMEDA _ CONTRA COSTA
                       TRANSIT DISTRICT

          FY 2003-0+ Year - End financial Performance
                                    Report




Tnble of Contents                                            Pases


ComparativeRevenueand ExpenseSummary                      .... ..8

Budget Basisreconciledto Accounting Basis.                ......9




                                                             AttachmentI
                                                Revenue Expense
                                      Comparative        and       Summary
                                                             and
                                                    FY 2002-03 FY 2003-04
                                                    for
                                BudgetBasisReconciled Van Hobl Bus Purchases
                                  ,+illiiiili




                             fl




                   ffi uli
               I   ffi




ilciiiiitiir
                                                                                                                           DISTRICT
                                                                                                                   ACTRANSIT
                                                                                                                         ACTUAL
                                                                                                                 FY2OO3.O4    REYIEW
                                                                                                                            (AMOUilft til fiOU[AilO$)


                                                                                                                      fq S
                                                                   . : . : . : . : . : . : . : . : . : . :IIl::l!:i.lI: t t!d . t i i
                                                                                                           .          . I                lrd, Qtr            :                                                  ,,,,,:,:.Ff.,43.N.litinl;:,::,:
                                                                                                                                                                                ,Fr0!4l14tt.$1.,1,1,,f.1.,10i.Q4ictr'rt|
                                                                   tryIE,,,,,, fruidfllr,', :tfti*tlon         :                        Pfoiection  Ft 0t-04 ,,,                .:.:.:.:.:ltl:i.:.:.:.:.:.:.::::::::::::ft::::::::::::::,:,:,,,,,:,:,{8
                                                                   .SSFI........ll9l9!'. ii tf otrtu        .        rY'03'o{           FY01.04i,i :,lrtual :,:                 F.I             l Q.t-da,7N,W,Pmi,
                                                                                                                                                                                  :01.d4,FIPtrI.,F.                 fl,or,N, Jid,W,P|ol
                                                                   g: nlrM             : ;i ;f lttnt                                    r.   ;a AE/M     r r.ral    lntto/61



    OPEMfilIG ITEIEIIUE$4 IUESIDIEI:

    T.D.A.                                                            $,{6.149                $,{6,14e              i44,521                  $45,804               $46,,190               $3,{1          $t,e66                 SdBd
    Firsbox                                                            ,t5.104                 11,163                 41,463                  44,463                44,230                 18711           (233)                (233)
    Property Tf,xe5                                                    50,585                  51,608                50,187                   50,187                52,607               2,O22            2,420                2,120
    lrlerrureAl & l'leasureBB                                            2.500                  7,ooo                  7,ooo                   7,ooo                 6,754                (7^21            (212)                (212)
    AB I t07                                                           24,750                  24,750                27,750                   28,4OO                24,526                 12241            776                  126
    l'lssurer B & C                                                    20,606                  20,606                20,606                   20,A23                21,752               l,l 46           1,116                  ?2?
    BARTTrensfers                                                        5,396                  5,396                  5,063                   4.803                 4.803                (593)            (260)                   o
    Interert Incomc (llotc l)                                              100                    100                    250                                           370                 270              t20                   20
    othei Revenuc                                                        2,777                  2,778                  2,858                   3.505                 3,500                 723              612                   (s)
    Wclferu to Work Funding                                              2,10?                  z,to?                  2,lO2                   2,258                 2,247                 185              tE5                    29
    Frdsrel lsirtrnce - Bur Defenal lncome                             19,OO7                  \9,AO7                 ls,99l                  11,927                26,792               7,745            7,EOl               | 1,865
    Strtc Trrnrit A$irtrnce (5TA)                                        3,651                  3.651                  3,143                   3,183                 3,077                (s711             (66)                 (t06)
    ADAPcratHndt FundlnS                                                 3,926                  3,225                  ,1,533                  4,502                 4,627                 701               ?1                  125
    Supplementsry$erulceFundlng                                          2,225                  2,225                  2,225                   2,225                 2.300                   75              75                   75
    Contrrct Seryicct                                                      245                    ?15                    ?45                     245                    s6                (r 8e)           (rE?)                (tE?)
    Advertiring                                                          ?.ooo                  2,032                  2,117                   2,117                 2,086                   86             (31)                 (31)
    $TPFundlng" Tlre and Tube                                                o                    766                    606                     606                   613                 6r3                7                    7
    Leem to Ssryico                                                      2,250                  3,000                  2,350                   1,600                 1,603                16471            (717)                   3
    SchoolBur Program Grant                                                  0                  1,000                  r,000                   1,000                 1,000               1.000                0                    0
                                                                                                                                                 't92                                         0            (575)                (te2)
    TFGA  Grsht                                                              0                    575                    575                                             0
    FederalA*l*tance Scction 5307 Gpitel Fr                                    0                 1,500                  1,83?                  | ,734                    O                    0          (1,832)              (t,734)
    ADAP*aranslt $et Asldc                                                3,81 I                 3,81 I                 3,479                  7,636                 7,637               3,826            3,758                    I
    BrldgeToff . Bua Def+rrelIncomr                                       4,450                  4,450         __._3495                        !4qV                      O              (4,4501l         F,6?5) __          _ _(116_!7)

    fottlapEEAffilofrErEilaEsasaffiDrE                             $250,631                1251,139               1219,99,1__ $251,177                         $261,114                     __ll_1.11?9
                                                                                                                                                                                _______it_qiE0                      ,... ,,. _$k?12_
    OPEMIilIG           EXElltElt

    SalffI & W{gej                                                 $ 1 0 ? , , 1 6 9 $ 1 0 4 , 8 3 6 $ 1 0 2 , 9 6 9 $ 1 0 3 , 6 0 9 $ I 03,662                                         $l,l?3              d93                 $53
    FrlngeBenelltr                                                    63,980            67,506          67,407          67,878           63,215                                           (/3s)          (1,s62)              (1,633)
                                                                                                                        't7                                                                                 (?s)                   (?s)
    Pcnrion Fund                                                      16,000            17,o27          17,A?7              ,o27         r6,932                                            932
    Tirm end Tubs                                                       1,279             1,376           1 F26           1,326           1,437                                            l5E              nl                   llI
    5eryics                                                           r 5,483           15,574          14,65't         l,{,651          14,531                                           (?4e)            (t t7)               (t t7)
    Fuel & Lubrlents                                                    6,800             7,088           7,116           7,116           7,95?                                          1,t52              83d                  536
    Other llet*rielr t Supplicr                                         7 32A             9,310           7,636           8.419           6191                                          (1,o37)          (1,315)              (2,t28)
    Utilitie I Trxe                                                     1,566            4,696            4,701           4,701           4,699                                            t33               (2)                   (2)
    Cerudty I Li$ility                                                  1,917             4t917           5,647           5,647           4,494                                            (s3)            (753)                (753)
                                                                                                                          'l                                                                                                      91
    Debt 5e*le (l{ote l)                                                  881             1,581           1,267             ,267          1,361                                            4EO               ?4
    0ther                                                               I,180             r,430           l,4ll              703          l,l3?                                            (4E)            (27e)                 429
    Ssvlte Reduclons                                                           0                0               0                0            0                                              0                0                      o
    Per*nnel redurtlon/retructuilng                                            0                0               0                0            0                                              0                0                      o
    ADAConmrtium                                                      16-797            1s.732          r7.l3l          l7.l3l           16,?lI                                            156             076)                   (176)

    |ONU OPEMTIIIG EXPEIIIE                                        t21t.7r0                tzst.o53               s218.689 9219,77s                            $213,091                $r.sE,r          ($s,sgs)             ($6,68r)
    oPErunilE ilnilaflt)EFEtD                r                          i8.921                 $3.386                 $.!,!9-!_____ll,!E____ll                                             ________u!flt ___________t!,256
                                                                                                                                                                                ________E,oe6
    ttPfitr    FutDiltE:
    EnginoI Trrnrnirion Gnnt                                                   $0                      $o                     $o                    $0                    $0                $0               $0                    t0
    STPFundlng- Tlrm & Tube                                                     0                       0                      0                     o                     o                $o                o                     o
    Bridge Tolh                                                                 o                       0                      0                     0                     0                 0                0                     o
    ADAPeretrenrit Vshiclc Lor*                                                 o                       o                      0                     _ 0            _     _ 0               $0                0                     o

    tottt     (aPfitt     Fuilutto                                             s0                     .t0                     $0                    50                    s0                $0               f0                    't0
    EIPIIII    EXPETDI|IIEES:

    EngiherI TmffiH|$ldni                                              $r,945                      $0                      $0                       $0                   i0            ($t,?45)             $0                     $o
    Tie & Tuber                                                             0                       0                       0                                             0                  0               0                      o
    ADAP*atrandt YehlcleLu*                                                0                        0                       0                        0                    0                  0               o                      o
    CapltallzedBus ComponcntRohrb                                          0                        0                       0                        0                    0                  0               o                      o
    Othtr ftpitd Expmditurer                                            3-O2l                    3-O2r                  r.09r                  1 , 0 9 1-_._            ?88             (2,733)            (Eo3)                  (803)

                                                                                                                                                                                       ($4,678)
                     IIOI
    f OIIL A H ru EXPE f VFES                               -- .,.r1re.fi. s3.o2l                                     $r.09r                  $1.091                    $zEE                              68q3)             - ff8-0'.3l

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    nEvEMtE / EXPETSE

    Tranafer(To) / From Equity                                        ($3,e58)                   ($365)                 ($2r
                                                                                                                           1)                  ($3il1              1117,7321          ($13,771)        ($17,518)           (st7,121)
    Trnnrfer From Capital Rener                                            0                        0                      0                      0                     0                  $             0            0           0
    Encumbfsfit6                                                                 0_                     s_                 o                      0                     0                  go____             g      _ _      .     g
    totAl ADlufrrEilnt                                                /,s3.958)                  (s365)                 (t2111                 (r311)
                                                                                                                                                    __Ell=l!4                         (i13,774)        ($t7,5t8)           ($t7,42t)

    ililusrED tuEPrus / (DEFE|D                                                                                                                                                     _..._. $0                s0

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                                                                                                                                                 $fi$$$]S
                                                                                                                                             1-17
                                                    Attachment1


                      A.C.TransitDistrict
           Basis
      Budget           Reconciled VanHoolBusPurchases
                Surplus,         For
                           FYE6/30/04
                         (lnThousands)




                                (See Attachment5)
SurplusBeforeCapitalContributions                        18,020

Capital    Of       Funds
      Outlay District                                      (288)

Capital
      Contributions                                      35,543
                                                         53,275

Less,Preventive                Designated
                        Revenues
              Maintenance
 ForVanHoolBus  Purchases                                (13,316)

      Reconciled
               Surplus                                   39,959




                                         8SOSO9
                    ALAMEDA - CONTRACOSTA
                       TRANSIT DISTRICT

          FY2003-04Year- End FinancialPerformance
                          Report




Table of Contents                                        Paee



Summary DistrictEquity.
      of                                             .......10




                                                      Attachment2
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                                FY 1994-1995 Through 2003-2004
                                                      FY
                                                   of
                                         Summary Dishict Equity
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                                                                                                                                                                                                                                                                                                                        c
                        ALAMEDA - CONTRA COSTA
                           TRANSIT DISTRICT

                           Year - End FinancialPerformance
                 FY 2003*-04
                                  Report




    Tnble of Contents                                        Paqe




I   Calculation QuickAssets.
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                                                            Attachment 3
                                                Calculation Quick Assets
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                                                       asofJune30.2004
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                            ALAMEDA - CONTRA COSTA
                               TRANSIT DISTRICT

                         FY 200344 Year-End FinancialPerformance
                                         Report




Table of Contents                                                      Paees


      Purpose
General             Statements
            Financial                                         .... . . tz

     AuditReport.
Single                                                         . ...,...53

M e a s u r e. . . . .
          B                                                    . .. .. . . . 6 3

M e a s wC . . . . .
         e                                                      .......65

ArticleXl118 Appropriations
                         Limit Worksheet                    ....... ....72

AC Transit       Corporation
         Financing                 Statements
                           Financial                          .. . ......77

         Letter (To be distributedat later date)
Management




                                                                    Attachment 4
                                              AC TransitAuditedFinancialStatements
                                               for the YearEndedJune30, 2004
                                            Prepared Macias,Gini & Company,
                                                     by                      LLP
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                             i;l
      ALAMEDA.CONTRA COSTA
         TRANSIT I}ISTRICT
          Oakland,California

                 Auditor's Reporg
             s Discussion fuialvsis.
                         and
                   Statements.and
                    Information




DM
        Year EndedJr:ne30, 2004




                      G##{lf F-
423
                  ALAIVIEDA.CONTRA COSTA TRAITSIT DISTRICT
                                      Year Ended June 30, 2004

                                           Table of Contents

                                                                                         Page

Independent
          Auditor'sReport.......

Management's
           l)iscussion
                     and Analysis(RequiredSupplementary
                                                      Infonnation)                    ........3

BasicFinancial Statements:

                Activity - Enterprise
    Business-type                   Fund:
        Statement Fund Net Assets
                 of                                                                         .9
        Statement Revenues,
                 of           Expenses, Changes
                                      and     in                                            l0
        Statement CashFlows......
                 of                                                                         11

    PensionTrust Fund:
        Statement PlanNet Assets.
                  of
        Statement Changes Plan
                  of      in

    Notesto the BasicFinancialStatements                                             ....... 14

Required SupplementaryInformation:
   Schedule Funding
            of       Progress....                                                      ..... 30

0ther SupplementaryInformation :
    Comparative Statements FundNet Assets
                          of                           ...............                .... 3 1
    Comparative Statements Revenues,
                          of          Expenses, Changes FundNet Assts.................. 32
                                                 and          in
    Comparative Statements Cash
                          of      Flows                                   ................ 33
    Comparative Schedules Revenues,
                         of          Expenses, Changes Fund Net Assets
                                                and          in         -
       Budgetary     -
                 Basis Business-type Activity * Enterprise Fund........              ..... 34
    scheduleof Revenues,subsidiesandExpenses,   Budgetversus Actrral-
                   Activity - Enterprise
       Business-type                    Fund......                                    .... 35
    Note to OtherSupplementary Information                                         ....... 36




                                           fiSSSa.,3

                                                424
                                                  I
To the Boardof Directors
Alameda-Conta   CostaTransit District
Oakland. California

                             IFIITEPEFII}ENTAUI}ITOR'S REPORT

We have audited the accompanyingfinancial statements the business-type
                                                      of                   activity and the pension
trust fund of the Alameda-ConhaCostaTransit Distict (Disfiic$ as of and for the year endedJune30,
2004, which collectively comprisethe Distict's basic financial statements listed in the table of
                                                                           as
contents. These financial statements  are the responsibilityof the District's management' Our
responsibility to expressopinionson thesefurancialstatements
               is                                                      our audit. We did not audit
the financial statements the pensiontust fund. Those
                        of                               find                 were auditedby other
auditorswhosereport has been furnishedto us, and                        as it relatesto the amounts
 included the pensiontrust fund, is
         for                        based                          otherauditors.

We conducted audit in accordance
                our                                     liHC generally acceptedin the United States
of America and the standards                            audits contained in Government Auditing
Standards,  issuedby the Comptoller                 United States. Thosestandards    require that we
plan and perform the audit to obtain           assurance  about whether the financial statements  are
free of mit"tial misstatement.An audit  includesexamining,on a test basis,evidencesupportingthe
amountsand disclosuresin the financial statements. An audit also includes assessing       accounting
principles used and significant estimates made by managemen! as well as evaluatingthe overall
iurancialstatement  presentation. We believethat our audit and the report of other auditorsprovide a
reasonable basisfor our opinions.

                                                                                             referred to
In our opinion, basedon our audit and the report of other auditors, ttre ftrancial s'tatements
abovepresentfairly, in all material respects, the financial position of the business-type   activity and
pension frust fund of the Disricq as of June30, 2004 and the changes financial position and cash
                                                                           in
flo**, where applicable, thereof for  the year then ended in conformrty with accountingprinciples
generally                              of
          accepted the United States America.
                   in

In aocordance  with GovernmentAuditing Standards,we have also issuedour report datedNovember
19, 2004on our consideration the District's internalconhol over financialreportingand on ow tests
                              of
of its compliance with certainprovisions laws, regulations,
                                        of                                                 and
                                                           contractsand grant agreements other
matters. The pruposeof that report is to describethe scopeof our testing of internal contol over
financialreportingand compliance the resultsof that testing,and not to provide an opinion on the
                                   and
internal contol over fnancial reporting or on compliance. That report is an integral part of an audit
performed in accordancewith Governrnent    Auditing Standardsand should be consideredin assessing
the resultsof our audit'



                                           GfiS{t4 I


                                                 42s
                                                   I
The management's              and
                   discussion analysisand the schedule funding progress,as listed in the table
                                                              of
of contenb are not a required part of the basic financial $tatements are supplemenuryinformation
                                                                   but
required by accounting  principles generallyaccepted the United Statesof America. We and the
                                                       in
other auditorshave applied certain limited procedures,which consistedprincipally of inquiries of
management   regardingthe methodsof measurement presentation the required supplementary
                                                      and              of
information. However,we did not audit the informationandexpress             on it.

Our audit was conductedfor the purpose of forming                  the financial statementsthat
collectively comprisethe Dishict's basic financial                     supplementaryinformation
identified in the accompanying   table of                            of additional analysisand is
not a   required part of the basic frnancial                          Such information has been
subjectedto the auditing proceduresapplied               of the basic financial statementsand. in
our opinion, is fairly statedin all material            to the basic financial statements
                                                                                        taken as
a whole.


CertifiedPublicAccountants

Walnut Creek,California
November19, 2004




                                          G0ss15

                                             426
                                              2
1\{ANAGEMENT'S DISCUSSIONA}[D ANALYSIS

INTRODUCTION

The purposeof Management'sDiscussionand fuialysis (MD&A) is to provide an
objectiveand easily readableanalysisof the Alameda-Contra    Costa Transit District's
                                     on
(District's)financial activitiesbased currentlyknown facts,conditions, decisions
                                                                     or           as
ofJune30,2004.

FINA}ICIAL STATEMENTS

The District's financial statements prepared an accrualbasisin accordance
                                   are        on                                with
accounting principlesgenerally  accepted theUnited States Americapromulgated
                                       in                of                       by
the Governmental   Accounting Standards  Board. The District is structruedas a single
enterprisefund with revenues  recognizedwhenearned, whenreceived. Expenses
                                                    not                           are
recognized when incurred,not when they are paid. Capitalassets capitalizedand
                                                                   are
(except land and constructionin progress)are depreciated     over their useful lives.
Amouatsarerestrictedfor debtservice   and,whereapplicable, constuctionpurposes.
                                                          for

FINAI\ICIAL POSITION SUMMARY

Total net assetsserye over time as a useful indicatorof the District's financialposition.
TheDistrict's assetsexceed  liabilitiesby $229.2million at June30, 2004,a $24.5million
increase          30.
        from Jr:ne 2003.

A condensed                                  of         at
            summaryof the District's statement net assets June30, 2004 and2003
is shownbelow(in thousands):

            n*4;r#tir..pi:lll#!iffiri'#ffis}?'ti{:{     ijig;} ir:+t:# iriili,P;.litrllUll{r*t$S**i
                                                                    :
ASSETS:
Current and other assets                                                   $ 89.431                   $ 82,771
Capitalassets                                                                 262,030                  ?28.343
  Total assets                                                                 351,461                 311,114

LIABILITIES:
Cunentliabilities                                                                80.262                 6t.777
Lone-term ptirtion of certificates of narticipation                              r9.89r                 20,959
Othernon-currentliabilities                                                      22,L03                 23.7rr
  Total liabilities                                                            t2?,257                 106.447

NET ASSETS:
Invested capitalassets, ofrelateddebt
         in                net                                                 24r.579                 206.890
Restricted for debt requirements                                                   2.0r3                 2,013
Unrestricted                                                                   fl4.388)                 4.236\
   Total net assets                                                            229.?04                 204-667




                                                                      0sG+gs
                                                      +fr
The largestponion of the Disfrict's assets eachyear(14.6%at June30, 2004)represen6
its investnent in capital assets (e.g. land, work-in-progress,buses,' buildings,
improvements, equipment). The District usesthese."pit"l "rs"tr to provide services
               and
to lF employees    and its patrons and passengors;    consequentlythese assetsare not
availablefor future spending. Although the District's investn*t in its capital assetsis
reportednet of relateddebt, it is notedthat the resources
                                                        requiredto repay ihis debt must
be provided annually from operationsand subsidiessince the capital assetsthemselves
cannot usedto liquidateliabilities.
      be

Currentand otherassets  increased 8.0%, from $82.8million in Fy 2002-03to $g9.4
                                 by
million in FY 2003-04. The increase due primarily to a $I2.9 million increase
                                      is                                         in"
accounts  receivable,
                    offset by a $6.6 million decrease cashand investments. The
                                                     in
29.9%inctease currentliabilities is duemainly to the $20.0million loanreceived
               in                                                             from
ACTIA in the3d quarterof 2003-04. Tte loanii duein February,  z00s.

FINA}ICIAL OPERATIONS MGHLIGHTS

A condensed
          summary thEDistrict's changes net assets the yearsended
                  of                     in      for             June30,
2004and2003is shownbelow (in thousands):


lQperatingreyenues;
   Passengerfares                                      $ ,+4.230        $ 41,056
   Contact se,lvice                                       8,815            9,114
  Setyice
        funding                                               56            245
  Other                                                    7.188            4.252
Non-operating  revenues
                      :
  Propertytaxes                                           s9.36s           49.623
  Local sales taxes                                       50,278           56.056
  Local funds                                             46.489           36.806
  FederalrevEtrues                                        37.207           40.881
  Staterevenues                                            6.499             7.335
  Iaterestincome                                            466               653
Capitalcontributions                                      35,543           37.648
     Total revenues                                      296.136          283.729
Operatingexpenses:
  Salaries wages
         and                                             105.833          r r 1.165
  Fringebenefits                                          81,274           93.384
  Depreciation                                            29.362           22-98s
  Otheroperatingexpenses                                  53.758           58.801
Non-operatingexpenses
                    :
  Alameda Congestion Management Agencv                        0              1.699
  Interestexperrse                                         t-372             973
     Total expenses                                      271,599          289,007
Q angein net assets                                       24.537           (s.278)



                                        q$assss4 ?
    Operatingrevenueincreased 10.2%from $54.7million to $60.3million. There
                                 by
    are two primaf,y explanationsfor the increase. First, passenger
                                                                  fares increasedby
    $3.2 million as a result of increased                              of
                                          ridership and discontinuation the lO-ride
    discount ticket. Also, the time period for use of bus fransfers was reduced
    significantly. Second,                                in
                          other incomeincludesincreases sale-leaseback    transactions
    andparkingcitationsin the amounts $1.6million and$0.7million, respectively.
                                       of

r   The following chart shows the major sources and the percentageof operating
    revenues theyear ended
             for            June30, ?004:



                                            E Contract Services 14.620lo

                                            lService Funding 0.09%

                                            H O t h e r 11 , 9 ? %

                                            EPessenger Fares 73.37%




    Non-operatingrevenuesincreasedfrom $191.3 million to $200.3 million. The
                                                               AA ($6.7 million)
    primaryreason the increase the initial collectionfor Measure
                   for          is
    and the $3.0 increase regularpropertytaxesreceivedfrom Alameda and Conha
                         in
                                                                 in
    CostaCounties.Also attributable the increase the $9.7increase TDA, offset
                                   to           was
    by moderate decreases otherlocal,state, federalfimding.
                         in                and

                       decreased 5.6% from $37.6million to $35.5million. The
    Capitalcontributions          by
             is
    decrease due                                                    receiving FTA
                   primarily to the decline in capital assetpruchases
    tunding.

    Operatingexpenses  decreased 5.6% from $286.3million to $270.2 million. The
                                   by
    decrease attributable the decrease expenses
              is            to                in                 with labor costsand
                                                        associated
    fringe benefits. Labor cost decreased a result of servicecuts and the related
                                               as
    layoffs. Fringe benefits reflect the lower workers compensationliability associated
    with the lower actuarial estimates. Vacation and other compensated        absences
    decreased a resultof the employee
               as                          layoffs.


CAPITAL ACQUISITIONS A}ID CONSTRUCTION ACTIVITIES
Capitalassetacquisitions capitalized cost. Acquisitionsarefundedusing a variety
                         are          at
                       including Federalgrants,with matchingStategrants and District
of financing techniques,
reserye                     and
        funds,debtissuance, Disfict revenues.
Additionalinformationon the Distict's capitalassets commitnentscanbe foundin
                                                  and
thenotesto thebasicfinancialstatements.




                                                       0#s$i5
                                         qfu
DEBT ADMIMSTRATION
On September     25,2001, proceeds  from the issuance $23.8million of Refunding
                                                       of
             of
Certificates Participation(2001 COPS)was usedto refirnd the 1989Certificates      of
Panicipationand to establisha $2.0 million debt reservefirnd in accordance  with the
terms of the 2001 COPS Trust Agreement. The District issuedthe 2001 COPS to
refinancethe debt on its adminisfrativeoffice building and make improvementsto the
District's Division 3 garage. The Disrict hascovenanted the leaseagreement as
                                                         in                  that
long as the property is availablefor the Distict's use and possession, will make all
                                                                     it
leasepalmrentsand other paymentsobligations and include the repaymentin its anrrual
budget.
At June 30, 2004, the outstandingprincipal component the annualleasepayrnEnt
                                                    of                     was
$21.5million. The Disnict plansto repaythe obligationover seventeen
                                                                  years, August
                                                                       by
2018.
Additionalinformationon the Disfrict's long-termdebtcanbe foundin thenotesto the
basicftrancial staternents.
CREDIT RATINGS AI'{D BOI{D INSURANCE
Standard Poor'sandMoody's gavethe District's 2001COPSa MunicipalBondRating
        &
of AAA and Aaa"respectively,judged to be of the best quality. They carry the smallest
                   risk and aregenerallyreferredto as"gilt edge."
degreeof invesfrnent
Standud & Poor's definition of AAA bond ratinq for lone-termissuecredit ratines:
An obligor rated '4fu4.has actremelystrong capacity to meet itsfi.nancial commitmmts.
,4'M is the highestissuercredit rating assigned Standard& Poor's. The obligor's
                                               by
capacityto meetitsfinancial commitment theobligationis very strong.
                                        on
Moodv's definitionof Aaa bondratinefor lone-term   issuecreditratines:
Interest ptrymentsare protected by a large or by an mceptionally stable margin and
principal is secure. While the various protective elementsare lilwly to change,such
         as
changes can be visualizedare mostunlikelyta impairfundamentally     strong positionof
such issues.

In conjunctionwith the 2001 COPStransaction,    Ambac Assurance  Companyissueda
financial guarantyinsurancepolicy insuring the schedutedpaymentof principal and of
intereston the 2001 COPS when due. In addition,a LeasePaymentFund and a Reserve
Fund ($2.0 million) have been established thE Disrict to depositfunds to make lease
                                         for
payments and to protect the Disffict from default on required lease payments in
accordance  with the leaseagreement.




                                    s0ff*4 I

                                        4s
ECONOMIC FACTOR,SA}ID ITEXT YEAR'S FARES

r                                                                      of
    In August2004 the Disfict received$40.0million cashfrom the issuance short-
    term RevenueAnticipationNotes. The Noteswere issuedat an interestrate of 3%
    andareduein May of 2005.

r                                                 includingthe following:
             2004,voterspassed numberballotmeasures
    ln October               a

    BART's MeasweAA which providesfirndingto refrofit the BART systemthat will
    enhance overall quality of the entireEastBay transit system.
          the

    Measure which is a parceltax anticipated provideAC Transitwith $14million
             BB                                to
    per yearin operating                          beginningJuly l" of 2005.
                        fundsfor the next tenyears,

    Measure in ContraCostaCounty,which is the renewalof their Yzcenttransportation
            J
    salesta:r. This measuredoes not take effect until 2008, but includes substantial
    increasesin revenuesfor AC Transit in the form of bus operating and paratransit
    funds,aswell asmoneyfor theRichmondParkandRide TransitCenter.




                                  s0s*fic

                                       +fr
District Fares



                                                 Fares
                                          Effedive $eot l. 2003
]ash
                                      1                     1.5t
               'orrth
                                                            0.71

       Adult                      1                        15.
                                                            7.5(
t1-Day Pa$s
       Adult                                               tso.0(
                                  15.00                    15.0(
vlonthlyFlash Pass
     Sr/Dis                       15.00                    20.0(
]ne-Dav Pass
      Adult                        5.00                      n/E
     Sr/D'rsffouth                 2.5(                      n/e
qnnual YouthFass                 150.0(                      nlt
-qcal Transfer(see note 1          0.21                     0.?I
SART-to'Bus  Transfer
   iMuft                           1-?,                     1.2!
               (see
   Sr/Dls/YorJth note 3)           0.5t                     0.5f

 port$ Special                     2.0(                     2.5(

        Hv {Ea8ic}
lash
    Adult                          3.0c                     3.0(
    Sr/Disft'outh                  1.5(                     1.5(

l$'rlde pass
      Adult                       ?6.0t                    30.0(
      Sr/Disffouth                13.0(                      n/i
i1-Day Pass
    Adult                         85.0C                   100.0(
fransbay       (note1
        Transfer                   0.0c                    0.0(
 portsSpecial                      3.5C                    3.5(

        rav(Lonq Distarce) (Eeenote 2)
lash
       Adult                       3.2f                      rt/r
       Sr/DisfYouth                1.6(                      n/E
l0-fide pass
      Adult                       ?8.0r                      n/E
       Sr/Dis/YorJth              14.0C                      r*
t1-Day Pa$s
     Adult                        s5.0[                      nll
franshavLD Transfer                0.0[                      nle

l[otes;
1) Transfertme reduced 1.5hoursend 1-useonly,
                        to
2) TransbayLong-Dlstance categoryeliminated
                           fare                     fromfare
$tructure.
3) BARTPlusno longeraccepted.
4) Youth/Sr/DisTransbay  1O-ride tcket no longer        for
                                                 offered sale.
    Patronscan add-fareto local lGride ticketfor Transbayride.




                                                     4s             so0sf,3-
 STATEMENT OF FTJIYDI.{ET ASSET$
 BUSINESS-TYPE           -
                ACTTVTTY EI{TERFRISEFTJTID
 JIJNE 30, 2004



ASSETS
 CURRENTASSETS;
  Casb                                                            $        22,280
  Investrtretrts                                                               7
  Receivables:
   Fedemlaadlocal grants:
     Capital                                                               l 1,1gg
     Planning,operatfuU other
                       and                                                 20,609
   Propertytax                                                               5,800
   local sales tax                                                         t2,ttz
   Other, principallyuadereceivables
                                                                             4,966
     Totalreceivables.
                     net                                                   54,616
   Due from the Pension
                      Trust Futrd                                            It3
             at
   IDventorie$ cost                                                        8,224
   Prepaidexpenses                                                         1,536
     Total currentasseu                                                    86,911

 NONCURRENTASSETS:
  Cashanrlinvesulents  restisted for certificates                          2,013
  Capitalasseu:
   Nondepreciabl"                      fll                                 43,046
   Deproeiabte,nct                                                        218,984
                                       I lll
     Total capitalassets,
                        net               "/
                                       |                                  262,031
  Cerdficates panicipadon
             of             issuance #
   net of accrrmulated
                     anortization                                            50'l
    Total noncurrent
                   assets                                                 264,550
    Total Assetg                                                          351,461
LIABILITIES
 CT]RRENT  LIABIIJTIES:
  Accormts payable accrued
                   ald          expenses                                   7,U7
  Accruedsalaries wages
                  &                                                        2,061
  Ac+ruedvacation sick leave
                  ard                                                     t?'524
  Other accruedliabilities                                                 9,268
  Accnredinterestpayable                                                     816
  Unearned revenue                                                         r,162
  Currentportion of claimsliabilities                                     25,7t8
  Notespayable                                                            20,000
  Currentportion of certificates participation
                               of                                     _    1,067
    Total currentliabilities                                              80,262
NONCURRENTLIABILITIES:
 Accnredvacation sick leave
                   and                                                      8,626
 Claimsliabilities                                                         13,477
 Certificates participation
             of                                                            19,891
     Total noncurrent
                    Iiabilitics                                           41,994
     Total liabilities                                                    &?afl
NET ASSETS
 Invested capitalasset$, ofrelated debt
         in            net                                                ut,579
 Restricted debtservice
           for                                                              2,013
 Unrestricted                                                             (14,388)
     TOTAL NET ASSETS
                                                    0ssfia3   #
                                                                  $       ?29,2M

  Seeaccompanying
                notes the basicfinancialstatemeflts.
                     to
                                                       434
                                                         9
    ALAI\{EDA-COI,{TRACOSTA TRANSTTDISIRICT

              OF
    STATEMEI\TT REVENTIES,EI(PENSES,AND CHANGESIN FTJNDNET ASSETS
    BUSINESSTYPEACTTYITY . ENTERPRISETTJND
                    30,
    YEAR ENDED JTJNE 2OO4



    OPERATING   REVENUES:
     Passengerfares                                                                 $     44,230
     Confractservices                                                                      8,814
     Servicefunding- City of Alameda                                                         56
     Other                                                                                 7,188
             Total operatingrevetrues                                                     60,288
    OPERATING    EXPENSES:
     Operatorwages                                                                        59,9i6
     Otherwages                                                                           45,9r7
     Fringebenefits                                                                       81,274
                 and
     Depreciation anrortization                                                           29,362
     Fuel andoil                                                                           8,126
     Otbermaterialandsupplies                                                              7,792
     Sewices                                                                              14,538
     rnsuraqce                                                  4S              -          5,141
                                                           1 1 l { - l l
      Netexpensesofjointventlue                                                           r2,445
                                                   _-,, 1,\l?              ll
      other
                     expenses
         rotaloperating
                                               {rlpllA\l          I t)                     5,7t6

                                 [n f f n\/ fl)-                                         n0,227
         Netoperatiqs
                   ross                  n
t   NONOPERATTNG
     Operating assistance:
                                 I U l)
                         (E)(PENSEj-/
                REVENT.TES
                                                                                         (209,939)


       Propertytrxes                                                                      59,365
       Local salestax                                                                     50,278
       Local funds                                                                        46,490
       Federal                                                                            37,207
       State                                                                               6,499
     Pass-through Ala$eda CountyCongestion
                 to                      M'negementAgency
     Interestincome                                                                          466
     Interesterpen.se                                                                     (1,372)
             Net nonoperating
                            revenues                                                     198,933
             Lossbeforecapitrl contributious                                             (1r,006)

    CAPITAL CONTRIBUTIONS                                                                 35,543

    CHANGEIN NET ASSETS                                                                   u,537
    NET ASSETS,
              beginning year
                      of                                                                 ?M,661

              end
    NET ASSETS, ofyear                                                              fi   229,2M

                  notesto the basicfinarcial statements.
    Seeaccompanying



                                                           S$S,Sfl$
                                                       435
                                                        10
ALAMEDA-COMRA COSTA TRANSITDISTRICT

STAITMENT OF CASII FLOWS
BUSINESS.TYPE ACTTVITY . ENTERPRISEFII\D
YEAR ENI}ED JT]NE30, 2OO4
On thousands)


CASHFI,OWSFROMOPERATINGACTNTITES:
  Cashreceivedfrom ctrstomer$                                       47,ffig
  Cashpayments smppliers goods services
               m          for   and                                (55,2s9)
  Cashpaymenrs euployees services
               to           for                                   (189,484)
  Otheroperatingreceipts                                            12,047
       Net cashusedin operatingactivities                          (185,027)
CASHFI.OWSFROM NONCAFITAI.FINANCING
  Operati4g          received
            assista.nce                                            193,416
  Proceeds ftom sotespayable                                        20,000
         paymeil or trotEs
  Intere$t                payables                                    (3e6)
      Net cashprovided noncapital
                       by
CASHFLOWSFROMCAPITAI AI{D
 FINANCINGACTIVTIIES:
   Acquisition construction capital
               and            of                                   (63,016)
   Capitalconributions from gants                                   29,s45
                    of
   Pavment costs iszuaace
            for
   hincipai paidou certificatcs participation
                              of                                    (1,075)
          paidon certificatcs participation
   Interest                  of                                       (857)
       Net cashusedin capitalandrelatedfffDcitrg activities        (35,403)
CASHFI.OWSFROMINfFJTING ACTNTITES:
  Proceeils         snd
           ftom sales manuitiesof invesffients                      t9,L22
  Purchase invesfinents
           of                                                      (r9,123)
         received investmenls
  Iurerest       on                                                    468
       Net cashprovided investing
                      by         activities                           467
NET DECREASE CA.SH
           IN     AI'{D CASHEQUIVALENTS                             (6,942)
CASHAI.ID CASHEQI.IVALENTS, begindng year
                                    of
CASHAND CASHEQIJWAIENTS"eodofyear                                   22,28r

                      OF
RECONCILIATION OPERATINGLOSS                     TO
 NET CASII U$ED IN OPER.ATING            ACTNTIIES:
 Net operating  loss                                          $    (209,939)
 AdjusmeDls reconcile
              to             operatingloss
  t0 netcash   usediuoperatingactivities:
                    and
     Dcpreciatioa anortization                                      29,362
                                  and
     Effect of rrhgnge$ assets liabilities;
                          in
       Receivables                                                    (es8)
       InvenJories                                                  (1,619)
       Prepaid   expenses                                              836
       Accouffspayable accnred
                             aud        liabilities                  I,120
       Accnred              &
                  sslaries wages                                       299
       Vacation sickleave
                  and                                               (1,463)
       Clairns  liabilities                       ss$$#5            (2,663)
       Conributions     payable
          Net cash    in
                  used operatingactivities                    _q__i!il4t
                                                      4:16
ALAIVTEDA.CONTRACOSTA TRANSIT DISTRICT

STATEMENT OF PLA}'I hIET ASSETS. PENSION TRUST FTJND
DECEMBER 31, 2003
(In thousands)

ASSETS
 Contributions  receivable                                           3,998
 Receivable  from brokers                                            1,994
                    otr
 lnterestreceivable if,vesmenB                                         974
 InvesEnents payment accrued
              for          of         pension
                                            costs:
   Corporate   EquitySecurities

                                                          n{l
                                                                    L37,073
   U.S. Government    SecuritiesMonevMarketFund                       6,028
   U.S. Government    SecuritiesFixedIncome  Securities              60,050
   Non-U.S.Government       Fixed Income
   Mutual funds
     Total investments palment of
                        for
                                                          rLr        52,046
                                                                     66,628
                                                                    321,825
   Totalassets                                                      328,79r

LIABILITIES
  Due to EnterpriseFund                                              1,931
          to
  Payable brokersfor unsettledftensactions
   Total liabilities                                                29,546

NET ASSETSHELD IN TRUST FOR PENSION BENEFITS                    s   299.245

              notesto the basicfuancial statements-
Seeaccompaaying




                                              $&$flfis

                                                   t2
                                                  437
ALAI\4EDA-COMRA COSTA TRANSIT DISTRICT

STAIEMENT OF CHAIYGESIN PLAl.l NET ASSETS- PENSION TRUST FIJI{D
YEAR ENDED DECEMBER 31, 2003
(In thousands)


A.DDITIONS:
 Earningson investments                                            5,069
 Contributions                                                    r7,027
  Net depreciation fair value of investments
                 in                                               47,7_40
         TouI additions                                           69,836
DEDUCTIONS:
 Benefttpayments                                                   17,423
 Administrativeexpenses                                             1,504
         Total deductions
NET DECREASE
NET ASSETS HELD IN TRUST FORPEN
    Beginning year
            of
                                                           FT      18,927
                                                                  50,909

                                                                  248,336
     End of vear                                                  299,245

Seeaccompanying notes to the basic financial statement$.




                                               CIsssa?

                                                     13
                                                    438
ALAMEDA-CONTRA COSTA TRANSIT DISTRICT
NOTES TO TIIE BASIC FINANCIAL STATEMENTS
YEAR ENDEDJTINE 2OO4
               30-

(1) TItr FINANCIAL REPORTING ENTITY

  Organimtion - The Alameda-Contra  CostaTransitDistict @istrict) is a political subdivision the
                                                                                            of
  State of California established 1956 and is subjectto Transit Distict Law as codified in the
                                 in
  California PublicUtilities Code.

  Reporting Entity - The Distict follows the provisionsof Governmental            Accounting Standards
  Board (GASB) Statement     No. 14, TheFinancialReportingEntity, as amended.This statement        sets
  forth accountability a government's
                        of                electedoffrcialsto their constituents the basic criteria for
                                                                                 as
                                in
  inclusionof an organization a governmental      reportingentity. The governmental     reportingentity
  consistsof the Disrict (primarygovernment) organizations which the Dishict is financially
                                                and                  for
  accountable. Financial accountability defined as the appointnent of a voting majority of the
                                           is
  component   unit's board, and(i) eitherthe Disfrict's ability to imposeits will on the organizationor
  (ii) the potenfialfor the organization provide a financialbenefitto, or imposea financialburden
                                        to
  on the District. GASB Statement        No. 14 sets forth criteria to be used in determininghow
  individual governmental datashouldbe presented the component
                            unit                         by                  unitsof a reportingentity.

  The basic financial statements include legally separatecomponentunits, yrhich are so financially
                                                          part of the Di
  intertwined with the Dishict that they are, in substance,                  The componentunits
  discussed below are includedin the Distict's reporting                  the significanceof ther
              or
  operational furancialrelationships   with the Disfrict.

  For financial reporting purposes,the                                          include all financial
  activities that are conholled by or are                                 bv the Dishict's Board of
  Directors. As such, the basicfurancial                     the financial activitiesof the Distict's
  Special Transit Service Disnicts No. I                and other areas in which the Disnict has
  contacted to provide tansit service.                disticts are not legally separate entities,they
  are not considered    componentunits under Governmental     Accounting Standards    Board (GASB)
  Statement   No. 14. SpecialDisfrict No. I was createdthrough an annexation      agreement  between
  the City of Newark and the Disnict. SpecialDishict No. 2 was createdthrough an annexation
  agreement   between City of Fremon! Countyof Ala:nedaandthe Distict. All propertywithin
                       the
  ttre SpecialDisticts is subject ta:res
                                to      that may be leviedby the Distict.

  In May 1988, the Disfrict createdAC Transit FinancingCorporation(Corporation),a nonprofit
  public benefit corporation incorporatedin the State of California under the guidelinesof the
  Nonprofit Public Benefit CorporationLaw. Legally separate from the District the Corporationis
  blended wiflr the primary govemmentbecause sole purpose is to provide financial assistance
                                              its                                            to
  the Distict by financing, refinancing, acquiring, constucting, improving, leasing and selling
  buildings, equipmentland, buildingimprovements, other public improvements.
                                                  and

   The financial activities of the Alameda-ContraCosta Transit District Employees' PensionPlan
   (Plan) are blended in the basic financial statementsbecausethe Plan exclusively servesthe
   employees the Disuict. The financialpositionand changes frnancialposition of the Plan are
             of                                              in
   reportedon a calendar  yearbasis.


                                         s0ssEs
                                              439
                                               T4
ALAMEDA-CONTRA COSTA TRAI{SIT DISTRICT
NorES To TI# BASIC FINAIICIAL STATEMENTS (continued)
YEAR ENDED JUNE 30. 2OO4

   The pension plan is administered by the five member Retirement Board made up of two
   representatives the generalpublic selected the Disrict's Board, two Disrict employees
                  of                           by                                            who
   are elected officials of the AmalgamatedTransit Union, Local 192 (ATIJ) and one Dishict
   employee selected the District's Board of Directorsfrom the employees
                      by                                                  who are not represented
   by ATU' The RetirementBoard has adminisnative     snd fiduciary responsibilityover thi pension
   plan' The RetirementBoard utilizes a third-partybanking institutionas custodianover the plan's
   assets.

  Separatefinancial statements the Corporation and the Plan may be obtainedfrom the Distict
                              for
  Confroller.

(2) SUMII{ARY OF SIGNIFTCAT\ITACCOUNTnqb pol,rcms

   Basisof Presentation

  The basic financial statementsprovide information about the Distict's enterprise fund and the
  pensiontrust fund. Separate$tatements eachfund category - enterprisemd
                                         for                                    fiduciary - arc
  presented. The basic financial statements reportedusing ttre economicresourcesmeasurement
                                           are
  focus and the accrualbasisof accounting. Revenues recordedwhen
                                                      are                      and expenses   are
  recordedwhen a liability is incurred regardless the timing of the
                                                 of                          cash flows. On an
  accrualbasis,revenuesfrom operatingactivities are recognized                that the operations
  were provided; revenues  from propertytaxesand sales                     in the fiscal year for
  which the taxes are levied; revenuefrom grants is                           year in which all
  eligibifity requirementshave been satisfied;                              is recognizedwhen
  earned.

  EnterpriseFmd (proprietmy fund) - The                        Distict are organizedon the basisof a
  proprietary fund-type, speoifically an enterprise        The activities of this fund are accountedfor
  with a set of self-balancing aacountsthat comprisesthe Disfrict's assets,liabilities, net assets,
  revenues  and expenses.Enterprisefirnds accountfor activities (i) that are financedwith debtthat is
  securedsolely by a pledge of the net revenuesfrom fees and chargesof the aotivity; or (ii) that are
  required by laws or regulationsthat the activity's cost of providing services,including capital costs
  (suchas depreciationor debt service),be reoovered    with fees and charges,rather than with taxesor
  similar revenues; (iii) that the pricing policiesof the activity establish
                    or                                                        feesand charges  designed
  to recover its oosts,including capital oosts(suohas depreciationor debt service).

  Enterprisefunds distinguish operatingrevenuesand expenses  from nonoperatingitems. Operating
  revenues expenses
            and          generallyresultfrom providingservicesand producingand deliveringgoods
  in connection with an enterprise fund's principal ongoing operations. The principal ofeiating
  revenuesof the Disnict's enterprise fund are charges to passengers    for services provided.
  Operating expensesinclude the cost of services, adminishative expenses,and depreciation on
  capital assetsand equipment. All revenuesand expenses meetingthis definition are reportedas
                                                        not
  nonoperating  revenues expenses.
                         and

  The District has elected under GASB Statement No. 20, Accotmting and Financial Reporting
                                                                                         for
  ProprietmT Futtds and Other Governmmtal Entties That tlse Proprnwy Fmd Accirmting,- tn
  lPPlv all applioable GASB pronouncements,as well as any apphlable ironouncements of tfte
  Financial4cgguntingStandards   Board(FASB), the AccountingPiinciplesBoard or any Accounting
  Research
        Bulletins
                issued or before
                     on        Novffir 30, l9ffiffipq,#*"                   pronounoemenb
                                                                                      conflii
                                                15
ALAMEDA-CONTRA COSTA TRANSIT DISTRICT
NOTES TO THE BASIC FINAT'TCIALSTATEMENTS(CONtiNUCd)
YEARENDED JUNE 30. 2OO4

  with or contadict GASB pronouncements.   The GASB periodioallyupdatqs codificationof the
                                                                       its
                                                                                       with
  existing Governmental Accounting and Financial Reporting Standards which, along
                                                                                  accounting
  subseqient GASB pronouncements (Statements and Interpretations), constihrtes
                                                 _
  principlesgenerallyaccepted the Uniied States America(GAAP) for gorrernmental
                               in               of                               unib' The
                                                         guidanceof FASB after November30,
                                            private-sector
  Disftict haselectednot to follow subsequent
  1989.

                                                    for             resources be used
   pension TrustFund - The pensionTrust Fund accounts the accumulated       to
                annuitypayments all members the
   for retirement             to            of   Plan'

                                                                                considers all
   Cashand CashEquivalents For purposes the statement cashflows, the Disnict
                             -             of           of
                                                                                    be cash
   highly liquid investmentswith matwity of three months or less when purchasedto
   "qui*t"nt . Any resticted cash and investnentsused to service  debt principal and interest
                                               cashequivalents.
   payments the District would not be considered
             of

   Investments The Disftict appliesthe provisionsof GASB Statement
                 *                                                              No' 3l, Accomting and
   Financial Reportingfor Ceriitn Investments for External InvestmentPools, which require
                                                     and
   gon"rrr**rrt"i entiti", to report certain invesftnents fair value in the statement net assetand the
                                                        at                           of
                                                                  changein fair  value of investnentsin
   itatementof plan net assetand recognizethe corresponding
                                                             with GASB Statement    No' 31, the Disfrict
   the year in which the changeo.r*t*d. In acoordance
   has reportedits investmentsat fair value based     on quotedmarket informatioryftained from fiscal
   agents other sources.
          or

   Restrfuted             -
              Investments The Corporationis requiredto ma                           relatedto its 2001
   Certificatesof Participation equal to the lesserof (l)                            original principal
                                                                                             pa)4nents
   component installmentpayments (2) 100%
               of                      or
   due in the current year or any fufirre year or                               amount of installment
   paymentsdue in the current year or any future                   f ?00q, the resfrictedassets consist
   of investnentsvalued at $2,013,000.                               agreement bY and between the
   Corporation,the Distict and the tustee, the               assetscan only be used to service the
   principal and interest on the outstanding certificates of participation. In addition, the District
   **u!"r    cash and investrrents resticted for the Plan, which are managedby several investment
   **u["tr and are held by a bank servingasthe Plan'scustodian.

   pension plan - The Disniot's noncontibutory pensionplan providesretirementbenefitsfor all
                                                                                            pension
   qualiffing union and non-unionemployees. The District's annualcontibution to fund the
   pf* ir altuarially determinedbasedon a percentage   of gtoss payroll, which includesthe normal
   costof the ptan ptus amortizationof prior servicecostsover a period of not more than forty years'
                                                                                     for the future
   Cash and investnentsin the Plan are restrictedby the PensionBoard to provide
   payment pensionbenefitsandrelatedexpenses'
            of

               -                                   parts and fuel urd are statedat average   cost'
     fnventories Consistprimarily of bus replacement
    Inventoriesare chargedto expense, a weighted-average
                                     on                   basis,at the time that individual items
    are withdrawn from inventorY.


                                              essft-3'3
                                                 441
                                                   16
ALAMEDACONTRA                COSTA TRANSIT DISTRICT
NOTES TO THE BASIC FINAI.{CLALSTATEMENTS(Continued)
YEAR ENDED JIJNE 30. 2OO4

   Cryital4ss"{.-..Are statedat cost and are depreciated
                                                       using the staight-line method over the
   estimatedusefullives of the assets. follows:
                                     as

               Buildings,structures otherimprovunents
                                  and                                         30 years
               Revenue equipment                                              l2 years
               Servicevehicles otherequipmmt
                              and                                        3 to l0 years
                      and
               Engines tmnsmissions                                            4 years
               Revenue vehicles(Mini Vans)                                     4 years

  The District's policy is to capitalizeall propertyandequipment
                                                               with a cost greater
                                                                                 than $1,000and
  a usefullife of more than one year.

                     -
  Operating assistance Grants are accountedfor as nonoperatingrevenue as soon as all eligibility
  requirementshavebeenmet.

  Contract Sertices- The Metopolitan Transportation Commission(MTC) allocates portion of
                                                                                a
  the Bay Area Rapid Transit's (BART) State TransportationAssistancefunds to the District for
  allowing BART passengers ride Disrict buses a discounted
                             to                 at           rate when they provide a BART
  fransfer. Allocations from MTC totaled approximately$4,803,000for the year endedJune30,
  2004 and are recordedas contact services. Theremainingamountof approximately $4,011,000is
  from the ADA Paratransit Consortium.

                                                   -
  Propefit Taxes,Collection and Maximum Rates The Stateof                             ) Constitution
  Article )ilII A provides that the manimum basicproperty tax rate                          may not
  exceedl% of its assessed   value unlessan additional                               debt has been
  approvedby voters. Assessed     value is calculated I
                                                     at                                   bv Article
  )ilII A and may be increasedby no more than 2%                                is sold, transferred
  or improved. The StateLegislature determined
                                      has                                     of receips of the tax
  lely amongthe counties,cities, schooldistrictsand               ineluding the Disfrict.

   Alameda and Conta Costa Countiesassess      properties,bill for, collect and distribute property
   tanes, Property taxes af,erecordedas nonoperating revenue(including secureddelinquentproperty
   taxes)net of estimateduncollectibleamounts,in the fiscal year of levy.

   Assessed valuesare determined  annuallyby the Assessor's  Offices of Alamedaand Conta Costa
   Countieson Januaryl, and becomea lien on real property at January l. The Ievy date for secured
   and unsecuredproperty is July I of each year. Secured  taxes are due November I and February I
   and are delinquent not paid by December10 andApril 10, respectively. Unsecured
                      if                                                              propertyux
   is due on July I and becomes  delinquenton August31. The County is permithd by StateLaw
   (Proposition 13) to levy taxes at l%o of the full market value of the property (at the time of
   purchase)and can increasethe property-assessed                              per
                                                  valuationby no more than 2o/o year. Property
   tax revenues recognized
                are           whenlevied.

   The Distict acerues delinquent property taxes. The cumulative amount of delinquent tanes
   uncollectedfor the current and prior years has been recorded as a receivable. The Distict,
   through the County of Alameda (County), is underthe Teeter plan whereby, delinquentta:ces     are
   receivedby the Distict from the County's own funds in the event that delinquent     taxes are not
   received by a certain due date. In return, the Distict forgoesthe penaltiesand interestthat would
   accrueon thesedelinquent propertytaxes.
                                              M2          GSSSSS
                                                t7
ALAMEDA-CONTRA COSTA TRA}ISIT DISTRICT
NOTES TO THE BASIC FINAI'ICIAL STATEMENTS(Continued)
YEAR ENDED JUNE 30, 2OO4

  On November5, 2002, the voters approvedthe parceltax, MeasureAA, which imposes          $24 per
                                                       Disfrict No. l. This tax became
  year for 5 yearson eachparcelof taxableland in Special                                 effective
  July 1, 2003 and terminates June 30, 2008. The revenuederivedfrom this measureis to be
                             on
  used to sustainpublic tansportation servicesprovidedby the Distict in SpecialDisnict No. 1.
  The Distict'received approximately million in MeasureAA tarces
                                     $7                              during the fiscal year ended
  June30, 2004.

                          -
  Conpensated Absences The personnelpolicies of the Distict generally allow employeelto
  accrueup to 240 hoursof vacationand 140 daysof sick leave. Unusedaccruedvacationis paid to
  the employeeupon terminationfrom Distict employment. Unusedaccrued,vested sick leave is
                                        with ten or moreyearsof Disfrict service.
  paid, upon retirement to thoseemployees

   Capital Contributions- The Distict receivesgrantsfrom the FederalTransitAdministration(FTA)
   and state and local tansportation funds for the acquisitionof busesand other equipmentand
                                       are
   improvements.Capitalconfributions recordedas revenues                           revenues
                                                              after net nonoperating       and
   the cost of the relatedassets includedin capitalassets.
                               is

              -                                        presentation.Net assets categorized
                                    utilize a net assets
   Net Assets The financialstatements                                        are         as
                          (net
   investedin capitalassets of relateddebt),reshictedandunrestricted.

      r    lnvestedin capital assets, of relateddebt - This categorygroupsall capital assets
                                     net                                                   into
                           of
           one component net assets. Accumulated             ion and the outsanding balances of
           debt that are atfuibutableto the                      or improvementof theseassets
                              in
           reducethe balance this category.
      .    Resticted net assets-                                 restictions imposedby creditors,
           grantors,confuibutors                     of other governments resnictionsimposed
                                                                           and
           by law through                        or enablinglegislation. When both resticted and
           unrestictednet assets             unrestrictedresources usedonlv after the resfrioted
                                                                   are
                     are
           resources depleted.
       .                         *
           Unresticted net assets This categoryrepresents assets the District, not reslricted
                                                        net    of
           for any projector otherpurpose.

   (Ise of Estimates- Managementhas made estimatesand assumptions    relating to the reporting of
   assetsand liabilities and revenuesand expenses prepare these basic financial statements
                                                   to                                          in
   conformity with GAAP. Actual resultscould differ from thoseestimates.




                                          sfiilcl3?
                                             M3
                                              18
ALAMEDA.CONTRA COSTA TRAI\SIT DISTRICT
NOTES TO TI{E BASIC FINA}ICIAL STATEMENTS (Continued)
YEAR ENDED JIJNE 30. 2OO4

   (3) CASH AFID rI{VESTMENTS

   At June 30, 2004 @ecember31, 2003 for the PensionPlan), the Dishiot's cashand invesfinents
   consisted the following (in thousands):
            of

   Cashand cashequivalents                                                                  $    22,280
   Investments                                                                                  323,810
   Total                                                                                    $ 346.r20
   Reportedas:
     Cashandcashequivalents                                                                 $   22,280
     Investrents                                                                                    2
     Cashandinvestments  resricted for certificatesof participation                              ?,013
     Cashand invesfrrentsrestrictedfor payurents  of
     accrued pensioncosts(at December 2003)
                                        31,                                                     32t.825
     Total                                                                                  $ 346.120


  Deposits- At June 30, 2004, the carrying amountof the Distict's depositswas approximately
  fi22,208,200.The correspondingbank balancewas $22,074,924,which is less than the carrying
  amount due to deposits in transit. Of the bank balance, $245,615 was covered by federal
  depositoryin$uranoe,and $?1,829,309 was collateralized accordance
                                                       in          with section 53552of the
  California GovernmentCode. The  Dishict alsomaintained$28,725in petty cash.

  The California GovernmentCode requiresCalifornia banks and savingsand loan associations         to
  securegovernmentaldepositsby pledging governmentsecuritiesas c,ollateral. The marketvalue of
  pledgedsecurities   must equal at least lt0% of the Distict's deposits. California law also allows
  financial institutions to secure governmentaldepositsby           first fust deed mortgagenotes
  having a value of 150% of the Dishict's total                           is considered be held in
                                                                                       to
  the District's name.

  Investments- In accordancewith the                                    , $ecuritiespurchased District
                                                                                              as
  investnents mustbe physically                             Disnict or to a third-party custodialagentof
  the Distict. If U.S. Treasurv                               delivery may be made by book enty only,
  Under provision of the                          f'the Distict may invest in the following types of
  investnentssubjectto the                        CaliforniaGovernment   CodeSection53601:
      (a)   Repurchase  agreements
      (b)   Securities U.S. government its agencies
                      of                  and
      (c)   California Local Agency Inves:frnent
                                               Fund
      (d)   Negotiablecertificates of deposit
      (e)   Commercial   paper
      (f)   Bankersacceptances




                                              GfiSS,33

                                                   444
                                                    19
    ALAMEI}A.CONTRA COSTA TRANSIT DISTRICT

    NOTES TO TI{E BASIC FINA}.ICIAL STATEMENTS(Continued)
    YEAR END         30.2004

       The Distict's securitiesare maintained,in the name of the Dishict, in the fiust safekeeping
       deparbrentof the various banksdoing business with the Disuict as established written third-
                                                                                  by
       party custodial fiust safekeeping
                     and                agreements between Distict andthe banks.
                                                           the

                                                        under the direction of the PensionBoard'
                                                 managers
       The Plan's firnds are investedby inveshment
       The maximumallocationguidelines diversityof investnentsare as follows:
                                          for

                   Bonds                                              37%
                   Commonstock andconvertiblesecurities               48%
                   Internationalsecurities                            t5%

       The investrtent managers are prohibited by the Pension Board from investingin securitiesand/or
                                      securities
       realty of contibuting employees,        purchased mon                  iq short sales,letter stock, private
       placements, other non-marketable
                    or                    securities,opti                        positionsand foreign securities
       otherthanthoseIistedon a major domestic

       The Distict's and the Plan's                                      sive an indicationof the level of
       custodial credit risk assumed the
                                       by                           andthe Planat December 2003.31,
       Category   I includesinvestnents                                                          are
                                                                     or for which the securities held
       by the District or its agent in the Di           Plan'sname. Category2 includes     uninsured  and
       unregistered  invesftnents which
                                 for            uritiesare held by the counterparty's tust department   or
       agent in the District's or the Plan's name. Category 3 includesuninsuredand uruegistered
       investnents for which the securities€ue held by the counterparty or by its trust departnent or
       agen! but not in the Distict's or the Plan's name. Inveshnentsin mufual funds and U'S'
       government    securitiesmoney market funds are not categorized because  they are not evidenced  by
       seowitiesthat exist in physicalor book enty   form. There are no category3 investnentsheld by
       the District at June30, 2004.

       At June30, 2004 (and December 2003 for the Plan) investments fair valuewere classified
                                   31,                            at                         as
       follows (in thousands):

                                                          CategorvI       Categoru2        Categorized       Total
        Distict investnents:
           U.S.government             (resticted)
                             securities               $          -    $   2    ,   0   1   5   $   - $   ?   ,   0    1   5
           Mutual  funfu                                                                            43               43
        Total District investnrents                              -             2,015               43            2,058

           Plan investnents:
           U. S. Governmeut securities                       60,050                               -           60,050
           Otherfixed incomesecurities                       52,046                               -           52,046
           Corporatestocks                                  137,073                               -          137,073
           Mutual funds                                                                        66,628         66,628
           Money Market Fund                                                                    6,028          6,028

            Total pensionplan invesffients                  l89,ll9                            72.656        321,825

o          Total investnents                         -$J-99=ug- I              zJls        l-z?-699- -$123"8!3-
                                                    0G*+-31
                                                      445
                                                          20
ALA-IVIEDA-CONTRACOSTA TRAFISIT DI$TRICT
NOTES TO THE BASIC FINAI{CIAL STATEMENTS(Continued)
YEAR ENDED      30. 2004

(4)      CAPITAL ASSETS

   Following a summary capital
            is       of           at
                             assets June 2004(in thousands):
                                       30,


                                                    July I,     Additions/     Reductions/            J u n e3 0 ,
                                                     2003       Trengfers       Trunrferq               2004
      Non-depreciable
                    capitalas$ets:
        Land                                  $       r 1,403   $       -      $         -        $        l1,403
        W ork-in-progress                             48,569                         (r 6,921i)
                                     Total            59,972                         (l6,926)              43.046
      Depreciable
                capitalassets:
        Revenue equipment                            220,808        59,36            (49,545)            2 30 , 6 3
                                                                                                                  0
        Service       and othercquipment
               vehicles                               t9,I 83                         (1,1 5)
                                                                                         0               108,568
        Buildings,
                 structure
                         and improvements            r2r,773                                             l2t,867
                                     Total           431                             (50,650)            461,065
   Lessaccumulateddepreciation
     Revenue equipment                                                 ,048)         50,006                   7
                                                                                                         (94,2s)
     Servicevehicles
                   and otherequipmcnt                               (10,23 )
                                                                          7            632               (77,942)
     Buildings,       and improvements
              structure                                                                                  (6e,864)
                                     Total                          (4e,326)         50,638             (?4?.081)
        Depreceiable
                   capitalE$sets, of
                               net
        accumulated
                  depreciation                       168,37t        50,625              L2)              218,984
        Capitalas$ets, of accumulqted
                    net
         depreciation amortization
                    and                             228,341     $   5q,625     $     (16,93S)
                                             -$ :    - -                                          $      ?62,030




(s) INTERn]ND RECETVABLES/PAYABLES

  The enterprisefund in the accompanying   basicfinancial statements reported as of June 30, 2004
                                                                   is
  and the pension tust flrnd is reportedas of December 2003; therefore,interfundpayables
                                                       31,                                     and
  receivables do not equal. lnterfund receivables and payables arise due to the timing of
  reimbursernents from the pension fiust fund for administation costs and retiree benefits payments
  made by the Distist and paymentsto the pensiontust fund for confributions basedon covered
  payroll.

                                          June30,2004
                            Interfirndreceivableltnternma
                                                        uavable
                            Enterprise fund     lPuuiontust fund             $ 183


           December 2003
                 31,

                                             $ 1,931                                                                  o
                                               efiil.*.35
                                                       446
                                                        2l
ALAMEDA-CONTRA COSTA TRANSIT DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS(Continued)
YEAR ENDEDJUNE30. 2OO4

(6) CAPTTAL ASSTSTAIICE

  The Distict has l8 grant contractsin processwith the FederalTransit Administration(FTA) that
  provide federalfunds for the acquisitionof buses,other equipment  and improvements.Under the
  terms of the grants, proceedsfrom equipmentsold or retired are refundableto the federal
  governmentin proportion to the original federal capital grant funds used in the purchase. The
  Distict has also received allocations funds generated
                                       of                                              of
                                                          from net bridge toll revenues the -San
  Francisco-Oakland  Bay Bridge. Thesefundsare receivedunderprovisions the California Sfreets
                                                                           of
  and Highways Code and are allocatedbasedon claims approvedby the MTC. Thesegrantsare
  summarized June30, 2004as follows (in thousands):
              at

                         Federalgrants                       $    7,988
                         Stategrants                             23,055
                         Local grants                             4,500
                                                             $   35.s43

(7) OPERATTNG ASSISTAI'{CE

   State and Local Operating Assistance- The                 Development  Act (TDA) createsin
   eachlocal jurisdiction a Local Transportation         fundedbv a %centfrom ttre retail sales
   tax collected statewide. The state board of                 thesefundsto the local jurisdiction
   according the amountof sales
             to                                                                             to
                                                           iction. TDA fundsare allocated the
   Distict from Alameda and                              meet, in part, the Distict's operating
   requirements.The allocati

   StateTransportation                       lll) funds are allocated the Dis:frictbasedon the
                                                                      to
   portion of the Disffict's q    g"revenues a portion of qualifying revenues
                                            as                                statewide and the
   populationof the areas      the Disfict serves. The   qualiffing reveuuesare property taxes,
   MeasuresB and C funds, and other funds generatedat the local level excluding state or federal
   subsidies.

   Supplementary   service revenues(AB 2972) are formula allocatedfunds that are passedto the
   Disfrict through the OaklandUnified SchoolDistict (OUSD) for OUSD's hometo schoolservice
   program. Fundsare allocated this programbased the costof rururingthe OUSD programas
                                for                  on
   a percentage total SchoolDisticts statewide
                of                            applyingfor thesefunds.

   Welfare to work grant funding is provided by the State to match the federal welfare to work
   proglam that is used to fund the Distict's Job Ascess and ReverseCommuteprogram. The
   welfare to work grant is funded basedon the population within a local areasthat are below the
   poverty level and oomprise CaIWORKS recipients. The Job Access and ReverseCommutp
   programprovidestansportation to key low-incomeneighborhoods,     homeless centersand targeted
   work centersparticularly during evening,night andweekendhours.




                                            frflm*3$
                                                 447
                                                  22
               COSTATRAI'{SITDISTRICT
ALAIVIEDA-CONTRA
NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued)
YEAR ENDED JUNE 30. 2OO4

  Below is a sumrnaryof stateand local operatingassistance the year endedJune30, 2004 (in
                                                         for
  thousands):

                  Local fuitds:
                   TransportationDevelopmentAct                          _$ 46.19!_
                  $tate operating assistance:
                    PropositionI I I                                       $   3,077
                    Supplementaryservice/welfareto work                        3.422




  Local SalesTm - The local salestax assistance  (ABll07) is derived from the one-halfpercent
  retail ta:cimposed flre three BART counties(Alarneda"
                    on                                 Conta Costaand SanFrancisco). Of the
  total arnountcollected. 75a/ois a direct BART subsidvwith the Disfrict and the San Francisco
  Municipal Railway SystemMIJNI) sharingthe                  equally.

   In 1987,the District beganreceivinglocal                        rrnderMeasureB. Approved by the
   votersof AlamedaCountyoMeasure                                   ion and distibution bv the Alameda
   County Transportation  A                                                and use tan. The Dishict is
   authorized receive
             to          11.51                                    under the condition that the monev be
   usedfor serviceexclusivelyin

   In 1988,the Disnict began            local salestax revenue under Measrue C. which authorizes
   the Conta Costa TransportationAuthority to collect a one-half percent salestan for improvement
   of public and paratansit services. As a tansit operatorin Conta Costa County, the District is
   eligible to submitproject proposals Confra CostaCounty TransitAuthority (CCTA) for funding
                                     to
   underMeasureC.

                                                                below (in thousands):
   Local sales assistance the year endedJune30, 2004is summarized
             tan        for

                               ABll07                         $   28,526
                               MeasureB                           20,246
                               MeasureC                            1.506
                                                          #
                                                              $   50.278


   Section 5307 Fanding Sources - All federal firnding $ouroesare disfributed by FTA after
   approvalby the MTC. Federalfunding sources the year endedJune30, 2004 are summarized
                                            for
   below (in thousands):

         Preventivemaintenance                                                         $   ?6,751
         Americanswith Disabilities progmm- ADA set aside                                   7,637
         Job Access& ReverseCommuteProgram                                                  2,165
                                Tires/Tubes- PlanningGrant
         Other federal assistance                                                             654
                                                                                       s   37207
                                          s0#"$f;?
                                               448
                                                23
ALAMEDA-CONTRACOSTATRANSITDISTRICT
NOTES TO THE BASIC FINAIICIAL STATEMENTS(Continued)
YEAR ENDED JIJNE 30. 2OO4
 '
     At June30, 2004 federalsection5307firndstotalingapproximately          were recordedas
                                                                 $244,902,000
     a receivable.

(8) SrrORT-TERM LIABILITm,S

     In August 2003, the Distict issued$35 million in short-termrevenueanticipationnotes(Notes).
     Thesenotes bore an interest rate of 2To, The final paymentof principal and interest was made in
                                         to
     May of 2004. TheNoteswereissued provideshort-term                                               In
                                                               financingfor the Disffict's operations.
     Februaryof 2004, the Disfiict borrowed $20 million from the Alameda County Transportation
     Improvement    Authority (ACTIA). This loan accrues interestat the prevailing LAIF rate plus 1%.
     Repayment this loan will commence February
                 of                         in         2005at a rate of $4 million per monthuntil the
     loanbalance paid off Interest
                  is                payments   mustbe received full by February
                                                                 in                  2006. This loanwas
     made to enable the District implement cost reductionand revenueenhancingprograms. The
     following is a summary the District's short-term
                             of                       liabilitiesfor the fiscal year endedJune30, 2004
     (in thousands):

                                               Balance  rt                                            Balanceat
                                                July I,                                                June 30,
                                                 2003            Additions     Retirenenk               2004
            2003-04Revenue
                         Notes
              Anticipation                     $      -          $ 35,000          $   (3s,000) $
              ACTIA Loan                                                                                   20.000
                TotalShort-termdebt            $      -          $ 55                                    $ 20"000



(e) LONG-TERIVI LIABILTTTES

     The following is a summaryof the                                                               fiscal year endedJune30,
     2004(nthousands):

                                                                                                      Balance   at
                                                                                                       J u n e3 0 '   Amounts l)ue
                                                                               Retircmentq               2004         @
     Certrficateof
        Participation:
     2001 Series                         $      22,56i       $            -    $       (l,01+        $     2t-49q     $       l-t!s
     Less unamortized
     deferred amount
     on refiruding                                  (s69)                                  17                 lEl?)

        Total long-term debt, net                  2t,996                              ( 1 , 0E )
                                                                                              3             20,958             I,067

     Accrued vacatiotr and sick lcave           22,613                12,548               0
                                                                                       (14,l l)             21,150            12,524
     Claims liability                              1L874                               (16,06.0)           l9J9i              ?u]8
                                                                   2s'929              (31'lo9)                           $   39,309
        Total                           : $:       86'483    $                 $                    : $:    s1.303




                                                      fif;{B*38
                                                             449
                                                                 24
ALAMEDA-CONTRA COSTA TRANSIT DISTRICT
NOTES TO TIIE BASIC FINAIICIAL STATEMENT$ (Continued)
    ENDED JI,JNE 2OO4
                 30.

   Certifrcatesof Particip ation

  In July 1988, proceedsfrom the issuance $18,570,000of Certificatesof Participation(I9BB
                                           of
  COPS)were used by the Disnict to acquire an office building. In December1989,the Disfrict
  electedearly defeasance the 1988COPSthroughthe issuance $28,315,000 Certificates
                        of                                    of            of           of
  Participafion(1989 COPS). A portion of the proceeds
                                                    from the 1989COPSwas usedto retire the
  1988COPSon July l, 1991. The proceeds    abovethe amountneeded retirethe 1988COPSand
                                                                  to
  establisha debt reserve fund, were used by the Distict to acquire, consfructand equip the
  Alameda-ContaCostaTransitDisrict Garage(Division 3).

                 25,
  On September 2001, proceeds       from the issuance $23,800,000of RefundingCertificates
                                                    of                                   of
  Participation,Series2001 (2001COPS)were usedto refirnd the 1989COPS. Intereston the 2001
  COPS is payablesemiannually February I and August I of eachyear throughthe year 20i8.
                                 on
  The interestrate rangesfrom 2. l%o 4.8o/o the frnal maturity is on August1, 2018.
                                    to      and

  The District's debt service requirements maturity for each of the next 5 fiscal years and
                                          to
  thereafter summarized follows (in thousands):
           are             as

  Year         Principal      Interest
  2005              1,105             848
  ?006              1,140             8r4
   2007             1,175             780
  ?008              1,210             741
  2009              1,250             699
  2010-             6,990           2,720
  2015*             8.620           1.064
  Total       -,.$. 2t dqn    $    fj6,{



  Deht Limit

  Board pollcy on debt                                     No. 3773) states that "total annualdebt
  serviceexpenses   shall not                     operatingrevenue(includingsubsidies)     provided
  that in no event shall such                   twenty percentofthe assessed  value ofall real and
  personalproperty within the                Distict's legal annualdebt servicelimit as of June30,
  2004, is approximately  $26.

  Arbifiage

  The Tax Reform Act of 1986 institutedcertain arbitrage resfrictions wittr respectto the issuanceof
  tan-exempt bondsafter August31, 1986. Arbitage regulationsdealwith the investnentof 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 retoaotively rendered taxable if applicable
  rebatesEuenot reported and paid to the Internal Revenue Service (IRS) at least every five years.
  During the current yearo the Distict performed a oalculation to determineif there was any excess
  investment earningson the Disfiict's COPS at June 30, 2004, and as a result of this calculation
  doesnot expectto incur a liability.
                                            GSSS'33
                                             450
                                               25
ALAMEDA-CONTRACOSTATRANSITDISTRICT
NOTESTO THE BASIC FINANCI"AL STATEMENTS(Continued)
YEAR ENDED JI.INE30, 2OO4

(9) PENSION PLA}I

   Plan Description: The Alameda-Contra   CostaTransitDisftict Employee's  Pension PIan(Plan)is a
   noncontributory  single-employer defined benefit pensionplan, which providesretirementbenefits
   for all qualifuingunion and non-unionemployees.Adminisfrationof the Plan is performedby the
   Plan's management    staff and overseenby the Plan's retirementBoard. All permanent  full-time
                       are
   Distict employees eligible to participatein ttrePlan. Effective July 1, 2000, former part-time
   operators designated "Peak Operators"andare alsoeligibleto participate the Plan.
             are            as                                                 in

  The Board of Directors of the District adopteda resolutionin December1997,amending       certain
  provisionsof the Plan basedon a collective bargainingagreement    with the ATU effectiveJuly 1,
  1997. The amendment    providesthat for ATU employees   retiring on or after January1, 1998,the
  benefit paymentcalculation has been revised to reflect a level percentage either 2% (for
                                                                                 of
  retirementon or after age 55) or 2.5a/o(for retirementon or after age 65) of monthly average
  earnings, times years of service. Similar benefit provisions were adopted for employees
  represented InternationalBrotherhood Elecfical Workers GBE\lf) effectiveJanuary1, 1999.
              by                          of
  EffectiveJuly 1, 2002, AmericanFederationof State,County,and Municipal Employees      (AFSME)
  and uuepresented  employees were awardedthe following: 2.25% at age 60 andretirement    benefits
  would be determined over the high 3 years,or last36 monthsof employment.

  Act uarial methodsand assamptions:

    Valuationdate                      Januaryl, 2003
    Actuarial costmethod               Projectedunit credit
    Amortizationmethod                 Level percentage   open
    Remainingamortizationperiod        28 years(decreasing yeaxannually,15yearminimum)
                                                             one
    Assetvaluationmethod               Market value lessunrecognized   investnentgainsor losses
                                       during the prior four years,phased at 20% per year,but
                                                                          in
                                       requiredto be within 20% of marketvalue.
    Acuarial assumptions:
                 rate
      Invesbnent of refirrn+         8-00%
      Projectedsalaryincreases+      4.00%                             panicipants

    *Includesinflation at
    Cost of living adjutuents

   Basis of Accounting: Con                recognized revenues the period in which employee
                                                       as           in
                                   'and
   servicesare performed.               refunds of prior contributionsare reoognizedwhen due and
   payablein accordance with the terms of the Plan. Investnentsare statedat fair value. Quoted
   market valuesare used to value investments. Investnent gains and lossesare basedon average
                  and
   cost. Purchases salesofsecuritiesare recordedon the tade date.

  Funding Policl: The Disrict's contributions to the Plan normally are made in accordance    with
  actuariallydetermined requirements.The Plan'sfundingpolicy providesfor actuariallydetermined
  periodic contibutions so that suffrcientassets
                                               will be availableto pay benefitswhen they are due.
  Significant actuarial assumptions used to compute the actuarially determined oontibution
              are
  lequirement the sameas thoseusedto compute District's actrarial accruedliability.
                                                    the
  I '
                                            s@#s43
                                                 26
ALAIVIEDA.CONTRACOSTATRAI{SIT DISTRICT
NOTESTo rI{E BAsIc FINA}rCIAL $TATEMENTS
                                       (continued)
YEARENDEDJIJNE30. 2OO4

   The actuarially determined contuibution for the year ended June 30, ZQ04 consisted of
   approximatety$17,027,000normalcost(13.74%of cumentcoveredpayroll).
   Concentrdion: The following Plan investnents represent 5To or more of plan net assetsat
   December 2003 (dollarsin thousands):
            31,
   I
                                           Fair Value
Capial Guardianlnternarional
                           EquityFund       $ 21J67
TempletonForeigrrEquity Fund                    ZS,SZI
Barclay'sGlobalEqurtyIndex Fund                 3Z,9SB

   I
   The three-yeartrend information for the NPO is agfollows (dollars in thousands):

  Fiscal      Annual      Percentage
                                                     I
                                          Net
  Year        Pension      of APC        Pension
  Ended      Cost (APO    Conributed

6/30/2002        12,437      100%              397
6/30n003         r4,rr2      103%
6/30n004          17027      100%

   The Plan issuesstand alone financial statements
                                                 and copies of these statements
                                                                              can be obtained
   from the AC Transit RetirementDeparfinenl 1500Franklin Stree! Oakland,CA 94621.

(10) COMMITIUENTS AI{D CONTINGENCIES

  There are olaims and litigation                               normal to the District's operationof
  the tansit system. The Disfrict                              for such incidents,as summarizedin
  Note ll, and provisions have                             statements estimatedlossesunder the
                                                                     for
  self-insuranceretention limits

   During ttre year ended June3      1, the Disfrict enteredinto an agreement
                                                                            with Van Hool N.V.
   bus manufacfirrerof Belgium and their
       busesfor




                                         ffiffi*s4g
                                               452
                                                27
ALAMEDA-CONTRA COSTA TRANSIT I}ISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS(Continued)
YEAR ENDED JTINE30. 2OO4

(ll) RI$K MANAGEMENT

      The Distict is self-insured for automotive liability and property damage for claims up to
                 per
      $1,000,000 occurrence;    self-insured general
                                            for                                        per
                                                       liability claimsup to $150,000 occurrence
      and workers' compensation claimsup  to $2,000,000per occurrence. Insurance      policiesprovide
      excesscoverage claims that exceed
                     for                  theseself-insured retentions, with generalliability, properly
      damage and statutoryworkers' compensation insurance coverage to $45,000,000.
                                                                     up
      t -
                                           in                                   from the prior
                                                                         coverage
      There havebeenno significantreductions *y of the Distict's insurance
      year, and no settlement
                            amountshaveexceededinsurance coverage the lastthreefiscalyears.
                                                                   for
      I
      The Distict accrues liability for claimsand litigation(includinga reservefor claimsincurredbut
                          a
      not reported)basedon an actuarialstudy. The liability includesallocatedand unallocated      claims
      adjusftnentsexpenses  and incrementalclaim expense.     In addition, the Distict is partially self-
      insured for health and dental exposure. Management       has evaluatedthe potential liability and
      Iecorded an accrual,which includes amountfor incurredbut not reportedclaims.
                                          an
      I
      During the year endedJune30, 2004,the actuarial         based the 50frpercentile
                                                    estirrrates    on                 discounted
      tt 4.5o/o estimate liability for worker's compensation public liability claimswere $33.4
               to        its                                 and
      million and$5.4million, respectively.

      Changes the reportedliability resulted
             in                             from the following (in thousands):


                                           Workers'                          Health and
                                          compensation        Public            dental
                                                            #
                                                             liabilitv     -ffiliabilitv      -5ffi05
                                                                                                 Total
 Balance June30,2002
         at                                                     $4,205
 Claimsand changes estimates
                  in                               2,5,491        5,448              2,695        33,638
 Claim payments                                                 (3,I 85)            (2,615)      (16,969)
                                                           -676F            .T0-6
 Balance June30, 2003
         at
                                                                3,251
                                                                                              w 13,398
 Claimsand changes estimates
                  in
 Claim pa1'nrents                                              (4,326)                (16)       (16,077)
                                                            -T*ffi
         at
 Balance June  30,2004                                                                        _ffi
iri

      The classification the
                       of              and long-term portion of the self-insurance liabilitiesfor the vear
      endedJune30, 2004are                 as follows (in thousands):

                                       Current      Long-term           Total
 Workers' compensation    liability   g 22'720      $ 10,692 I           33/1,
 Public liability                        2,608          2,785             5,393
 Health and dentalliabili$                 390                             390
                                      $ 25,718       $   13.477     $    39,195




                                             GSSS43

                                                  453
                                                    28
ALAMEDA-CONTRACOSTATRANSITDISTRICT
NOTES THE BASICFINANCIAL STATEMENTS
     TO                           (Continued)
YEARENDEDJI,JNE 2OO4
              30.

(r2) JOINT \lENTtiRE

   The Disuict is a participant with BART in a joint venture, the East Bay Paratansit Consortium
   (Consortium),to provide Americans with Disabilities, complementaryparatansit services in
   Alamedaand WesternContra CostaCounties. The areaservedencompasses AC TransiUBART
                                                                            ttre
   coordinatedservicearea. On dissolution the Consortium, net assets be distibuted based
                                          of                the           will
   upon actual conhibutions of the member agenciesof ttre Consortium. Any assetsin excessof its
   actualcontibutions shall be disbrused the recommendation the agencyoriginally disburiing
                                        at                      of
   the fundsand subject the approvalof the MTC.
                       to

   Effective October 1, 2003, the Consortium discontinued  the practice of rotating lead agency
   responsibilities an annual basis. Key adminishativesupport functions are no\il permanently
                  on
   assigned eachparticipatingagency. Also effectiveOctober l, 2003, a ServiceReviewAdvisory
           to
   Committee(SRAC) was established serve in an advisory capacity to the Service Review
                                      to
   Committee. The primary missionof the SRAC will be to advise on planning,policy and other
   matter$ related to the Consortium; advocate for high quallty, safe, reliable and courteous
   paratansit services;and to provide a forum for publio input and participationin the review,
              and
   assessment evaluationof the ADA paratansit service.

   In fiscal year 2004, the Distict incurrednet expenses approximately
                                                       of             $12,445,000relatedto the
   Consortium. Separate   frnancial          may
                                    statements be obtained from the Consortium'$
                                                                               management.

(r3) STTBSEQIJENT
               E\ruNTS
   (a.)In August2004, the Distict issued$40            in short-term revenue anticipation notes
      (Notes). The Notes were issuedat                    3% and are due in May of 2005. The
      notes are general obligations                      payablefrom taxes, revenues  and cash
               The
      receipts. Notesarepcq$trF/bli+F           Ff (ulgo amount equal one-half theprincipal
                                                                    to         of
              of
      amount the NotesplFq-Fllap6il+tfe$rl#to one-half the interest
                                                            of           due on the Notesat
      maturitythereoffrom thp Ff+ lutr$ilF{cted
                                              revenues  received ttreDisfrict duringthe month
                                                                by
      of April 2005;ft) * *Fq# bdualto one-half the principalamount the Notesplus an
                                                    of                   of
      amount  equalto one-halfdf the interestdue on the Notesat maturitythereoffrom the first
      unres:tictedrevenuesreceived by the District during the month of May 2005; and (c) an
      amountequal to any deficiency in the amountrequired to be depositedduring any prior month
      duringthe monthof June2005. TheseNoteswere assigned     ratingsof "SPI* " by Standards &
      PoorsRatingsGroup and    "MIGI" by Moody's InvestorsServices,  basedon a letter of Credit
      issuedby the Credit Bank.
   (b.)In Octoberof 2004, voterspassed numberof ballot measures
                                     a                        includingthe following;

      BART's Measure AA which provides funding for the work to refrofit the BART systemthat
             the
      enhances overall quality of the East Bay nansit system.

      Measure which is a parceltalr anticipated provide the Distriet with $14 million per year
              BB                                   to
      in operatingfunds for the next ten years,beginningJuly lst of 2005.

      MeasureJ in Conta Costa County, which is the renewal of their % cent tansportation sales
      talr. This measure doesnot take effect until 2008, but includessubstantial
                                                                               increases revenues
                                                                                       in
      for AC Transit in the form of  bus operating and paratansit funds, as well as money for the
      Richmond    Park and Ride TransitCenter.
                                             4s4       c,0fi,fJ43
                                              29
ALAMEDA.CONTRA COSTA TRAIT{SITDISTRICT
SCHEDULEOF FT.JNDING
                   PROGRESS
ALAMEDA.CONTRACOSTA TRANSITEMPLOYEES'
                                    PENSIONPLA}.{(I.JNAUDITED)
YEAR ENDEDDECEMBER 2OO3
                  3I.


 Actuarial   Actuarial   Acfirarial     (overfrurded)                                (overfunded)
 valuation   valueof      accrued     actuarialaccrued   Funded                      Iiability asa
    date      assets
              assets      liability        liability      ratio          palroll
                                                                   Covered         percent oipayroll
  lll/01      283,202      292,330             9,128       g7o/o         107,3M                  9o/o
  l/1102      290,753      314,359            23,606       gTo/o         lt3,7i4                2lo/o
  t/l/03      296,724      347,614            50,g90       g5%           t?3.g41                4lYo




Schedule prepared other auditors. Seeaccompanying
       is        by                             independent
                                                          auditor'sreport.




                                      DMFT


                                        sss,$45                                                         I
                                             456
                                              30
 COMPARATTVESTATEI\4ENTS FUNDNET A,SSETS
                       OF
             ACTTVTIYTENTERPRISE
 BUSINESS-TYPE                 FTJFTD
 JTJhTE 2OO4 2OO3
      30,  AND


                                                                                 2004           2003
ASSETS
 CURRENTASSETS:
  Cashand cashequivalents                                                         22,280         29,223
  Investmeuts                                                                           7
  Receivables:
   Federaland locd grauts:
    Capital                                                                       l I,199         5,201
    Plenning,operatingafld other                                                  20,609         t5,723
   Property talr                                                                    5,800         5,604
   Local salesta-n                                                                t2,llz         11,579
   Due from the PensionTrust Fund                                                    183            233
   Other, principally trade receivables                                            4,gffi         3,610
                        -
     Total receivables net                                                        54,869         42,020
   Inventoriesat cost                                                              8,2U           6,601
   hepaid expsrrses                                                                1,536          2,37r
                                                              _.r1
      Total curretrtasse6                                   (/1       |           86,9il         80,215
 CASHAlrD Il-IvEsTMENrs
                      RESTRICIED n
                                FoR         / ^\ | 7                 ||
  CERTIFICATES  oFPARTICIPATI0N.1 | pi i A \ | |                     w             2,013          2,013
 CAPITALASSET$:                ln ll "\i fl)r-
  Nondepreciablc               lli/l * l\J/                                       43,M6          59,972
  Depreciable,
             net                                                                                168,371
                               V
     Total capitalassets,net                                                     262,030        228,341
 CERTIFICATESOF PARTICIPATION ISSUANCE COSTS,
  net of accumulatedamortization                                                     so7          543
 TOTAL ASSETS                                                                    351,461        311,114
LIABILITIES AI{D EQUTTY
 CURRENT LIABILITIES:
   Accoutrtspayableand accrued expen$es                                            7,il7         10,006
   Accrued salaries wages
                   &                                                               2,061          1,762
   Accrued vacation and sick leave                                                12,524         13,632
   Other accnredliabilities                                                        9,268          5,975
   Accruedinterestpayable                                                            816            374
   Unearned reveilre                                                               1,162          I,U7
   Curent portion of clairns liabilities                                          25,718         27,14
   Notespayable                                                                   20,000
   Currentportion of cenificates of participatiou                                  1,067          1,037
    Total currentliabilities                                                      ffi,262        6rn
NONCURRENTLIABTLTTIES:
 Accrued vacationand sick leave                                                    8,626          g,gg1
 Claims liabilities                                                               B,4n           14,730
 Cenifi catesof panicipation                                                      19.89r         20,959
     Total uoncurrcntliabilities                                                  4t.w4          M,670
     Total liabilities                                                           r22,257        LM,47
NET ASSETS
 Investedin capitalassets,net of relateddebt                                     241,579        206,890
 Restrictcd                                                                        2,013          ?,013
 Unrestricted                                                                                    (4,236)
     TOTAI NETASSETS                                                             229,2M
                                                    GffifiS+?             - 8:              $   204.667


                                                      458
                                                       3l
ALAIVIEI}A-CONTRACOSTA TRANSIT DISTRICT

C0MPARATIVE STATEMEMS OF REVENUHS,BTtrENSES,AND CHANGESIN FUND NET A^SSETS
BUSINESS-TYPE  ACTIVTTY . ENTERPRISEFt.iND
YEAR EF{DEDJTINE30. 2OO4 AND 2OO3
(In thousauds)

                                                                           2003

OPERATING REVENUES:
 Passengerfares                                             44,230     $     41,056
 Contract services                                           8,814            9,174
 Service funding - City of Alameda                             56                 u5
 Other                                                       7.188            4,252
         Total operatingrevetrue$                           60,288           54,7n
OPERANNG E}FENSES:
 Operator wages                                             59,916           61,474
 Other wages                                                45,9r7           49,691
 Fringe beuefits                                            8L,274           93,384
 Depreciation and amonization                               29,362           22,985
 Fuel and oil                                                8,126            7,616
 Other material and supplies                                 7,792           i0,000
 Services                                                   14,538           14,732
 Insurance                                                   5,141            6,889
 Net expensesofjoint vetrture                               12,445           12,686
 Other                                                       5,7t6            6,878
         Total operatingexpeffies                          n0,22'1          286,33s
         Net operatingloss                                 (209,939)        (23i,608)
NONOPERATING REVENUES (EXPENSE):
 Operating assistance:
   Ptoperry tanes                                           59,365           49,623
   Iocal salestan                                           50,278           56,056
   Local funds                                              46,490           36,806
   Federal                                                  37,207           40,881
   State                                                     6,499            7,335
 Pass-through Alameda County Colgestion ManagementAgency
               to                                                            (1.6ee)
 Interest income                                              466               653
 hterest elper$e                                            (1,372)            (973)
         Net nonoperatingrevenues                          198,933           i88,682
         Net loss before capital contributions              (11,006)         (a,g?fi)

CAPITAL CONTREUTIONS                                        35,543           37,648

CHANGE IN NETASSETS                                         u.537             (s,278)

NET ASSETS, beginning of year                              20l',667         209,94s

NET ASSETS,end of year                                     229.2M      $    204,667




                                                 $sss4B

                                                   459
                                                    32
ALAME)A-CONTRACOSTATRAhISITDISTRICT

COMPARATTT{E                OF
               STATETIENTS CASHFLOWS
BUSII\ESS.TYPE          -
                ACTTVTTY ENTERPRISEF-UF{DS
YEARENDED    JIJNE30.2OO4AI'{D2OO3
(In thousands)


                                                                                     2rx)4
CASH FLOWS FROM OPERATINC ACTIVITIES;
  Cashreceivedfrom customers                                                     $     47,669 $      50.373
  Cuh pryments to zuppliers for goodsand services                                     (55,259)      (55,831)
  Cashpaymenmto employeesfor services                                                (189,484)     (18e,e5s)
  Other operatingreceipts                                                              tz.M7          4.137
       Net cashusedin operatingactivities                                            (185,027)     (190,676)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
  Operatingassistance received                                                        193,416      174,ffi
  Proceeds froB note$payable                                                           20,000
  hterest paynent otr Dotespayabtres                                                    €Pq)
      Net cashprovidcd by noncapitalfinancing activities                              273,021      174,N6
CA^SHFLOWSFROM CAPITAL AND RELATED
 FINANCING ACTIVITIES:
   Acquisition ard constructionof capilal assets                                      (63,016)     (51.294)
   Capitalcontributions from grants                                                    29,545       37,151
   Paymentfor cost$of issuance                                                                        (100)
   Principal paid on certific{tes of pnrticipation                                     (1'075)      (1,235)
   lnterestpaid on certificaEs of panicipation                               ,           (857)        (914)
       Net csshusedin cauital and related                                             (35,403)     (16,392)
CASH FLOWS FROM INVESTING
  Proceeds  from salesand manuities of i                                               79,122       77,828
  hrrchaseof invesffircnts                                                            (19,123)     (31,7s3)
  Interestreceivedon iwestrnents                                                         468          653
       Net cashprovided by investing activities                                          467        46.728
NET (DECREASE)TNCREASBIN CASH AND CASH EQUWALENTS                                      (6,942)      14,066
CASH AI.ID CASH EQIJMLENTS,          beginni4gof year                                 29,n3         15,157
CASH AND CASH EQUFfALENTS, end ofyear                                            $    22.281 $      29,223

RECONCILTA'TIONOF OPERATING IfSS TO
 NET CASH USED IN OPERATING ACTIVTIIESI
 Net operatingloss                                                               $   (209,939) $   (231,608)
              to
 Adjusmaents reconcile operatiqg loss
  to rct csshusedin operatingactivities:
     Depreciationand amortization                                                     29,362        22,985
     Issuance costsappliedto accruedliabilities                                                        100
     Cashpaymentto Alameda Congestioununf,gement,      agencyfor operating                           L,576
       assisunsereceived applied to accnredliabilities
                        in
     Effect of chatrges assetsand liabilifles:
       Receivables                                                                      (9s8)         M7
       Iuventories                                                                     (1,619)       (45e)
       Prepaidexpeffies                                                                  836         (663)
       Accountspayableard accruedliabilities                                            1,120        (401)
       Ascrued salariqs& wages                                                           299          419
       Vacationand sick leave                                                          (1,463)        656
       Claims liabilities                                                              (2,663)      16,669
       Confributionspayable                          ess$4s                                          (397)
          Net cashusedin operating activities                                    $   (185,U27) $   (190,676)

                                                        489
coMpARATwE SCEEDTJLES RE\IENUES,ETtrBNSES,
                            OF                    AI\ID CHANGESIN FUNI) NET ASSETS
BTJDGETARY    BA.SIS- BUSINESS.TYPE
                                  ACTTWTY - EI.ITERPRISE FTIND
YTARS ENDED JUNE 30, 2004AND 2003
fin thowands)

                                                                     2fi)4                2ffi3

OPERATING REVENUES;
 Passenger  fares                                                        M,230                41.056
 Contract services                                                        4,803                4,911
 Service fulding - City of Alameda                                           56                    u5
 Other                                                                    7.188                   4,752
         Total operating revetrues                                       s6.271               50,484

NONOPEMTING REVENUES (HffHNSE) :
 Operating assistalce:
    Pro'pertytaxes                                                       59.365               49,623
    Incal salestax                                                       50.n8                56,056
    Local funds                                                          46,490               40,638
    Federal                                                              37,207               39,I82
    Capital contributiou                                                 35,543               37,648
    State                                                                 6,499                7,335
 lnterest income                                                            370                  581
 Ifierest expetrse                                                       (1,361)                   (sn)
          Net nouoperatingrevelrues                                     234,391              230,136
          Total revenues                                                290,668              280,620

OPERATING E}trENSES:
 Operator wages                                                          58,331               s9,698
 Other wages                                                             45,331               49,026
 Fringe benefits                                                         63,U5                78,037
 PensionFund                                                             16,931               14,055
 Fuel a.ndoil                                                             7,952                7,481
 Other material aad supplies                                              7,7?A                9,957
 Services                                                                14,534               14,730
 Ilsuraace                                                                4,894                6,840
 Net expenses ofjoint vennrre                                            12,445               i6,518
    Other                                                                 5.716                6,878
          Total operatingexp€nses                                       ?.37,107             2$.n0
  Capital outlay of Disrict tunds                                             288                 1,340
  Transfer (from) to equity
  Encumbrances
          Totalexpenses                                                 237,395               25/.,sffi
               of       ovgr experuies
          Excess reveuues                                        $           53.273   $           16,060




See accompanyingnote to other supplementaryinformation.



                                                   ssssSc
                                                          461
                                                            34
ALAIVIEDA.COMRACOSTATRAN$IT DISTRICT

SCHEDULE  OFREVENUES,           AND
                      SUBSIDTES EI(PEI{SES,            ACTUAL
                                           BUDGET\TERSUS
BUSINESSTYPE  ACTTWIY - EI'{TERPRISE
                                   FTTII{D
                30,
YEARENDEDJT]NE 2{X}4
0n thousands)
                                                                                                      Yariancewith
                                                                                                      Final Budget
                                                                         Final                          Posifive
                                                                        Budget           ActuBI        (Negative)
OPERATING REVENT]ES:
 Passeuger fares                                                    $     49,266     $     ,14,230 $         (5,036)
 Conftact services                                                           u5             4,803             4,558
 Servicetuntling - City of Alameda                                         2,tl'l              56            (2,061)
 Other                                                                     5,105            7,188             2,083
          Total operatingrevenues                                         56,733           56,277             (456)
NONOPERATING REVENUES (EXPEN$E):
 Properrytaxes                                                            57,L87           59,365            2,t78
 Stateo'peratingasgistance                                                 5,483            3,422           (2,06r)
 Sales (A81107)
       tax                                                                28,400           28,526              126
 Salestax (TDA)                                                           45,8M            46,490              686
 Federaloperatingassistarce                                                8,283           10,456            2,t73
 hevcntive maintenance                                                    20,429           26,75t            6,322
 MeasureB                                                                 19,317           20,246              929
 Measrrre  C                                                               1,506            1,506           18,7N
 Statetransit a$$istaffe                                                   3,183            3,On              (106)
 Capital conuibrrtions                                                                     35,543           35,543
 ADA parauansitconsortium                                                  4,502            1,800           (2,702)
 Interestrcvenue                                                             350              370               20
 Iuterestexperue                                                                           (1,361)             (e4)
          Total uonoperatingrevenues(expense)                             193,177          236,191          43,014
          Total revenres                                                  249,910          2vZ,#8           42,558
HPENSES:
 Operatorwages                                                             58,934           58,331             603
 Other wages                                                               44,676           45,331             (6ss)
 Fringe benefits                                                           67,878           63,U5             4,633
 Pension                                                                   17,027           16,93r               96
 Services                                                                  14,651           14,534              Lt7
 Materials and supplies                                                    17,161           15,680            1,481
 Utilities                                                                  2,ylr            3,006          (12,759)
 Insurance                                                                  5,647            4,894              753
 Taxes                                                                      1,78r            1,693               88
          ard
 Leases rentals                                                               611              592,              19
 Net expenses ofjoint veDture                                              17,131           14,u5             2.886
 Other                                                                         93              426             (333)
           Total operatingexpense$                                        248,5n           ?38,907            9,604
  Capital outlay of Disnict Funds                                           r,091             288               803
  Transfer!o €quity
  Encumbrances
           Total expenses                                                 ?4i9,602         239,195           l0,,t07
           Excess (deficiency) ofrevenues over (under) expeu$es     $        308     $      53,273 $         52,e65

              noteto other zupplementrryinformation.
Seeaccompanying                                                35
                                                              462   sfis(Bst
ALAMEDA.CONTRA COSTA TRAFISIT DISTRICT

NOTE TO OTIIERSUPPLEMENTARY
                          INFORMATION
                30.
YEAR ENDEDJTJNE 2OO4

    Budgetary Basisof Accounting

    The Disrict's fiscal policies establishthe framework for the management and control of the
    Distict's resources ensurethat the Distict remainsfiscally sound. The District's goals and
                       to
    policies, which are approved by the Board of Directors, determinewhere and how Disnict
    resourcesshouldbe dedicated. For this reason,Distict goals, objectives,short and long-range
    planningand performance           are           into
                             analyses incorporated the budgetdevelopment     process.

    It is the policy of the District that the Board of Directors approves annualbudgetprior to the
                                                                        an
    beginning of each fiscal year. The budget is developedgenerallyusing the accrual basis of
    accounting. Seethe following sectionfor a reconciliationof budgetversus generallyaccepted
    accounting  principles.

   B adgetary B asisDifferences

                in
   As discussed Note 2, the accompanying   basicfinancial statements
                                                                   have been preparedon the
   accrual basis of accountingin conformrtywith accountingprinciples generally acceptedin the
   United Sates America (GAAP). The following is a summaryof tfuedifferences
               of                                   summ""yj4-                 betweenGAAP
   and budgetary basis:
                                                        tjS     (
        '            differences
            Perspective               from
                              resulting tflt"fflt4oq  -+4 theParafransit     not
                                                                     operations
            budgeted.                  ^(n)    /1\\la U
                         for
            Encumbrances supplies Sidp! b1#rF#b\trriotre-ceived reported theyearthe
                                   and                             is       in
            order is placedfor budgetarv
                                       F44d{*n \{tffiafie year the supplies received
                                                                          are      for
            financialreportingpurposes. | | I I | | \-,I-
            Transfers from equity *" outrff-#yd Uuagetary resources but are not expensesfor
                                                Kf
            financialreportingpurposes.
        '   Capital outlay funded by District operations are reported as outflows of budgeury
                      but
            resources are not expenses financialreportingpurposes.
                                         for
        '                 on
            Depreciation fixed assets  fundedby District operations not budgeted,as it is not an
                                                                  is
            outflow of budgetaryresources.

   The effect of thesedifferencesbetweenbudgetaryand GAAP accountingon the June 30, 2004
   basicfinancialstatements the Dishict's budgeted
                           of                    fund is as follows (in thousands);

Increasein net assets a GAAP basis
                      on                                    s 24,537
Perspective differences                                         (302)
Capital ouflay of Distict fimds                                 (288)
Depreciationon fixed assets  ftnded by Distict operations       29,326
Increasein retainedearningson a budgetarybasis              $   53,273




                                             fi#$ss3
                                                    463
                                                     36
                       I




               COSTA


           Reports

             30,
         June 2004




                       o




                       o
GSSS53
  464
                    ALAi\{EDA-COI.{TRACOSTATRANSIT DISTRICT
                             YEAR ENDEDJUNE30. 2OO4


                                     Tableof Contents


                                                                                  Page(s)

Independent Auditor's Report on Compliance and on Internal Connol
  Over FinancialReporting Basedon a:r Audit of BasicFinancial
  StatementsPerformedin Accordancewith hvernment Auditing Standardsand,
 theTranqportation Development  Act                                         ........... l_z




      of
Schedule Findings Questioned
                and        Costs...                                       .................7




                                     #$c.s5g
                                          46s
Board of Directors
Alameda-Contra  CostaTransit District
Oakland, California


    IhIDEPEI\DENT AIIDITOR'S REPORT ON I}TTERNAI, CONIR,OL O\TER FINAI.TCIAL
        REPORTINGAI{D ON COMPLTANCEAII{DoTHm. 1\4A                                         BY
                    GOVERNMENT AADITING
                  THE IRANSPORTATION

We have auditedthe basic financial statements of                                     Disnict(DistricD,
as of aad for the year ended June 30, 20G1,and                           thereondated November 19,
2004. We did not audit the pensiontnrst firnd of                     statemetrts were auditedbv other
auditors, whosereports bave beenfurnishedto us                    insofar as it related to the amounts
included for the pensionhust firld, is basedsolel5l,odthereportsof other auditors. We conductedoru
audit in accordance with auditing staudardsgenerallyaccepted the United Statesof America and the
                                                             in
stardaxdsapplicable to finauciat audits containedn Government     Attditing Standards,issued by the
Comptroller Generalof the Uuited Shtes.

Internal Control OtterFinancial Reporting

In planning and performing our audit, we consideredthe Disnict's internal confiol over financial
reporting in order to determine our auditing procedruesfor the purpo$eof expressingour o,pinionon
the basic financial statement$and not to provide an opinion on the intemal conffol over fiuncial
reporting. Otu consideration of the htemal contol over financiat reporting would not necessarily
disclose all matters in the hternsl conhol over finaucial reponing that night be material weahesses.
A material weaknessis a condition in which the desigu or o,peration ose or more of the internal
                                                                         of
control components  does not reduceto a relatively low level the risk that misstatements amountsthat
                                                                                        in
would be material in relatiou to the basic fuancial statements    beiqg audited may occru and not be
detected within a timsly period by employeesin the normal coluse of performing their assigned
functious' We noted tro matters involving the internal eontol over financial ieporting aoOits oprrution
that we consider to be material weaknesses.However, we noted other matteis involving the-internal
control over financial reporting, which we have reported to mnnngement a separateletter dated
                                                                              in
November    19,2004.

Compliance and Other l\4atters
As part of obtaining reasonableasflrance about whether the Disfrictos basic financial statementsarc
free of unterial misstatement,we performed tests of its conpliance with certain provisions of laws,




                                           s&#s55
                                                466
                                                  I
regulations, contracts and grant agreements,noncompliancewith which could have a direct and
material effect on the determination of financial strtementamounts. Our audit was firther made to
determinethat Transportation DevelopmentAct funds allocatedto and received by the Disnict were
expendedin conformance with the applicable statutes,rules and regulations of the Transportation
DevelopmentAct and the allocation insuructions     and resolutions of the Metropoliun Transportation
Cornmission requiredby Section6667 of Title 21 of the CatiforniaCode of Regulaf;cns.However,
             as
proviciing an opinion on compiiance with those provisions was not aD objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosedno insunces of
noncompliancethat are required to be reported under Cnavernilzenl        Auditing Standnrdsand the
Transportation DevelopmentAct.

. This report is intended solely for the information and use of the State Contoller's Office, the
  Mefropolitan Transportation Commission, federal awarding agencies,pass-throughentities, and the
 Board and management the Distict and is not intendedto be and shouldnot be usedby auyoneother
                        of
 thanthesespecifiedparties.
                                                                         --1
                                                                         t
                                                                         tlt        I
                                                                                        {


Certified Public Accountanm
                                                                               tl
                                                                               t l
                                                                               Ll

                                                    l n 1
Walnut Creek, California                            Ilt
November  19.2004                                   tuI
                                                    V




                                          0ss*55
                                               467
                                                2
Boardof Directors
Alameda-Contra Costa
                   TransitDistrict
Oakland,California

               INDEPENDENT  AIJDITOR'SREPORTON COMFLIANCE WIIH
               REQUTREI\,IENTSAPPLTCABLE EACH i\{aIOR HROGRAI\{.
                                         TO
                    INIERNAL CONIR.OL O\MR COMPLIANCEA}ID
                 SCHEDTJLE E)(PEFIDITTJRES FEDERALAWARDS
                           OF               OF
                     IN ACCORDAI'{CEWTIH OMB CIRCTJLAR
                                                     A-I.33
Compliance

We have auditedthe complianceof Alameda-Contra                                    with the qpes of
compliancprequiremeutsdescribedin the U.S. ffice                                (OI[B) Circular A-
133 ComplianceSupplernenf are applicableto its
                         that                                          for the year endedJune30,
20&+. TheDistrict's   majorfederal  program i
                                            is               $lmnary of auditor's resultssectionof
the accompanyrug    scheduleof findings and                   Compliancewith the requirementsof
laws, regulatiols, contractsand grant agreemetrbapplicable eachof its major federal prbgrans is the
                                                          to
responsibility of the Dishict's manegement. Our responsibility is to express 4n opinion on the
Distict's compliance  basedon otrr audit.

We couductedour audit of compliangein accordance     with auditing standardsgenerally accepted the
                                                                                               in
Udted Statesof America; the standards  applicableto fiaancial audib containedtn Govemment    Aud.iting
Standards,issuedby the Comptoller Generalof the United Sates; and OMB Cirnilar 4-133, Audils ;I
States,Incal Governments, Non-Profit Organizaiow. lhose standards
                           and                                             and OMB Circular A-l3i
require that we plan andperfom the audit to ob'^in reasonable  asmrance about whether uoncompliance
with the qDes of compliancerequirements  referred to abovethat could have a direct and materialeffect
on a major federalProgmmoccurred. An audit iucludesexamidug, on a test basis, evidenceabout the
Disnict's compliancewith those requirementsand performing suchother proceduresa$ we considered
necessary the circumsrances.We believe that our audit providesa reasonable
          in                                                                    basis for ou opinion.
Our audit doesnot provide a legal determinationof tle Distict's compliance with thoserequirenents.

In our opinion, the Disnict complied, in all material respeets,with the requirementsreferred to above
that are applicableto each of its major federal prograrnsfor the year endedlune 30, 2004. However,
the results of onr auditing proceduresdisclosedan instanceof noncompliance     with those requirements
that is required to be reported in accordance with OMB Cirular A-133 and which is describedin rhe
accompanying    schedule fildings nnd questioned
                         of                        costsas item 2004-1.




                                             ss$s5?
                                               468
                                                 J
Internal Control Over Compliance

 The menegement the Disfict is responsible establishing naintaining effective internal control
                  of                            for            and
over compliancewith the requirementsof laws, regulations,conEactsand granu applicableto federal
progmms. Il planning and performing our audit, we consideredthe District's interual control over
compliancewith requiremens that could have a direct andmaterial effect on a major federalprogramin
order to determineour auditing proceduresfor the purposeof expressingour opinion on compliance
and to test and report on the internal contol over compliance accordance
                                                              in          with OMB Circular A-i33.
Our consideration the intemal conffol over compliancewould not necessarily
                   of                                                           discloseall mattersin
the internal coufrol ttrat might be material weaknesses. material weakness a condition in which the
                                                         A                 is
designor operationof one or more of the internal contol components      doesnot reduceto a relatively
low level the risk that noncompliancewith applicablerequirementsof laws, regulations, contractsand
grarts that would be material in reiation to a major federalprogram beingauditedmay occur and not be
detectedwithin a timely period by employeesin the normal coluse of performing their assigned
            'We
functions.      notedno matter$involving the internal contol over compliance  and its operationthat we
         to
consider be materialwealcnesses.

       of
Schedule Expendirures Federd.l
                    of       Awards

We have auditedthe basic financial statements the Disfrict as of
                                                  of                                     endedJuae 30,
2004, and baveissuedour report thereondatedNovember19,                                            for the
purposeof forming an opinion on the basic financial                                   b did not audit the
pensiontrust filnd of the District. Thosestatements  were                            whosereportshave
beenfuruishedto us, and ou opinion insofar as it related                   included for the pensiontrust
fu:rd, is basedsolely on the repofts of other auditors.                  ing scheduleof expenditures   of
federal awardsis presentedfor purposesof additional             as requiredby OMB Circular A-133 and
is not a requfued part of the basic fuancial statements. Such information has been subjectedto the
auditiug proceftres applied in the audit of the basic financial statements and, in our opinion, is fairly
stated,in all material respects,in relation to the basic financial satementstaken as a whole basedon
ou audit and the reportsof the other auditors.

This report is intended solely for the information and use of the Sate Connoller's Office, federal
awarding agencies,  pa$s-throughentities, and the Board snd management the Disnict and is not
                                                                        of
intendedto be andshouldnot be usedby anyorc otherthan thesespecifiedpa:ties.



Certified Public Accountauts

Walnut Creek, California
November  19,2004




                                             0&sftS3

                                                 469
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                                I       53S53S6S6d66 S                                                                                6533                O U U         U U U 9 U



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                                        HsHdfiddds**e
                                                              H
                                                                                                                                 Fi   FiHFiFi
                                                                                                                                                          Hqq
                                                                                                                                                          H S F
                                                                                                                                                                        EFH E R$ E
                                                                                                                                                                        F R R



                                                                                                                                                                    E
                                                                                                                                                                    t                e
                                                                                                                                                                -E.                 E
                                    6                                                                                                                         - E E                 E
                    5


                    E

                        E

                        d
                                          ;aEsissEE
                                    E*u*$n$€es$s$$-
                                                EEgE
                                              E EEsssgiE
                                    EEgig$+niFfleiH q
                                              $EEEE E
                                          {gEEfFE
                                                      E
                                                  ElisrEFr                                                                                                                               s#fts5s
                                                                $
                                    E E = ' i : ' ; . : ; r fr ; ; o r o Ei $ $ E E * E E '
                  ALA]\{EDA-CONTRA COSTA TRAI.ISIT DISTRICT
         NOIES TO THE SCffiDIJLE OF E,pEI{DITIJRES OF F]EDERAL AWARDS
                            YEAR ENDED JUNE 30. 2OO4


!_.    GENEBJI

       The scheduleof expendituresof federal awards(Schedule)      presentsthe activity of aII federal
       awards programs of the Alameda-Cotrta Costa Jpnsit Distict (District). Federal awards
       received directly from federal agencies as well as federal awards passed through other
       govemmentagencies,are included on the Schedule. The grant period may be ffierent from
       the Disnict's fiscal year, which is from July 1 through June30. Federalexpenditures  represent
       transactions during the District's flscal year.
,,
       BASIS OF ACCOT]NTING

       The Schedule presented
                       is          using the accrualbasisof accounting,which is describedin the notes
       to the Distict's basic flnancial statements.

3.     RELATIONSHIPTO FINAI.{CIAL STATEMENTS

       The Disfict's federal awards are reported as follows 4                                 for the
       year ended June30, 2004 (itr thousands):

       Reported in the Statement of Revenues, Expenses,

Federalportion of capitalcontibutions    $    7888
Federal ransit technicalstudiesgraut            4l
Job access reverse
           &         courmuteprogrflm         1933
Federaltransit operatingassistance           35333

                                         -   -t*




                                                                   GS0SSc

                                                   471
                                                   6
                            ALAT\,IEDA-CONIRA
                                            COSTATRAT'ISIT
                                                         DISTRICT

                                    Schedule FindhgsandQuestioned
                                           of                   Costs

                                           YearEnded  30,
                                                   June 20O4



Financial Statemenfr:
Tlpe of audior's repofl issued;                                             Unqualified

Interual conuol over fuancial reporting:

.   Material weaknesses
                      ideutified?                                           No
.   Reportableconditionsidentified tbat are not consiieredto be material
    weahesses?                                                              None reported

Noncompliance
            materialm fi.ua.ucial      noted?
                               staEments                                    No

FederalAwards:                                                                              A

Internal     overmajorprograns:
       control                                                                    ,,1 G\;
r Marerial
                                                                            { a l i \l /        ll
                                                                                                i
             ideuri.fied?
       weahesses
r   Reporuble
                                                         t13 lry/ / A \l
                      identified arenot con$ilered benate4al-l I l-^ \ | (:#'- J
             conditions         tbat             to
    weaknesses?                                          | lJ llT\Ft*tot*
                                                                    l " / v
Type audibr's
    of            isured compliance major
             report    m         for    irogrr.rr                   L/      Unqualifled
Any audit findings disclosedtbat are required to be reportedin accordance
with section510(a)of Circular 4"133?                                        Yes

Idendfication of major progratns;

CFDA Nos. 20.507and 20.516                                                  FederalTransitCluster

Dollar tbresholdusedto distingui$hbetween
Type A and Type B prqgrams    (3% ot total annualfederalexpenditures)       $1,355,857

Auditee qualified as low-risk arditee?                                      Yes


Section II       Financial Statement

No matterswere reported.




                                            *sss6i-

                                                    472
                                                     7
      Section ffi     Federal Award Findings and QuestionedCosts

      FindingNo. 20044r              20.500/507Federal Trausit Cluster - Equipment & r eal property
                                     managernent

      Finding:

      In accordancewith 49 CFR 18.32 (d), I) Property records mast be maintained that incfude a
      description of thepropeW, a serial rutmberor other idertification namber, the sourceof propeny, who
      holds title, the acquisitiondate, and costof theproperty, percerrtage Federal panicipation in the cost
                                                                           of
      of the properTy, the location, use and condition of the property, and arry ultimate dispositiondata
      including the date af disposal and.sale price of the property, (2) A physical inventory of the propeny
      must be takm and the resultsreconciledwith theproper-ty    recordsat least once everytwo years.

      During the performanceof our proceduresover the federal compliancerequiremeut of equipment&
      real property managstnsaf,we noted that the District had not performed a physical inventory of its
      property in over two years.

                Costs:
      Qaestioned.



-
LWe
      None.

      Recommendntionr

         recommend management
      leastonce
                  that
              everytwoyears.
                             includeprocedures ensure
                                             ro     FAJ*,,
                                                                   d-l                FT
                                                                               hl inventory is performedat
                                                    V
      Management Response:




                                                0s0s$P


                                                     473
                                                      8
                                                                                                       t

Boardof Directors
Alameda-Contra CostaTraasitDistrict
Oakland,California

                           INDEPENDENT ACCOUNTANT'S

We have exemined the Alameda-Contra Costa Transit                              compliance with the
requirementsdescribedin the Measure B SalesTax                               agreemeBt (Agreemeut)
betweenthe Disrict and the AlarnedaCounW                                 Authority (ACTLA), and for
the fiscalyearended
                  June30, 2004.                                   the Agreement included the
                                                                               are          in
accompanying schedule of revenues and                             B 2000 funds. Managemeut      is
responsible the District's compliance
            for                                                   Our responsibility to express
                                                                                   is          as
opinion on the Distict's compliance
                                  based

Our examinatiouwas conductedin accordancewith attestationstandards    established the American
                                                                                  by
lnstitute of Certified hrblic Accountant$ and, accordingly, included erffiEining, on a test basis,
evidenceaboutthe District's compliancewith thosereguirementsand performi4g suchother procedures
as we considered necessaryin the circumstances. We believe that our exaniflatiotr provides a
reasonablebasis for our opinion. Our examination does not provide a legal determinationof the
District's compliancewith specifiedrequirements.

In our opinion, the Disnict complied, in all rnaterial respects,with the aforementioned
                                                                                      requirements
                                                                                                 for
the flscal year eudedJune30, 2004.

This report is intendedsolely for the information and use of the Board of Directors, management,
                                                                                               and
the ACTLA and is not intended to be and should not be used by aryone other than these specified
parties.



Certified Public Accountants

Walnut Creek, California
November19, 2004




                                         sGss63

                                                474
                                                 I
  ALAJ\,IEDA.CONTRA
                  COSTATRANSITDISTRICT

Schedule Revenues Expenses Measure 2000Funds
       of       and      of      B

     For theperiod                to
                  from July 1,2003 Jutre 2004
                                       30,

                                           Jttly1,2l)03to
                                           Ime30,2{X}4

Rerienues:
  Famanit-AC Trarsit-N.               $         3,18I,323
  Fffifitrrsit-AC Trnuit- C.
                                                _H3at
  AC Tlrorsit
  AC Trasit C
                N
                                           4 f f&qts2244
                                                 iryft
                                    fl     ia +ffi,7e
  AC. Tffisir S
  AsrD y.*Jf,li ?{f .il il
      wertoeto
                             -'l   /f, \   i ( +]rzwo
                                               l,163,g99
  ACIDWettoetoWcrlq-g \i,
                 ll ti 'u
                                                 206,483
                       uJj;,} *
  I.{urSpecificlvFasrl,eBl v
     rb@ilcA&asr.uretsi                           83,556
      TdalI\ea$rrc Z00b#wrnre
                 B                             n245,5W

QeraingEp€rses:
  Fcatadt-AC Tirutsit-N.              $         3,181,323
  Mamsit-ACTrmsit-C                              712367
  AC TmSiIN                                     g,g]3J'.4
  AC. Trasit C                                  4,46],7ffi
  AC Tffisit S                                  \514n6
  ACm WelfoetoWork-N                            I,163,899
  ACID Welfratowod{-C                             206,483
  I-Iurffifcl\ftarueB                              83,556
     Tcfial        B 2000
           I\,Easune Epmses          _$___20,245,592_




                    0sfi,sf;1

                          475
                           2
                   C


            Year EndedJune30, 2004




I   $s##fr5
      477
Board of Directors
Alameda-Contra  CostaTrensit Disuict
Oakland,California

                          INDEPEF{DENT
                                     ACCOUNTANT'SREPORT

We have performed the proceduresenumeratedbelow, which                     to by management the
                                                                                              of
Alameda-Conffa
             CostaTrausit Distict (District), solely to                    evaluating service hours,
service miles and the allocation of operationsand rnai                     coutrty and specialtansit
service distict set forth in the accompanying                                    June30, 2004. The
Distict's managementis responsiblefor the                                 This agreed-uponprocedures
engagemeil was conducted in accordancew                                  establishedby the American
Institute of Certified Public Accoununts.                        of these procedures is solely the
responsibility of those parties specified in           . Consequently,we make no representation
regardingthe sufficiency of the procedures  describedbelow either for the purposefor which this report
hasbeenrequested for any other pwpose.
                    or

Our proceduresand findings are as follows:

GENERAL

       a. We read Measure C and the cooperative agreement between the Conna Cosa
          Transporation Authority (CCTA) and the District.

       b. We traced Measure C funds received for the year ended June 30, 2004 to the District's
          generalledger and to the independent
                                             confirmation receivedfrom the CCTA.

SCHEDULEOF SMWCE HOURS AND SERWCEMII.ES BY COUNTYAI{D SPECUL TMNSIT
SERWCEDIST".ICT

       a . We testedthe schedule clerical accuracy,and noted no errors.
                                for

       b . We compared servicehours by Special Transit Service Disnict (STSD) for the year ended
           June 30, 2004 to ttre worksheets prepared by the Distict and found them to be in
           agreenent. We comparedSTSD No. I service hours for the year endedJune 30, 2004 to
           the worksheetspreparedby the District and noted agreement servicehoursby coutrty.
                                                                   of




                                             G#ssss
                                                478
                                                  I
c. We recomputedthe net chatrgesin service hours during the year endedJune 30, 2004 by
   countyand STSD, andnotedno errors.




                              ftsftsc?

                                     479
                                      2
     d. We compared service miles by STSD for the year ended June 30, 2004 to worksheets
        preparedby the Disnict and found them to be in agreement.

     e. We compared STSD No. I miles for the year ended June 30, 2004 to the worksheets
        preparedby the District and notedagreement servicemiles by county.
                                                 of

     f.   We recomputedthe net changes service miles druing the year endedJune 30, 20O4by
                                      in
          countyandSTSD, and notedno errors.

SCHEDUIE OF OPEMTIONS AND MAINTENANCE ETGENSESBY COUNTY AND SPECIAL
TMNSIT SERWCEDISIRICT

     a. we testedthe schedulefor rnathematical
                                             accuracy,and notedno errors.

     b. We compared total expenses the Dishict's audited
                                 to
        Changesin Fund Net Assetsfor the year endedJune
        agreement.

     c. We recomputedthe total expenses                                            and noted no
        erTors.

    d. We comparedservice hours end                      by county and STSD to the Schedrrleof
       ServiceHours and ServiceMiles by             and STSD and found them to be in agreement.

    e. We recomputedthe service hours and service miles allocation percentages,
                                                                              and noted no
       errors.

    f.    We tracedexpenses, allocatedby county and STSD,to a worksheetpreparedby the District
          and found them to be in agreement. We noted that the District computedthe allocated
          expenses Contra CostaCounty,STSDNo. 1 asfollows:
                  for

                                                     (Servicehours allocation % +
              Total expensesbefore allocation
                                                X            Servicemiles allocation %)
                  by county and STSDG)
                                                                      2
          (L'fucluding
                     purchased.
                             trawponaion ffiperrses
                                                 relatd mchnivety STSD 2 (Dumfunon
                                                                to    No.
              Express)

          We recomputedexpense$       allocatedto Conta CostaCounty, STSD No. l, using the above
          calculationand found the recomputed      expenses be in agreementwith amountscalculated
                                                           to
          by the District after giving effect to rouudiqg.

    g. We comparedthe method used to allocate operationsand maintenanceexpenses STSD to
       No. 2 to the Distict's statedallocationmethodologyand found them to be in agreement.




                                       GSS$fi3

                                            480
                                              3
       h. We noted that the Distict computedthe allocatedexpenses Alameda County STSD No.
                                                                for
          I as follows:

              Total expenses before         Expensesallocated           Expensesallocared
                   Allocation             to ContraCostaCounty          to AlamedaCounty
              by countyand STSD                STSDNo. I                    STSDNo.2


            We recomputed the total allocation of operationsand rnainterumce
                                                                           expensesto Alameda
            County, STSD No. I and found the recomputedexpenses be in agreementwith amounts
                                                                        to
            calculatedby the Disfrict, after giving effect to rounding.

       i.   We noted that total Disrict operationsand maintenance
                                                                expensesallocatedto Contra Costa
            County on the Scheduleof Operafionsand MaintenanceExpenses County and Special
                                                                          by
            Transit Service District exceeded MeasureC funding of $1,506 by $31,633 for the year
            endedJune30, 2004 (in thousands).
                                                                         fl
No exceptionswere noted as a result of performing the above


of anopinion,on tlre accompanying
we performed
                   to,

             additional
                                 schedules.
                        procedures,
                                  othermatters
                                             toigh,
                                                                         ;J
We were not etrgaged and did not, conductan au4itithq qqi+S{d Q{{hichWould be the expression
                                          Accrirpin$ly"Spl0pglt-dxpress an opinion. Had
                                                                       such
                                                  tJh4Velsineto our attentionthat wouldhave
beenreportedto you.

This report is intendedsolely for the information and use sf rnanegement the Board of Directors of
                                                                        and
the District, and the Conffa CostaTramportation Authority and is not intendedto be and shouldnot be
usedby anyoneother than thesespecifiedparties.



Certified Public Accountants

Walnut Creek, California
November  19.2004




                                            sfi$.$fi3


                                              481
                                                4
                     ALAI\4EDA.COT{TRA  COSTATRANSIT DISTRICT
                         Schedule Service
                                 of      Hours and Service Mles
                        by Countyaud Special
                                           Tiansit Serryice
                                                          District
                                Year EndedJune30, 2004


                                         For the                                      For the
                                        Year Ended              Net                 Year Ended
                                       June 30, 2003     Increase (Decrease)       June 30, 2004
SERYICE HOTIRS

Conna Costa- STSDNo.                         u6,450                 (5,516)              240,934

Alameda- STSDNo. I                          1,687,499              (99,908)            1,587,580
Alameda- STSDNo. 2                           280.837               (45,429)              235,409

         Toul Alameda service hours         l,96g,3?5             (145,337)            1,822,989

Total STSD No. I servicehours               1,933,939             (105,424)            1,828,514
                                                                               %




                                                        {)
                                                        t4i
SERVICE MILES                                            t l
                                                         tl
                                                         V
ConhaCosta- STSDNo.                                                (68,485)            3,246,960

Alameda- STSDNo. I                         9,927,105              (852,971)           19,074,134
       -
Alameda STSDNo. 2                          3,995,532              (570,770\            3,314,762

         Total Alamedaservice miles       23,8L2",637          (1,423,741)            22,388,896
                                                                               #




TotalSTSD No. I servicemiles              23,242,550              (921,456)           22,321,W4




                                      8SS$?C


                           SeeaccompanyiDg
                                         notestCIthe schedules.
                                          482
                                           4
                    ALA]VIEDA-COI\TITA COSTA TRANSIT DISTRICT

                            Notesto the Scheduleof Service Hours
                and Service Miles by County and $pecial Transit Seryice District
                  and the Scheduleof Operations and Maintenance Expeuses
                        by County and Special Transit Service District

                                  Year Ended June 30. 2004


(t)   GenemI

      MeasureCisal9SS          Contra Cosu County ordinance authorizing the ConEa Cosu
      TransportationAuthority (CCTA) to collect and distribute a one-half cent transactionand use
      tax within Conta CostaCounty for countywide improvementof public hansit and paratransit
      services.

(2)   Summary of Significant Accounting Policiesanil Schedule

      These schedules preparedunder the guidelinesof
                      are                                                      the Conta Costa
      TrausportationAuthority and the                                         Consequently,they



(3)
      do not present the financial position, chang
      Alameda-Conha  CostaTransitDistict.

      Basisof Accounting
                                                  {s
                                                   i   tr                  or cash flows of the




      The Scheduleof Operationsand Maintenance  Expensesby County and SpecialTransit Service
      District hasbeenpreparedin accordance
                                          with the accrual basisof accounting.

(4)   Ba,lfis ExpenseAllocalion
            of

      The expenses the Schedule Operationsand MaintenanceExpeuses County and Special
                    on              of                                    by
      Transit ServiceDistrict are prorated to Alamedaand Conta CostaCounties(the Counties)and
      the SpecialTransit Service Disricts. It is basedon an equal weighing of the relationship of
      hours and miles of seryicebetweenthe Countiesand the SpecialTransit ServiceDistricts within
      the Counties.




                                        sfi#($?1

                                             483
                                               6
  ALANTEDA                A TRAI.ISIT


                       Reportfor the
                     it Calculation

          Year Ending June30, 2005




s#ss?fi
  484
                                Independent Accountant's Report
                              on Applying Agreed-Uponhocedures

Boardof Directors
Alameda-Contra CostaTransitDistrict
Oakland.California

We have performed the proceduresenumerated       below to                    Appropriations Limit
Worksheet the Alameda-Conna
            of                     CostaTransitDistri                  year endingJune30, 2004,
Theseprocedures,    which were agreedto by the                            the lrague of Ca]ifornia
Cities (as presentedin the publication entitled                      Applied to the Appropriations
Limitation Prescribed by Anicle XIIIB of the                      ) were performedsolely to assist
                                        of
the District in rneetingthe requirements Secfida'1.       le )ilIIB of the California Constitution.
                            is           for
The District's management responsible the-A,t'propriations Limit Worksheet.

This agreed-uponprocedures engagementwas conducted in accordance with attestation standards
             by
established the American Institute of Cenified Public Accountants. The sufficiency of these
proceduresis solely the responsibilityof the Disnict's menagement. Consequently, make no
                                                                                    we
representation  regardingthe sufficiencyof the procedures
                                                        describedbelow either for the purposefor
which ttris report hasbeenrequested for any otherpurpose.
                                     or

             performedandour findingswereas follows:
The procedures

1.     We obtained the completedworksheetssupporting the computation of the limit to determine
                                adjushrentfactorswere adopted resolutionof the Disnict's Board
       that the Iimit and anrrual                               by
       of Directors. We also determined   that the populationand inflation optionswere selected a
                                                                                              by
       recordedvote of the District's Boardof Directors.

                            were notedas a resultof our procedures.
       Finding: No exceptions

2.     For the accompanyingAppropriations Limit Worksheet, we added last year's limit to the
       annualadjustmentand agreedthe resultingamountto this year's limit.

                            were notedas a resultof our procedures.
       Finding: No exceptions

3.     We agreedthe current year information presentedin the accompanyingAppropriations Limit
       Worksheetto the appropriatesupportingworksheets describedin Number 1 above.




                                          ec0$+?3
                                              485
4.     We agreed the prior year appropriations limit presented in the accompanying
       Appropriatisns limit Worksheetto the prior year appropriationslimit adoptedby the
       District'sBoardof Directors.

       Finding: No exceptionswerenotedas a resultof our procedures.

We were not engaged and did not perform 4a slamination, the objectiveof which wouldbe
                     to,
the expression of an opinion on the accompanyingAppropriations Limit Worksheet,
Accordingly, we do not expresssuch an opinion" Had we performedadditionalprocedures,
other matters might have come to otu attention that would have been reported to you. No
procedureshavebeenperformed with respectto the detenninationof the appropriationlimit for
the baseyear asdefinedby Article XIIIB of the California Constitution.

This report is intendedsolely for the informationand use of the District's management
                                                                                    and
Board of Directors and is not intendedto be and should not be use3+$ anyone than these
specifiedparties'
                                                           ,fl,#"\:


      pubric
certined Accountan*
                                          ,--,.ffi11\i
                                                 I
                                                 - ' ' - - \ l [ \ l / l l;
                                            ^ l r al l i i \ i l       t

                                                 j[i,!tt
                                          i il
Walnut Creek.California                   i-./
November  19.2004




                                   ##{F$?5
                                         487
                 ALAIIIEDA-COII{TRACOSTATRA}'ISITDISTRICT
                    APPROPRTATIONS   LIh4IT WORKSHEET
                     FOR TIM YEAR ENDINGJUNE 30. ?OO5                                     l

               Appropriations limit, fiscal year 2003/2004   $ 272,848,058
               Adjushnent factors:
                 Populationgrowthr (rounded)                        r.0077
                 Inflation                                        x 1.0328
                     Total adjusment % (rounded)                   1.0407
               Amual adjusffirentin dollars                     11,109,112
               Appropriations limit, fiscal year 2003/2004




I The population growth factor is a weighted
                                                                       and Confta Costa
       Counties, whichare 88.4%and11.6%,




                                          fi-${F,$?$
                                              488
                   AC TRANSIT
           FINA}'ICING CORPORATION
              (A ComponentUnit of the
        Alameda-ConhaCosa Transit Disnic$

       Iadependent Auditor's Report,
    Management's Discussion Analysis,
                            and
       and Basic Fimncial Statements

  For the YearsEnded June30. 2004 and 2003




eG#sT"
  489
                                    AC ITA}ISIT FINA}ICING CORPORATION

                                     For the YeersEndedJuneS0,2004and 2003

                                                       Tahleof Contents

                                                                                        Page(E)

Independent
          Auditorts Report..,..                                                           ...... 1

Mauagement's
           Discussion
                    and Analysis(RequiredSupplementarA
                                                     Information)...................2 - 3

Basic Financial Stetementsl

                  tf
    S u t e m e n os N e tA s s e t s . . . . . . .                          ....................4

    Statements Revenues,
            of         Expenses Changes Net Assers
                              and     in                                          ..............5

    StatemeutsCash
            of    Flows                                                          ..............6

    Notesto the BasicFinancial
                             Statements                                            ......7 _ 11




                                                      GSSSfS
                                                           490
To the Board of Direcrors
AC Transit FinancingCorporation
Oakland, California

                                    IndependentAuditor's Report
'We
    have auditedthe accompanyingbasic fimrcial statements the AC Tralsit Financing Corporation
                                                            of
(Corporation), a componentunit of the Alameda-Conta CostaTraasit District, as of and for thr y***
ended June 30, 2004 and 2003, as listed in the table of contents. These financial statements the
                                                                                            are
responsibility of the Corporation's menagement. Our responsibility is to expressan opinion on these
finaneial statemetrtsbasedon our audits.

We conductedoru audits in accordance    with auditing standardsgenerally acceptedin the United States
of America. Thosestandardsrequire that we plan andperform the audit to ob'lin reasonable   assurance
about whether the financial statements free of materialmisstatement. Aa audit includes examidng,
                                       are
on a test basis, evidencesupporting the amountsand disclosuresin the finaucial statements. A:r aud.it
also includes assessing accountingprinciples usedand significant estimatesmade by manngement,
                       the
as well as evaluatingthe overall financial statement
                                                   preseutation. We believe that our auditsprovide a
reasonable basisfor orrr opinion.

ln our opiniou, the finaneial statements  referred to abovepresent fairly, in all material respects,the
financial position of the Corporation as of June 30, 2004 and 2003, aud the changesin itc financisl
position and its cashflows for the years then endedin conformity with accountingprinciples generally
acceptedin the United Statesof America.

The Maaagelxent'sDiscussion and Aaalysis, as listed in the table of contents,is not a requiredpart of
the basic fimnciat statementsbut is supplemeutaryinformation required by accounting principles
generally accepted the United Statesof America. We have applied certain liaited proceduris, which
                    in
consisted principally of inquiries of menagementregarding the methods of measuement and
presetrtationof the required supplementary
                                         information.However, we did not audit the informationand
elrpressno opinionon it.



Certif,ed Public Accountants

Walnut Creek, California
Oetober15, 2004


                                           0s#$?3

                                                491

                                                  I
                          AC TB,Ai{SIT FINANCING CORPORAfiON
                       IVTANAGEMET'{T'S  DISCUS$ION Af,[D Ai\IALyflS
                          For the Years Ended June 30, 2ffi4 and 2003

 II.{TR.ODUCTION

 The following discussionand analysisof fte AC Transit Financing Corporation (Corporation)
 provides an overview of its financial activities for the fiscal years eniled Jrrne 30, iOO+rnn
 2003. This discussion should be read in conjunction with the Corporation's basic fuancial
 statementsattached this report.
                   to

Financial Statenents

The Corporationis organizedpunuant to the Nonprofit Rrblic Benefit Corporationl,aw of the
Sute of Califomia for the puryose of providing fusncial assi$tance tnr Ahmeda-Contra
                                                                         to
Costa Transit District (AC Transit) by acquiring, consftucting, impmving and developing
certain real andpersonetpropeffy for the use, benefit, and e4iolment olthe potti.. AC Transit
borrowed fiIlrds from the Corporationto acquire an office [uilding used by AC Tralsit as its
administrativeheadqua.rters.Under a leaseagreement,       AC Transit is required to pay a third-
pafly tnrstee specified leasepaSnnents to holders of the 2001 Certificatesof partieipation
                                         due
(COPS). The Corporation is considereda component            udt of AC Transit; therefore,the
financial position and activities of the Corporationare included in AC Transit's basicfinancial
statements.

The basic financiat statemeffsprovide short-termand lo4g-term financial information aboutthe
Corporatiou'sfinancial activities.

FINA}.ICIAL BALAI{CES EIGHLIGHTS

A condeusedsrrmm4ry the Corporation's
                   of                statenent net assets Jrme30, 2004, 2003,and
                                             of         at
2002is shownbelow:

                                                                                  2ffi2
     Assets:
       Cunentassets                             $ 1J96,706 $ 1,378380 $ 1,660,877
       Capital otherassets
             and                                2tll2,tt6  22430,73   23,435fi72
         Totalassets
                                               *EBo'B;E
                                                         t      23,809,115 25,096J49
     Liabilities:
        Cunent  liabilities                        rA27178       1,410,915 1,686540
        Non-cunent  liabilities                   21904377      2297tfi32  24,008,992
           Toal liabilities                       2333r.85s     24382547   25,695432
             (deficit):
     Netassets
       Resuicted debtseffice
               for                                   45,633         35,609         50:r42,
       Unreenicted                                 (568,666)      (609,041)      (fls,42S1
           Toal netassee(deficit)               $ (523,033) $ (573,432)       $ (598,683)


Net assets         by
         increased 7.30 %, froma deflcitof $573 in 2003ro a deficitof $513033
                                                  #32                             in
2004. The increase net assets
                   in          from 2002to 2003was4.22 96. Both assets liabitities
                                                                       and
have declineddue prinarily to the collectionof leasereveruesfrom the Disnict and the
subsequentprincipalpayments theCOPS.
                           on

                                               GSSSgf,
                                            oe2
                                             .2
                    AC TRAF{SIT FINA}.ICING CORPORAIION
              MANAGEI\{ENT'S DISCUSSION AI.ID AhIALySIS (Continued)
                    For the Years Ended June 30, 2004 and 2{X}3


FINAT'{CIAL OPERATIONS HIGIILIGHTS

A condensed summaryof revenues expenses the years endedJrrne
                             and      for                   30, 2004,2003,and
2002 is shownbelow:

                                                           &w+              2003
          Operatiagrevetrues                           o
                                                       I
                                                           ttn   rA4
                                                           I t1,t/.4
                                                                       o
                                                                       .P
                                                                            ora   146
                                                                            OIJ'I4O      $ i,i35577
          Operatingexpenses                              (36,029)           (36,025)         (30J7s)
                          Operatingincome
                                                      -74W
                                                                            7
                                                                                        -i;id'sFo'-
          Non+perating revenues   (expenses) :
            I"nvesffientincome                               97524            71,610       144,066
            Intereston certificatesof participation        (790,819)        (823162)     (1,170308)
          Chaneein net assets                         $      5o3ee $         25,251     $   78,860




Comparative Analysis

Operatingrevenue$    and interestexpense    from 2003to 2004 decreased 4.11% and3.96%,
                                                                          by
respectively. Operatingrevenuesand interestexpense       from the period 2002 to 2003 decreased
by 4 .11 % and2 .96 %, respectively. Decreases both years are due primarily to decreases
                                                   in                                         in
the required   principal and interest paymeils requiredper the C.O.P.'s mafirrity schedule.
Inveshent income increasedby 24.26% from 2003 to 2004 as a result of higher investment
yield rates received during the year. Investment     income decreasedby 50.29% from 2002 to
2003  prinarily as a result of a decline in an uuusuallylarge balanceheld during the refinancing
processin the prior year.




                                         0$s$81

                                                493

                                                  3
  STATEtr\,TENTS
             OF'
               NETASSETS
  JUNE30, 2{t04AhtD2{l{13

                                                                              2ffi4                 2003
 Assets:
   Currenf asseB:
    Restrictedsashand irvestmetrts:
        Cashatrd cashequivalenils
                                                                                43,n9                35,609
        kryesheffs
                                                                                 2,394
     Interest receivablefrom AC Transit
                                                                               3ffi,222             373,659
     I-easereceivablefrom AC Transit, net of discount- curretrt
                                                                               990.851       %
                                                                                                    960,851
            Total flffent assets
                                                                             1,396,706             1.370,119
   Non-cufrent assets;
    Restriptedcashaf,d iwestnents:
      CashaDdcashequivalents
                                                                                                      8,%r
      Imresurents
                                                                             2,013,194             2,004,933
     Leasereceivablefrom AC Transit, lesscurrentportion
                                                                            20,385,000            21,490,000
     I.easeReceivablefrom AC Traruit, net of discounr_ notr flrrrent
        AC Transit, net of $313,910 $199,76laccumulated
                                     end
        a:nortization as ofJune 30, ZO04ard 2003, respectively              (1,493,448)           (1,607,597)
    Leasereceivablefrom AC Transit, net of discount- roncurrem              18,99i,552           19,882,403
    Deferred costr of issuance,
                              less accumulaEdaruortizationof
     $99,072 snrt $63,043at lule 30, 2I)04and 2003, respectively              507,370               543,399
          Total trorcuffent assets                                         21.4t2,.1r6           ?2,438,996
          Total asseB
                                                                           ??,808,ffi2   +
                                                                                                 23,809,115
Liabilities:
  Current liabilitiesr
    Accountspayable
    Accrued interest payabie                                                 3frp22                373,659
    Cureff portion of certificabs of participation, net
       of deferred loss on refirndigg
                                                                            1,067,256             1,037,256
           Total current liabillties                                        L,4n,478              1,410,915
  Non-current liabilities:
   Cc,rtificatesof participation, long-Erm portion, net
     of ddened loss on refurdi4g                                           19,891,183            20,958,438
   Due to ACTfa$it                                                          2,013,194             2,013,194
          Total norcurrent liabilities                                     ?.1,904,377           22,971,632
          Total liabitities                                                23,331,955            24,392,547
Net assets(de.frcit):
 ResEistedfor debt service                                                    45,633                3s,@9
 Unrestricted                                                               (s68,660              (609,041)
         Total rut assets(deficiD                                      $    (523,033) $           (573,43L'

Seeaccompanying
              note$to tbe basic fharcial statem€ffs.



                                                                GS{}ssfi
                                                              4e4
                                                               4
AC TRAI.ISITFINAI'{CING CORPORATION
          oF
STATEMENTS RE\4ENtrEs,EPENSESA],{D  cHaNcES IN NETASSETS
FORrHE YEARSENDEDJrrNE30,2004AI\ID2003

                                                                  2004          2003
Operatingrevenues:
   Leaserevenuefrom AC Transit                                $   779,723 $     813,128

Operatingexpenses:
   Amortization of certificatesof participationissuance
                                                      costs        36,029        36,025
      'v'IrciariliB
      l1na*o+i**      innn
                      iilcumg                                     743,694       '177,103

Non-operatingrevenues    (expenses) :
 '
   Iavesfinentincome                                                97,524        71,610
   lnterest on certiflcatesof participation                       (790,819)     (823,462)
     Changein net assets                                            50,399        25,257

          beginning year
Net assets,       of                                              (573,43?\     (599,683)
Net assets, of year
          end                                                 $ : (523,033) $   (573,432)
                                                              :

Seeaccompanying
              notesto the basic financial statement$.




                                              csGsES
                                                495

                                                  J
AC TRANSTT   FINAT{CINGCORPORATION
STATEI\{EI\IISOF CA^SHFT.OWS
F'ORTm YEARSENDEDJtIf,{E 30, 2004AND 2003

                                                                            2003
Cashflows from operatingactivities:
 Cashreceivedfrom lessee,principat portion                     1,075,000    1.235.000
 Cashreceivedfrom lessee,interestportion                        679,011      714.417
     Net cashprovided by operatingactivities                   1,754,011    1..949.417

Cashflows from capital and related fimrcing activities:
 Cashpaymentfor bond issuancecosts                                            (100,187)
 Cashpayments principal on certificatesof participation
               for                                            (1,075,000)   (1,235,000)
 Cashpayments interest on certificatesof participation
               for                                              (766,511)     (801,160)
     Net cashusedin capital and relatedfinaacing activities   (1,841,511)   Q,136,341)

Cashflows from investing activities:
 Ilvestmentssold                                               14,116,483 12,113,589
 Ilvesffients pruchased                                       (14,1n,L38) (12,073,085)
 Cashreceivedfrom earningson inveshents and cashequivalents       w,5?,4      71.610
     Net cashprovided by investing activities                    86.869       LLL,l14

                                                                   (631)
Net increase(decrease) cashand cashequivaleuts
Cashaxd ca.sh
                      in
              equivaleils, beginning of year
Cashand cashequivalents,end of year
                                                                 43,870
                                                                 43,239 $
                                                                              Ili,llE'
                                                                              43,870

Cashand cashequivalents
 Reporteda$cufient amounts                                       43,239 $     35,609
 Reportedasnon-cwTentamounts
    Toul cashand cashequivalents                                 43,239


 Operatingincome                                                743,694
 Adjustments reconsile operatingirsofle
             to
  to net cashprovided by operatingactivities:
  Amortizationof deferred costsof issuance                        36,929       36,025
  Amortizationof discorrnton leasereceivablefrom AC Transit     (114,149)    (114,149)
  Changes operatingassets
           in               end liabilities;
    Decrease leasereceivable
              in                                               1,075,000    L,235,000
    Decrease interestreceivablefrom AC Eartsit
              in                                                 13.437        15,438
     Net cashprovided by operatingactivities                   1,754,011$   t,g4g,4l7

              notesto the basic financial statements.
Seeaccompanying


                                                ss$s8t
                                                      496
                                                       6
AC TRAI.{SITFINAI\iCING CORPORATION
NOTESTO T}M BASIC FINANCIAL STATEMENTS
FOR TIM YEARS ENDED JUNE 30, ?OO4
                                AND 2OO3

(1) ORGA}.ilZATION AND SUMMARY OF SIGNIFICANT ACCOI.INTING POLICIES

  Orgatdrninn - AC Transit Financing Corporation (Corporation) is organizedpursuantto the Nonprgfit
  Public Benefit Corporation Law of the Sute of California for the purposeof providing f,nancialassistance
  to the Alameda-ContraCosta Tralsit Distict (AC Transit) by acquiring, consfucting, improving, and
  tieveloping certain real and personal prqperty for the use, benefit, and enjoymetrt of the pubUc. The
  Corporadonwas incorporetedin May 1988. The Ccrporadon'sBcaid of Directors is 1he             iame as AC
  Transit's Board of Directors, and AC Transit has oversight responsibility over the Corporatioi. AC
  Transit is responsible for paying all operating expensesof the Corporation. In accordancewith the
  provisions of Governmental Accounting StandardsBoard (GASB) StatementNo. 14 - The Fina.ncial
  Reporting Entity, the Corporation is considereda componentunit of AC Transit; therefore, the financial
  position and activities of the Corporationare included in AC Transit's basicfinancial statpments.

   Basis of Accounting - The Corporation maintains its records on the accrual basis of accountingas an
  enterprisefund' Under this method, tevenuesare recordedwhen earnedand expenses recordedwhen
                                                                                      are
  the related liability is incurred. Private-sectorstandards accountingaaAnnanciat reporting issuedprior
                                                           of
  to December1, 1989, generally are followed to the exteil that those standards not conflict with or
                                                                                 do
  conhadict guidanceof the GASB. The Corporation also has the option of following subsequent     private-
  $ector guidance, subject to this samelimitation. The Corporation has elected trot to follow subsequent
  private-sectorguidance.
  #
  Interest Income - lnterest income on investments  and on the leasereceivablefrom AC Transit is recorded
  as revenuein the year in which the interestis earned.

  Cashand CashEquivalents - For purposesof the statements cashflows, the Corporationdefinescash
                                                             of
  and cashequivalentsas cash on hand and investuents with a matruity of three monthsor lessfrom the date
  of purchess

  Investments- Luvestments      are reported at fair value. Fair value is defrned as the amount that the
  Corporationcould reasonablyexpectto receive for an investuent in a current sale benruees wilting buyer
                                                                                          a
  and seller and is generally measued by quotedmarketprices.

  Restrictedcashand cash equivdlentsand restricted invemnenfs- Trusteeaccountsthat are restrictedto
  specificusesare classified as resticted cashand cashequivalentsand resticted inveshnents. pursuantroa
  kust agreement and betweenthe Corporation, AC Transit and the trustee,the resfrictedassets onlv
                 by                                                                             can
  be usedto servicethe principal and interestof the outstandingcertificatesof participation.
  CertifrcAes of Participation Issaance Costs and Defeneil l-oss on Refuniling - Cerrificates of
  participationcostsof issuanceand deferredloss on refunding are amortizedon a straight-linebasisover the
  life of the certiflcates. Amortizatiou of costs of issuaflce is reported as amortization expense nnd
  amortizationof deferredloss on refirndingis reportedas a componetrt interestexper$e.
                                                                    of




                                           0$$$n5

                                                 497
                                                  7
AC TRANSTTFINAI{CING CORPORATION
NOTESTO TIIE BASICFINA]'-ICIALSTATEMENTS(Continued)
FORTHE YT,ARS                 2004Al-tD

(1) ORGANIZATION AI'[D SIIMIVIARY OF SIGNIFICAIIIT ACCOUNTING POLICIES (Continued)
            -
   Net Assets Net a.sset"s classifiedas: l) restrictedfor debt service,which oonsistsof fundsheld for the
                          are
   repaymentof debt prinoipal or interest, or 2) unresticted.

   Reclassiftcaions- Certain amountsin the 2003 financial statements
                                                                   havebeenreolassifiedfor
   comparativepurposesto conform wt'rhthe preseii*,ation the 2004fmancial statemen*a.
                                                       in

    Use of Estimates - The preparation of frnancial statcmentsin couformrty with accountingprinciples
  . general$ acoepted in the United States of America requires managementto make estimatesand
    assumptions that affect certain reported anormts and disclosures. Accordingly, acfiral resultscould differ
    from those estimates.

(2) CASH AI{D II\r\ESTMENTS

   The Corporation'sresfrictedcashand invesfinents
                                                 consisted the following at June30:
                                                         of

                                                                            2003
Current:
  Cashand cashequivale,uts                                  43,239    $       35,609
  Invesfuents                                                2,394
Noncurrent:
  Cashand cashequivalents                                                      8,261
  Investments                                             2,013,19;         2,004,933
  Total cashand investnents                       $       2,058,827 $       2,048,803

   For fmancial reporting purposes,investraents categorized give an indication of the level of custodial
                                                  are          to
   credit risk assumedby the Corporation at year-end. Category 2 includes uninsrued and unregistered
   investnents in securitiesheld by the couuterparty'sfiust deparfrent or agent in the Corporation'sname.
   Invesfinentsnot representedby individual securitiesare not subjectto categorization. A summaryof the
   Corporation'sinvesfirentsat frir value is as follows:

                                                                             June
                                                                                30,
                                                                                        2003
                   2:
            Category
                           Agency
              U.S.Government    obligations                      $ 2,ol5,5gg       $ 2,004,933
            Uncategorized:
              Mutual funds                                                43,239         43,870




                                            *0chss,s

                                                    498
                                                      R
AC TRAF{SITFINANCING CORPORATION
NorES To rIrE BASICFINANCIAL STATEMENTS (continued)
FORTfm YEARS   ENDEDJUNE30,2004AI-ID2003

(3) LEASE RECETVABLE FT.OM AC TRANSIT

  Pursuantto the 1989 Installment Agreementwith AC Transit (1989 Ifftalhnent Agreement), AC Transit
  borrowed $28,315,000from the Corporationto acquirean office fofitding, as well as to financeother
  capital improvements. The o16gs6rdlding had beenleasedby AC Transit fro* u third parry a:rdusedby
  AC Transit as its admini$tative headquarters. The InsreilmeutAgreement required AC Transit to make
  installment paymenlr to the Corporation frona AC Trassit's r*l,*ou*s.
                                                                        D*fu; the year endedJune 30,
  2002, the leasereceivable was effectively refinancedas part of a current refunding of the Corpolation's
  1989Certificates Participation
                   of             (seeNote 4).

   Pursuant to the 2001 Trust Agreement with AC Transit (2001 Trust Agreement), AC Transit borrowed
   $23,800,000  from the Corporation order to effectivelyrefinance Tiansit's obligations
                                    in                              AC                     underthe lggg
   InstnllmentAgreement. The 2001 Trust Agreement     requiresAC Transit to make ins'-ttmentpayments   to
  the Corporationftom AC Trarsit's reveuues;   however,there is no speciflcpledgeof the revioue for the
  paymentof the leasereceivablefrom AC Traasit. Intereston the leasereceivaLl"rangesfrom
                                                                                                 3.0% to
  4.75To,payablesemiannually February 1 and August 1 of eachyear. principal payments dueon
                                 on                                                            are
  each August 1. Ia addition, the Corporation is reporting a payable to AC Tramit, which represents  the
  reserve account securing the Certificates of Participation, Series 2001. It is expectedthat the reserve
  accountwill be usedto make the final leasepayment,however, in the eventtfrat AC llnnsit paysthe entire
  leasebalancebefore the final leasepaymentis due, the reserveaccoutrtwould be retu:ned to AC Transit.

 The Corporation's total receipts on the leasereceivablefrom AC Transit for each of the uext five fiscal
 years and thereafter (which are equal to the paymetrts required by the outstanding
                                                                                         cenificates of
 participation) are summarizedas follows:


                     Year              hincioal            Interest            Total

                   2005                    1,105,000           847,958           1,952858
                   2006                    1,140,000           814J83            1,954p83
                   2007                    1,175,000           779558            1854558
                   2008                    1,210,000          7415r4             1951514
                   2009                    1350,000            6e9220            1,949320
                    *
                 2010 2014                 6,ggo,o00         z,72AJg6            9,710,196
                    -
                 2015 2019                 8,620,000         1,036J36            9,656J36

                    Total                21,490,000          7,639t65     $     29,129465




                                          s#ss8?

                                                  499
                                                  9
AC TRAI'{STTFINAFICINGCORPORATION
NorHSTo rIrE BAsIc FINAl.tctALSTATEMENTS
                                       (continued)
FORTHEYEARS   ENDED  JLINE 2OO4 2OO3
                           30,   A}ID
(3) LEASE RECEIVABLE FROM AC TRANSIT (Continued)

    The lease receivable has been discountedfor amountsrelated to the refi,rnding. At June 30 the lease
    receivable detersrined follows:
              is           as

                                                  2004             2003
ToAl principal due                        $       ?1,490,000 $     22,565,000
Lessdiscorrnt                                 .   (r,601,597)      (1,721,746\
Net leasereceivable                               19,992,403       20,943,254
Lesscurent portion of receivable
(netofcurent portion ofdiscount)                   (990,851)        (960,851)
Lease  receivable,noncurrent
(net of noncurrentportion of discorrnt)   $       18,891,552   $   19,882.403

(4) CERTIFICATES OF PARTICIPATION

   In July 1988, the Corporationissued$18,570,000of Certificatesof Participation(tgBS COpS). The
   proceedswere loanedto AC Transit. AC Transit usedthe firnds to acquire an offrce building as disoussed
   in Note 3. In December1989,the Corporationissued$28,3i5,000 oiCertificates of PartiJipation      (1g89
   COPS),and useda portion of the proceeds retire the lg88 COPSon July l, l9gl. The proceeds,
                                             to                                                     above
   the amountneeded retire the lg88 COPSand establish debt reservef,*4 *o" Ioanedto AC Transit
                       to                                  a
   for other capital projects. AC Transit agreedto pay instalhneutpalrurentsto the Corporation in arnounts
   equalto the Corporation's  annualdebt servicerequirements the lggg COpS.
                                                            for

   On September25, 2001, proceedsfrom the issuanceof $23,800,000 of Refirnding Certificatesof
   Partioipation,Series
                      2001 (2001COPS)were usedto refuirdthe 1989COPS. . Intereston tt" 2001COPS
   is payablesemiannually FebruaryI and August I of eachyear tluough the year 2018. The interestrate
                         on
   rnnges from 2.10%to 4.75o/o the final maturityis on Augustl, 201g.
                              and

   The following is a flulrmary of the Corporation's certificstes of participation tansactions for the fiscal
   yearsendedJune30, 2004 and2003:
                Leaseprincipal palments                             (1,075,000)       (l;35.000)
                Outstandingcertificates end of year
                                      at                            21,490,000        22,565,000
                Unarnortizeddefenedlosson refi.rndings                (531,5611         (5d9,306)
               Total long-terur at endof year,net
                              debt                                 20,959,439         21,995,694
               Lesscurent portionoflong-termdebt
               (netof ounentportionofdiscomt)                       fl.067J56)        (1,037,256)
               Noncurrentportionof long-tenrr
                                            debt
               (netof noucnrrent
                               portionof discormt)
                                                               - $ - l9-891.183   $   20.958.438



                                                    $sss8s

                                                         500
                                                         ln
AC TRAI'ISIT FINAT{CING CORPORATION
NOTESTO TI{E BASIC FINAI'{CIAL STATEMENTS(Continued)
FOR TIIE IruARS ENDED JLINE30. 2OO4
                                  AND 2OO3

  (4) CERTIFICATES OF PARTICIPATION (Continued)

  The Corporation'stnnual debt servicerequirements maturity relativeto the certificates participation
                                                 to                                   of
  are suurmarized follows (in thousands):
                as


                 y*a1. sading
                   June30            Princiual                              Total

                  2005                   l,l05,ooo $         847,958   $      1,952,958
                  2005                   1,140,000           814,283          1,954,283
                  2007                   l, I 75,ooo         779,558          1,954,559
                  2008                   1,21o,ooo           741,514          1,951,514
                  2009                   1,250,000           699,220          1,949,220
                   -
                2010 2014                6,9go,ooo         2,120,196          g,71o,l95
                201- 2019
                   5                     8,620.000         1,035,736          9,655,'t36

                    Total       _$      2r,4eg.qqq.
                                                 __$-___?Jtgtr -$_2e.ued6r




                                        0sff.$[3


                                                 501

                                                 ll
                   ALAMEDA _ CONTRA COSTA
                      TRNASIT DISTRICT

                  FY 2003- 04 Year-End Financial Performance
                                   Report




AC TransitDistrict hrernalFinancialStatements                          ... g0




                                                                   Attachment 5
                                   AC TransitDistrict IntenralFinancialStatements
                                    for the YearEndedJune30. 2004



                                     503
t



    ALAMHDA.GEhdTRA'SO$TA   TRAN$ET    DISTRIGT'
                  fi
           FIh[AN [AI- STATEN,I
                              ENTS
        FDRT'[.[E
                TWELVH  ruflOf\fTfl.flS
                                  EFdDHD
                  (PREL!t\trNARY)
                       30,
                 JI.INE ?S{}4

t




o                     #&s$$3
                                        ISS!JEE:1
                                     DATE      1EB/lt4
                AI.AMEDA.-COI{TRA
                               SOSTATRANSIT
                                          DISTRIST

                          FINANCIA!-
                                   $TATEMENTS

                           TAELEOF CONTENTS



                                                     PAGE
                                                        NO.

      of
Summary Cashand Invesiments.                                I



Balance   -
      Sheet Assets                                     2
Balance   -           and
      Sheet Liabilities Canlial                        J


      &        -
Revenue ExpensesDistrict
                       Total(Year-To-Date)             4

       of
Statement CashFlows.                                   5

      &        -       Totel(Month)
Revenue ExpensesDistrict                               tr

         of      &
Comparison Revenue Expenses,
                          Year-To-Date
    vs.
2004 ?003.




                                  ssss$f
                                   s06
                                                                     PAGE1


                          SUIMMARY CASHAND INVESTMENTS
                                 OF
                                  J U N E3 0 . 2 0 0 4




                                       EALANCE        CHANGES        BALANCE
    TRANSIT
 A.C.                                    MAY           DURING         JUNE
                                        2004           IvIONTH        20M
    -
 Cash ln Bankandon Hand                  $4,145,452    $3,087,653     $7,233,105

 Bank GA- Money
     of       Markei                            0             0                0

     of      -
 Bank Arnerica MonevMarket                    3,518          20              3,538

Repurchase
        Agreements                      15,0oo,ooo            0       15,000,000

         Inv.
Guaranteed Ceriificates
                      fGlC)                     0             0                0

   Treasury -
U.S.        Bills
Less than90 Days                         9,998,il7     (9,998,266)         281
                                        25,002,065     (9,998;246)    15,003,819

     &
 Cash CashEquivalents                   ?9.147.517     (6,910,593)    ?2,238,924

   Treasury
U.S.      Bills-
      Than90 Davs
Greater

         &
TotalCash lnvestments              =   $29,147,5'12       0,593)     $22,236.924




                                 CI#{-}$$fi


                                       507
                                                        PAGE2

                       ALAMEDA-CpNTRA
                                    COSTATRANSTTSTR|
                                               Dt  CT
                                BALANCESHEET
                                 JUNE30.20tt4

                                      ASSETS

 Cunent
      Assets:

      and
  Cash CashEouivalenb                                       $22,236,924
  Investments                                                      0
 Receivables

 FederalandStateCapltal
                      Grants                                 31,695,099
 Federal        Assistance
        Operating                                              1?3,600
 StateandLocalOperatingAssistance                           '.18,032,916
 Other          (Net
      Receivables of Reserve)                                   3,768,584
 Duefrom/(to)
            Pension                                              192,793
Materials Supplies
       and                                                      g,?23,9n

Prepaid
      Exnenses                                                  1,535,742
 TotalCunentAssets                                          85,789,524
Unamortized  Discount Certificates
                    on
 of flarticipation                                              1,607,597
Defened
      Compensation                                                    0
        PlantandEquipment Cost;
Froperly,              at

 Land                                                       11,402,646
 Buildings,        and
          Strustures lmprovemenb                           1?1,866,955
 Revenue Equipment                                         230,160,438
 ShbF,Ofice, $ervice OtherEquipment
                   and                                     108,589,504
 Acquisiiions Progress
            in                                              31,643,718

TotalBefore
          Accumulated
                    Depreciaiion                           503,642,261
Less:         Depreciaiion
    Accumulated                                            241,612.309
TotalProperly,
             PlantandEquiprnent                            ?;6?,429,952

 TotalAssets                                              $34S,427,073

                                     ftsfts$3

                                          508
                                                            PAGE
                                                               3
                        ALAMEDA-CONTRA
                                    CCSTA     iT
                                          TRANS DI.qTRICT
                                 BALANCESHEET
                                  JUNE 2004
                                      30.

                                        LIABILITIES

 Cunent
      Liabilities:

 Accounts Payable                                              $7,643,711
 $alaries,                   &
          Wages, Vacations SickLeave                            14,363,831
 BookOverdraft                                                   6,539,545
 InterestPayable                                                  455,795
 Other Liabilities                                              4,938,075
 Notes          -
       Payable Rans                                                    0
 Noies Payable  - Gops- SiT Poriion                              1,105,000
 Other                 - S/T
       Loans/Advances Poriion                                  20,000,000
 Defened Revenue                                                1,18?,310
Self-lnsuranceReserves:                                                0
 Public        and
       Liability Properiy   Damage                              3,181, 056
 Workers'Gomnensation                                          ?1,670,9M

 Total    Liabilities
     Cunent                                                    $81,060,267

LongTermLiabilities:
 Defened Compensation                                                  0
 Accrued          and
        Vacation SickLeeve                                      8,770,460
 ClaimsLiabilities                                             13,125,000
 Notes         -
      Payable UT Portion                                       18,371,806
 OtherLongTennLoans/Advances                                          0
 Dueto/(from)FinancingCorp.                                           0

     Long
 Total  Term Liabilities                                       40.267.266

    Total
        Liabiliiies                                           121,327,533

                                       GAPITAL
Disfiict
       Equlty:

 lnvested capital
        in            net        debt
                a$Bets, of related                            242,178,513
 Reskicted                                                    (14,076,973)
 Unresbicted                                                          0

    TotalCapital                                              228,099,s|.0
  Total
      Liabilities Capital
                and                                    @



                                       s##$E's
                                                                                                           PAGE
                                                                                                              4




                                                                                                   % oF YTD 100.00%

                                                                                                           YTD%
                                                                                      FYo$04             OF.BUDGFT
                                                         \EAF-TO-DA:TE                Elf th|lrr
                                                                                                         EXFENI}ED
      RE\ENUES:
       Farpbo.r                                                 $+4,2?9,5i2            $44,463,000          9s.47%
       BartTransfers                                             4,803,331              4,803,000          100.01%
      ContradSeruices                                               56,380                245,000
      Advertising                                                                                           23.01%
                                                                 ?,085,813              2,117,000           98.53%
      Interest
             lnsome                                                370$n                  350,000
      OtherIncome                                                                                          105.82%
                                                                 5,102,119              5,105,000           Hg.B4%
  OFERATING
          RE\,ENUES                                                                                         9S*?4%
  SUBSIDIES:
   FropertyTaxEs                                                52,807.022             50,18?.000          104.82%
   $upplementaryServiceAA/elfere
                              b Work                              5,587,335             5,483,000          101.90%
   481107                                                       28,526,402             29,400,000
   TransltDevelonment                                                                                      100.45%
                     Ac{                                        46,489,835             45,804,000          101.50%
   FedlAssist-
             AEIA Aside/Planning
                  $et                                            7,877,786              7,677,000          100.010/6
  Fed.AEeisFBus  Def./Tires Tubes/Oher
                          &                                        812,831                606.000
  Fed Assist-Prev.                                                                                         101.13%
                  Mainl                                         26,751,312 {a)         20,429,000          130.S5%
  MBEEure'AA*                                                    6,758,045              7,000,000
  MeaEure'B*                                                                                                s6.Bf%
                                                                ?0"245.5S2             19,317,000          104"81%
  MBtBure'Cn                                                     1,505,734              1,506,000           g9.gB%
  SEteTransit A.ssishnce                                         3,077,432              3,183,000           s6.68%
  ADA Paratranslt
                Service/Consorlium                               4,827
 EUBSIDIES

REVENUE SUE$IDIES
      &                                                        261,113,876           251,12,000           103.98%

EXPENSHS:
  OperabrWages                                                 58,331,250            58,833,719             98.S8%
  OftrerWages                                                  45,331.081            44,675.663           101.47%
 FrlngeBenefits                                                83,?.4/.,702          67,878.000            s3.17%
 Peneion   Expense                                             1S,931.576            17,027,000            0s.44%
 Serviceg                                                      14,584,414            14,851,000            0ssl%
 Fusl & LubriEanb                                               7.S52.385             7,418.000           107J3%
 Tires& Tubes                                                   1,472,411             1,3:16,04g          111.04%
 ffice/Printing$upplies                                           682,430               625.000           105.99%
 BueParE/Maint. Supplies                                        5:59?,840             7,793,953            71.78%
 Ufllliies                                                      9,005,550             2,921.000           10e89%
 Ineurance                                                      4,893,693             6,44?.000            86,68%
Tocer                                                           1,633,2e6             1,780,8n             95.07%
L.eesss Rentals
          &                                                      5S1.S7S               610.616             sB.s5%
OtherErpenses                                                    422.750                (67,000)         -630.S7%
Purcfiaeed  Tranuportation rvlce
                        Se                                       117,389               180,000             ?ts.17'/o
Purcfiaeed        -
            Transp ADA Coneortium                              16,S55,S05            17,131,000            sB.wlk
lntBrE$t  Frpenae                                              1,360!9g9              1,?67,000          '1W.42%

H(FENSES                                   S243,0ga,g7g                            824E,TE,H7B            97.3296
Suplus (beficlt) belore Depr&cap corrunffi
Depruciation                                (29,s26,380)
Capltal  Conftlbufions                       8tr542,888                          Farebpx
                                                                                       Recovery
                                                                                              Ratio:      20.61%
lncreaee(Decrrase)            Equlty
                    in District             24,236,385
Dlg-ttlct      -
         EqulW Beginning Year
                          of               203,868,155                           Operating
                                                                                         Revenue
                                                                                               Ratio:     83.107o
               -
Eisillct Equlty Endof June?004
                                                                                                                   ss0$s5
DiHfttct
       CaptUt                                                    "rr-t"rF10      _lseqJaE-              _2640?6_
/ql    lndtr|*   G.l+   qr{E   ?ll?   4*rr*J-rtrrtJrr   u--r    ts---
                                                                    PAGE
                                                                       5

                             STATEMFNT CASH
                                     OF    FLOWS




 CASHFLOWSFROM    OPERATING   ACTIVITIES:
  Gashreceivedfromcustomers                                 $48,4S1,319
  Cashpayments supnliers good*s services
               to       for      and                        tql r t vn7Ar t7ft7\
                                                            tv        r v   vt I
  Cashpayments employees services
               io         for                              (184,532,577)
      operating
  Other        revenues                                      7,497,146
    Netcashused opemting
               for     aciivities                          (189,652,900)
CASH FLOWSFROM     NONCAPITAL    FINANCIhIG ACTIVITIES:
 Operating grantsreceived                                  20?,999,713
 Proceeds from otherloanobligations                         20,000,000
        paid on revenue
 Interesi              aniicipation
                                  notes                       (708,672)
 Amortization premium revenue
             of        on         anticipation
                                             notes             312,900
   Netcashprovided noncapitalfinancing
                    by                   activiiies        2?p,.493.941
CASHFLOWSFROMCAPITAL          AND RELATEDFINANCING
                                                 ACTIVITIES:
 Gapitalconiributed grants
                    by                                       24,699,954
 Acquisition construction capiiaf
            and             of       a$seh                  (63,016,469)
 Principalpaidoncertificates participation
                            of                               (1,075,000)
 Discount amortization noiepayabie
                       on                                     (114,149)
 Principalpaid onotherloanobligations                               0
 Interestpaid on cedificates participation
                           of                                 (654.,783)
 Intereitpaid on otherloanobligations                               0
   Netcashprovided capitaland
                 by         related
                                  financing
                                          ac,tivities      $4J61,M7)
cAqHFLOWS  |NVEST|NG
        FROM       ACTTVITTES:
 Sales investment
      of        securities                                  9;994,632
 Furchases investment
          of        securlties                             (4,996,632)
 lnterest dividends investments
       and        on                                         374,2U.
   Netcashused investing
             for       activities                           5,368,?44
 . Netincrease
             (decrease cash cash
                    )in   and  eguivalents                 (1,952,161)

    ANDCASH
 CASH      EQUIVALENTS BEGIhTNINGYEAR
                    AT         OF                         24,189,095
    ANDCASH
 CASH              AT
          EQUIVALENTSJUNE 2OO4
                         30.                              $22,236,924

                                    Gsqfi3
                                                                                                 PAGE6




                                                                                          % OFYEAR          8;3%

                                                     MONTHLY                  FYoSt)4            %OFEUDGST
                                                      TOTAL                 FUthnET
                                                                            H.EJ-                 EXFENDED
  RH\ENUESI
   FsrEbox                                            $3,674,8S3            $4+,463,000                  8.?E?;
  tsartTnnsfers                                         400,279               4,803,000                  8.33%
  Confact Services                                            0                245,000                   0.00%
  Advertising                                           168,667               2,117,000                  7.87%
  Interustlncome                                          s,140                350,000                   2,61to
  Otrer lncome                                          788,336              5,105,000                  15.44%
 OP=RATTNG
         REVENUES                                      5,03S,285
                                                ,                            57,083,000                  8.83%
SUBSIDIES:
 ProperiyTaxes                                         6"237,438           50,187,000                   12.43Vb
 SupplemenEry    Service/WelrareWork
                              to                       1,635,509            5,493,000
 AE1107                                                                                                29.88%
                                                       4r   I Ididi'O      28,400,000                    7,65%
 TransltDeveloDment  AEt                              4,65S,479            45,8e[,000
 FedlAssist-ADASatAsldelPlannino                                                                        10,178h
                                                        640,068             7,677,000                    8.34%
 Fed Asgist-BusDef./Tires Tubes/bther
                         &                              187,099               606,000                  e0J7%
 Fed Assisi.Prev. Mainl                                {285,25S)
         "AAn                                                              20,429,000                   -1.400h
 Measure                                                s3?,376             7.000,000                   4.7*/r
 MeasureTln                                           2,053,724            19,317,000
 Measure "H                                                                                            10.83%
                                                        125,415             1,50B,ooo                   8.3it%
 Stab TranEitAs8iBtanue                                1S6,001                                         '6.16%
                                                                            3,183,000
 ADA Paraffi nsltSeMce/Coneorfium
SUBSIDIES                                                                                              t1

RE1/ENUE SUBSIDIES
       &                                             23.501,859           251,1il.000                   s"36%

EXFENSES:
 OpErabrWEges                                        4,539,6S0             58,933J19
 OtherWages                                                                                              7J0%
                                                     3,467,860            44,tr15,663                   7.7BFh
 Fdnge Benefits                                      2.397,661            67,879,000
 FeneionErFenEe                                                                                         s.5g%
                                                     1,417221             1?,027,000                    8'3?%
 SeMces                                              1.58s.s11            14,651,000
 Fuel & Llbdcanb
                                                                                                       t0_85%
                                                       6?4,024              ?,416,000.                  8.41%
Time & Tubes                                           224,883              1F2B,r]48
Office/FrinlingSupplies                                                                                IE.SB16
                                                        95,121               625,000                   15Jg%
Bus PartslMainl $upplies                               358,56.1            7,793,S58
LJtllflee                                                                                               4.{t%
                                                       ZFg,475             2,921,000                    g"Egj5
lnEurBnEe                                            1,183*?75             5,647,000
Taxee                                                                                                  20-s5%
                                                       188,801             1,z$D,gn                    10.88%
LeasEs& Renbls                                          53,585               810,6i6                    g.Tto;
Oher Expeneee                                           88,736               (67,000)
FurrhaaedTransportslion
                                                                                                     {n.gBoia
                        Seruice                       (156,558)              160,000                  _s7.8s?6
Purchaeed  TransporEton- ADA                         1,603,008            17,181,000
InterestHrtrense                            .                                                           8.771tr-
                                                       105,78+             1,267,000                    B.S5%
D(FENSES                                            $17,936,418          $249.7t6,976
Surplus (DefiElt)                                                                                      7.1t%
               beforEDepm. Capibl
                           &
 Cqntlbufions                                    $5,E65,441
DEptetriatlon                                    (6,476,137)
CEFltslContlbutione                               4.930,065
Inereaee(Decream)Dlsfrict
                                        -
                  in     Equliy                   4,919,369
             -
Dlgfid Equtty Endof May31, 20n4                 2?3,180,171
       Equity- Endof June10,20t14
Disfrict                                _jagJss.54a-
                                                                          GSGSg?
                                                                   512
                                                                                             PAGE7
                                ALAMEDA=CONTRACOSTATRANS]T.D]SIR I
                              COMFARISONOEACIUM
                                        MONTHSENDED
                           FORTHETWELVE '
                                          DISTEICTTOTAT




                                                                            INCREASE         P=RCENTAGF
                                          680/04            6/30/pts       (EEGEEAEH           GHANGE
RHVEXUEfr                                                                   qr {7x ?nq            1 17tL
 trqrohnv                                 $44,2?9,512       $41,056-203
 Bart Transfers                             4,803,331         4,S30,63S       (127,305)          4.5BYo
                                                                              (188,5241         -76.98%
 ConfrBct Services                             56,380           244,904
                                            2,085,F!3         1,883,313        202,500           10.75%
 Advettising                                                                                    -36.289o
 lnterestInsome                               3703n            581"228        (210,851)
                                            s,10?,1
                                                  1S          ?,368,758      2,733,3!l          115.39%
 Other lncome

        REVENUES
OPERATING                                  56,647,53?        s1,085,042      5,582,4s0

SUB€ItrIEg.                                                ,$49,82?,697
 Property Taxes                            52,607,022                        es84,325              6.01%
                                                             7,197,550       (1,610p15)         -22376/D
 Supplementary   Service/Welfare Worl<
                               to          3'Ct / rrlqF
                                                            32,409,694       (3,883,2S2)        -11.98%
 A81107                                   28,526,402
 Tran$ltbeveloPment   Acl                 46,489,635        38,806,167        9,683,468          2S.31o/o
                                                             8.291,666         (613,880)         -7.AAotL
 Fedl Assist-ADA Sei Aside/Pianning         !,trt t,I6 E
                                                                                                -42.88o16
                          &
 Fed Assisi'BusDef'/Tires Tubes/Other       61?,8ts1         1,072,489         {459,658)
                   Main!                  26,751,312        26,784,506          {33,1S4)         4.121a
 Fed Assist-Prev.
                                                                                                  N/A
 Measure"AAn                               6,759,M5                 0         6,758,045
                                                                                                  -8.710h
 Measure"8"                               20,245,5S2        22,178,308       (1,S3?,716)
 MgasutE-Co                                1,505,734         1,468,188           37,566           2.ffi10
                                                                                                 -2.36%
 State Translt Assistance                  3,077,432         3,171.728          (e3,7e6)
 ADA Paratransit  Service/Consorlium                                           7S5,431           20,78%
                                                                                                   6.03%
SUESIDI=S

REVENUE SUBSIDIES
       E                                 261,113,876       243,8s9,302      17"214,574           7.06%


EXEENSES.                                                                                        -ZIArJo
 Operator  Wages                          58,331,251       $59,6S8,166       (1,366,915)
                                                            49,026,494       (3'EE5/412)          -7.54%
 OtherWages                               45,331,081
                                          63,,2M,702        78,036,619      (14,781,911)        -18.96%
 Fringe Benefib
                                          16,931,5./6       14,055,320        2,876,256          ?A,4EOh
 Penslon  Expense                                                                                -1.33%
 Services                                 14,534,414        14,729,998         (1S5,584)
 Fuel& Lubdsants                           7,95?,385         7,481,541          470,W              6JS%
 Tires& Tubes                              1,472,411         1,3EB,gB0          103,431            7.58%
                                            662,430            E4g,2n          (188,847)        -n.Bxoh
 ofiiceFrintingSuPPlies                                                                         -Z7fibJo
 BusParE/Maint.  Supplies                  5,592,840         7,7A8,287       12,"145,4d.7)
 Ufilitiee                                 3,005,559         3,224,991         (21S,432)         s.80%
                                           4,883,693         6,839,706       (1,546.013)        -28.45%
 lnsurance                                                                                       '7.650;/o
 Taxes                                     1,693e26          1,833,562         (140,3116)
                                             591,S7S          662,1?3          rr0,144)         -10,59%
         &
 Leases RenEls                                                                                  -63.48%
 Other  Expenses                            4?2,780          1,156,8S1        F84,141)
                                             117,388           140,337         (22,949)         -16.35%
 Puruhesed               Service
            Transportation
 Purchaeed               - ADA
            TrarrsFortgtion               16,S55,305        16,378,166        577,139             3.52%
         ExDense                           1.360,g89           9?,7,278       43q,?11            46:t7%
 lntersst

EXPENSES                                 $243,093,979      $?M,141729      {21,0
Surplus(Deficlt)before & Capltal
                  Depm.                                                                        -188.9970
 Contributions                           $18,019,897       (820,248,427)    38"268,324
                                         (2S,326,S80)       (22,986,793)    (6,339,587)          27.58%
Depreciation                                                                                     -5.590/6
      ConFibutions
Caplial
                         Equlty
               in Districi
lncrease(Decrearc)
                                         Gs#s?i$
                    ALAMEDA _ CONTRA COSTA
                       TRANSIT DISTRICT

              F"f 2003-04
                        Year-End FinancialPerformance
                              Report




Table of Contents                                                  ^ _*_
                                                                   Pnoe




          and
Revenue Expense         Summary AlamedaCountySpecial
                              by                   Transit
          D
 Se r vi ce i stri cts.                                      ..........99




                                                            Attachment 6
                           and
                    Revenue Expense   SummarybyAlamedaCountySpecialTransit
                          Districts FY 2003-04
                    Service



                                    515
                                  AI.AilSIA-EINIRA TRAN$IT
                                                   COSTA        DISTHICT
                                   NE{EMIE EXPEiITE
                                            AIID         BY SERVICE
                                                                 AREA
                                 ME THE TII'E.YE
                                               IIIIIIITIS     JUNE
                                                        EIilDED 30.2tIII4


                                                                                           Allocrtion
                                           srs0 tl         sTspd2            TIITAL                   Hrf-
                                                                                          Msthodoloov #
 HEyEdltEs,-

  Frnbor                                     4l,BUl,lP        92,083,108 ${ts,904.300 fi)                A
  lltherTransitFErEE                            $?5.2t1             0       325,2t2 ll0l
  gan TrEnsleffi                                                                                         B
                                              4,t/5,4!g         w,s02     4.803.331 l3l                  E
  Conraci $ervicEs                              UE.J4,              0        86.380 {r0)                 D
  Advertising                                 r,B3?.Ell        ?53,802 zcs19t3
  li.-E'+   I^AiE.
                                                                                     tzt                 E
                                              33il.54S           SS,BZB         g7[,g?l      t6l         F
  0ther
      lncome                                 454Zlq             559.s87       5,t02"tls     ll4l         s
 OPEBATINE
       HEVENUES                             53,48ZgtE
                                                    _         3.t64.5.?7     58,847.53?

 flBHNES
  Pmpaty Trras                              4l,8ftzlgB       10,804,824      52807,0:?    17)            H
              $eruice
  Supplunantrry                              5,485.855          r2l,BE0       5.587,335 {141             I
      Tar
  Seles lABll07l                            2S,S2t$2                 0       2S,525,402 tt0l             I
      Tar
  Sahs TDA                                  37.S8r,27S        8,50&359       46,493,635 ll2l             K
                 . ADA fuide
       AssistafiEa SEr
  Fedgral                                    7,23S,9t4         398672         7,836,586 l8l          I    F
  Fderal
       AssistsnEe- 0thEfs                   25,t90,9r5        1,714,428      2?,4115.343 n4)             M
  MeesurcAA                                  r,754045                tl       6,758,045 ln               N
 Mesnre  B                                  18,722,450        1.s23,14:l     20.?45.593 l11l             tl
 Mearute C                                   I.sffi,n4               0        1,505,734 (r0)             0
 ADA Paratransit
               SEilicc                       4154,trffi        473.153        4,F272tE    l8l            P
 Dumbsrton nEfirtursement                            0       l.ll8J70         r,il8.?70  lto)            0
 StrteTransit
            Assistrncr                       489!.5m _._       378,87?        3,877,432 15)
suEslDtE$                                  t80itg0.2t{      25.034.400 2ll5.tB4.B14
   HEVENUES
TOTAL   & SUBSIIIIS                        234.033.1t9      ?8,r99,027 1tu?32.148
EXPENSFS:

 0peratorWages                             5l,g4s5m          6,381,680 58.381_?50           Ft        s
 olhErWage$                                3s,815,t85        5,515,897 45.331,082           tzl       T
ftinge Bmefits                             55,985"954        7,2t8.748  H,244.792          llsl       T
hnsion  Erpsnsts                           r4,s8g,zsB        1.s43.278. 16,s3t.578         N3L       T
sdiiiEEE                                   te7H,B63          1.788,551 14,534414           t?t      wl
     &
FUEILubriEEnts                              6.984,737          s87,848   7.s52385          H        rl|z
Tms& Tubss                                  1,2s3.248          r7g.rHt   7,47U12           El       uflt
0flirefPrinting
             Suppli*                         58l.U28            80.805     t6e430          l2l      |/ll4
BmPerrlMrint.  Suppli*                      4.gle30r           Eg0,t38   5,5S2840          BI       W5
Uliltiss                                    effi&84t           385,717   3,00855s          l2l      tl|l6
l&urance                                    +a,qfr             5g5,4SE   +Bsg.Bgg          lzl      trrT
Trrps                                       It87,r94           206.032   I,ES3,2?6         l2l      ul8
h*et & Bantals                               5ls,gfi            7LEJ2      tg1,s79         l2l      lryS
0therfuenm                                   3713il             51,440     4n751           lzl     ttt'rl]
PuEhlsed             Ssruie
          TrsnEportstion                                     r,235.858   1.235,5'58        n0)       u
A0A  ParatsEnsit
              SEnriEt                      t5J2l"5F[         r,793,75t  t8,955,305         IBI       P
htsrEst ErpEflEe                            I,lg7x54           183.035   1,380,s8s         tgl       v
D4rEiirtiorl                         .     25,757.9S         3.589.441 29.326.380          P}
TOTAI
    EXPENSES                              240,770,948       3e767.BBl       un,538,E?g
        (lossl
ilh hrome        capital
             belon    contrlbtiru          f6,737,8301      14,588.6541 nlJ08,4S4)
                 . Fedenllocal
tepltilContiburi0nr    &                   Bl.zt8,DtB       4,324,885       35,542,888     t2l
     lN NFI
CHAI'IEE ASSETS                           24,480,174




                                                               000$39
                                                                      517
          ALAh4EDA{ONTRA COSTA TRJ].ISITDISTRICT
           REVENI,]EANDE)GENSE SERVICE
                              EY          AREA
         FORTIIE TWEL\E MONTITS
                              ENDED  JTINE 30,2OO4
      ALLOCATIONIIilETHoDoLoGY DESCRJPTION
                                         IEGEND



 Fuebox revenues aiiocat*d
                  arre
 route operated a distict as recordedby the GFI system. Estimated
               by                                                reve1ues
 consistof cashcollectsdon a routeo
                                  plus the impacttf estimated
                                                            reveilres
 relatedto passes ticlcels_
                atrd       used on-tharseme  routg.
 Thisrevenue/expense item ir aU
                  line
pro'ratashareof sEnrice
                      hours andservice  miles. Eachdisfrict'sallocation
percenb.ge calcrrlared
          is          using the fottowing formr:Ia:

(district svc. hoursltotel svc. hours) * (district
                                                   svc.mlles/total svc.miles)


Bart ftnsfer revenue allocated on
                      is
of farebox revenlr-es calcrlated utrder(l) above.
                     as
Actual operatorpayper g*othe
its pro-rata shareof scheduledoperator asrecord.ed, the ors 370
                                      pay         by

Statetansit assistance   revenuesatr .llo
lata-share of "quaiiffing revenues"which arpdefined. the Disfrict to include
                                                    by
the followiag; propertytaxeso   Measue AA revenues, hieasureB reveuues,
Measurec revenues"     farebox revexrues Dumbarton
                                         and         reimbursement
revenues.
Iatgrestincome is allocatedto each
revenues  and subsidies,  excluding interestincome.
Propertytaxesareallocatedto eachdisfr$
         to the Distictby Alaqeda andConfiaCosta
ADAparafransitsenrice
                    revtrtrues ixpros
                             aoA
based its pro-rata
    on           share ridership
                      of        arreported theDistrictby its
                                         to
Iaterestexperuie allocatedto eachdi
                  is
E4llsnses,excludingiuterestelmense.
Ailocatron ot trls reyEnrJ? elcptrnse ite,m not necessary it is
                          or        linE   is           as
associatodsolelywitb 3 singledistiet.
MeasureB reve,rues   were allocatedbetwe
mEthodologies.For thr old MeasureB revenues allocatef usingthe
                                              are
formulain (2) above. subsequent May 31,2002,
                                to              MeasueB reven'es    are
based therevised
     on            legislation,
                              \Mhich allocates specific
                                             B        pcrtionof thatotal
revenuesreceived fron eachdisfrict.
TDA reyenues ailocate4lq
              are            r4_chdistiq!


                         88#s*3
                               518
       reported theDistict by theMetropolitan
               to                           Transportation
                                                        co*missibn
(13)   Fringe benefits pension
                     and        expenses allocited
                                       are       usingthesum oieacl
       DisfricJ's ratashare operator's
                pro*         of        wages andotherwagesdivided the
                                                                by
       sum oftotal operatorr{aggland wages.
                                   other
(14)   This revenueor expense item is allocatedto the diitirt ix,frtbich
                              line                                      ntch
                  prqvided,or if distiet wide,usingmethodolosv above.
       services.af,e                                           (z)




                                  ch#ss.+i"
                                    s19
                   ALAMEDA - CONTRA COSTA
                      TRANSIT I}ISTRICT

            FY 2003-04 Year-End FinancialPerformance
                            Report




Tabteof Contents                                       -                  PasE




Paratransit
         Service               Statements
               InternalFinancial                                      '.....102




                                                                  Attachment 7
                                  ParatransitService Internal Financial Statement
                                    for the Year Ended June 30, 2004




                                  521
t



          FARATHAIU$$T   SERVilGES
          FIFJAI"+ STATEMI.JTS
                CIAI.       E
    FffiR TI-IETVVELVE MfiISTf;j$
                                EISDEffi
               {PRELIMTNARY)
              J[-lf\dE ?004
                     30,


t




o               e'$#f+3
                        (PAP,ATF,ANSTTsEVf
                                     cEE
                          FINANCIAL
                                  ETATFMENTS
                           -nABLE
                                 oF CONTFTrITS




                                                 PAGHNO.
Ealance   -
      Sheei lssets
                                                       {
                                                       I




Falance   -
      Sheet Liabiiities Capital
                     and     .
              - District
Revenue Expenses
      &                Total(year_To_Date)
                                                       o
Comparison Revenue Expenses,
        of       &        yeer-to_Date
2004vs.2003.,..
                                                   t

              * Disbict
Revenue Expenses
      &               Totat
                          (Month)                  5




                          ss{ifs3
                                  524
                                                                    PAGtr''

                                        PARATF.ANSITSERVICES
                                          BALANCE SHEET
                                           JU|{E 2004
                                                30,

                                                aqtrtrTe
                                                ]!-vG   I   U




       CunentAssets:

         Cashand CashEquiuaients
         lnvestnnents                                                                $0
                                                                                      U

       Receivables

       Federaland $tateCapitalGranb
       FederalOperafingAssistance                                                  0
       Due(to)ffromA/C Transit                                                     0
       OtherReceivables of Reserue)                                           1,919,9r/
                       {Net                                                    716,205
      Materials Sunnlies
              and
                                                                                     0
      Rrenaid
           Expanses
I                                                                                    0
      TotalGunent Assets
                                                                -         ?,536.082
      Unamortked  Discount Certificates
                         on
      of Participation

     Deferred
            Compensafion


     Froperiy,
             Plantand Equipment Cssf:
                             et

      Land
      Buildings,
               Strucfures lmprovements
                        anrJ                                                      0
      Revenue  Eguipment                                                          0
      Shop,Ofiice,Service Other
                        and
                                                                                  0
                               Equipment
      Acquisitions Frogress
                 in                                                               0
                                                                                  0
     Toial Before Accurnulated
                             Depreciaiion                                        n
     Less:
         Accumulated
                   Depreciation
                                                                                 0
^Total    Fropefi, FlantandEquipment
--
      TotalAsseLq
                                                                       $2.536.082
                                            0s+g*'t2 5
                                                  5
                                                           FAEE2
                                   PARATRANST
                                            SERVIC=S
                                        EALANCE
                                              SHEET
                                         JUNE 20tr4
                                            s0.

                                         LABILT]-IES
   Cunent
        Liabilities;

    AccounhPayable
    Saiaries,
            Wages, Vecaiions SickLeave
                           &                                       $3,098
   Hnnlr
   HHSA
           4..^r*t-tr
           LJVE'I IJI E:IIT                                        76,046
   Other Liabilities                                                   0
   Dueto/(frnm)AC Transit                                              0
   NoiesPayable- Rans                                                 0
                  -
   NntesPay'46;u Cops- .S/l-Fortion                                   0
   GapihlLease Obligation-,S/Tportion                                 0
   Defened Revenue                                                    0
  Self-lnsuran Reserves:
             ce                                                       0
  FublicLiabltityandpropertyDamage
  Workers' Eornpensation                                        5?9,000
                                                       -        ?99.000
  TotalCurrent Liabiliiies
                                                                907JM
 LongTerm Liabiiiiies:
  Defened Gompensation
  EarlyRetirement                                                   0
  AccruedUnfundedFension   Costs                                    0
  NotesFayable - UT portion                                         0
 Capital                -
        Lease Obligation UT                                         0
 Dueto1(frorn)FinancingCorp,                                        0
                                                                    0
     Long TermLiablliiies
 Total

    TotalLiabitiiies
                                                               907,144
                                        CAPI-.rAL
District
       Equity:
 Designated
 Non-designated
   $uFTotal
ContributedCapiial:
 Federal Granh
 ShteGrants                                                        0
Locaf TransportafionFunds                                          0
                                                                   0
  'Total
       Capital
                                                             1,629,938
 Total
     Liabillties Caottal
               and
                                                            $2,536,08?

                                    Gsfigc5
                                               526
                                                                                                                                           PAGE
                                                                                                                                              3




I                                                                                                                         % DFYTD 10027%

                                                                                                                                          YTD96
                                          YEAHJO-DATE                                                                                   OFEUDCE]'
        RFVENUES;                                                                                  BUDGFI                                EXFENDED
         Farebox                                                         ibu
        Cor,,traci Service
                 Br.s                                    /   hti       air
                                                                                                                $0                             I\UA
                                                         +,1' | ,t+tEc
        BeriTrEnsiers                                                                                      4,011,?98                           trE BOot
                                                                      n
        Aduertising                                                                                              0                             N/A
        interest
               lncome                                                                                                 U                        ht/A
                                                                             0                                    0                            N/A
        Otherlncome                                                          0                                    0                            N/A
       OPERATING
               REVENUES

      SUESIDIES:
       Property
              Te,res                                                     o               p                  N               /                 A
       SupplernenFrySenrice                                              o               6                  N               /                 A
      A81107                                                             o               o                  N               /                 A
      Translt
            DweloFmenl  A0r                                              o               g                  N               /                 A
      FedenlAssiEFnce                                                    D               p                  N                /                A
      Measure "8"                                                       .D
      Measure'fl                                                                                                 o                         N/A
                                                                        o                g                  N               l                A
      Shte TrarsitAssisbnee                                             o            s             i              l             /           A
      ADA FarahansltServiue                          .                           0           0               N                  /             A
     SUEEIDIES                                                         o                                         o,                       N/A
     REVENUESUHSIDIES
           &




     trvtrEhtcFc'
       OperatorWages                           1,584,807
       OtherWages                                                                                  1,623,054                               E7.E4yo
                                                 585,881                                            6'18,902                            101J0%
       Fringe Benefib                          1,002,4'17
       Pension                                                                                     1;332,732                              75il%
               Elpense                            95,981
       $enriEEs                                                                                      59,000                             18251%
                                                   3,865                                              4,250                               90.84%
       Fuel& Lubricnnb                          173,817
      Ttns &Tubes.                                                                                  158,n4                              fisAly,
                                                   8,115                                             12317                               4s.65%
      Ofiue/Prirting
                   Suppties                       7,372
      BUE  ParE/Maint,                                                                                I,930                               B1EE%
                     Supplies                    50,825                                              56,461
      UtlllfiEs                                                                                                                          80.029;
                                                      D                                                  D                                N/A
      inEuranEe                                 247,0D0
     Tares                                                                               .         ?s0,000                               85.17%
                                                     E5                                               2,717                                3.13%
     Leases henEls
              &                                      63
     Other                                                                                               0                               MA
            Brpenses                               (152)                                                     n
     Purchaned  Transportation
                            $ervice                                                                                                      N/A
                                                      0                                                      0                           l'llA
     Purchased              - AIJA
                Transporiation                        0                                                      0                           N'A
     Intereet Enpsnee                                .                       o       o                 .          N                 /           A
     Depreciaiion                                                  o                                         o                          l'tn
    D#ENSES                               r!5,/o/.H5ft
                                          IA    5-           AhA

                                                                                                 $4,127,197                             91.05%
    suRFLUs(DEflCrr)                           $258,?9S
    Depreciafiar0onhib.
                    Cnpiial                          0

    lncrease(Decroane)
                    ln Dlsfijct
                              Equlty           ?ET ,bD
               -
          Equity Beginning yeer
    EiEbiEt               of               1,375,63S
               -
    Dishlct
          EquftyEndof June90,?004
                                       #stzz                                                               ss#Ls6
                                                                                        FACE4
                                          PARATRANSIT
                                                   SHRVICES
                            -.                                      NSE
                            FOF THE rWEL\E MONTHSENFEDJUNE30, t004 ANE'*2003
                                                    TOJIAL
                                             DISTRICT




                                                                         INEREAEE       FEREH.fi'AEE
                                        6,ts0t04         s,ED/03        TDECREASE]       CHANGE
  HH\'FNI   IF\''
  l5ry
    Farebox                                    s0               $0             $0           N/A
   GonbattEus  Service                   4,011,255        4,24L629        (?31.365)       -5.45j6
   Bert'TrEnsiers                              0                 0              0           hI/A
   Adveriising                                 0                 0              0           hI/A
   Interest
          lncome                               0                    0          0            N/A
   Otherlnmme                                  0                    0          0            N/A
 OFERATING
         REVENUEB                        4,0'11.255       4,?42,820       (231,385)       _5,45%
  SUBSIDIEE:
   PmpertyTaxes                                0                0                0          N/A
   SupplemenEry Eervice                        0                0                D          N/A
   A81107                                      0                0                0          N/A
   TransltDevelopmsni
                    AEl                        0                0                0         N/A
   FederalAssisbnse                            0                n
                                                                                 0
                                                            '   0                          N/A
   Measure'B'                                  0                                u          N/A
   MgEsure'Cn                                 0                 0               0          l,t/A
   StateTrensft
              Assisbnoe                       ,0                                0
 . ADAPeretranslt
                                                                U                          N/A
                $ervioe                                         0               n
 SUBSIDIES

RE\ENUE SIJB$IDIES
      &




EXEEI{$ES:
 Operator  WaEEs                       1,584,807        1,716,374        (191,567)       -10.78%
 OtherWages                             sBd8El           685.?87                         .11,S4?6
 Fringe Benefib                                                           r7g,4lrB)
                                       1,002,417        1"23S,468        (231,t151)      -18.7:l%
 Pennion  Expense                        95,881           58,610           37,371        '63.8716
 Eervicee                                 3,865            1,958            1,907        97.40%
      &
 Fuel Lubdcants                         1?3,817          184,688          39,184         ?E.OB%
       &
Tiree Tubes                               6,115            I,807           (fl,tsEr)         N/A
 Ofiue/FdnffngBupplies                    7,372            9,164           (1,7S2)      .1E.ff%
Bue   Farts/Malnl
                Supplies                 50,826           24,018          28,806        111.6tr/6
lJflllHee                                   '0
                                                               0                 0           N/A
lnsurance                               247,000           4S,000         198,000        4M.08%
Tnxes                                       B5               124                        .31.4516
Leasss Renbls
         &                                  g3                                 Fs)
                                                               0             63             NiA
Other  Expenses                           (152)               13           (185)       -128S.?3%
Pumhaeecl  Trunsportatinn
                       $Ervine               0                 n              0            .N/A
Purnhaaed              . AEA
           Transportelion                    0                 0              0             N/A
IniErBBt Expense                             t)               0               0             ll/A
Depnclaffon                                  0                0               0             N/A
H(FENSES                                757.S56

SURPLU$fDEFlCr)                     , $e5B,egg
                                            /           $?80"ffi3
Depraoioflon-Confib,
               Eaplbl

               ln
lnrease(Decreaee)Dlebist
                       EgulW

                                   ss#g6FF
                                                                                                          rAutr b
                                                  PAMTRANSITEERVICES


a                               coMtrARlsclJ oF ACTUALREVENUE =XFENSE
                                                              AND
                                         FORTHEONE MONTHFNDEDJUNE 2OD4
                                                     DISTRI0TTt).:rAL
                                                                      30
                                                                         WITHEUDGET



                                                                                         % DF\EAR                  E,EDA


                                                 IMONTHLY                                                -/0ur.lluulstr l
                                                                                                         nt  AF At thh+


                                                  TDTAL                                                    trYFFNN=N
                                                                                                           :
          RAENIJE,S:
           Fembox                                           F6
                                                              iDU                 $0                            N/A
                   Bus
           ContraEt Service                         ?iA
                                                    su!r
                                                           {/ g u
                                                              EN
                                                                             4,011,798                            O 'JODT
                                                                                                                  UrqU tO
          BariTransiers                                      0                     0                           N/A
          Adveriising                                        0                     0                           N/A
          lnErest lnspme                                     0                    0                            hJ/A
          Oiherincome                                        0                    n                            N'A

          OFERATINGREV=NUES                         ?aa 'tFa                4.011.798

          SUESIDIES:
                    -r
           Property axes                                    0                        0                         ht/A
           Supplementary  Serviae                           0                        0                         I'l/A
          4El1107                                           O           O            N           /                   A
          Tiarrslt DevelaFmentAst                           O           O            N           /                  A
          Federal  AssisEnce                                O           O            N           i                  A
          MeasureB"                                         0           0           N        /                     A
          MeasulE   "C"
                                                            O           O            N           I                  A
          SfEteTrEnsit A.EsiEE
                             nEe                            O           O           N            /                  A
          ADA PEratransitService                            0       0         .          N           /             A

     SUESIDIES                                              0                                                  hI/A

     RE\ENUE & SUBSIDIES                        . s36,150                   4,011J88                             B.3B%




    trtFtrhttr=E.
    4.:

      OperaiorWages                                140,S26                  1,8?3,0F1                             B.EB%
      OtherWages                                    51,1071                  579,90?                             .8.83%
      Fdnge  Beneflts                             {226,486)                 1,332,78!                          -16.SS%
      Pensian Expenee                               .9,518                    58,000                            16.18%
     Een,iEBE                                       . 1"285                    4"250                            30-?4%
     Fuel& Lubricenh                                16,176                   158,774                            10.1e%
     Trras &Tubes                                     1,733                   12,317                            14.870h
     Office/ftinting
                   SuppliaE                            ss0                     I,930                            11.08%
     BusPerts/Mainl  Supplies                       5,178                     58,461                             8.17%
     Ufllltie                                       . 0                            0                          hl/A
     lneumnre                                     (18,834)                   290,000                            .6,4S%
                                                                              ., '1,t7
     Taxes                                             tn4)                                                     ,824%
     Leases Renhls
             &                                           0                         o                          N/A
     OflrerE:Fenses                                    (18)                        0                          N/A
     Purchasgd TranspnrHtion
                           Seryice                      0                          0                          N/A
     Purchased             - ADA
               TrensporEfion                            0                          0                          hUA
     lnterestE*bense                                    0                          0                          hl/A
     Depreciation                                       0                          0                          N/A

    EXFENSES                                     ts18,844)              M,1?7.137                              -0,45?6

    SUR.PLUSrtrEF|CtT)                           s354,784
    EeFrEciation-Conidb,Caplbl               -*-;?6r   0

I   lncrease(Denrease)
    Diatrict
    Dlshict
                 -
           Equlty Endof May31,
                               Equliy
                      in Distict

           Equitl- Endoi June zDM
                             30,
                                 2004           \n4J44,
                                               $i1.628.S38


                                              s$ntsF
                    ALAMEDA - CONTRA COSTA
                       TRAF{SITDISTRTCT

             FY 2003- 04 Year-End FinancialPerformatrce




Table of Contents                                                     Pase




                                                                Attachment 8
                     AC TransitFinancingCorporation        FinancialStatements
                                                   Irrternal
                      for the Year EndedJune30. 2004




                                  531
I

       /frT*,^,     7     tl           -r-
      fTEffiF,IEE##
                 L#FEfrM
    C*sfmTrnyl*itilisfrict

      Fiytav,tcitt Corpfrr#-fi
               g             oru

t            Financial Statentents
        For the Tsarchte
                       MonthsEnding
                Juyre30,20A4




o                         Wth AuditAdjusEneflts
                                             Issuod
                                                  NovgmbEr 2004
                                                        tI,



               e$#1G3
                    s33
           A!.AMEDACCNT'RA
                         SSSTATR,ANSIT,
                                     DI$TRICT
                            FtNANCtNc
                                    SORFORATION
                                             (SOPS)
      STATEMENT NETA.$SETS
              OF         AVAILABLE CERTIFIOATE
                                 TO          I{OLDEP.S
                                        At June 90,Z0&[

                                                                                 Asof
                                                                              June ?0M
                                                                                  30,
      Assets:
  '
            Cash,unresticted
                                                                                   43,29t
            lnvesfunenis,
                       unrestricied
                                                                                   41,051
           NoteReceivable  ACTD-Current Fortion                                  1,105,000
           InterestReceivabl+AGTD
                                                                                  360,222
           Intercompany-ACTD
                     Total Current
                                 Assets                                         1,549.563
          Cash & Invesfnents,restricted debtseruice
                                      for                                       1,S74,539
          Note ReceivaHe"RCf+Long termportion
                                                                             20,395,000
          UnamortizedIntercornpany
                                 defenal                                     (1,607,597)
          Note Reseivable,
                         net                                       --r*
                                                                             18,m,403
                                                                          $$$$$
                                                                   %



          Unamortized
                    lssuance
                           Costs
                                                                                 507,389
         TotalAssets                                              -
                                                                       $ 2e,909,973
                                                                  tuh-i'j-r



Liabilities:

         Acsountspayable
         InterestPayable
                                                                                380.224
         Gertlficates participation-cunent
                    of                   portion
                                                                ---_           1,105.000
                    TotalCunentLiabilliies
                                                                       s       1,465,224
        FundsHetd ACTD
                    for
                                                                               ?,013,1S4
        Certificaiesof participation-Long portion
                                         term                                 20,395,000
        Unamortrzed  defenedarnount   fromreftrndino                            (531,563)
        Total Liabilities                                    -:--_
                                                               $
                                                             ---- 23,331.955

        Net assetsavailable cartificate
                          for         holders                ----
                                                               $               (522.s821
                                                             E_-l-j-




                                           00#14c
                                                       534
 ALAMEDASONTRACOSTATRANSITilISTRICT
                   FtNANGIhtG
                            CORFCF,AT'| {GOFS}
                                    ON
                  STATEMENT CHANGES NETASSETS
                          OF      IN
                      Forthe Twelve MonthsEnded
                                              June S0.2004




                                                                     Twelve
                                                                          Months
                                                                     Ending 30
                                                                          June

 Addiiions netassets
         to        athibuted
                           to:

        lntqrestFromACTDto Fin Corp                              $       779,722
        Amortization Deferral
                    on                                           $       t 14,149
        lnvestment Income                                        h

                                                                 s        'u/,c/o
                                                                          A+   FEF




          ,:'
          ,, TotalAddiiions                                  T-ffi6
          i


         from
Deductions netassets        is:
                   attributed
          l

       Interest Ceriifrcate
              to          Holders                            $           867,?2+
     . Interest
              Expense:amortizaiion netgainftom defeasence
                                  of                         $            37,742
       Amortization COFSissuance
                  of              costs                      $            36,030

                  TotalDeduciions                            $           940.9s6
              '
                  Netincrease
                            {decrease)                                   50,450


Net assets       for         Holders:
         available Certificate
        Beginning period
                of                                           $          (573,432)

Net assets       for         Holders:
         available Certificate
        Endof period                                         $          t522,982)




                               #rJ{}t11
                                         535
AC Transit
6-year trend ratios
June 30, 2004



                                        Net assels


     240,000

     230,000

     220,000

     210,000
                                                                         Nel assets |
     200,000

      190,000

     180,000
                1999   2000      2001      2002       2003   2004




                        1999        2000             2001     2002      2003       2004
Net assels             199,907     230,019        213,884    209,945   204,667    229,204
                                                                                                                          1 I




AC Transit
6-year trend ratios
June 30, 2004




      70,000

      60,000

      50,000                                                                                                     D1999

      40,000                                                                                                     ■ 2000
                                                                                                                 □ 2001
      30,000
                                                                                                                 □ 2002
      20,000
                                                                                                                 ■ 2003
      10,000
                                                                                                                 □ 2004

               Pas5er>3eHa>es Contracl sencices   Propertytasea   Sales La*          Federal inrttfs   Stale l




                    1999            annci             2001          2002      2003   2004
AC Transit
6-year trend ratios
June 30, 2004



   600,000

   500,000

   400,000

   300,000                                                              Capital Assets
                                                                        Depreciation
   200,000

   100,000



                 1999   2000     2001      2002   2003      2004




                          1999          2000      2001        2002       2003          2004

Capital Assets           360,377        408.212   426,255     445,428   491,733     504,111

Depreciation             174.039        209.668   222,983     245.391   263,393     242,081
AC Transit
6-year trend ratios
June 30, 2004




                                                                          □ Unrestricted cash and
                                                                              investments

                                                                          ■ Current liabilities




                      1999   2000   2001      2002     2003     2004




                                           1999      200Q     2001     2002       2003        2004
Unrestricted cash and investments          63,607    70,363   50,350   61,233     29,223      22,282
Current liabilities                        20,125    37,618   37r141   49,369     61,815      80,263
AC Transit
6-year trend ratios
June 30, 2004



  300.000

  250,000

  200.000

  150,000                                              D Operating Revenues

                                                       ■ Operating Expenses
  100,000

   50,000



            1999   2000   2001   2002   2003   2004




                     1999        2000      2001       2002     2003      2004
AC Transit
6-year trend ratios
June 30, 2004



  300,000

  250,000

  200.000 \

  150,000                                                     I Capital assets
                                                              I Debt
  100,000

   50,000


              1999   2000      2001    2002   2003   2004




                        1999          2000    2001     2002     2003        2004
AC Transit
3-year trend ratios
June 30, 2004



                         Components of Net assets


       300000

       250000
                                                                              in cap
       200000
                                                                     assets
       150000                                                        Restricted

       100000
                                                                     Unrestricted
        50000

               0 -                     un


        -50000              2002       2003        2004

                           Fiscal Year ended




Net assets                  2002            2003          2004
invested in cap assets      177,422         206,890       241,579
Restricted                     2,013          2,013         2,013
Unrestricted                 30,510           (4,236)     (14,388)

				
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