City of Santa Rosa CALIFORNIA

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					City of Santa Rosa
CALIFORNIA
"I firmly believe, from what I have seen, that this is the chosen spot of all this earth as far as Nature is concerned."
                                                                                           - Luther Burbank 1849-1926




                    COMPREHENSIVE ANNUAL FINANCIAL REPORT
                             FOR THE YEAR ENDED
                               JUNE 30, 2007
      CITY OF SANTA ROSA

    SANTA ROSA, CALIFORNIA

    COMPREHENSIVE ANNUAL
      FINANCIAL REPORT


FOR THE YEAR ENDED JUNE 30, 2007




            Prepared by

       Department of Finance
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INTRODUCTORY SECTION
                                                   CITY OF SANTA ROSA
                                          COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                                                  TABLE OF CONTENTS
                                                                     JUNE 30, 2007

                                                                                                                                           Statement/
                                                                                                                                           Schedule/
                                                                                                                                           Table No.                     Page
Introductory Section:

     Table of Contents......................................................................................................................... ...........................i
     Letter of Transmittal .................................................................................................................... ..........................v
     GFOA Certificate of Achievement for Excellence in Financial Reporting ................................. .........................xi
     City Council, Executive Staff, Boards and Commissions ........................................................... ........................xii
     Organization Chart....................................................................................................................... .......................xiii

Financial Section:

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

     Management’s Discussion and Analysis (Required Supplementary Information) ...................... ..........................3

     Basic Financial Statements:
     Government-wide Financial Statements:
      Statement of Net Assets................................................................................................................ A-1.............. 21
      Statement of Activities.................................................................................................................. A-2.............. 22

     Governmental Funds:
      Balance Sheet................................................................................................................................ A-3..............   24
      Reconciliation of the Governmental Funds
       Balance Sheet to the Statement of Net Assets ............................................................................ A-4..............                      25
      Statement of Revenues, Expenditures and Changes in Fund Balances......................................... A-5..............                                       26
      Reconciliation of the Governmental Funds Statement of Revenues,
       Expenditures and Changes in Fund Balances to the Statement of Activities.............................. A-6..............                                         27
     Proprietary Funds:
      Statement of Fund Net Assets....................................................................................................... A-7.............. 28
      Statement of Revenues, Expenses and
       Changes in Fund Net Assets ....................................................................................................... A-8.............. 29
      Statement of Cash Flows .............................................................................................................. A-9.............. 30

     Agency Funds:
      Statement of Fiduciary Assets and Liabilities............................................................................ A-10...............32

     Notes to the Basic Financial Statements ............................................................................................... ...............33

     Other Required Supplementary Information
     General Fund:
      Schedule of Revenues – Budget and Actual (Budget Basis) ........................................................ B-1...............61
      Schedule of Expenditures and Encumbrances – Budget and Actual (Budget Basis).................... B-2...............62
      Note to Required Supplementary Information.................................................................................... ...............65




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                                             CITY OF SANTA ROSA
                                    COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                                           TABLE OF CONTENTS
                                                              JUNE 30, 2007

                                                                                                                                  Statement/
                                                                                                                                  Schedule/
                                                                                                                                  Table No.                    Page

Other Supplementary Information
Nonmajor Governmental Funds ........................................................................................................... ...............66
 Combining Balance Sheet............................................................................................................. C-1...............70
 Combining Statement of Revenues, Expenditures and
  Changes in Fund Balances.......................................................................................................... C-2...............76
 Schedule of Revenues, Expenditures, Encumbrances and
  Changes in Fund Balances – Budget and Actual (Budget Basis):
   Special Revenue Funds:
    Homeless Shelter Operations.................................................................................................. C-3...............82
    Federal ISTEA ........................................................................................................................ C-4...............83
    Federal Narcotics Asset Forfeiture ......................................................................................... C-5...............84
    State Narcotics Asset Forfeiture ............................................................................................. C-6...............85
    Traffic Safety .......................................................................................................................... C-7...............86
    Gas Tax................................................................................................................................... C-8...............87
    Traffic Congestion Relief ....................................................................................................... C-9...............88
    Federal Grants....................................................................................................................... C-10...............89
    State Grants........................................................................................................................... C-11...............90
    Environmental Crimes .......................................................................................................... C-12...............91
    SWCA Zone 1A.................................................................................................................... C-13...............92
    Public Facilities Improvement Fee ....................................................................................... C-14...............93
    Capital Facilities Fee ............................................................................................................ C-15...............94
    Traffic Signal Fee ................................................................................................................. C-16...............95
    Street Light Fee..................................................................................................................... C-17...............96
    Burbank Home and Gardens................................................................................................. C-18...............97
    Park Acquisition and Development ...................................................................................... C-19...............98
    AB 434.................................................................................................................................. C-20...............99
    Special Tax Districts............................................................................................................. C-21.............100
    Mobilehome Rent Stabilization ............................................................................................ C-22.............101
    Library Improvement............................................................................................................ C-23.............102
    Supplemental Law Enforcement Services ............................................................................ C-24.............103
    Law Enforcement Federal Block Grant ................................................................................ C-25.............104
    Utility Impact Fee Fund …………………………………………………………………….C-26………..105
    Southeast Area Plan Recovery Fee ....................................................................................... C-27.............106
    Southeast Area Development Impact Fee ............................................................................. C-28.............107
    Southwest Area Recovery Fee .............................................................................................. C-29.............108
    Southwest Area Development Impact Fee............................................................................ C-30.............109
    Sidewalk Program – Owner Contribution............................................................................. C-31.............110
    Redevelopment Contribution ................................................................................................ C-32.............111
    Measure M Special Revenue Fund ....................................................................................... C-33.............112
    Economic Development Special Revenue Fund ................................................................... C-34.............113
    Neighborhood Revitalization Program ................................................................................. C-35.............114
    Change For Kids ................................................................................................................... C-36.............115
    Brownfields Grant Special Revenue .................................................................................... C-37.............116
    Measure O Special Revenue ................................................................................................ C-38.............117
    Administrative Hearing Special Revenue ............................................................................ C-39.............118
    Downtown BIA Fund ........................................................................................................... C-40.............119
    2007 Building Acquisition Certificates of Participating Debt Service Fund ....................... C-41.............120




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                                                  CITY OF SANTA ROSA
                                         COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                                                 TABLE OF CONTENTS
                                                                    JUNE 30, 2007

                                                                                                                                         Statement/
                                                                                                                                         Schedule/
                                                                                                                                         Table No.                     Page


     Nonmajor Enterprise Funds .................................................................................................................. .............121
      Combining Statement of Fund Net Assets.................................................................................... D-1.............122
      Combining Statement of Revenues, Expenses and
       Changes in Fund Net Assets ....................................................................................................... D-2.............123
      Combining Statement of Cash Flows ........................................................................................... D-3.............124
      All Enterprise Funds
       Combining Schedule of Capital Assets and Depreciation .......................................................... D-4.............126
      Schedule of Revenues, Expenses and Transfers – Wastewater Utility Fund ................................ D-5.............128

     Internal Service Funds .......................................................................................................................... ............. 129
      Combining Statement of Fund Net Assets.................................................................................... E-1.............130
      Combining Statement of Revenues, Expenses and
        Changes in Fund Net Assets ....................................................................................................... E-2.............131
      Combining Statement of Cash Flows ........................................................................................... E-3.............132
      Combining Schedule of Capital Assets and Depreciation ............................................................ E-4.............134

     Agency Funds ....................................................................................................................................... .............136
      Combining Statement of Changes in Assets and Liabilities ..........................................................F-1.............137

Statistical Section (Unaudited):

      Net Assets by Component – Last Six Fiscal Years........................................................................... 1.............143
      Changes in Net Assets – Last Six Fiscal Years ................................................................................ 2.............144
      Fund Balances, Governmental Funds – Last Six Fiscal Years ......................................................... 3.............146
      Changes in Fund Balances, Governmental Funds – Last Six Fiscal Years....................................... 4.............147
      Tax Revenues by Source, Governmental Funds – Last Six Fiscal Years ......................................... 5.............148
      Assessed Value and Estimated Actual Value of Taxable Property
       Last Ten Fiscal Years ..................................................................................................................... 6.............149
      Direct and Overlapping Property Tax Rates – Last Six Fiscal Years ............................................... 7.............150
      Principal Property Tax Payers – Current Year and Nine Years Ago ................................................ 8.............151
      Property Tax Levies and Collections – Last Ten Fiscal Years ......................................................... 9.............152
      Taxable Sales by Category – Last Ten Fiscal Years....................................................................... 10.............153
      Direct and Overlapping Sales Tax Rates – Last Ten Fiscal Years.................................................. 11.............154
      Sales Tax Revenue Payers by Industry – Current Year and Nine Years Ago................................. 12.............155
      Water and Wastewater Revenue by Source – Last Ten Fiscal Years ............................................. 13.............156
      Ratios of Outstanding Debt by Type – Last Six Fiscal Years......................................................... 14.............157
      Direct and Overlapping Governmental Activities Debt.................................................................. 15.............158
      Legal Debt Margin Information – Last Ten Fiscal Years ............................................................... 16.............159
      Pledged-Revenue Coverage – Last Ten Fiscal Years ..................................................................... 17.............160
      Demographic and Economic Statistics – Last Ten Fiscal Years..................................................... 18.............161
      Principal Employers – Current Year and Nine Years Ago ............................................................. 19.............162
      Full-Time-Equivalent City Government Employers by Function/Program
       Last Ten Fiscal Years ................................................................................................................... 20.............163
      Operating Indicators by Function/Program – Last Ten Fiscal Years.............................................. 21.............164
      Capital Asset Statistics by Function/Program – Last Ten Fiscal Years .......................................... 22.............165




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xi
                                         CITY OF SANTA ROSA

                                              JUNE 30, 2007


                                             CITY COUNCIL


                                              Bob Blanchard
                                                 Mayor

Lee Pierce                            Jane Bender                          Susan Gorin
Vice Mayor                            Council Member                       Council Member

Michael Martini                       Veronica Jacobi                      John Sawyer
Council Member                        Council Member                       Council Member


                                           EXECUTIVE STAFF

Jeffrey C. Kolin                                               Brien J. Farrell
City Manager                                                   City Attorney

Greg Scoles                                                    Karen S. Walker
Deputy City Manager                                            Director of Human Resources

Marc R. Richardson                                             Edwin Flint
Assistant City Manager/                                        Police Chief
Director of Recreation and Parks

Michael S. Frank                                               Richard A. Moshier
Assistant City Manager/                                        Director of Public Works
Director of Administrative Services

Chuck Regalia                                                  Robert E. Dunlavey
Director of Community Development                              Director of Transit and Parking

Bruce Varner                                                   Miles A. Ferris
Fire Chief                                                     Director of Utilities

David E. Gouin                                                 Patricia M. Fruiht
Director of Economic Development and Housing                   Assistant to the City Manager

Wayne G. Goldberg                                              David M. Heath
Director of Advance Planning and Public Policy                 Director of Finance



                                      BOARDS AND COMMISSIONS

Board of Community Services                               Board of Public Utilities
Design Review Board                                       Cultural Heritage Board
Personnel Board                                           Luther Burbank Home & Gardens Board
Planning Commission                                       Housing Authority
Building Regulation Appeals Board                         Redevelopment Agency
Community Advisory Board



                                                    xii
                              THE CITY OF SANTA ROSA
                               ORGANIZATION CHART




                                     PEOPLE OF SANTA ROSA




                                          CITY COUNCIL




 BOARDS &                                  CITY MANAGER         REDEVELOPMENT              HOUSING
                    CITY ATTORNEY
COMMISSIONS                                 CITY CLERK             AGENCY                  ATHORITY




                                                                                  ECONOMIC
                                 HUMAN                    TRANSIT &
     PUBLIC WORKS                                                               DEVELOPMENT &
                               RESOURCES                   PARKING
                                                                                   HOUSING




                              ADMINISTRATIVE            COMMUNITY
        UTILITIES                                                                   FIRE
                                SERVICES               DEVELOPMENT




                                           RECREATION &
                     POLICE                                           FINANCE
                                              PARKS




                                                xiii
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FINANCIAL SECTION
                                      CITY OF SANTA ROSA

                          MANAGEMENT’S DISCUSSION AND ANALYSIS
                                      JUNE 30, 2007

As management of the City of Santa Rosa (City) we offer readers of the City’s financial
statements this overview and analysis of the City’s financial activities for the fiscal year ended
June 30, 2007. We encourage readers to consider the information presented here in conjunction
with additional information that we have furnished in our letter of transmittal and the City’s
basic financial statements, which follow this section. All amounts, unless otherwise indicated,
are expressed in thousands of dollars.

FINANCIAL HIGHLIGHTS

   •   The assets of the City of Santa Rosa exceeded liabilities by $772,605 (net assets). Of this
       amount, $169,227 (unrestricted net assets) may be used to meet the City’s ongoing
       obligations to citizens and creditors, $82,294 is restricted for specific purposes (restricted
       net assets), and $521,084 is invested in capital assets, net of related debt.
   •   The City’s total net assets increased by $32,580 during the fiscal year. Most of this
       increase was due to receipt of one-time grants ($6 million), higher development impact
       mitigation charges ($4 million) and unrestricted investment income ($5.5 million).
   •   Government-wide revenues increased by 8 percent. Increases in operating grants
       ($6,105), development impact mitigation charges ($3,907), unrestricted investment
       income ($5,509), and major tax sources ($4,422) offset a year-over-year decline in capital
       grants and contributions of ($2,126).
   •   Expenses increased by $24,653 or 10 percent above the prior year. Major increases were
       attributable to public safety related programs associated with voter approved revenues
       and annual increases in employee compensation programs. Business type activity
       expenses increased by 14 percent and governmental activity expenses increased by 8
       percent.
   •   The City’s governmental funds reported combined ending fund balances of $129,790, an
       increase of $14,049 from the prior year. This was primarily due to the issuance of $9,960
       of certificates of participation in June to fund building acquisitions, year over year
       increased development impact mitigation charges and higher investment returns.
   •   The General Fund unreserved fund balance, was $29,268, or 23.3 percent of total General
       Fund expenditures. Of this amount $21,117 has been designated by the City Council for
       contingencies and $3,935 for future expenditures. The remaining unreserved balance of
       $4,216 is designated for appropriations.
   •   The City’s total long-term debt decreased by $2,061 in comparison with the prior year.
       The decrease resulted primarily due to repayment of the Wastewater enterprise’s State
       revolving loans. This decrease was partially offset by the sale of $9,960 in certificates of
       participation as well as the refunding of four series of Wastewater bonds.


OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the City’s basic financial
statements. The City’s basic financial statements comprise three components 1) Government-
wide financial statements; 2) Fund financial statements and 3) Notes to the basic financial
                                                 3
                                      CITY OF SANTA ROSA

                          MANAGEMENT’S DISCUSSION AND ANALYSIS
                                      JUNE 30, 2007

statements. This report also contains other supplementary information in addition to the basic
financial statements themselves.

Government-wide Financial Statements are designed to provide readers with a broad overview
of City finances, in a manner similar to a private-sector business.

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

The statement of activities presents information showing how the City’s net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows
(i.e., accrual basis of accounting). Thus, revenues and expenses are reported in this statement for
some items that will result in cash flows in future fiscal periods, such as revenues pertaining to
uncollected taxes and expenses pertaining to earned but unused vacation.

Both of these government-wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a portion of their costs through user fees and
charges (business-type activities). The governmental activities of the City include general
government, public safety, public works, parks and recreation, and housing opportunity and
other. The business-type activities of the City include a golf course, transit service, storm water
operations, water utility, wastewater utility and parking facilities.

The government-wide financial statements include the City (known as the primary government),
along with two legally separate component units, the Housing Authority and Redevelopment
Agency, for which the City is financially accountable. Financial information for these
component units is reported separately from the financial information presented for the primary
government itself.

Fund Financial Statements are designed to report information about groupings of related
accounts, which are used to maintain control over resources that have been segregated for
specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate finance-related legal compliance. All of the funds of the
City can be divided into three categories: governmental funds, proprietary funds and fiduciary
funds.

Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental funds financial statements focus on near-
term inflows and outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in determining what
financial resources are available in the near future to finance the City’s programs.

The governmental funds focus is narrower than that of the government-wide financial
                                                 4
                                      CITY OF SANTA ROSA

                          MANAGEMENT’S DISCUSSION AND ANALYSIS
                                      JUNE 30, 2007

statements. It is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
This comparison facilitates a better understanding of the long-term impact associated with the
government’s near-term financing decisions. The governmental funds balance sheet and the
governmental funds statement of revenues, expenditures and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental
activities.

The City maintains several individual governmental funds organized according to their type
(special revenue, debt service, and capital projects). Information is presented separately in the
governmental funds balance sheet and in the governmental funds statement of revenues,
expenditures and changes in fund balances for the General Fund and the Capital Projects Fund,
which are considered to be major funds. Data from the remaining nonmajor governmental funds
are combined into a single, aggregated presentation. Individual fund data for each of these
nonmajor governmental funds is provided in the form of combining statements on C-1 through
C-2.

Proprietary funds are generally used to account for services for which the City charges
customers – either outside customers, or internal units of departments of the City. Proprietary
funds provide the same type of information as shown in the government-wide financial
statements, only in more detail. The City maintains the following two types of proprietary funds:

•   Enterprise funds are used to report the same functions presented as business-type activities in
    the government-wide financial statements. The City uses enterprise funds to account for the
    water utility, wastewater utility, parking, municipal transit, storm water, and golf funds.

•   Internal service funds are used to report activities that provide supplies and services for
    certain City programs and activities. The City uses internal service funds to account for
    equipment maintenance and replacement, insurance programs, information services, and
    pension benefits on a cost-reimbursement basis. Because these services predominantly
    benefit governmental rather than business-type functions, they have been included within
    governmental activities in the government-wide financial statements. The internal service
    funds are combined into a single, aggregated presentation in the proprietary fund financial
    statements. Individual fund data for the internal service funds is provided in the form of
    combining statements on E-1 through E-4.

Fiduciary funds are used to account for resources held for the benefit of parties outside the City.
Since the resources of these funds are not available to support the City’s own programs, they are
not reflected in the government-wide financial statements. The accounting used for fiduciary
funds is much like that used for proprietary funds.
Notes to the Basic Financial Statements provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.

Other Required Supplementary Information is presented concerning the City’s General Fund
budgetary schedule. The City adopts an annual budget for its General Fund. A budgetary
comparison schedule has been provided for the General Fund to demonstrate compliance with
this budget.
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                                             CITY OF SANTA ROSA

                             MANAGEMENT’S DISCUSSION AND ANALYSIS
                                         JUNE 30, 2007


The combining and individual fund statements and schedules referred to earlier provide
information for non-major governmental, enterprise, internal service, and agency funds and are
presented immediately following the other required supplementary information.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Analysis of Net Assets – As noted earlier, net assets may serve as a useful indicator of a
government’s financial position. For the City, assets exceeded liabilities by $773 million at the
close of the current fiscal year.

                                City of Santa Rosa, California’s Net Assets


                                Governmental                       Business-type
                                     Activities                        Activities                         Total
                              2007                2006          2007                2006       2007                2006
Current and other assets     233,461          $213,545          195,615         $201,467       429,076            $415,012
Capital assets, net          289,697              278,812       527,273             515,394    816,970             794,206
  Total assets               523,158              492,357       722,888             716,861   1,246,046           1,209,218


Current and
 other liabilities            17,706               10,112        20,365              18,360     38,071              28,472
Long-term liabilities         79,768               70,404       355,602             367,027    435,370             437,431
  Total liabilities           97,474               80,516       375,967             385,387    473,441             465,903


Net assets:
 Invested in capital
    assets, net of related
    debt                     287,735              276,541       233,349             195,896    521,084             472,437
 Restricted net assets        82,205               70,360              89            25,782     82,294              96,142
 Unrestricted net assets      55,744               64,940       113,483             109,796    169,227             174,736
  Total net assets           425,684          $411,841          346,921         $331,474       772,605            $743,315




Following are the primary components of the City’s net assets:

     •    The net assets invested in capital assets (e.g. infrastructure, land, buildings,
          improvements other than buildings, construction in progress, and equipment), less any
          related debt used to acquire assets still outstanding are $521,084 (67 percent). The City
          uses these capital assets to provide services to citizens; consequently, these assets are not
          available for future spending. Although the City’s investment in its capital assets is
          reported net of related debt, it should be noted that the resources needed to repay this debt
                                                            6
                                       CITY OF SANTA ROSA

                          MANAGEMENT’S DISCUSSION AND ANALYSIS
                                      JUNE 30, 2007

       must be provided from other sources because, generally, proceeds from sale of capital
       assets are not used to liquidate these liabilities.
   •   Net assets of $82,294 (11 percent) represent resources that are subject to external
       restrictions on how they may be used. Among these amounts are $68 million restricted
       for the construction of major capital projects and $7 million restricted for public safety
       programs.
   •   The remaining net assets of $169,227 (22 percent) are unrestricted representing amounts
       that can be used to meet the City’s ongoing obligations to citizens and creditors.

At the end of the current fiscal year, the City reported positive balances in all three categories of
net assets. Net assets invested in capital, net of related debt, for both governmental and business-
type activities increased. Restricted net assets increased in governmental activities but decreased
in the business-type activities. Unrestricted net assets decreased in governmental activities but
increased in the business-type activities.




                                                  7
                                                CITY OF SANTA ROSA

                                  MANAGEMENT’S DISCUSSION AND ANALYSIS
                                              JUNE 30, 2007

The following table indicates the changes in net assets for governmental and business-type
activities:

                                 City of Santa Rosa, California’s Changes in Net Assets


                                        Governmental                   Business-Type
                                           Activities                     Activities                       Total
                                      2007            2006           2007            2006        2007                2006
 Revenues:
  Program revenues:
  Charges for services              $ 19,219      $ 23,079          $92,710        $86,122       111,929           $ 109,201
  Operating grants and
    contributions                     10,013           8,510         12,237           7,635       22,250             16,145
  Capital grants and
    contributions                     11,456         11,942          16,260         15,696        27716              27,638

 General revenues:
  Property taxes                      21,038         17,922                -                -     21,038             17,922
  Utility use taxes                    9,376          9,106                -                -      9,376              9,106
  Other taxes                         16,927         17,302                -                -     16,927             17,302
  Sales taxes                         39,856         38,445                -                -     39,856             38,445
  Motor vehicle in lieu fees          11,925         11,044                -                -     11,925             11,044
  Development impact
    mitigation charges                12,569         10,866                -                -     12,569             10,866
  Unrestricted investment
    income                             7,906          4,605           7,104          4,896        15,010              9,501
  Other                                3,386          3,107           1,632          1,425         5,018              4,532
     Total revenues                  163,671        155,928         129,943        115,774       293,614            271,702


 Expenses:
  General government                  29,959         25,253                -                -     29,959             25,253
  Public safety                       69,263         65,861                -                -     69,263             65,861
  Public works                        26,589         25,609                -                -     26,589             25,609
  Recreation and parks                17,875         15,756                -                -     17,875             15,756
  Housing opportunity and
    Other                              1,752           1,900                                       1,752              1,900
                                                                           -                -
  Interest on long-term
    liabilities                        2,835           2,746                                       2,835              2,746
                                                                           -                -
  Water Utility                            -              -          28,756         24,626        28,756             24,626
  Wastewater Utility                       -              -          65,909         58,285        65,909             58,285
  Parking                                  -              -           4,209          3,579         4,209              3,579
  Municipal Transit                        -              -          10,943          9,986        10,943              9,986
  Golf Course                              -              -           1,371          1,259         1,371              1,259
  Storm Water                              -              -           1,573          1,521         1,573              1,521
 Total expenses                      148,273        137,125         112,761         99,256       261,034            236,381
 Excess before transfers               15,398        18,803           17,182        16,518        32,580             35,321
 Transfers                              1,735         3,480           (1,735)       (3,480)            -                   -
 Change in net assets                  17,133        22,283           15,447        13,038        32,580             35,321
 Net assets, beginning of year        408,551       389,558          331,474       318,436       740,025            707,994
 Net assets, end of year            $ 425,684     $ 411,841        $ 346,921     $ 331,474      $772,605           $743,315




                                                               8
                                     CITY OF SANTA ROSA

                         MANAGEMENT’S DISCUSSION AND ANALYSIS
                                     JUNE 30, 2007

Governmental activities. Governmental activities increased the City’s net assets by $17.1
million, thereby accounting for 53 percent of the total growth in net assets of the City. The
current year growth accounted for a 4 percent increase to total Governmental net assets.

The key elements of this increase were:

   • Charges for services revenue decreased $3,860 or a 17 percent primarily due to decreases
     in fees for building, planning, and fire inspections as construction in the residential real
     estate market has slowed.
   • Operating grants and contributions increased $1,503 or 18 percent primarily due to the
     receipt of additional grants for public works maintenance projects.
   •   Sales taxes increased $1,411 or 4 percent as compared to the prior year. This is a much
       lower increase than has been seen in past years as the economy is slowing due to the
       housing slump.
   •   Unrestricted investment income increased $3,301 or 72 percent due to an increase in the
       average yield on the City’s pool of investments from 3.53 percent to 4.82 percent. The
       City average maturity is just over one year so interest income responds rapidly to changes
       in interest rates. This has been an advantage to the City in light of the inverted yield
       curve that has characterized interest rates.
   •   Property taxes increased $3,116 or 17 percent despite the weakening residential real
       estate market due to a significant increase in supplemental property taxes.

   •   Total governmental activity expenses increased by $11,148 or 8 percent primarily due to
       compensation and benefit cost increases totaling $4,777. Public safety compensation
       increased by $2,291 and benefit costs increased by $2,082 while combined compensation
       and benefit costs for non-safety employees increased by $404. In addition, expenditures
       from non-major funds increased $2,639 primarily in Recreation and Parks ($576) and
       Public Safety ($1,244) as activities supported with Measure O funds became fully
       operational. The remainder of the increase can be attributed to additional energy, fuel,
       professional services and supply costs.
Business-type activities. Business-type activities net assets increased by $15.4 million, a 5
percent increase. The increase accounted for 47 percent of the total growth in the City’s net
assets.

The key elements of this increase were:

   •   All enterprises except for Municipal Transit and Storm Water had growth in net assets.
   •   Operating grants and contributions increased $4,602 or 60 percent primarily due to the
       receipt of approximately $3,200 in grants to the Water enterprise and an additional
       $1,007 of grants received by the Municipal Transit enterprise.
   •   Charges for services increased by $6,588 or 7 percent as Water and Wastewater rates
       were increased by 9 percent during the year.


                                               9
                                      CITY OF SANTA ROSA

                          MANAGEMENT’S DISCUSSION AND ANALYSIS
                                      JUNE 30, 2007

   •   Unrestricted investment income increased $2,208 or 45 percent from last year due to the
       increase in the average yield of the City pooled investments from 3.53 percent to 4.82
       percent and an increase in the amount of cash invested.

   •   Overall business type activity expenses increased by $13,505 or 14 percent as compared
       to the prior year due primarily to increased operating costs for fuel, employee benefits,
       and salaries, as well as higher interest costs on the Wastewater variable-rate debt.
       Expenses increased across all enterprises.

FINANCIAL ANALYSIS OF THE CITY’S FUNDS

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.

Governmental funds. The focus of the City’s governmental funds is to provide information on
near-term inflows, outflows and balances of resources that are available to provide services. In
particular, unreserved fund balance may serve as a useful measure of a government’s net
spendable resources.

As of the end of the current fiscal year, the City’s governmental funds reported combined fund
balances of $129,790, an increase of $14,049 in comparison with the prior year. Approximately
$106,247 of this amount constitutes unreserved fund balance. Of this amount $39,998 is
committed to ongoing capital projects and $66,249 is available for spending at the City’s
discretion. The City Council has appropriated and designated uses for much of the unreserved
fund balance through budget resolutions tied to its core financial planning processes for
operations and capital assets. The remainder of fund balance is reserved to indicate that it is not
available for new spending because it has been committed: 1) to reflect prepaid items and the
amount due from other funds that are long-term in nature and thus do not represent available
expendable resources ($6,630), 2) to liquidate contractual commitments of the period ($16,191),
and 3) for debt service ($722).




                                                10
                                        CITY OF SANTA ROSA

                             MANAGEMENT’S DISCUSSION AND ANALYSIS
                                         JUNE 30, 2007

General Government Functions The following table presents the amount of revenues from
various sources as well as increases or decreases from the prior year.

                City of Santa Rosa, California’s Revenues Classified by Source

                                       Governmental Funds
                                       FY 2007                     FY 2006                   Increase/(Decrease)
                                            Percent of                  Percent of                      Percent of
Revenues by Source                Amount       Total          Amount      Total              Amount      Change
Property taxes                   $ 21,038        13.1%       $ 17,922       11.5%                3,116      17.4 %
Sales tax                           40,887       25.5%          39,480      25.2%                1,407       3.6%
Utility use tax                      9,376         5.9%          9,106       5.8%                  270       3.0%
Other taxes                         28,771       18.0%          28,346      18.2%                  425       1.5%
License and permits                  1,988         1.2%          2,123        1.4%               (135)     (6.4)%
Intergovernmental                   13,085         8.2%         16,241      10.4%              (3,156) (19.4)%
Charges for services                18,753       11.7%          22,049      14.1%              (3,296) (15.0)%
Development impact mitigation
  charges                            12,570           7.9%      10,866            7.0%          1,704      15.7%
Investment income                     6,093           3.8%       3,737            2.4%          2,356      63.1%
Other                                 7,503           4.7%       6,242            4.0%          1,261      20.2%

   Total                         $ 160,064       100.0%      $ 156,112         100.0% $         3,952        2.5%


                                          Revenues by Source


                                              Other
                Investment income
                                              4.7%                       Property taxes
                              3.8%
                                                                                13.1%
    Development impact
      mitigation charges
                    7.9%
  Charges for services
                11.7%


                                                                                              Sales tax
                                                                                                25.5%

 Intergovernmental
             8.2%
                                                                           Utility use tax
       License and permits                                                           5.9%
                                       Other taxes
                     1.2%
                                           18.0%




                                                     11
                                        CITY OF SANTA ROSA

                             MANAGEMENT’S DISCUSSION AND ANALYSIS
                                         JUNE 30, 2007

The following provides an explanation of revenues by source and significant changes over the
prior year.
•   Sales taxes increased by $1,407 or 3.6 percent. This increase was much lower than recent
    years due to a softening local economy. A downturn in the real estate sector has also
    provided less home equity thereby reducing the amount of disposable income for taxable
    purchases.

•   Property taxes increased $3,116 or 17.4 percent despite the weakening residential real estate
    market. Approximately 5.5 percent of this increase was due to an additional $954 increase in
    supplemental tax collections.
•   Intergovernmental revenue decreased by $3,156 or 19.4 percent during the year. This
    decrease is primarily due to receipt in the prior year of $2.3 million of funding from State
    Grants for capital projects such as A Place to Play and the Pierson Reach Creek Restoration.
•   Charges for Services decreased $3,296 or 15.0 percent primarily due to decreases in fees for
    building, planning, and fire inspections as construction in the residential real estate market
    has slowed.
•   Development impact mitigation charges (development impact fees) increased $1,704 or 15.7
    percent due to the implementation of significant fee increases shortly before the beginning of
    the fiscal year. Fees were also adjusted again during mid 2006/07.
•   Investment income increased by approximately $2,356 or 63.1 percent during the year due to
    an increase in the average yield of the City pooled investments from 3.53 percent to 4.82
    percent and an increase in the amount of cash invested.
The following table presents expenditures by function compared to prior year amounts.

                           City of Santa Rosa’s Expenditures By Function
                                         Governmental Funds
                                       (Amounts in Thousands)
                                      FY 2007                FY 2006            Increase/(Decrease)
                                           Percent of             Percent of               Percent of
Expenditures by Function          Amount     Total      Amount      Total      Amount       Change
Current:
 General government               $ 33,743     21.5%    $ 29,679       20.6%   $ 4,064         13.7%
 Public safety                       69,158    44.0%       66,604      46.2%      2,554         3.8%
 Public works                        19,238    12.2%       18,366      12.7%        872         4.7%
 Recreation and parks                16,051    10.2%       14,211       9.9%      1,840        12.9%
 Other                                1,667     1.1%        1,882       1.3%      (215)      (11.4)%
Capital outlay                       16,543    10.5%       13,100       9.1%      3,443        26.3%
Debt service                            756      .5%          370       0.2%        386       104.3%
  Total                           $ 157,156   100.0%    $ 144,212     100.0%   $ 12,944         9.0%




                                                 12
                                                CITY OF SANTA ROSA

                                       MANAGEMENT’S DISCUSSION AND ANALYSIS
                                                   JUNE 30, 2007




                                               Expenditures by Function



                                              Debt service 0.5%

                Capital outlay 10.5%
                                                                          General government 21.5%
               Other 1.1%

Recreation & parks 10.2%




                Public works 12.2%


                                                                                   Public safety 44.0%




   The following provides an explanation of the expenditures by function that changed significantly
   over the prior year.

   •    Public safety – overall public safety expenditures increased $2,554 or 3.8 percent. This
        increase was due primarily to negotiated increases in public safety compensation.

   •    Capital Outlay – expenditures increased $3,443 or 26.3 percent due to increased funding
        available from development impact fees and funds made available due to a General Fund
        reserve policy change.

   •    Recreation and parks – expenditures increased $1,840 or 12.9 percent primarily due to
        expanded gang prevention and intervention programs funded by Measure O sales tax
        revenues. Utility cost increases and costs associated with professional and outside services
        also contributed to the increase.

   •    General Government – costs increased $4,064 or 13.7 percent as compared to the prior year.
        This increase was due to many factors including increases in salaries and benefits, animal
        control costs, insurance, outside services, and projects.




                                                             13
                                      CITY OF SANTA ROSA

                          MANAGEMENT’S DISCUSSION AND ANALYSIS
                                      JUNE 30, 2007

The General Fund is the chief operating fund of the City. As a measure of the General Fund’s
liquidity, it may be useful to compare unreserved fund balance and total fund balance to total
fund expenditures. Unreserved general fund balance represents 23.3 percent of total general fund
expenditures of $125,882 while total fund balance represents 30.3 percent of that same amount.
The unreserved fund balance, designated for contingencies, future expenditures, and
appropriations, of the General Fund was $29,268 while total fund balance was $38,152.

On March 14, 2006, the City Council adopted a policy to designate part of the General Fund
balance for contingencies at an amount between 15 percent and 17 percent of General Fund
expenditures. Any unreserved balances in excess of 17 percent of expenditures will be
designated for future expenditures. At June 30, 2007 these designated amounts were $25,052.
The policy change represented a reduction from a previous contingency target level of 20 to 25
percent of revenues. A significant portion of funds freed by the change in the designation level
were appropriated for capital projects in 2006/07.

During the fiscal year, the City’s General Fund balance decreased by $11,064. This decrease
resulted primarily from expenditures in excess of revenues totaling $3,192 and an increase of
$6,616 in transfers to the Capital projects fund due to the reserve policy change made in the prior
fiscal year.

Proprietary funds The City’s proprietary funds statements provide the same type of information
found in the government-wide financial statements, but in more detail.
At the end of the fiscal year, the unrestricted net assets for the Wastewater Enterprise were
$62,779, for the Water Enterprise $31,936, for the Parking Enterprise $11,489 and the remaining
non-major enterprise funds $2,984. Included within the unrestricted net assets are amounts
already committed to on-going capital projects.

Net Assets of the enterprise funds increased $14.3 million. Key factors resulting in this increase
are as follows:

   •   The Water Utility net assets increased by $9,332 resulting primarily from $3,713 of
       demand fees collected to pay the future capital costs of serving new development and
       infrastructure, a $2,689 increase in Sale of Water revenue due to the dry spring season,
       and the receipt of a one-time grant revenue of $3,000.

   •   The Wastewater Utility net assets increased by $3,422. This increase resulted primarily
       from receipt of $2,804 of additional demand fees collected to pay the capital costs of
       serving new development and infrastructure and a $1,093 increase in interest revenue due
       to improved rates of return.




                                                14
                                       CITY OF SANTA ROSA

                          MANAGEMENT’S DISCUSSION AND ANALYSIS
                                      JUNE 30, 2007

Overall revenues and contributions in enterprise funds increased $4,934 compared to the prior
year. Expenses in enterprise funds increased $13,645 from the prior year, primarily in the Water
and Wastewater enterprises.

GENERAL FUND BUDGETARY HIGHLIGHTS

The General Fund actual revenues were lower than estimated revenues by $4,466 or 3.5 percent.
Actual expenditures were $5,829 or 4.5 percent less than final budget appropriations. Revenues
fell short of estimates in charges for services, $2,775; sales tax, $1,812; and intergovernmental,
$971. Charges for services were below estimates primarily due to the declining housing market.
The shortfall in sales tax revenue is a reflection of the weakening economy. The shortfalls were
partially offset by higher than estimated revenues in other taxes, $829; and interest, $782. Other
revenues were $1,103 below estimates because amounts anticipated during the budget process
from undefined revenue enhancements were recorded in this category while ultimate receipts
were recorded in Charges for Services.

Expenditures were $2,059 (2.9%) less than appropriations in Public Safety; $2,834 (18.0%) in
Public Works; and $411 (3.0%) in Recreation and Parks due to savings from vacant positions
and small projects that are not yet completed.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

The City’s investment in capital assets for its governmental and business-type activities as of
June 30, 2007, amounted to $817.0 million (net of accumulated depreciation). This investment in
capital assets includes infrastructure, land, buildings, improvements other than buildings,
equipment and construction in progress. The total increase in the City’s investment in capital
assets for the current period was 2.9 percent.
Major capital asset events during the current fiscal year included the following:
•   Purchased land for construction of a new fire station in the northeast quadrant of the City.

•   Completed West Steele Lane widening to three lanes.

•   Purchased five new fire pumper trucks.

•   Purchased properties/right of way for future widening of Stony Point Road.




                                                 15
                                            CITY OF SANTA ROSA

                             MANAGEMENT’S DISCUSSION AND ANALYSIS
                                         JUNE 30, 2007

For government-wide financial statement presentation, all depreciable capital assets were
depreciated from acquisition date to the end of the current fiscal year. Fund financial statements
record capital asset purchases as expenditures.
City of Santa Rosa’s Capital assets, net of accumulated depreciation, for the governmental and
business-type activities are presented below to illustrate changes from the prior year


                                                                                                                  Increase/
                  Governmental Activities          Business-type Activities                 Total                (Decrease)
                                                                                                                   Percent
                      2007          2006            2007              2006            2007            2006       of Change
Infrastructure    $    119,100 $     114,481   $            -    $           -   $     119,100   $     114,481         4.0%
Land                    38,390        35,016           12,586           11,908          50,976          46,924         8.6%
Buildings               22,058        22,058          122,010          126,648         144,068         148,706       (3.1%)
Improvements
  other than
  buildings             47,548        53,286          258,627          259,806         306,175         313,092      (2.2%)
Equipment               17,202        16,388           25,303           28,981          42,505          45,369      (6.3%)
Construction in
   progress             45,399        37,583          108,747           88,051         154,146         125,634        22.7%
   Total          $ 289,697        $ 278,812       $ 527,273         $ 515,394       $ 816,970       $ 794,206        2.9%

Among the significant construction commitments was $13 million for the Farmers Lane
Extension, $11 million for the Bennett Valley Golf Course Clubhouse, $12 million for the Stony
Point Road from Highway 12 to Hearn Avenue project, $5 million Summerfield Road
Transmission Main, and $18 million for the Utilities Operations and Maintenance Facility.

Additional information about the City’s capital assets can be found in Note 6 to the basic
financial statements.

Debt Administration

At June 30, 2007, the City had total long-term debt outstanding of $414.2 million as compared to
$417.7 million in the prior year. This amount was comprised of $49.9 million of pension
obligation bonds, $9.8 million of certificates of participation, $228.5 million of revenue bonds
and $126.0 million of loans payable. During the year the City issued certificates of participation
in the amount of $10 million to finance building acquisitions. The City also issued $67.0 million
in wastewater revenue bonds to refund $68.1 million of existing bonds and provide $4.0 million
for additional projects. During the year, retirement of debt amounted to $13.8 million excluding
the amount refunded.

The City insures all long-term fixed-rate revenue bonds resulting in an AAA Standard & Poors
and an Aaa Moody’s rating. In addition, all variable rate debt is secured through letters of credit
with Landsebank Hessen-Thuringen Girozentrale and Landsebank Baden-Wurttemberg.



                                                           16
                                     CITY OF SANTA ROSA

                         MANAGEMENT’S DISCUSSION AND ANALYSIS
                                     JUNE 30, 2007


The City’s Ordinance imposes a limit on the amount of general obligation bonds the City can
have outstanding at any given time. As of June 30, 2007, the City’s debt limit (3.75% of
assessed valuation) was $680 million. At June 30, 2007, the City did not have any debt
applicable to the limit outstanding.

Additional information about the City’s long-term obligations can be found in Note 7 to the basic
financial statements.

Economic Factors and Next Years Budget and Rates

   •   Over the past year the economic climate has changed dramatically in northern California.
       Housing prices continue to drop and are not likely to stabilize for at least another year.
       Consumer spending has flattened due to reduced real estate equity and higher fuel prices.
       Construction related revenues are also projected to be soft over the next year. With
       minimal revenue growth anticipated during 2007/08 it will be difficult to maintain current
       expenditure levels.
   •   In fiscal 2008, total General Fund revenues are currently projected to be approximately 4
       percent over what is estimated for 2006/07.
   •   Sales tax growth is proposed to remain slow next fiscal year, increasing by approximately
       1.5 percent. This increase is contingent on avoiding a recession in 2007/08.
   •   Property taxes in the General Fund remain one of the few bright spots and are expected to
       increase by approximately 7 percent for fiscal year 2007/08. As housing prices continue
       to fall it is anticipated that this growth rate will not be sustainable in the long term.
   •   General Fund charges for services are not expected to be materially different next fiscal
       year. As the housing market continues to slip fee adjustments will be necessary to
       achieve reasonable cost recovery.
   •   The 2007/08 General Fund budget includes a $1.2 million transfer to the City's Capital
       Improvement Program.
   •   All of these factors were considered in preparing the City’s budget for fiscal year
       2007/08.

Requests for Information

This financial report is designed to provide a general overview of the City of Santa Rosa,
California’s finances for all those with an interest in the government’s finances. Questions
concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Finance Director, P.O. Box 1678, Santa Rosa, CA 95402.



                                               17
This Page Intentionally Left Blank
BASIC FINANCIAL STATEMENTS
                                                                                                                                    Statement A-1



                                                              CITY OF SANTA ROSA
                                                           STATEMENT OF NET ASSETS
                                                                  JUNE 30, 2007
                                                              (Amounts in Thousands)

                                                                              Primary Government                           Component Units
                                                            Governmental         Business-type                         Housing     Redevelopment
                                                             Activities            Activities          Total           Authority      Agency
ASSETS
 Cash and investments                                      $      156,626       $     105,663      $    262,289    $        6,895   $      36,885
 Receivables (net of allowances for uncollectibles):
   Accounts                                                          7,929             14,359            22,288              267               -
   Interest                                                          1,879              1,506             3,385                84              389
   Intergovernmental                                                 9,590              3,389            12,979              583               247
   Assessments                                                          74                -                   74             -                 -
 Internal balances                                                  (4,295)             4,295               -                -                 -
 Inventory of supplies                                                 334              1,193             1,527              -                 -
 Prepaid items                                                       2,269                  22            2,291              899               -
 Restricted assets:
   Cash and investments                                                474             59,444            59,918               363              -
   Interest receivable                                                 -                  301               301             7,236              -
   Notes and loans receivable                                          -                  -                 -              58,468              -
   Other                                                               -                    31                31              -                -
 Advances to primary government                                        -                  -                 -                 -              2,961
 Advances to component unit                                          5,790                -               5,790               -                -
 Notes and loans receivable - long-term                                200              2,429             2,629               -                -
 Deferred charges                                                      952              2,983             3,935               -              1,159
 Net pension asset                                                  51,639                -              51,639               -                -
 Capital assets:
   Nondepreciable                                                  83,789             121,333           205,122              147            4,392
   Depreciable, net                                               205,908             405,940           611,848              547           11,663
       Total assets                                               523,158             722,888          1,246,046           75,489          57,696
LIABILITIES
  Accounts payable and accrued liabilities                           8,399             10,462            18,861              472                 58
  Interest payable                                                     644              3,012             3,656              -                 736
  Unearned revenue                                                   5,205              6,493            11,698              -                 -
  Intergovernmental payable                                            -                  -                 -                  12                41
  Deposits                                                             497                398               895              363               -
  Advances from primary government                                     -                  -                 -                -               5,790
  Advances from component unit                                       2,961                -               2,961              -                 -
  Long-term obligations:
    Due within one year                                              7,645             12,150            19,795               -               670
    Due beyond one year                                             72,123            343,452           415,575               -            39,659
       Total liabilities                                            97,474            375,967           473,441              847           46,954
NET ASSETS
 Invested in capital assets, net of related debt                  287,735             233,349           521,084              694              (564)
 Restricted for:
   Debt service                                                        -                    89                89              -              3,401
   Housing programs                                                    -                  -                 -              72,512            2,273
   Parks                                                            17,012                -              17,012               -                -
   Public safety                                                     7,477                -               7,477               -                -
   Roads                                                             3,974                -               3,974               -                -
   Public and capital facilities                                    47,316                -              47,316               -                983
   Other purposes                                                    6,426                -               6,426               -                -
 Unrestricted                                                       55,744            113,483           169,227             1,436            4,649
       Total net assets                                    $      425,684       $     346,921      $    772,605    $       74,642   $      10,742

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




                                                                          21
                                                                                                                                 Statement A-2


                                                    CITY OF SANTA ROSA
                                                 STATEMENT OF ACTIVITIES
                                          FOR THE FISCAL YEAR ENDED JUNE 30, 2007
                                                    (Amounts in Thousands)

                                                                                                Program Revenues

                                                                            Fees, Fines and            Operating            Capital
                                                                              Charges for              Grants and          Grants and
                                                         Expenses              Services               Contributions       Contributions
Primary government:
  Functions/Programs:
    Governmental activities:
      General government                             $        29,959        $           9,730     $             851   $               51
      Public safety                                           69,263                    5,149                 4,144                   57
      Public works                                            26,589                      835                 4,513              10,949
      Recreation and parks                                    17,875                    3,505                   505                 399
      Housing opportunity and other                            1,752                      -                     -                   -
      Interest on long-term liabilities                        2,835                      -                     -                   -
            Total governmental activities                    148,273                   19,219                10,013              11,456
    Business-type activities:
      Water Utility                                           28,756                   29,821                 3,763               4,400
      Wastewater Utility                                      65,909                   54,155                   451              11,306
      Parking                                                  4,209                    4,245                   -                   -
      Municipal Transit                                       10,943                    1,571                 7,913                 554
      Golf Course                                              1,371                    1,182                   -                   -
      Storm Water                                              1,573                    1,736                   110                 -
            Total business-type activities                   112,761                   92,710                12,237              16,260
            Total primary government                 $       261,034        $         111,929     $          22,250   $          27,716
Component units:
  Housing Authority                                  $        14,171        $            409      $          14,188   $             -
  Redevelopment Agency                                         7,487                       7                    -                   -
            Total component units                    $        21,658        $            416      $          14,188   $             -
                                                     General revenues
                                                      Taxes:
                                                        Property taxes
                                                        Utility use taxes
                                                        Tax increments for redevelopment agencies
                                                        Other taxes
                                                      Contributions not restricted to specific programs:
                                                        Sales taxes from State
                                                        Motor vehicle in lieu fees
                                                        Development impact mitigation charges
                                                      Grants not restricted to specific programs
                                                      Unrestricted investment income
                                                      Other
                                                     Transfers
                                                           Total general revenues and transfers
                                                               Change in net assets

                                                               Net assets, beginning of year, as restated
                                                               Net assets, end of year

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


                                                                       22
                                                                                              Statement A-2




                      Net (Expense) Revenue and Changes in Net Assets
                 Primary Government                               Component Units

Governmental           Business-type                         Housing       Redevelopment
 Activities             Activities          Total            Authority        Agency




$     (19,327)     $             -      $     (19,327)   $           -     $           -
      (59,913)                   -            (59,913)               -                 -
      (10,292)                   -            (10,292)               -                 -
      (13,466)                   -            (13,466)               -                 -
       (1,752)                   -             (1,752)               -                 -
       (2,835)                   -             (2,835)               -                 -
     (107,585)                   -           (107,585)               -                 -


          -                    9,228            9,228                -                 -
          -                        3                3                -                 -
          -                       36               36                -                 -
          -                     (905)            (905)               -                 -
          -                     (189)            (189)               -                 -
          -                      273              273                -                 -
          -                    8,446            8,446                -                 -
     (107,585)                 8,446          (99,139)               -                 -


          -                      -                  -                426               -
          -                      -                  -                -              (7,480)
          -                      -                  -                426            (7,480)



      21,038                     -             21,038                -                 -
       9,376                     -              9,376                -                 -
         -                       -                -                  -               7,062
      16,927                     -             16,927                -                 -

      39,856                     -             39,856                -                 -
      11,925                     -             11,925                -                 -
      12,569                     -             12,569                -                 -
         -                       -                -                3,203               -
       7,906                   7,104           15,010              2,380             2,043
       3,386                   1,632            5,018              3,554             1,237
       1,735                  (1,735)             -                  -                 -
     124,718                   7,001          131,719              9,137            10,342
      17,133                  15,447           32,580              9,563             2,862

     408,551                 331,474          740,025             65,079             7,880
$    425,684       $         346,921    $     772,605    $        74,642   $        10,742




                                                             23
                                                                                                                                   Statement A-3



                                                              CITY OF SANTA ROSA
                                                                BALANCE SHEET
                                                             GOVERNMENTAL FUNDS
                                                                  JUNE 30, 2007
                                                              (Amounts in Thousands)

                                                                                                                     Nonmajor          Total
                                                                                                   Capital         Governmental    Governmental
                                                                                General            Projects           Funds           Funds
ASSETS
 Cash and investments                                                       $         24,340   $       21,470      $     74,527    $    120,337
 Receivables (net of allowances for uncollectibles):
  Accounts                                                                             2,876                  41          4,997            7,914
   Interest                                                                              337                  23          1,073            1,433
   Intergovernmental                                                                   7,903                  58          1,629            9,590
   Assessments                                                                           -                -                   74              74
 Due from other funds                                                                    170              -                 -                170
 Inventory of supplies                                                                   247              -                 -                247
 Prepaid items                                                                           640              -                 -                640
 Restricted cash and investments                                                         474              -                 -                474
 Advances to component unit                                                            5,790              -                 -              5,790
 Notes and loans receivable - long-term                                                  200              -                 -                200
         TOTAL ASSETS                                                       $         42,977   $       21,592      $     82,300    $    146,869

LIABILITIES AND FUND BALANCES
 LIABILITIES
   Accounts payable and accrued liabilities                                 $          3,669   $        4,111      $        277    $       8,057
   Due to other funds                                                                      -              -                 170              170
   Advances from component unit                                                            -              -               2,961            2,961
   Deferred revenue                                                                      659              -               4,735            5,394
   Deposits                                                                              497              -                 -                497
       TOTAL LIABILITIES                                                               4,825            4,111             8,143           17,079

  FUND BALANCES
   Reserved for:
    Advances                                                                           5,790              -                 -             5,790
    Encumbrances                                                                       2,254           13,752               185          16,191
    Long-term notes and loans                                                            200              -                 -               200
    Debt service                                                                         -                -                 722             722
    Prepaid items                                                                        640              -                 -               640
   Unreserved, reported in:
    General fund                                                                      29,268              -                 -            29,268
    Special revenue funds                                                                -                -              73,250          73,250
    Capital projects fund                                                                -              3,729               -             3,729

         TOTAL FUND BALANCES                                                          38,152           17,481            74,157         129,790

         TOTAL LIABILITIES AND FUND BALANCES                                $         42,977   $       21,592      $     82,300    $    146,869

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




                                                                          24
                                                                                                         Statement A-4



                                               CITY OF SANTA ROSA
                        RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
                                            STATEMENT OF NET ASSETS
                                                   JUNE 30, 2007
                                               (Amounts in Thousands)



Fund balances - total governmental funds (Statement A-3)                                             $        129,790

  Amounts reported for governmental activities in the
   statement of net assets are different because:

       Capital assets used in governmental activities are not financial resources
         and therefore are not reported in the governmental funds.                                            284,529

       Other long-term assets are not available to pay current period expenditures
         and, therefore, are deferred in the governmental funds.                                                  189

       Internal service funds are used by management to charge the costs of
         equipment and replacement, insurance, information services and pension benefits
         to individual funds. The assets and liabilities are included in governmental
         activities in the statement of net assets.                                                            27,216

       Certain liabilities, including bonds payable, are not due and payable in the
         current period and therefore are not reported in the governmental funds
           Capital lease obligation                                                        (1,873)
           Certificates of Participation                                                   (9,792)
           Accrued interest payable on long-term obligations                                  (29)
           Compensated absences                                                            (4,616)            (16,310)

       Other long-term assets are not available to pay for current-period expenditures,
         and therefore are not recorded in the governmental funds.                                                270

       Net assets of governmental activities (Statement A-1)                                         $        425,684


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




                                                                      25
                                                                                                                                    Statement A-5



                                                   CITY OF SANTA ROSA
                           STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
                                                 GOVERNMENTAL FUNDS
                                         FOR THE FISCAL YEAR ENDED JUNE 30, 2007
                                                   (Amounts in Thousands)

                                                                                                                     Nonmajor           Total
                                                                                                     Capital       Governmental     Governmental
                                                                                   General           Projects         Funds            Funds
REVENUES:
 Property taxes                                                                $       21,038    $          -      $        -       $      21,038
 Sales taxes                                                                           33,022               -             7,865            40,887
 Utility use taxes                                                                      9,376               -               -               9,376
 Other taxes                                                                           28,771               -               -              28,771
 License and permits                                                                    1,988               -               -               1,988
 Charges for services                                                                  18,649               -               104            18,753
 Development impact mitigation charges                                                    -                 -            12,570            12,570
 Intergovernmental                                                                      3,317               261           9,507            13,085
 Fines and forfeitures                                                                  1,817               -               357             2,174
 Interest                                                                               1,812                 98          3,874             5,784
 Net change in the fair value of investments                                                74                 1            234               309
 Contribution from property owners                                                        -                 341             550               891
 Other                                                                                  2,826               -             1,612             4,438
     TOTAL REVENUES                                                                   122,690               701          36,673           160,064
EXPENDITURES:
 Current:
  General government                                                                   29,698               561            3,484           33,743
  Public safety                                                                        67,481                 98           1,579           69,158
  Public works                                                                         13,100             6,083               55           19,238
  Recreation and parks                                                                 13,046               987            2,018           16,051
  Other                                                                                 1,665               -                  2            1,667
 Capital outlay                                                                           406            15,543              594           16,543
 Debt service:
  Principal                                                                               398               -               -                 398
  Bond issuance costs                                                                     -                 -               270               270
  Interest                                                                                  88              -               -                  88

     TOTAL EXPENDITURES                                                               125,882            23,272           8,002           157,156

     EXCESS (DEFICIENCY) OF REVENUES
      OVER (UNDER) EXPENDITURES                                                        (3,192)          (22,571)         28,671             2,908
OTHER FINANCING SOURCES (USES):
 Proceeds from sale of capital assets                                                       36              -                -                 36
 Issuance of long-term debt                                                               -               8,800            1,160            9,960
 Discount on debt issuance                                                                -                 -               (168)            (168)
 Transfers in                                                                           3,455            29,352            5,009           37,816
 Transfers out                                                                        (11,363)             (755)         (24,385)         (36,503)
     TOTAL OTHER FINANCING SOURCES (USES)                                              (7,872)           37,397          (18,384)          11,141
NET CHANGE IN FUND BALANCES                                                           (11,064)           14,826          10,287            14,049
FUND BALANCES, beginning of year, as restated                                          49,216             2,655          63,870           115,741
FUND BALANCES, end of year                                                     $       38,152    $       17,481    $     74,157     $     129,790

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




                                                                          26
                                                                                                             Statement A-6


                                            CITY OF SANTA ROSA
                    RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
                 EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007
                                            (Amounts in Thousands)


Net change in fund balances - total governmental funds (Statement A-5)                                   $         14,049

  Amounts reported for governmental activities in the
   statement of activities are different because:
       Governmental funds report capital outlay as expenditures. However, in
        the statement of activities, the cost of those assets is allocated over
        their estimated useful lives and reported as depreciation expense.
          Capital outlay                                                                       16,543
          Depreciation                                                                        (12,537)              4,006
       In the statement of activities, capital assets donated to the City are reported as
         a capital contribution, whereas in the governmental funds, capital assets donated
         do not increase financial resources. Thus, the change in net assets differs from
         the change in fund balance by the fair value of the asset donated.                                         6,346
       In the statement of activities, only the gain on the sale of capital assets is
         reported, whereas in the governmental funds, the proceeds from the
         sale increases financial resources. Thus, the change in net assets differs
         from the change in fund balance by the value of the asset sold.                                             (141)
       Revenues in the governmental funds are recognized when resources are available
         while revenues are recognized in the statement of activities when they are earned.                            79
       Long-term debt, net of bond discount, provides current financial resources to
         governmental funds, but issuing debt increases long-term liabilities in the
         statement of net assets. Costs of issuance are expenditures in the governmental
         funds, but costs of issuance increase deferred charges in the statement of net
         assets.
            Long-term debt issuance                                                            (9,960)
            Discount on debt issuance                                                             168
            Costs of issuance                                                                     270              (9,522)

       Repayment of long-term debt is reported as an expenditure in the governmental funds,
         but the repayment reduces long-term liabilities in the statement of net assets.
         In the current year, these amounts consist of:
           Capital lease payments                                                                                     398
       Some expenses reported in the statement of activities do not require the
         use of current financial resources and therefore are not reported as
         expenditures in governmental funds.
           Change in accrued interest payable                                                      5
           Change in compensated absences liability                                             (518)                (513)
       Internal service funds are used by management to charge the costs of
         certain activities to individual funds. The net revenue of the internal
         service funds is reported with governmental activities.                                                    2,431
       Change in net assets of governmental activities (Statement A-2)                                   $         17,133

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




                                                                      27
                                                                                                                                                                  Statement A-7



                                                                      CITY OF SANTA ROSA
                                                                 STATEMENT OF FUND NET ASSETS
                                                                      PROPRIETARY FUNDS
                                                                          JUNE 30, 2007
                                                                      (Amounts in Thousands)
                                                                                                                                                          Governmental
                                                                                           Business-type Activites - Enterprise Funds                      Activities
                                                                      Water               Wastewater                        Nonmajor                        Internal
                                                                      Utility              Utility         Parking          Enterprise                      Service
                                                                      Fund                  Fund             Fund              Funds          Total          Funds
ASSETS
 CURRENT ASSETS
  Cash and investments                                            $      30,856       $         60,118    $     11,267    $       3,422   $    105,663    $    36,289
  Account receivables, net of
   allowance for uncollectible accounts                                   5,491                  8,688             -                180         14,359             15
  Interest receivable                                                       472                    816             156               62          1,506            446
  Intergovernmental receivable                                              -                      -               -              3,389          3,389            -
  Inventory of supplies                                                     188                    920             -                 85          1,193             87
  Prepaid items                                                             -                       22             -                -               22          1,629
 RESTRICTED ASSETS
  For interest, bond redemption and construction
   Cash and investments                                                     -                  58,587              453              404         59,444            -
   Interest receivable                                                      -                     296              -                  5            301            -
   Intergovernmental receivable                                             -                     -                 22              -               22            -
   Assessments receivable                                                   -                     -                  9              -                9            -
   TOTAL CURRENT ASSETS                                                  37,007               129,447           11,907            7,547        185,908         38,466
 NONCURRENT ASSETS
  Notes receivable                                                              -                2,429             -               -              2,429           -
  Deferred charges                                                              -                2,673              81             229            2,983           682
  Net pension asset                                                             -                  -               -               -                -          51,639
  Capital assets
   Nondepreciable                                                        25,832                82,187            2,969          10,345         121,333            -
   Depreciable, net                                                      67,560               318,882           10,012           9,486         405,940          5,168
    TOTAL NONCURRENT ASSETS                                              93,392               406,171           13,062          20,060         532,685         57,489
    TOTAL ASSETS                                                        130,399               535,618           24,969          27,607         718,593         95,955
LIABILITIES
 PAYABLES FROM UNRESTRICTED ASSETS
  Accounts payable and accrued liabilities                                3,637                  5,276             209              411          9,533            342
  Unearned revenues                                                         787                  1,967             -              3,739          6,493            -
  Accrued interest payable                                                  -                      -               -                 28             28            615
  Workers' compensation and general liabilities claims                      -                      -               -                -              -            1,956
  Compensated absences payable                                              178                    428              44              172            822            176
  Bonds payable                                                             -                      -               -                -              -            1,830
  Customer deposits                                                         398                    -               -                -              398            -
   TOTAL PAYABLE FROM UNRESTRICTED ASSETS                                 5,000                  7,671             253            4,350         17,274          4,919
 PAYABLES FROM RESTRICTED ASSETS
  Accounts payable and accrued liabilities                                  -                      867             -                 62            929            -
  Accrued interest payable                                                  -                    2,762              96              126          2,984            -
  Bonds payable - current portion                                           -                    3,603             299               55          3,957            -
  Loans payable - current portion                                           -                    7,371             -                -            7,371            -
   TOTAL PAYABLE FROM RESTRICTED ASSETS                                     -                   14,603             395              243         15,241            -
   TOTAL CURRENT LIABILITIES                                              5,000                 22,274             648            4,593         32,515          4,919
 LONG-TERM OBLIGATIONS
  Workers' compensation and general liabilities claims                                            -                -               -               -           11,340
  Compensated absences payable                                               71                    77               61              25             234             82
  Loans payable                                                             -                 118,657              -               -           118,657            -
  Bonds payable                                                             -                 215,976            3,103           5,482         224,561         48,103
   TOTAL LONG-TERM OBLIGATIONS                                               71               334,710            3,164           5,507         343,452         59,525
    TOTAL LIABILITIES                                                     5,071               356,984            3,812          10,100         375,967         64,444
NET ASSETS
 Invested in capital assets, net of related debt                         93,392               115,855            9,579          14,523         233,349          5,168
 Restricted for:
  Debt service                                                              -                     -                 89             -                89            -
 Unrestricted                                                            31,936                62,779           11,489           2,984         109,188         26,343
    TOTAL NET ASSETS                                              $     125,328       $       178,634     $     21,157    $     17,507         342,626    $    31,511
     Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.                                    4,295
     Net assets of business-type activities                                                                                               $    346,921
The notes to the basic financial statements are an integral part of this statement.




                                                                                               28

                                                                                               22
                                                                                                                                                              Statement A-8



                                                               CITY OF SANTA ROSA
                                         STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
                                                               PROPRIETARY FUNDS
                                                     FOR THE FISCAL YEAR ENDED JUNE 30, 2007
                                                               (Amounts in Thousands)
                                                                                                                                                                Governmental
                                                                                             Business-type Activites - Enterprise Funds                          Activities
                                                                          Water             Wastewater                        Nonmajor                            Internal
                                                                          Utility            Utility         Parking          Enterprise                          Service
                                                                          Fund                Fund             Fund             Funds            Total             Funds
OPERATING REVENUES
 Charges for services                                                 $       5,779     $        54,155     $      3,730     $      4,488    $     68,152       $     36,907
 Sale of water                                                               24,042                 -                -                -            24,042                -

   TOTAL OPERATING REVENUES                                                  29,821              54,155            3,730           4,488           92,194             36,907

OPERATING EXPENSES
 Purchase of water                                                           10,377                 -                -               -             10,377                -
 Maintenance and operation                                                    9,355              32,952            2,823          10,789           55,919              4,468
 Administration                                                               5,704               7,256              829           1,774           15,563                -
 Personnel services                                                             -                   -                -               -                -                7,245
 Self-insurance claims                                                          -                   -                -               -                -                2,997
 Workers' compensation and liability expenses                                   -                   -                -               -                -                2,503
 Property insurance                                                             -                   -                -               -                -                  572
 Life and disability insurance                                                  -                   -                -               -                -                  478
 Health and dental insurance                                                    -                   -                -               -                -               13,392
 Unemployment insurance                                                         -                   -                -               -                -                   63
 Depreciation                                                                 3,636              14,298              381           1,345           19,660              1,066

   TOTAL OPERATING EXPENSES                                                  29,072              54,506            4,033          13,908          101,519             32,784

   OPERATING INCOME (LOSS)                                                      749                (351)            (303)          (9,420)          (9,325)            4,123

NONOPERATING REVENUES (EXPENSES)
 Intergovernmental revenue                                                    3,763                 451              -             8,023           12,237                -
 Parking district assessment                                                    -                   -                515             -                515                -
 Interest revenue                                                             1,693               4,079              560             285            6,617              1,623
 Net change in the fair value of investments                                    140                 282               39              26              487                111
 Interest expense                                                               -               (11,833)            (232)           (349)         (12,414)            (2,752)
 Gain (loss) on disposal of capital assets                                      (41)                (25)             -                 (2)            (68)                30
 Other                                                                        1,175                 336               72             117            1,700                 47
   NET NONOPERATING REVENUES (EXPENSES)                                       6,730               (6,710)            954           8,100            9,074               (941)

   INCOME (LOSS) BEFORE CAPITAL
   CONTRIBUTIONS AND TRANSFERS                                                7,479               (7,061)            651           (1,320)           (251)             3,182

 Capital contributions                                                        4,400              11,306              -               554           16,260                -
 Transfers in                                                                   368               1,091              735           1,531            3,725                548
 Transfers out                                                               (2,915)             (1,914)               (8)          (623)          (5,460)              (126)
   CHANGE IN NET ASSETS                                                       9,332               3,422            1,378             142           14,274              3,604
NET ASSETS, beginning of year                                              115,996              175,212           19,779          17,365                              27,907
NET ASSETS, end of year                                               $    125,328      $       178,634     $     21,157     $    17,507                        $     31,511
     Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.                                       1,173
     Change in net assets of business-type activities                                                                                        $     15,447

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




                                                                                       29
                                                                                                                                              Statement A-9



                                                             CITY OF SANTA ROSA
                                                         STATEMENT OF CASH FLOWS
                                                             PROPRIETARY FUNDS
                                                   FOR THE FISCAL YEAR ENDED JUNE 30, 2007
                                                             (Amounts in Thousands)
                                                                                                                                                   Governmental
                                                                                 Business-type Activites - Enterprise Funds                         Activities
                                                              Water             Wastewater                        Nonmajor                           Internal
                                                              Utility            Utility        Parking           Enterprise                         Service
                                                              Fund                Fund            Fund              Funds             Total           Funds
CASH FLOWS FROM OPERATING ACTIVITIES
 Cash received from customers                             $      29,873     $        53,638    $       3,731     $      4,431     $     91,673     $        -
 Cash received from other funds                                     -                   -                -                -                -             36,905
 Cash paid to suppliers for goods and services                  (16,114)            (23,598)          (1,308)          (3,910)         (44,930)         (23,149)
 Cash paid to employees for services                             (5,857)            (12,269)          (1,970)          (5,155)         (25,251)          (5,226)
 Cash paid for interfund services used                           (2,475)             (4,113)            (479)          (3,137)         (10,204)          (1,321)
 Cash paid for other                                                -                   -                -                  (5)              (5)            -
 Cash inflow from other sources                                   1,175                 336               72              122            1,705               47
   NET CASH PROVIDED BY (USED IN)
    OPERATING ACTIVITIES                                          6,602              13,994               46           (7,654)          12,988           7,256
CASH FLOWS FROM NONCAPITAL
 FINANCING ACTIVITIES
  Operating grants received                                       3,763                 451              -            10,459            14,673              -
  Transfers in from other funds                                     368               1,091              735           1,531             3,725              549
  Transfers out to other funds                                   (2,915)             (1,914)               (8)          (623)           (5,460)            (126)
  Payment on interfund loan                                         -                   -                -            (1,495)           (1,495)             -
  Receipt of note receivable                                        -                   132              -               -                 132              -
  Principal paid on pension obligation bonds                        -                   -                -               -                 -             (1,635)
  Interest paid on pension obligation bonds                         -                   -                -               -                 -             (2,740)
  Parking district assessments                                      -                   -                515             -                 515              -
   NET CASH PROVIDED BY (USED IN) NONCAPITAL
    FINANCING ACTIVITIES                                          1,216                (240)           1,242            9,872           12,090           (3,952)
CASH FLOWS FROM CAPITAL AND
 RELATED FINANCING ACTIVITIES
  Proceeds from long-term borrowing                                 -                 3,632              -                -              3,632              -
  Bonds cost of issuance paid                                       -                  (765)             -                -               (765)             -
  Payment to refunded bond escrow agent                             -                (4,102)             -                -             (4,102)             -
  Proceeds from sale of capital assets                              -                   -                -                  2                2               30
  Acquisition and construction of capital assets                (14,204)             (8,515)            (779)          (6,845)         (30,343)          (1,740)
  Principal paid on bonds and notes                                 -               (13,175)            (315)             -            (13,490)             -
  Interest paid on bonds and notes                                  -               (11,543)            (200)            (250)         (11,993)             -
  Capital contributions                                           4,400              10,582              -                553           15,535              -
   NET CASH PROVIDED BY (USED IN) CAPITAL AND
    RELATED FINANCING ACTIVITIES                                 (9,804)            (23,886)          (1,294)          (6,540)         (41,524)          (1,710)
CASH FLOWS FROM INVESTING ACTIVITIES
 Interest on investments                                          1,582               5,814              512             226             8,134           1,482
 Change in fair value of investments                                140                 282               39              26               487             110
   NET CASH PROVIDED BY
    INVESTING ACTIVITIES                                          1,722               6,096              551             252             8,621           1,592
   NET CHANGE IN CASH AND CASH EQUIVALENTS                         (264)             (4,036)             545           (4,070)           (7,825)         3,186
   CASH AND CASH EQUIVALENTS, beginning of year                  31,120             122,741           11,175            7,896          172,932          33,103
   CASH AND CASH EQUIVALENTS, end of year                 $      30,856     $       118,705    $      11,720     $      3,826     $    165,107     $    36,289




                                                                           30
                                                                                                                                                             Statement A-9



                                                                       CITY OF SANTA ROSA
                                                              STATEMENT OF CASH FLOWS (Continued)
                                                                       PROPRIETARY FUNDS
                                                             FOR THE FISCAL YEAR ENDED JUNE 30, 2007
                                                                       (Amounts in Thousands)
                                                                                                                                                                  Governmental
                                                                                                 Business-type Activites - Enterprise Funds                        Activities
                                                                           Water                Wastewater                        Nonmajor                          Internal
                                                                           Utility               Utility        Parking           Enterprise                        Service
                                                                           Fund                   Fund            Fund              Funds            Total           Funds
RECONCILIATION OF OPERATING INCOME (LOSS) TO
 TO NET CASH PROVIDED BY (USED IN) OPERATING
 ACTIVITIES
 Operating income (loss)                                               $         749        $          (351)   $        (303)    $     (9,420)   $      (9,325)   $     4,123
ADJUSTMENTS TO RECONCILE OPERATING
 INCOME (LOSS) TO NET CASH PROVIDED BY
 (USED IN) OPERATING ACTIVITIES
  Depreciation                                                                 3,636                 14,298              381            1,345          19,660           1,066
  Miscellaneous nonoperating income                                            1,175                    336               72              117           1,700              47
  Changes in assets and liabilities:
   Accounts receivable                                                           120                   (425)                 1           (57)            (361)              (2)
   Inventory of supplies                                                         (14)                   101              -                47              134              50
   Prepaid items                                                                  10                     44                9              26               89            (606)
   Net pension asset                                                             -                      -                -               -                -             1,818
   Accounts payable and accrued liabilities                                      939                     18             (137)            257            1,077            (326)
   Workers' compensation and general liabilities claims                          -                      -                -               -                -             1,041
   Customer deposits                                                              33                    -                -               -                 33             -
   Deferred revenue                                                             (101)                   (92)             -               -               (193)            -
   Compensated absences payable                                                   55                     65               23              31              174              45
   NET CASH PROVIDED BY (USED IN)
    OPERATING ACTIVITIES                                               $       6,602        $        13,994    $          46     $     (7,654)   $     12,988     $     7,256

RECONCILIATION OF CASH AND CASH EQUIVALENTS
 TO THE STATEMENT OF NET ASSETS
  Cash and investments                                                 $      30,856        $        60,118    $      11,267     $      3,422    $    105,663     $    36,289
  Restricted cash and investments                                                -                   58,587              453              404          59,444             -
     Total cash and cash equivalents                                   $      30,856        $       118,705    $      11,720     $      3,826    $    165,107     $    36,289

NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
 Acquisition of capital assets on accounts payable               $                   -      $           102    $         -                 58    $        160     $       -
 Payment to refunded bond escrow agent                                               -               66,030              -                -            66,030             -
 Capitalized interest                                                                -                  382              -                -               382             -
 Accrued and accreted interest on capital appreciation bonds and
  State loans                                                                        -                2,888              -                -             2,888             -
 Contributions of capital assets from developers                                     -                  724              -                -               724             -
 Book value on disposed capital assets                                                41                 25              -                  4              70             -
 Costs of issuance defeased                                                          -                  921              -                -               921             -
 Amortization of deferred charges                                                    -                  171                  9             10             190              40

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




                                                                                           31
                                                                                          Statement A-10


                                                 CITY OF SANTA ROSA
                                     STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
                                                    AGENCY FUNDS
                                                     JUNE 30, 2007
                                                  (Amounts in Thousands)




ASSETS
 Cash and investments                                                                 $        10,230
 Accounts receivable                                                                              995
 Interest receivable                                                                               59
 Intergovernmental receivable                                                                      90
 Deposits                                                                                           4

       Total assets                                                                   $        11,378

LIABILITIES
  Accounts payable                                                                    $         1,604
  Payroll payable                                                                               2,074
  Deposits                                                                                      7,700

       Total liabilities                                                              $        11,378

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




                                                                      32
                                                       NOTES TO THE
                                               BASIC FINANCIAL STATEMENTS


                                                                     INDEX




                                                                                                                                         Note                 Page
                                                                                                                                        Number               Number

Reporting Entity.................................................................................................................................. 1 ...............34
Summary of Significant Accounting Policies ..................................................................................... 2 ...............34
Cash and Investments.......................................................................................................................... 3 ...............40
Notes and Loans Receivables – Long-Term ....................................................................................... 4 ...............42
Interfund Transactions ........................................................................................................................ 5 ...............42
Capital Assets...................................................................................................................................... 6 ...............44
Long-term Obligations........................................................................................................................ 7 ...............46
Net Assets/Fund Balances................................................................................................................... 8 ...............52
Employees’ Retirement Plan............................................................................................................... 9 ...............53
Postretirement Healthcare Benefits................................................................................................... 10 ...............54
Joint Venture..................................................................................................................................... 11 ...............54
Self-Insurance ................................................................................................................................... 12 ...............55
Related Party Transactions................................................................................................................ 13 ...............57
Restatement of Net Assets/Fund Balance ......................................................................................... 14 ...............57
Contingencies.................................................................................................................................... 15 ...............58




                                                                             33
                                                   CITY OF SANTA ROSA
                                          COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                          NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                        JUNE 30, 2007

NOTE 1 – REPORTING ENTITY

The City of Santa Rosa, California (the City) is a municipal corporation governed by an elected seven-member council. The governmental
reporting entity consists of the City (Primary Government) and its component units. Component units are legally separate organizations for
which the City Council is financially accountable or other organizations whose nature and significant relationship with the City are such
that exclusion would cause the City’s financial statements to be misleading or incomplete. Financial accountability is defined as the
appointment of a voting majority of the component unit’s board, and (i) either the City’s ability to impose its will on the organization or
(ii) there is potential for the organization to provide a financial benefit to or impose a financial burden on the City. The basic financial
statements include two discretely presented component units – the Redevelopment Agency of the City of Santa Rosa (the Agency) and the
Housing Authority of the City of Santa Rosa (the Authority). The Agency and the Authority are reported in separate columns in the
government-wide financial statements to emphasize that they are legally separate from the government. The governing bodies of these
component units are appointed by the City Council. However, the Agency and the Authority are fiscally dependent upon the City because
the City Council approves the budget of the Agency and the City provides substantial funding to the Authority. In addition, these
component units do not provide services entirely or almost entirely to the City. The Authority and the Agency utilize City personnel as
staff members on a cost-reimbursement basis.

The Agency was established for the purpose of eliminating blight and to revitalize specific areas within the City. This is accomplished
through the use of specific laws giving the Agency special powers in the areas of eminent domain and property tax increments. The annual
tax increment revenue from the project areas is collected by Sonoma County (the County) and distributed directly to the Agency. The
Agency may issue debt without the City's approval.

The Agency administers four Project Areas: Santa Rosa Center Project, Southwest Project, Grace Brothers Site Redevelopment Project and
Transit-Oriented Redevelopment Project. Tax increment revenues from these project areas are used to make improvements within the
specific project area and to provide funding to the Authority for low and moderate income housing programs.

The Authority was established to ensure adequate decent, safe and sanitary housing for low-income persons within the City. To meet these
needs, the Authority is participating in the following programs: Rental Housing Assistance, Housing Production, Housing
Conservation/Preservation, Public Services, and Housing Services and Compliance.

State law specifies all rights, duties, privileges, and immunities for housing authorities. The Authority derives the majority of its revenue
from federal funding and tax increment revenue from the Agency. These funds must be used to facilitate the housing needs of low and
moderate income persons.

Complete financial statements of the individual component units can be obtained from:

The City of Santa Rosa
Department of Administrative Services
P. O. Box 1678
Santa Rosa, CA 95402

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)       Basis of Presentation

          Government-wide Financial Statements

          The statement of net assets and statement of activities display information about the primary government (the City) and its
          component units. These statements include the financial activities of the overall government, except for fiduciary activities. In
          general, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this
          rule are charges to other City Departments from the Water Utility and Wastewater Utility Funds. These charges have not been
          eliminated because elimination would distort the direct costs and program revenues reported in the statement of activities. These
          statements distinguish between the governmental and business-type activities of the City and between the City and its discretely
          presented component units. Governmental activities, which normally are supported by taxes, intergovernmental revenues and
          other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees
          charged to external parties.




                                                                     34
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      The statement of activities presents a comparison between direct expenses and program revenues for each segment of the
      business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are
      specifically associated with a program or function and; therefore, are clearly identifiable to a particular function. Program
      revenues include 1) fees, fines and charges paid by the recipients of goods or services offered by the programs and 2) grants and
      contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not
      classified as program revenues, including all taxes, are presented instead as general revenues.

      Fund Financial Statements

      The fund financial statements provide information about the City’s funds, including fiduciary funds. Separate statements for each
      fund category – governmental, proprietary and fiduciary – are presented. The emphasis of fund financial statements is on major
      governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are
      separately aggregated and reported as nonmajor funds.

      Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses
      generally result from providing services in connection with the fund’s principal ongoing operations. The principal operating
      revenues of the City’s enterprise and internal service funds are charges for customer services including: water, sewer and storm
      water charges, parking and golf course fees, public transportation fares, equipment maintenance and usage fees, insurance
      charges, information services support charges, and pension benefit charges. Operating expenses for enterprise funds and internal
      service funds include the cost of services, administrative expenses and depreciation on capital assets. All revenues and expenses
      not meeting this definition are reported as nonoperating revenues and expenses.

      The City reports the following major governmental funds:

      The General Fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of
      the City that are not accounted for through other funds.

      The Capital Projects Fund accounts for the accumulation of resources used for the acquisition or construction of general capital
      assets.

      The City reports the following major enterprise funds:

      The Water Utility Fund accounts for the revenues and expenses related to providing a safe and economical water supply for
      municipal, industrial and fire suppression use.

      The Wastewater Utility Fund is a segment and accounts for the revenues and expenses related to providing a collection,
      treatment and disposal system for the City’s wastewater and the subregional wastewater system. In addition, the City pledges
      income derived from the acquired or constructed wastewater facility to pay debt service on the wastewater revenue bonds.

      The Parking Fund is a segment and accounts for the revenues and expenses related to providing public parking within the City.

      The City reports the following additional fund types:

      Internal Service Funds account for the City’s equipment maintenance and replacement operations, insurance programs,
      information services, and pension benefits on a cost-reimbursement basis.

      The Agency Funds account for assets held by the City as an agent for various local governments, surety bonds and performance
      deposits and for the City’s clearing accounts.




                                                                 35
                                                CITY OF SANTA ROSA
                                       COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b)   Measurement Focus, Basis of Accounting

      The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus.
      The government-wide, proprietary and fiduciary fund financial statements are reported using the accrual basis of accounting.
      Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related
      cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or
      giving) equal value in exchange, include property, sales and utility use taxes, grants, entitlements and donations. On an accrual
      basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales and utility
      use taxes are recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are
      recognized in the fiscal year in which all eligibility requirements have been satisfied.

      Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of
      accounting. Under this method, revenues are recognized when measurable and available. Property, sales, and other taxes,
      interest, certain state and federal grants and charges for services are accrued as revenue when their receipt occurs within sixty
      days after the end of the accounting period so as to be both measurable and available. Expenditures are generally recorded when
      a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to
      compensated absences are recorded only when payment is due. General capital assets acquisitions are reported as expenditures
      in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources.

      Under the terms of grant agreements, the City funds certain programs by a combination of specific cost-reimbursement grants,
      categorical block grants and general revenues. Thus, when program expenses are incurred, there are both restricted and
      unrestricted net assets available to finance the program. It is the City’s policy to first apply cost-reimbursement grant resources
      to such programs, followed by categorical block grants, and then by general revenues.

      Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both
      the government-wide business type activities and the enterprise fund financial statements to the extent that those standards do not
      conflict with or contradict guidance of Governmental Accounting Standards Board (GASB). Governments also have the option
      of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to the same
      limitation. The City has elected not to follow subsequent private-sector guidance.

(c)   Cash and Cash Equivalents

      Proprietary fund types’ cash and investments are deposited in the City’s cash and investment pool, invested in short-term money
      market securities or cash held by financial institutions for future construction and debt service payments. Amounts invested in
      the City’s cash and investment pool are, in substance, demand deposits and are, therefore, considered cash equivalents for
      purposes of the statement of cash flows. Amounts invested in money market securities and cash held by financial institutions are
      highly liquid (including those classified as restricted assets on the statement of fund net assets), generally with original maturities
      less than three months, and are, therefore, also considered cash equivalents.

(d)   Investments

      Statutes authorize the City to invest in securities of the U.S. Government or its agencies, negotiable certificates of deposit,
      bankers’ acceptances, medium-term corporate notes, repurchase agreements, the State Local Agency Investment Fund (LAIF),
      mutual funds as permitted by the California Government Code, and commercial paper rated P-l by Moody’s Commercial Paper
      Record. City policy prohibits the purchase of reverse repurchase agreements and derivative securities. Investments are stated at
      fair value. Valuations are obtained by using quotations obtained from independent published sources. Interest earned in the
      Capital Projects and a portion of the expendable special revenue funds has been transferred to the General Fund per management
      decision.

(e)   Advances to Component Unit

      Non-current portions of long-term receivables due from the Agency are reported as advances and are offset equally by a fund
      balance reserve in the fund financial statements, which indicates that they do not constitute expendable available financial
      resources and therefore are not available for appropriation.




                                                                   36
                                                CITY OF SANTA ROSA
                                       COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                       NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                     JUNE 30, 2007

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(f)   Inventory of Supplies

      Inventory of supplies are valued at cost (weighted average), which approximates the market value. The consumption method is
      used to account for the inventories. Under the consumption method, the costs of governmental fund type inventories are
      recorded as expenditures when consumed rather than when purchased.

(g)   Prepaid Items

      Payments made to vendors for services that will benefit periods beyond June 30, 2007, are recorded as prepaid items, and in
      governmental fund financial statements are offset equally by a fund balance reserve, which indicates that they do not constitute
      expendable available financial resources and therefore are not available for appropriation.

(h)   Restricted Assets

      Certain proceeds of the City’s enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are
      classified as restricted assets on the fund and government-wide statements of net assets because they are maintained in separate
      bank accounts and their use is limited by applicable bond covenants. In addition, restricted assets in the form of certificates of
      deposit, letters of credit and passbook savings accounts recorded in the City’s name but maintained in separate bank accounts are
      reported in the General fund.

(i)   Capital Assets

      Capital assets (including infrastructure) are recorded at historical cost or at estimated historical cost if actual historical cost is not
      available. Contributed capital assets are valued at their estimated fair market value on the date contributed. Capital assets
      include public domain (infrastructure) capital assets consisting of certain improvements including roads, bridges, lighting
      systems, and storm drainage systems. The City defines capital assets as assets with an initial, individual cost of more than
      $5,000 and an estimated useful life in excess of one year. Capital assets used in operations are depreciated or amortized (assets
      under capital leases) using the straight-line method over the lesser of the capital lease period or their estimated useful lives in the
      government-wide and proprietary funds statements.

      The estimated useful lives are as follows:

                Infrastructure                                       20 to 100 years
                Buildings                                            30 to 50 years
                Improvements                                         20 to 50 years
                Equipment                                            3 to 12 years

      The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives is not
      capitalized. Improvements are capitalized and, for government-wide and proprietary fund types statements, are depreciated over
      the remaining useful lives of the related capital assets.

      Interest is capitalized on proprietary fund type capital assets acquired with tax-exempt debt. The amount of interest to be
      capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project
      with interest earned on invested proceeds over the same period.

(j)   Compensatory Time Off

      Certain employees have the option to take time off in-lieu of receiving payment for overtime worked. In this case, the
      recognition of the liability is recorded in the fund when overtime is worked and is reported with accrued liabilities.

(k)   Compensated Absences

      The City reports compensated absences for accrued vacation. City employees have a vested interest in accrued vacation time
      and all vacation hours will eventually either be used or paid by the City. Generally, employees earn and use their current
      vacation hours with a small portion being accrued or unused each year. As this occurs, the City incurs an obligation to pay for
      these unused hours. This liability is recorded in the government-wide statement of net assets and in the various proprietary funds
      to reflect the City's obligation to fund such costs from future operations. A liability is recorded in the governmental funds
      balance sheet when it is due and payable. Sick leave benefits do not vest and no liability is recorded.

                                                                    37
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(l)   Long-term Obligations

      Long-term debt is recognized as a liability in governmental fund financial statements when due or when resources have been
      accumulated in the debt service funds for payment early in the following year. For other governmental fund long-term
      obligations, only that portion expected to be liquidated with expendable available financial resources is reported as a fund
      liability of a governmental fund type to the extent they are due and payable. The total obligation is reported in the government-
      wide statement of net assets. Long-term liabilities expected to be financed from proprietary fund type operations are accounted
      for in those funds. The current portion of bonds payable in the enterprise funds represents principal payments to be made in the
      ensuing fiscal year, adjusted for unamortized bond premiums and discounts and deferred amounts on refundings.

(m)   Fund Equity

      Reserved governmental fund balances represent amounts (net of related liabilities) not appropriable for expenditure or legally
      segregated for a specific future use. Designated governmental fund balances represent tentative plans for future use of financial
      resources.

(n)   Revenue Recognition for Water and Wastewater Utility Enterprise Funds

      Revenue is recorded as billed to customers on a cyclical basis. All customers are billed monthly. Amounts unbilled at June 30 are
      accrued and recognized as revenue. At June 30, 2007, the billed and unbilled receivables are shown net of an allowance for
      uncollectibles for the water and the wastewater utility funds in the amount of $34,000 and $47,000, respectively.

(o)   Bond Premiums/Discounts, Issuance Costs, and Deferred Amounts on Refundings

      In governmental fund types, bond premiums/discounts and issuance costs are recognized in the period bond proceeds are
      received. Bond premiums/discounts and issuance costs for the government-wide statement of net assets and proprietary fund
      types are deferred and amortized over the term of the bonds using a method that approximates the interest method. Government-
      wide statement bond premiums/discounts and bond premiums/discounts for proprietary fund types are presented as an
      increase/reduction of the face amount of bonds payable whereas issuance costs are recorded as deferred charges.

      Gains or losses occurring from advance refundings, completed subsequent to June 30, 1993, are deferred and amortized into
      expense for both business-type activities and proprietary funds. For governmental activities, they are deferred and amortized
      into expense if they occurred subsequent to June 30, 2001.

(p)   Interfund Transactions

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

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

(q)   Property Tax Levy, Collection and Maximum Rates

      The State of California (the State) Constitution Article XIII A provides that the combined maximum property tax rate on any
      given property may not exceed one percent of its assessed value unless an additional amount for general obligation debt has been
      approved by voters. Assessed value is calculated at 100 percent of market value as defined by Article XIII A and may be
      adjusted by no more than two percent per year unless the property is improved, sold or transferred. The State Legislature has
      determined the method of distribution of receipts from a one percent tax levy among the counties, cities, school districts and
      other districts.


                                                                 38
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Sonoma County assesses properties and bills for and collects property taxes as follows:

                                                           Secured                                   Unsecured

                  Valuation Lien Dates                     January 1                                 January 1
                  Levy Dates                               July 1                                    July 1
                  Due Dates                                50% on November 1                         August 31
                                                           50% on February 1
                  Delinquent after                         December 10 (for November)                August 31
                                                           April 10 (for February)

      The term “unsecured” refers to taxes on personal property other than land and buildings. These “unsecured” taxes are secured by
      liens on the personal property being taxed. Sonoma County distributes to the City the entire amount of each year’s levy and in
      return receives all penalties and interest on delinquent payments.

(r)   Effects of New Pronouncements

      The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the
      following GASB Statements:

      In June 2004, GASB issued Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits
      Other Than Pensions, which addresses how state and local governments should account for and report their costs and obligations
      related to postemployment healthcare and other nonpension benefits. Collectively, these benefits are commonly referred to as
      other postemployment benefits, or OPEB. The statement generally requires that employers account for and report the annual
      cost of OPEB and the outstanding obligations and commitments related to OPEB in essentially the same manner as they
      currently do for pensions. Annual OPEB cost for most employers will be based on actuarially determined amounts that, if paid
      on an ongoing basis, generally would provide sufficient resources to pay benefits as they come due. This statement’s provisions
      may be applied prospectively and do not require governments to fund their OPEB plans. An employer may establish its OPEB
      liability at zero as of the beginning of the initial year of implementation; however, the unfunded actuarial liability is required to
      be amortized over future periods. This statement also establishes disclosure requirements for information about the plans in
      which an employer participates, the funding policy followed, the actuarial valuation process and assumptions, and, for certain
      employers, the extent to which the plan has been funded over time. This statement is effective for the City’s fiscal year ending
      June 30, 2008.

(s)   Estimates

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




                                                                  39
                                          CITY OF SANTA ROSA
                                 COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                NOTES TO THE BASIC FINANCIAL STATEMENTS
                                              JUNE 30, 2007

NOTE 3 – CASH AND INVESTMENTS

The City maintains a cash and investment pool that is available for use by all funds and component units. Each fund type's and
component unit's portion of this pool is included on the statement of net assets as “Cash and investments”.

Total City cash and investments are reported as follows (in thousands):

                     Primary government:
                       Cash and investments                                                            $262,289
                       Restricted cash and investments                                                   59,918
                     Component units:
                       Housing Authority:
                        Cash and investments                                                               6,895
                        Restricted cash and investments                                                      363
                       Redevelopment Agency:
                        Cash and investments                                                             36,885
                     Agency funds                                                                        10,230
                               Total cash and investments                                              $376,580

Custodial Credit Risk - Deposits
Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City does not
have a deposit policy for custodial credit risk. As of June 30, 2007, $2,038,577 of the City's bank balance of $25,897,287 was
collateralized with securities held by the pledging financial institutions at 110 percent of the City’s deposits in accordance with
the State of California Government Code.

Investments
The City’s investments consist of pooled deposits and investments; dedicated investment funds; and other funds held by trustees.
The dedicated investment funds represent restricted funds and relate to bond proceeds of the Wastewater Enterprise Fund,
assessment districts and the Agency. The other funds held by trustees are made either in accordance with bond covenants and
are pledged for payment of principal, interest, and specified capital improvements or in accordance with trust agreements.

Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investment policy limits its
pooled investment maturities as follows:

                     Maturity                                                              Maximum Investment
                     One Year and Under                                                       No restriction
                     Over One Year/Less than Five Years                                           60%
                     Between Four and Five Years                                                  15%

As of June 30, 2007 the City maintained $68,392,425 of U.S. Government Agency investments with maturities between 1-5
years that are callable. These issues are sensitive to interest rate changes and are callable, on either a monthly or quarterly basis,
at par prior to maturity based on interest rate changes.

Credit Risk
The City’s investment policy is to apply the prudent-person rule: Investments are made as a prudent person would be expected
to act, with discretion and intelligence, to seek reasonable income, preserve capital, and in general avoid speculative investments.
The City’s investment policy includes investments permitted by the California Government Code and limits medium-term
corporate note, negotiable certificates of deposit and commercial paper investments as follows:

     •    Medium-term corporate notes, including bank notes and deposit notes, must be issued by corporations doing business
          in the United States as outlined in the California Government Code. Issuers must possess an acceptable long-term
          senior debt rating by two of the nationally recognized rating services; i.e., Moody’s Investors Services, Standard &
          Poor’s, Fitch or Duff & Phelps, as detailed below:
               1.    For maturities of two years or less, a minimum rating of “A” or better.
               2.    For maturities of two to four years, a minimum rating of “AA” or better.
               3.    For maturities of four to five years, a minimum rating of “AAA” or better.

                                                             40
                                                CITY OF SANTA ROSA
                                       COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                       NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                     JUNE 30, 2007

NOTE 3 – CASH AND INVESTMENTS (Continued)

           •     Negotiable certificates of deposit must be issued by a federal or state-chartered bank or a state savings association or a
                 state licensed, domestic branch of a foreign bank. Issuers must possess an acceptable long-term senior debt rating by
                 two of the nationally recognized rating services; i.e., Moody’s Investors Services, Standard & Poor’s, Fitch or Duff &
                 Phelps, as detailed below:

                      1.   For maturities of two years or less, a minimum rating of “A” or better.
                      2.   For maturities of two to four years, a minimum rating of “AA” or better.
                      3.   For maturities of four to five years, a minimum rating of “AAA” or better.

           •     Commercial Paper – State law limits investment in commercial paper to be of “prime” quality of the highest ranking of
                 the highest letter and number rating as provided for by a nationally recognized statistical-rating organization (NRSRO).
                 It is the City’s policy to limit its investments in commercial paper to the state legal limits.

       As of June 30, 2007, the City had the following cash and investments (amounts in thousands):

                                                                        Credit           Investment Maturities (in Years)
                                                                        Rating          Less than 1              1–5              Total
        Pooled investments:
         U.S. Government Agencies                                      AAA/Aaa           $    72,324         $    77,698        $ 150,022
         Medium-term corporate notes                                   See Below              24,941              29,358           54,299
         Commercial paper                                               A-1/P-1               44,839                   -           44,839
         Negotiable CDs                                                 A-1/P-1               20,996                   -           20,996
         Money market mutual funds                                        NR                   4,500                   -            4,500
         LAIF – pooled investment                                         NR                  27,500                   -           27,500
               Total pooled investments                                                      195,100             107,056          302,156
        Restricted Investments with Trustees
         And Other Dedicated Investments:
         Money market mutual funds                                       NR                   21,218                        -      21,218
         U.S. Government Agencies                                      AAA/Aaa                 6,510                        -       6,510
               Total restricted investments                                                   27,728                        -      27,728
        Other investments:
         U.S. Government Agencies                                      A-1/P-1                48,064                        -      48,064
               Total investments                                                         $ 270,892           $ 107,056            377,948
               Demand deposits                                                                                                    (1,368)
                Total cash and investments                                                                                      $ 376,580

       The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government
       Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is
       reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by
       LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is
       based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

       The total amount invested by all public agencies in LAIF at June 30, 2007 was $19.7 billion. LAIF is part of the California
       Pooled Investment Account (PMIA), which at June 30, 2007 had a balance of $65.6 billion. Of this amount, 3.466% were
       invested in structured notes and asset-backed securities. PMIA is not SEC-registered, but is required to invest according to
       California State Code. The average maturity of PMIA investments was 176 days as of June 30, 2007.

       The Local Investment Advisory Board has oversight responsibility for LAIF. The Board consists of five members as designated
       by state statute. The value of the pool of shares in LAIF, which maybe withdrawn, is determined on an amortized cost basis,
       which is different than the fair value of the pooled treasury’s portion in the pool. Withdrawals from LAIF are done on a dollar
       for dollar basis.




                                                                  41
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 3 – CASH AND INVESTMENTS (Continued)

      Following is a table indicating the credit ratings for the City’s investment in medium-term corporate notes (amounts in
      thousands):

                                                           Standard &                 Moody’s
                                     Amount                  Poor’s               Investors Service
                                       $ 2,536                  A                        A1
                                           2,456               AA                       Aa1
                                           3,013               AA                       Aa2
                                           3,220              AA-                       Aa2
                                           2,968               AA                       Aa3
                                           8,974              AA-                       Aa3
                                         31,132               AAA                       Aaa



                                        $ 54,299

      Concentration of Credit Risk

      The City diversifies its portfolio by issuer by requiring that no more than 10% of the portfolio be invested in any one issuer’s
      name. U.S. Treasury and Agency securities are not subject to this limitation. More than 5 percent of the City’s pooled
      investments are in the Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation, Federal Home Loan Bank and the
      Federal National Mortgage Association. These investments are 6.5%, 12.9%, 14.5%, and 15.8%, respectively, of total pooled
      investments.

NOTE 4 – NOTES AND LOANS RECEIVABLE

      Long-term notes and loans receivable at June 30, 2007 were as follows (amounts in thousands):

                                                                     Interest                                     Amount
                            Description                                Rate                Maturity              Receivable
           Primary government:
           Governmental Activities:
             Sonoma County
               Community Development Commission                      5.46%                   2011                 $       200
           Business-Type Activities:
            Dairy improvement loans                                     0%                 Various                      2,429
                     Total primary government                                                                     $     2,629



                                                                     Interest                                     Amount
                            Description                                Rate                Maturity              Receivable
           Component units:
           Authority:
            Housing Rehabilitation and Opportunity
              Deferred Repayment Notes and Loans                    0-10.00%               Various                $   58,468

NOTE 5 – INTERFUND TRANSACTIONS

      Due From (To) Other Funds

      Due from other funds and due to other funds amounts are current balances expected to be repaid during the following year. At
      June 30, 2007 the General Fund is due $170,000 from nonmajor governmental funds.




                                                               42
                                                     CITY OF SANTA ROSA
                                            COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                            NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                          JUNE 30, 2007

NOTE 5 – INTERFUND TRANSACTIONS (Continued)

       Transfers

       The following schedule briefly summarizes the City’s transfer activity for the fiscal year ended June 30, 2007 (amounts in
       thousands):


       (a) Between Governmental and Business-type Activities:

       Transfer From                                Transfer To                                 Amount Purpose
       General Fund                                 Parking Fund                               $    735 Provide funds for parking enforcement.
                                                    Internal Service Funds                           92 Provide funds for capital outlay.
                                                                                                    827
       Nonmajor Governmental Funds                  Nonmajor Enterprise Funds                        1,531 Provide funds for capital outlay.
                                                    Wastewater Utility Enterprise Fund                 303 Return funds for capital outlay.
                                                                                                     1,834
       Water Utility Enterprise Fund                General Fund                                       141 Administrative assistance.
                                                    Nonmajor Governmental Funds                      1,961 Provide funds for capital outlay.
                                                    Internal Service Funds                              25 Provide funds for capital outlay.
                                                                                                     2,127
       Wastewater Utility Enterprise Fund           General Fund                                       284   Administrative assistance.
                                                    Capital Projects Fund                              300   Provide funds for capital outlay.
                                                    Nonmajor Governmental Funds                        531   Provide funds for capital outlay.
                                                    Internal Service Funds                             431   Provide funds for capital outlay.
                                                                                                     1,546
       Parking Enterprise Fund                      Capital Projects Fund                                  8 Provide funds for capital outlay.


       Nonmajor Enterprise Funds                    General Fund                                        50 Administrative assistance.
                                                    Capital Projects Fund                              573 Provide funds for capital outlay.
                                                                                                       623

                 Total                                                                        $      6,965


       (b) Between Funds within the Governmental or Business-type Activities(1) :
       Transfer From                                Transfer To                                   Amount     Purpose
       General Fund                                 Capital Projects Fund                      $     8,459 Provide funds for capital outlay.
                                                    Nonmajor Governmental Funds                      2,077 Operating assistance.
                                                                                                    10,536

       Capital Projects Fund                        General Fund                                       315 Transfer interest earnings.
                                                    Nonmajor Governmental Funds                        440 Provide funds for capital outlay.
                                                                                                       755
       Nonmajor Governmental Funds                  General Fund                                     2,539 Provide funds for capital outlay
                                                                                                           ($2,160), for public safety ($355) and
                                                                                                           other administrative assistance and
                                                                                                           cost reimbursements ($24).
                                                    Capital Projects Fund                           20,012 Provide funds for capital outlay.
                                                                                                    22,551
       Water Utility Enterprise Fund                Wastewater Utility Enterprise Fund                 788 Provide funds for debt service and
                                                                                                           administrative assistance.
       Wastewater Utility Enterprise Fund           Water Utility Enterprise Fund                      368 Provide funds for capital outlay.
       Internal Service Funds                       General Fund                                       126 Administrative assistance.

                 Total                                                                       $     35,124
       (1)
             These transfers were eliminated in the consolidation, by column, for the governmental and business-type activities.

                                                                          43
                                                     CITY OF SANTA ROSA
                                            COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                            NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                          JUNE 30, 2007

NOTE 6 – CAPITAL ASSETS

       The following is a summary of changes in capital assets for the fiscal year ended June 30, 2007 (amounts in thousands):
                                                                                Balance                                          Balance
                                                                                July 1,                                          June 30,
                                                                                 2006         Additions       Reductions           2007
        PRIMARY GOVERNMENT
        Governmental activities
        Capital assets, not being depreciated:
         Land                                                               $      35,016     $    3,374       $         -     $    38,390
         Construction in progress                                                  37,583          9,647           (1,831)          45,399
           Total capital assets, not being depreciated                              72,599        13,021           (1,831)          83,789
        Capital assets, being depreciated:
         Infrastructure                                                           145,560          7,762            (141)          153,181
         Buildings                                                                 41,115          1,124                 -          42,239
         Improvements other than buildings                                        144,011              -                 -         144,011
         Equipment                                                                 47,850          4,602             (554)          51,898
            Total capital assets, being depreciated                               378,536         13,488            (695)          391,329
        Less accumulated depreciation for:
          Infrastructure                                                            31,079         3,002                -           34,081
          Buildings                                                                 19,057         1,124                -           20,181
          Improvements other than buildings                                         90,725         5,738                -           96,463
          Equipment                                                                 31,462         3,788            (554)           34,696
            Total accumulated depreciation                                        172,323         13,652            (554)          185,421
        Total capital assets, being depreciated, net                              206,213           (164)           (141)          205,908
        Governmental activities capital assets, net                         $     278,812     $   12,857      $    (1,972)     $ 289,697
        Business-type activities
        Capital assets, not being depreciated:
         Land                                                               $      11,908     $      678       $         -     $    12,586
         Construction in progress                                                  88,051         24,849           (4,153)         108,747
           Total capital assets, not being depreciated                              99,959        25,527           (4,153)         121,333
        Capital assets, being depreciated:
         Buildings                                                                183,135             51              (7)          183,179
         Improvements other than buildings                                        379,142          8,642             (66)          387,718
         Equipment                                                                 58,857          1,542            (232)           60,167
            Total capital assets, being depreciated                               621,134         10,235            (305)          631,604
        Less accumulated depreciation for:
          Buildings                                                                56,487          4,685              (3)           61,169
         Improvements other than buildings                                        119,336          9,755                -          129,091
          Equipment                                                                29,876          5,220            (232)           34,864
            Total accumulated depreciation                                        205,699         19,660            (235)          225,124
        Total capital assets, being depreciated, net                              415,435         (9,425)             (70)         405,940
        Business-type activities capital assets, net                        $     515,394     $   16,102      $    (4,223)     $ 527,273

       During the year ended June 30, 2007, the Transit Enterprise Fund (business-type activities) transferred fully depreciated assets of
       $49 to the governmental activities.




                                                                  44
                                                    CITY OF SANTA ROSA
                                           COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                           NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                         JUNE 30, 2007

NOTE 6 – CAPITAL ASSETS (Continued)

       The following is a summary of changes in capital assets for the fiscal year ended June 30, 2007 (amounts in thousands):
                                                                              Balance                                               Balance
                                                                              July 1,                                               June 30,
                                                                               2006            Additions       Reductions             2007
       COMPONENT UNITS
       Authority
       Capital assets, not being depreciated
        Land                                                                  $      147       $           -       $        -   $          147
       Capital assets, being depreciated
        Building                                                                     663                -                   -                663
        Less accumulated depreciation                                                 94               22                   -                116
           Total depreciable capital assets, net                                     569               22                   -                547
           Total capital assets, net                                          $      716       $       22          $        -        $       694
       Agency
       Capital assets, not being depreciated
        Land                                                                  $    3,790      $       602          $        -    $         4,392
       Capital assets, being depreciated
        Equipment                                                                     99                -                   -                 99
        Buildings and improvements                                                10,930            2,407                   -             13,337
           Total capital assets, being depreciated                                11,029            2,407                   -             13,436
       Less accumulated depreciation for:
         Equipment                                                                    99                -                   -                 99
         Buildings and improvements                                                1,252              422                   -              1,674
           Less accumulated depreciation                                           1,351              422                   -              1,773
           Total depreciable capital assets, net                                    9,678           1,985                   -             11,663
           Total capital assets, net                                          $   13,468      $     2,587          $        -    $        16,055

       Net capitalized interest for the year ended June 30, 2007 in the business-type activities capital assets increased the carrying value
       of such capital assets by $381,881.

       Depreciation

       Depreciation expense was charged to governmental functions as follows (amounts in thousands):

              General government                                                                                                          $1,154
              Public safety                                                                                                                1,449
              Public works                                                                                                                 7,774
              Recreation and parks                                                                                                         2,020
              Housing opportunity and other                                                                                                  140
              Depreciation on capital assets held by the City’s internal service funds is charged to the various
               functions based on their usage of the assets.                                                                               1,066
                    Total depreciation expense – governmental functions                                                                  $13,603

       Depreciation expense was charged to the business-type functions as follows (amounts in thousands):

              Water Utility                                                                                                               $3,636
              Wastewater Utility                                                                                                          14,298
              Parking                                                                                                                        381
              Transit                                                                                                                      1,212
              Golf Course                                                                                                                    105
              Storm Water                                                                                                                     28
                    Total depreciation expense – business-type functions                                                                 $19,660




                                                                   45
                                              CITY OF SANTA ROSA
                                     COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                     NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                   JUNE 30, 2007

NOTE 6 – CAPITAL ASSETS (Continued)

       At June 30, 2007, the significant construction commitments included the following (amounts in thousands):

                                                                                                 Expended
                                                                                                  through
                                                                                               June 30, 2007        Committed
       Governmental activities
        Prince Memorial Greenway                                                                      $24,073            $24,639
        A Place to Play                                                                                 4,597              9,359
        Farmers Lane Extension                                                                          2,533             13,114
        Stony Point Rd from Hwy 12 to Hearn Ave                                                         1,529             12,505
        Fountaingrove Community Park                                                                    1,564              2,643

       Business-type activities
        Bennett Valley Golf Course Club House                                                          9,247              10,672
        Audubon Right of Way                                                                           1,458               1,800
        Geysers project-right of way acquisition                                                       6,427               6,427
        SM Replacement: Wright St                                                                      1,658               1,660
        SM Replacement: Terrace & Parsons                                                              1,343               1,939
        Geysers project- mitigation monitoring                                                         4,283               4,435
        Seepex Pumps                                                                                   2,719               4,680
        Geysers project – engineering services                                                        32,258              32,258
        Radio Read Water Metering                                                                      1,698               1,926
        Pump station S9 Upgrade                                                                        3,185               3,504
        Seismic Upgrade Water Reservoirs                                                               2,584               6,034
        Proctor Heights Reservoir                                                                      6,293               7,855
        Los Alamos High Level System                                                                   1,212               1,319
        Operations & Maintenance Facility-Water                                                        2,235               9,250
        Operations & Maintenance Facility-Local Wastewater                                             2,281               9,250
        Summerfield Rd Transmission Main                                                               4,156               4,944
        WM Replacement: Wright St                                                                      1,120               1,121


NOTE 7 – LONG-TERM OBLIGATIONS
       The City issued pension bonds to fund the net actuarial accrued liability. In addition, the City issued wastewater improvement
       bonds and obtained state loans and parking improvement bonds to provide funds for wastewater and parking projects, golf
       improvement certificates of participation to fund municipal golf course improvements, and building acquisition certificates of
       participation to fund the purchase of the office building located at 637 First Street, Santa Rosa, California.




                                                                46
                                                    CITY OF SANTA ROSA
                                           COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                           NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                         JUNE 30, 2007

NOTE 7 – LONG-TERM OBLIGATIONS (Continued)

       Bonds and loans outstanding at June 30, 2007 consisted of the following (amounts in thousands):

                                                                                                           Original       Outstanding
                                                                 Final     Installment     Interest         Issue         at June 30,
    Type of indebtedness (purpose)                              Maturity    Amounts         Rates          Amount            2007
    Governmental activities
      2007 Building Acquisition Certificates of Participation   2037-38     $   65-515    4.0-4.75%        $      9,960     $     9,960
      1995 Pension Obligation Bonds                             2008-09        855-985       7.4%                 8,665           1,905
      2003A Pension Obligation Bonds                            2024-25      235-2,140     Variable              20,500          18,885
      2003B Pension Obligation Bonds                            2024-25      545-3,030     2.2-5.4%              30,170          29,145
                Total Governmental Activities                                                                    69,295          59,895
                Less unamortized discount                                                                                         (171)
                Total Governmental Activities, net                                                                               59,724
    Business-Type activities
    Wastewater Improvement Bonds
      1992 Wastewater Revenue Refunding Bonds, Series B         2016-17    1,810-2,425      6.0%                 37,180          12,630
      1992 Wastewater Refunding Improvement Bonds               2015-16    1,295-1,730      6.0%                 26,190           9,025
      1993 Wastewater Revenue Refunding Bonds, Series A         2016-17    1,170-1,365      5.25%                19,135           5,060
      2002 Wastewater Revenue Bonds, Series B
                                                                2016-17      980-2,355    3.4-5.375%              9,245           5,445
       (current interest bonds)
      2002 Wastewater Revenue Bonds, Series B
                                                                2032-33    1,624-3,409    5.35-5.79%             39,878          39,878
       (capital appreciation bonds)
      2002 Wastewater Refunding Improvement Bonds               2009-10    1,070-1,185     3.4-3.8%               8,840           3,435
      2004 Wastewater Refunding Bonds, Series A                 2033-34     445-18640      Variable              57,880          57,880
      2004 Wastewater Revenue Bonds, Series B                   2014-15      265-1,945     2.0-4.0%              22,525           9,800
      2007 Wastewater Revenue Bonds, Series A                   2037-38       25-5,995     4.0-5.0%              67,010          67,010
               Total Wastewater Improvement Bonds                                                               287,883         210,163
               Plus unamortized discount and premium                                                                               3,312
               Less deferred loss on refunding bonds                                                                             (7,017)
               Plus accreted interest                                                                                            13,121
               Total Wastewater Improvement Bonds, net                                                                          219,579

    Wastewater State Loans Payable
     1994 State of California Loan Agreement                    2014-15    1,399-1,720        3%                 25,986          12,440
     2000 State of California Loan Agreement                    2022-23       197-327     2.4 – 2.7%            132,963         113,237
     California Energy Commission Loan                          2013-14       109-219     3.0-3.95%               1,135             351
            Total Wastewater State Loans Payable                                                                160,084         126,028

    Parking Improvement Bonds:
      1998 Santa Rosa Central Parking Services Facilities       2015-16         305-500    4.8-5.4%               7,340           3,680
      Less deferred loss on refunding bonds                                                                                        (278)
               Total Parking Improvement Bonds, net                                                                               3,402

    Golf Improvement Certificates of Participation:
     2005A Certificates of Participation                        2030-31          45-255    3.0-4.5%               3,850           3,850
     2005B Certificates of Participation                        2030-31          10-125   4.57-5.44%              1,725           1,725
     Less unamortized discount                                                                                        -             (38)
              Total Golf Improvement Certificates, net                                                            5,575           5,537

               Total Business-type activities                                                                   460,882         354,546

               Total Primary Government                                                                    $ 530,177       $ 414,270

    Component Unit – Agency
     2005A Certificates of Participation                        2027-28         20-140    3.5-4.75%        $      1,500    $      1,465
     2005B Certificates of Participation                        2027-28      175-1,315    4.93-5.81%             13,850          13,520
     2002 Southwest Area Bonds                                  2033-34        160-640      4.0-6.0%              9,690           9,295
     2005A Southwest Area Bonds                                 2033-34      110-1,370      3.0-5.0%             14,090          13,980
     2005B Southwest Area Bonds                                 2020-21        105-195     3.89-5.5%              2,120           1,945
             Total component unit bonds                                                                          41,250          40,205
             Plus unamortized discount and premium                                                                                  124

               Total Component Unit                                                                            $ 41,250     $ 40,329

       Wastewater and parking improvement bonds are secured by a pledge of the revenues and assets of the related enterprise fund.

                                                                    47
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 7 – LONG-TERM OBLIGATIONS (Continued)

       The following is a summary of long-term obligation transactions for the year ended June 30, 2007 (amounts in thousands):

                                                                                                                                    Amounts
                                                    Balance                                                          Balance       Due Within
                                                  July 1, 2006             Additions            Retirements        June 30, 2007    One Year
        Governmental activities:
         Building Acquisition Project
           Certificates of Participation          $         -          $               9,960    $    -             $     9,960     $   -
         Pension Obligation Bonds                           51,570                 -                      1,635         49,935              1,830
         Less deferred amounts for:
            Issuance discounts                                  (3)                    (168)         -                    (171)
         Capital Lease Obligations                           2,271                 -                       398            1,873                 507
         Worker’s Compensation and
           General Liability Claims                         12,255                      2,997             1,956          13,296             1,956
         Compensated Absences                                4,311                      3,916             3,352           4,875             3,352
            Total governmental activities
              - long-term obligations              $        70,404         $           16,705    $        7,341     $    79,768    $        7,645
        Business-type activities:
         Wastewater Improvement Bonds             $        217,293         $           67,010    $       74,140    $    210,163    $           3,720
         Accreted Interest on Capital
           Appreciation Bonds                               10,233                      2,888        -                   13,121            -
         Parking Improvement Bonds                           3,995                 -                       315            3,680                 330
         Golf Certificates of Participation                  5,575                 -                 -                    5,575                  55
         Less deferred amounts for:
           Issuance premiums                                 1,661                   2,650                  767           3,544                  72
           Issuance discounts                                 (767)                -                       (497)           (270)                   -
           Refunding loss                                   (5,051)                (4,958)               (2,714)         (7,295)               (220)
              Total bonds payable                          232,939                     67,590            72,011         228,518             3,957
          State Loans Payable                              133,206                          2             7,180         126,028             7,371
          Compensated Absences                                 882                        997               823           1,056               822
                 Total business-type activities
                       - long-term obligations        $ 367,027            $           68,589   $        80,014    $    355,602    $       12,150
        Component Unit - Agency:
         2005 Certificates of Participation        $        15,350    $        -                 $         365      $    14,985    $            195

          2002 Southwest Area Bonds                          9,455                 -                       160            9,295                 165
          2005 A Southwest Area Bonds                       14,090                 -                       110           13,980                 120
          2005 B Southwest Area Bonds                        2,120                 -                       175            1,945                 185
          Less deferred amounts for:
            Issuance premiums                                  135              -                           5               130                   5
            Issuance discounts                                  (6)            -                     -                       (6)
                         Total component unit
                       - long-term obligations         $    41,144    $        -                 $         815      $    40,329    $            670

       Compensated absences typically have been liquidated in the general fund and proprietary funds. Workers’ Compensation and
       General Liability Claims liabilities typically have been liquidated in the internal service funds.




                                                                      48
                                                       CITY OF SANTA ROSA
                                              COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                              NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                            JUNE 30, 2007

NOTE 7 – LONG-TERM OBLIGATIONS (Continued)

      As of June 30, 2007 annual debt service requirements of governmental activities to maturity are as follows (amounts in
      thousands):
                              Building Acquisition
                                      Project              Pension Obligation
                           Certificates of Participation          Bonds                   Capital Lease
                                                                                           Obligations
      Year ending June 30:    Principal       Interest    Principal   Interest (1)    Principal     Interest

      2008                $               -          $       241       $        1,830    $    2,602       $      507      $         70
      2009                                   65               473                2,035         2,494              401               49
      2010                                   65               470                1,195         2,409              200               37
      2011                                   70               467                1,360         2,348              208               29
      2012                                  185               462                1,540         2.279              216               21
      2013-2017                           1,070             2,173               10,790         9,992              341               17
      2018-2022                           1,345             2,901               17,525         6,360               -                 -
      2023-2027                           1,690             1,547               13,660         1,180               -                -
      2028-2032                           2,140             1,086                 -              -                -                 -
      2033-2037                           2,705               496                 -              -                -                 -
      2038                                  625                15                 -              -                 -                -
          Total                         $ 9,960          $ 10,331        $      49,935       $29,664          $ 1,873         $    223
       __________________
       (1)
             The Series 2003A Pension Obligation bonds are issued as Variable Rate Bonds. These bonds may be set at different interest rate calculation
             modes, including daily, weekly, monthly and fixed rates. Interest on these bonds is estimated at 5.32%, which are the rates at the end of the
             fiscal year.

       As of June 30, 2007 annual debt service requirements of business-type activities to maturity are as follows (amounts in
       thousands):

                                                                                                                                                 Golf
                                          Watewater                                   Wastewater                   Parking                  Certificates of
                                      Improvement Bonds                           State Loans Payable         Improvement Bonds             Participation
                                                      Accreted
       June 30:               Principal Interest (2)   Interest                  Principal     Interest       Principal       Interest   Principal Interest
       2008                  $ 3,720 $ 6,523 $               -                  $ 7,371        $ 3,264        $    330        $ 184      $      55 $    250
       2009                       6,020       7,245          -                       7,456        3,069            350            167        110        248
       2010                       7,040       7,006          -                       7,542        2,873            365            150        155        243
       2011                       7,370       6,689          -                       7,741        2,674            385            130        160        238
       2012                       7,725       6,323          -                       7,946        2,470            405            110        165        231
       2013-2017                 46,145      25,164          -                      39,373        9,145          1,845            205        920      1,051
       2018-2022                 30,922      30,332      14,373                     38,958        4,233            -              -        1,145        823
       2023-2027                 37,623      47,425      36,303                      9,641          299            -              -        1,440        519
       2028-2032                 39,161      55,315      49,309                        -            -              -              -        1,425        141
       2033-2037                 24,217      14,513      13,546                        -            -              -              -           -         -
       2038                         220           5          -                         -            -              -              -           -         -
           Total             $ 210,163 $ 206,540 $ 113,531                      $ 126,028      $ 28,027       $ 3,680         $ 946      $ 5,575 $ 3,744
       __________________
       (2)
             The Wastewater Revenue Bonds, Series 2004A are issued as Variable Rate Bonds. These bonds may be set at different interest rate
             calculation modes, including daily, weekly, monthly and fixed rates. Interest on these bonds is estimated at 3.65%, which are the rates at the
             end of the fiscal year.




                                                                           49
                                                CITY OF SANTA ROSA
                                       COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                       NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                     JUNE 30, 2007

NOTE 7 – LONG-TERM OBLIGATIONS (Continued)

       As of June 30, 2007 annual debt service requirements of the Agency’s Certificates of Participation and bonds to maturity are as
       follows (amounts in thousands):
                                             Certificates of            Southwest Area                 Southwest Area
                                              Participation         Tax Allocation Bonds             2005 Series A and B
        Year ending June 30:             Principal      Interest     Principal      Interest       Principal       Interest
        2008                              $ 195         $ 815          $ 165        $ 527          $      305     $      738
        2009                                  215            805           175           519              320            726
        2010                                  305            792           185           510              335            713
        2011                                  530            772           190           500              345            700
        2012                                  710            741           200           490              360            686
        2013-2017                           4,495          3,069         1,175         2,277            2,020          3,184
        2018-2022                           6,400          1,573         1,535         1,906            2,555          2,644
        2023-2027                           1,845            280         2,035         1,396            3,250          1,918
        2028-2032                             290              8         2,705          702             4,120          1,030
        2033-2037                             -              -             930            45            2,315          1,063
            Total                       $ 14,985       $ 8,855        $ 9,295      $ 8,872        $ 15,925       $ 13,402

       Special Assessment Debt

       All outstanding special assessment debt issued in the name of the City was issued under the 1915 Bond Act. The property owners
       in the assessment districts are responsible for repayment of the debt. The possibility of the City assuming a secondary liability is
       considered remote as the underlying property values were evaluated before the assessment districts were established. These
       bonds were issued after January 1986 and provide the City with no obligation to make any advances from the City treasury.
       These bonds are, accordingly, not included in the City's basic financial statements. However, the City is acting in an agent
       capacity for the property owners in these assessment districts. Bonds outstanding at June 30, 2007 totaled $21,060,000.

       Special Assessment Bonds at June 30, 2007 were comprised of (amount in thousands):

                                                                               Interest              Final              Outstanding
                                 Description                                    Rates               Maturity           June 30, 2007
        Northpoint (1997 refunding)                                         4.50-6.60%               2012                   $      590
        Fountaingrove Parkway Extension (1999 refunding)                    3.70-5.70%               2020                       11,640
        Santa Rosa Townhouses (1998 refunding)                              4.20-5.65%               2016                        1,655
        Santa Rosa Avenue Fire Protection                                   5.70-8.10%               2016                          475
        Skyhawk (1998 refunding)                                            4.10-5.75%               2021                        4,600
        Nielsen Ranch                                                       4.20-6.70%               2023                        2,100
              Total                                                                                                     $       21,060

       Current Year Additions

       The following provides a brief description of the current year additions to long-term obligations:


       2007 Wastewater Revenue Bonds

       In June, 2007, the City issued $67,010,000 in Series 2007A Tax-Exempt Wastewater Revenue Bonds maturing on September 1,
       2008 and each September 1 thereafter, to and including September 1, 2026 bearing interest from 4.0% to 5.0%. The remaining
       principal balance of $5,585,000 at September 1, 2026 matures September 1, 2037 and bears interest of 4.5%.

       Proceeds from these bonds were used to fully refund $45,740,000 of the outstanding Wastewater Revenue 1996 Series A Bonds
       (“Prior Bonds”), $2,300,000 of the outstanding Wastewater Revenue 1998 Series B Bonds (“Prior Bonds”), $10,870,000 of the
       outstanding Wastewater Revenue 2001 Series B Bonds (“Prior Bonds”); and to partially refund $9,235,000 of the $19,035,000
       outstanding Wastewater Revenue 2004 Series B Bonds (“Prior Bonds”). $66,030,000 of the net proceeds along with $4,102,000
       of cash remaining from the Prior Bonds debt service and reserve funds were deposited into an irrevocable trust with an escrow
       agent to redeem the Prior Bonds on September 1, 2007, September 1, 2010 and September 1, 2014.



                                                                  50
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 7 – LONG-TERM OBLIGATIONS (Continued)

       As a result of the refunds, the Prior Bonds are considered defeased and the liability for the Prior Bonds has been removed from
       the City’s Wastewater Utility Enterprise Funds. Although the advance refunding resulted in the recognition of an accounting
       loss of $4,958,203 for the year ended June 30, 2007 the City anticipates long-term savings in interest due to the conversion of
       higher rate debt with lower rate debt. This advance refunding was undertaken to reduce total debt service payments over the
       next 24 years by $8,258,000 and resulted in an economic gain of $2,052,000.


       2007 Building Acquisition Project Certificates of Participation

       In June, 2007, the City issued $9,960,000 in 2007 tax exempt Certificates of Participation maturing on July 1, 2008 and each
       July 1 thereafter to, and including July 1, 2037 bearing interest from 4.0% to 4.75%. Proceeds from the issuance were used for
       the acquisition of the Chamber Plaza building located at 637 First Street, Santa Rosa, California.

       Legal Debt Limit

       As of June 30, 2007, the City’s debt limit (3.75% of assessed valuation) was $680 million. At June 30, 2007, the City did not
       have any debt applicable to the limit outstanding.

       Arbitrage

       Under U.S. Treasury Department regulations, all governmental tax-exempt debt issued after August 31, 1986 is subject to
       arbitrage rebate requirements. The requirements stipulate, in general, the earnings from the investment of tax-exempt bond
       proceeds that exceed related interest expenditures on the bonds must be remitted to the Federal government on every fifth
       anniversary of each bond issue. The City has evaluated each bond issued subject to the arbitrage rebate requirements and has
       determined that no arbitrage liability exists at June 30, 2007.

       Conduit Debt

       From time to time, the Authority has issued Multi-family Housing Revenue Bonds to provide funds to builders for the
       construction of multi-family housing projects. The bonds are payable solely from the revenues collected by the builders of the
       projects. The Authority is not obligated in any manner for repayment of the indebtedness. Accordingly, the liabilities are not
       reported in the Authority’s basic financial statements.

       As of June 30, 2007, the Authority had participated in the issuance of eleven series of Multi-family Housing Revenue Bonds.
       The aggregate principal amount payable for the eleven series of bonds is $32,774,142.

       Capital Lease

       In December 2001, the City entered into a lease agreement as lessee for financing the acquisition of firefighting equipment with
       a total cost of $1,519,000. In August 2002, the City entered into a lease agreement as lessee for financing the acquisition of
       additional firefighting equipment in the amount of $626,000. In December 2005, the City entered into another lease agreement
       as lessee for financing the acquisition of fire engines at a total cost of $1,409,000. These leases qualify as capital leases for
       accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the
       inception date. The net book value of assets acquired through these capital leases as of June 30, 2007, is $168,787; $323,198 and
       $1,217,604, respectively.




                                                                 51
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 8 – NET ASSETS/FUND BALANCES

      Net Asset Presentation

      The government-wide and business-type activities fund financial statements utilize a net assets presentation. Net assets are
      categorized as invested capital assets (net of related debt), restricted and unrestricted.

           Invested In Capital Assets, Net of Related Debt - This category groups all capital assets, including infrastructure, into one
           component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the
           acquisition, construction or improvement of these assets reduce the balance in this category.

           Restricted Net Assets – This category presents external restrictions imposed by creditors, grantors, contributors or laws or
           regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.
           Net assets restricted by enabling legislation include resources restricted by local Measure O totaling $7,342,000.

           Unrestricted Net Assets – This category represents net assets of the City, not restricted for any project or other purpose.

      Governmental Fund Balance Presentation

      In the fund financial statements, reserves and designations segregate portions of fund balance that are either not available or have
      been earmarked for specific purposes. While parties outside the primary government impose fund balance reservations, fund
      balance designations are established by actions of the City Council and management and can be increased, reduced or eliminated
      by similar actions.

      As of June 30, 2007, reservations of fund balance are described below:

           Advances - to reflect the amount due from other funds or component units that are long-term in nature. Such amounts do
           not represent available spendable resources.

           Debt service - to reflect the funds held by trustees or fiscal agents for future payment of bond principal and interest. These
           funds are not available for general operations.

           Encumbrances - to reflect the outstanding contractual obligations for which goods and services have not been received.

           Long-term notes, loans, and prepaid items - to reflect the portion of assets, which do not represent available spendable
           resources.

      Portions of unreserved fund balance may be designated to indicate tentative plans for financial resource utilization in a future
      period, such as for general contingencies or capital projects. Such plans or intent are subject to change and have not been legally
      authorized or may not result in expenditures. Fund balance designations include:

           Contingencies - to reflect management’s intent to expend certain funds for unanticipated needs.

           Future Expenditures – to reflect management’s intent to expend certain funds on future expenditures.

           Appropriations - to reflect management’s intent to expend certain funds approved for capital projects in prior years but not
           yet completed.

      The unreserved governmental fund balance designations at June 30, 2007 are composed of the following (in thousands):

                                                                                                Nonmajor
                                                      General               Capital            Governmental
                                                       Fund                 Projects              Funds                  Total
    Contingencies                                        $21,117                 -                   $41,197               $62,314
    Future Expenditures                                    3,935                 -                      -                    3,935
    Appropriations                                         4,216                $3,729                32,053                39,998
                                                         $29,268                $3,729               $73,250              $106,247




                                                                  52
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007

NOTE 9 – EMPLOYEES’ RETIREMENT PLAN

      Plan Description

      All permanent employees are eligible to participate in the Public Employees' Retirement Fund (the Fund) of the State of
      California's Public Employees' Retirement System (PERS). The Fund is an agent multiple-employer defined benefit retirement
      plan that acts as a common investment and administrative agent for various local and state governmental agencies within the
      State of California. The Fund provides retirement, disability, and death benefits based on the employee's years of service, age
      and final compensation. Employees vest after 5 years of service and may receive retirement benefits at age 50. These benefit
      provisions and all other requirements are established by State statute and City ordinance. Copies of the Fund's annual financial
      report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814. A separate report for the City’s plan
      within the Fund is not available.

      Funding Policy

      Participants are required to contribute 8% (9% for safety employees) of their annual covered salary. The City makes the
      contributions required of City employees on their behalf and for their account. The City is required to contribute at an actuarially
      determined rate. The 2006-07 fiscal year contribution rates were 13.438% for miscellaneous employees, 22.473% for police
      safety employees and 18.063% for fire safety employees, of annual covered payroll. The contribution requirements of plan
      members and the City are established and may be amended by PERS.

      Annual Pension Cost

      The City’s actual contribution to PERS is equal to the required contribution, which was determined as part of the June 30, 2004
      actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included the following:



                  Investment rate of return             7.75% (net of administrative services)
                  Projected salary increases            3.25% to 13.15% depending on age, service and
                                                         type of employment
                  Inflation                             3.00%

                  Payroll growth                        3.25%
                  Individual salary growth              A merit scale varying by duration of employment
                                                        coupled with an assumed annual inflation component of
                                                        3.00% and an annual production growth of 0.25%.
      The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market
      value of investments over a fifteen-year period (smoothed market value). PERS actuarial accrued liability is being amortized as
      a level percentage of projected payroll on a closed basis. There are nine years remaining in the amortization period at June 30,
      2007.

      The City’s changes in net pension asset for the year ended June 30, 2007, were as follows (amounts in thousands):

                                Annual required contribution                                         ($13,266)
                                Interest on beginning net pension asset                                 4,144
                                Adjustment to the annual required contribution                         (5,961)
                                Annual pension cost                                                   (15,083)
                                Contributions made                                                     13,266
                                Change in net pension asset                                            (1,817)
                                Net pension asset, beginning of year                                   53,456
                                Net pension asset, end of year                                       $51,639




                                                                 53
                                                CITY OF SANTA ROSA
                                       COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                       NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                     JUNE 30, 2007

NOTE 9 – EMPLOYEES’ RETIREMENT PLAN (Continued)

        The City’s contributions to the plan in the fiscal year ended June 30, 1996 included $8,435,000 from the proceeds of the Pension
        Obligation Refunding Bonds, Series 1995. The City’s contributions in subsequent years were equal to the annual required
        contribution, which were less than the annual pension cost as a result of the pension obligation transaction. In addition, in July
        2003, the City contributed $32,541,000, $7,216,000, and $10,004,000 to the miscellaneous, fire safety, and police safety plans,
        respectively, from the proceeds of the 2003 Pension Obligation bonds. As a result, the City’s contributions in subsequent years
        were equal to the annual required contribution, which were less than the annual pension cost as a result of the pension obligation
        transaction.

        Three-year trend information (dollar amounts in thousands):

                                          Annual                                     Percentage                Net
                    Fiscal year           Pension                                     Of APC                 Pension
                      Ended              Cost (APC)            Contribution          Contributed              Asset
                     6/30/05              $ 11,541               $ 10,676               92.50%                $54,925
                     6/30/06                16,573                 15,104               91.14%                 53,456
                     6/30/07                15,083                 13,266               87.95%                 51,639

        Schedule of funding progress for PERS (dollar amounts in thousands):



                                                                                                                            Unfunded
                                                                                                                             Actuarial
                      Entry age                                                                                              Liability
                       Normal             Actuarial           Unfunded                                 Annual                  As a
  Valuation           Accrued              Value              Actuarial            Funded              Covered              Percentage
    Date              Liability           Of Assets           Liability             Ratio              Payroll              Of Payroll
   6/30/03             $ 427,475           $ 349,045            $ 78,430              81.7%            $ 78,672                    99.7%
   6/30/04               466,201             428,535              37,667              91.9%              75,957                    49.6%
   6/30/05               507,964             465,535              42,429              91.6%              75,451                    56.2%

NOTE 10 – POSTRETIREMENT HEALTHCARE BENEFITS

        In addition to the pension benefits described in Note 9, the City provides postretirement health care benefits in accordance with
        the various Memorandums of Understanding and a contract with employee collective bargaining units, for those employees who
        retire from the City. To be eligible to participate in this program, at the time of retirement, the employee must have been an
        employee of the City for at least fifteen consecutive years (ten years for the Maintenance unit) and be at least 55 years old.
        Currently ninety-seven retirees meet those eligibility requirements. Under the Memorandums of Understanding and contract, the
        City reimburses the employee from $80 to $210 per month toward the cost of a health insurance plan offered by the City. The
        retiree pays for the cost of premiums above these limits, if any. During the year, expenditures of approximately $202,000 were
        recognized for postretirement health care. The City’s contributions are financed on a pay-as-you-go basis.


NOTE 11 – JOINT VENTURE

        Sonoma County Waste Management Agency

        The City participates in the Sonoma County Waste Management Agency (SCWMA), with Sonoma County and the nine other
        cities in the County. Each member of the joint venture has a representative on the Board of Directors. The Board of Directors is
        responsible for governing the joint venture as a separate entity. The Board of Directors, or a designee, is responsible for the
        preparation of an annual budget, assessing fees, and entering into contracts and is authorized to sue and become obligated when
        sued. The purpose of SCWMA is to conduct a yardwaste composting, woodwaste recovery system, household hazardous
        material recovery program, and a public education program in the County of Sonoma.

        The expenditures of SCWMA are primarily funded by dumping fees collected when reusable resources are disposed of at the
        County Landfill site. Funding for SCWMA also comes from the sale of composted and recycled products. No direct funding is
        required of the participants in the joint venture.


                                                                  54
                                                  CITY OF SANTA ROSA
                                         COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                         NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                       JUNE 30, 2007

NOTE 11 – JOINT VENTURE (Continued)

       The following summary of GAAP basis audited financial information at and for the year ended June 30, 2006 (the most current
       available audited information) was provided by SCWMA (amounts in thousands).
                             Total assets                                     $ 6,959
                             Total liabilities                                    1,991
                            Net assets                                                 $ 4,968

                            Total revenues                                             $ 5,267
                            Total expenses                                               4,578
                            Net increase in net assets                                    $689

       SCWMA had no debt outstanding at June 30, 2006.

       Complete financial statements for SCWMA can be obtained from:

       Sonoma County Waste Management Agency
       2300 County Center Drive, Suite B 100
       Santa Rosa, CA 95403

NOTE 12 – SELF-INSURANCE

       The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; errors and omissions;
       injuries to employees; natural disasters; unemployment coverage and providing health benefits to employees, and their
       dependents. The City is self-insured for its liability insurance, workers' compensation insurance, health benefits, and
       unemployment benefits. The City has chosen to establish a risk financing internal service fund where assets are set aside for
       claim settlements associated with the above risks of loss up to certain limits. Excess coverage for liability insurance is provided
       by the California Joint Powers Risk Management Authority (CJPRMA) and the California Transit Systems Joint Powers
       Insurance Authority (CalTIP), joint powers authorities (Authorities) whose purpose is to develop and fund programs of excess
       insurance for their member entities.

       The City, along with other Bay Area governments, is a member of the CJPRMA, a public-entity risk pool. CJPRMA provides
       excess liability and property damage coverage protection for the member agencies. CJPRMA is governed by a Board of
       Directors, which comprises officials appointed by each participating member. Premiums paid to CJPRMA are subject to
       possible refund based on the results of actuarial studies and approval by CJPRMA’s Board of Directors. In the opinion of the
       City’s management, premiums made represent the best available estimate of the ultimate cost of the City’s participation in
       CJPRMA and, accordingly, the accompanying basic financial statements of the City include no provisions for possible refunds or
       additional assessments. Actual refunds and assessments arising from retrospective premium adjustments relating to prior loss
       years will be recorded in the City’s basic financial statements in the year they become known. For the year ended June 30, 2007,
       the City paid premiums to CJPRMA of $871,000, which are included in the internal service fund in the accompanying basic
       financial statements.

       A summary of audited financial information on the CJPRMA authority as of and for the year ended June 30, 2006, the most
       current information, is as follows (amounts in thousands):

                            Total assets                                           $ 75,188
                            Total liabilities                                        42,846
                            Net assets                                             $ 32,342

                            Total revenues                                         $ 15,401
                            Total expenses                                           12,345
                            Net increase in net assets                             $     3,056

       CJPRMA had no debt outstanding at June 30, 2006.

       Complete financial statements for CJPRMA can be obtained from:

       CJPRMA
       2333 San Ramon Valley Blvd., Suite 250
       San Ramon, CA 94583-4456

                                                                  55
                                                    CITY OF SANTA ROSA
                                           COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                           NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                         JUNE 30, 2007

NOTE 12 – SELF-INSURANCE (Continued)

       The City, along with other California governments, is a member of the CalTIP, a public-entity risk pool. CalTIP provides
       liability insurance coverage to its participating members. CalTIP is governed by a Board of Directors, which comprises officials
       appointed by each participating member. Premiums paid to CalTIP are subject to retroactive assessments. Actual refunds and
       assessments arising from retrospective premium adjustments relating to prior loss years will be recorded in the City’s basic
       financial statements in the year they become known. For the year ended June 30, 2007, the City paid premiums to CalTIP of
       $89,000, which are included in the internal service fund in the accompanying basic financial statements.

       A summary of audited financial information on CalTIP as of and for the year ended April 30, 2006 (the most current available
       audited information) is as follows (amounts in thousands):

                              Total assets                                             $17,939
                              Total liabilities                                         10,041
                              Net assets                                               $ 7,898

                              Total revenues                                            $8,100
                              Total expenses                                             4.047
                              Net change in net assets                                  $ 4,053

       CalTIP had no debt outstanding at April 30, 2006.

       Complete financial statements for CalTIP can be obtained from:

       CalTIP
       1414 K Street, Suite 320
       Sacramento, CA 95814

       Excess coverage for workers’ compensation and health insurance is provided by commercial insurance policies after payment of
       large deductibles, referred to as self-insurance retention. Self-insurance and Authorities and commercial limits are as follows:

                 Type of coverage                         Self-insurance                             Authorities coverage
            General liability                     Up to $500,000 per occurrence           $500,000 to $40,000,000 per occurrence
            Transit liability                     Up to $100,000 per occurrence           $100,000 to $10,000,000 per occurrence
                                                                                                    Commercial coverage
            Workers’ compensation                 Up to $1,000,000 per                    $1,000,000 to $145,000,000 per
                                                  occurrence                              occurrence
            Health benefits                                                               Purchased through private insurance
                                                                                          (Kaiser) or through JPA large pool.
                                                                                          Reserves levels for pool are included in
                                                                                          premiums. Limit of health insurance for
                                                                                          covered individuals is $2 million


       Amounts in excess of these limits are self-insured. Property damage risks are covered on an occurrence basis up to $303,950,000
       by commercial insurance purchased from independent third parties. All properties are insured at full replacement values. For the
       past four fiscal years, no settlement amounts have exceeded commercial or Authorities insurance coverage.

       The unpaid claims liabilities included in the self-insurance internal service fund are based on the results of actuarial studies and
       include amounts for incurred but not reported (IBNR) claims. IBNR claims are claims that are incurred through the end of the
       fiscal year but not reported until after that date. Claim liabilities are calculated considering the effects of inflation, recent claim
       settlement trends including frequency and amount of payouts and other economic and social factors. Allocated claims adjustment
       expenses are included in the claims liability balance. The actuarial determined liability at June 30, 2005 and 2006 was
       discounted at 3%. After review by our finance department, the discounted rate was changed to 4% for 2007. It is the City's
       practice to obtain full actuarial studies annually. Annual premiums are charged by the self-insurance fund using various
       allocation methods that include actual cost, trends in claims experience and number of participants.




                                                                    56
                                                CITY OF SANTA ROSA
                                       COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                       NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                     JUNE 30, 2007

NOTE 12 – SELF-INSURANCE (Continued)

       Changes in the balances of claims liabilities during the past two fiscal years are as follows (amounts in thousands):

                                                                                          Year ended June 30
                                                                                       2007                 2006
                     Unpaid claims, beginning of fiscal year                             $12,255              $   12,643
                     Incurred claims and changes in estimates                              2,997                   3,392
                     Claim payments net of subrogation                                    (1,956)                 (3,780)
                     Unpaid claims, end of fiscal year                                   $13,296              $   12,255

NOTE 13 – RELATED PARTY TRANSACTIONS

       Advances to Component Unit

       The General Fund advanced the following loans to the Agency related to the SR Center Project, Gateways Project and Transit
       Oriented Redevelopment Project (amounts in thousands):

                                                                  Final                Outstanding
                                         Interest Rate           Maturity             June 30, 2007
                                             5.9%                  2020                      $4,172
                                              6%                   2039                       1,389
                                              6%                   2007                         229
                                                                                             $5,790

       Advances to Primary Government

       The Redevelopment agency component unit advanced to the city $3,290 in fiscal year 2005/06 for the construction of a fire
       station in the southwest quadrant of the City. This advance is to be repaid in annual principal only payments of $329 through
       fiscal year 2015/16.

       Contributions to the Housing Authority

       During fiscal year ended June 30, 2007, the City and the Agency contributed $1,664,774 and $801,393, respectively, towards the
       Authority’s affordable housing programs.

NOTE 14 – RESTATEMENT OF NET ASSETS/FUND BALANCE

       Information regarding restatement of net assets and fund balance (amounts in thousands):


                                                                   Governmental              Agency                    Governmental
                                                                    Activities            Component Unit                  Funds

       NET ASSETS/FUND BALANCE, beginning of year,
       as previously reported                                          $ 411,841                $ 4,590                     $ 67,160

       Restatement                                                          (3,290)                   3,290                    (3,290)

       NET ASSETS/FUND BALANCE, beginning of year,
       as restated                                                     $ 408,551                $ 7,880                     $ 63,870


       Beginning net assets of the governmental activities and Redevelopment Agency discretely presented component unit and
       beginning fund balance of the nonmajor government funds were restated to record a long-term advance from the Agency to the
       City entered into during the fiscal year ended June 30, 2006.



                                                                  57
                                               CITY OF SANTA ROSA
                                      COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTES TO THE BASIC FINANCIAL STATEMENTS
                                                    JUNE 30, 2007


NOTE 15 – CONTINGENCIES

      Litigation and Environmental Matters

      The City is directly and indirectly involved in various suits relating principally to claims arising from construction contracts,
      personal injury, and property damage. In addition, the City has identified several sites within the City’s boundary, which require
      environmental assessment and could result in undetermined cleanup costs. The potential costs to the City related to these
      environmental sites are highly uncertain, and the determination of the City’s liability is dependent on the extent, if any, to which
      such costs are recoverable from insurance or other parties. As a result, no liability has been accrued by the City relating to these
      environmental matters as of June 30, 2007.

      The City is also a defendant in a construction claim pertaining to the Geysers Recharge Project. To the extent the outcome of
      such litigation has been determined to result in probable loss to the City, such loss has been accrued in the accompanying
      financial statements.




                                                                 58
OTHER REQUIRED SUPPLEMENTARY INFORMATION
                                                                                                                      Statement B-1


                                                         CITY OF SANTA ROSA
                                                            GENERAL FUND
                                                       SCHEDULE OF REVENUES
                                                 BUDGET AND ACTUAL (BUDGET BASIS)
                                               FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                                                                                           Variance With
                                                                                                         Actual            Final Budget
                                                             Original                  Final            (Budget              Positive
                                                             Budget                   Budget             Basis)             (Negative)
REVENUES:
 Property taxes                                         $      20,391,672       $      20,391,672   $    21,038,105    $          646,433
 Sales taxes                                                   34,833,815              34,833,815        33,021,726            (1,812,089)
 Utility use taxes                                              9,023,000               9,023,000         9,375,733               352,733
 Other taxes                                                   27,942,823              27,942,823        28,771,366               828,543
 Licenses and permits                                           2,572,935               2,572,935         1,988,418              (584,517)
 Charges for services                                          21,424,823              21,424,823        18,649,400            (2,775,423)
 Intergovernmental                                              2,916,424               4,288,011         3,317,144              (970,867)
 Fines and forfeitures                                          1,720,764               1,720,764         1,816,808                96,044
 Interest                                                       1,191,637               1,029,343         1,811,723               782,380
 Net change in the fair value of investments                                                  -              74,014                74,014
 Other                                                           3,679,759              3,928,707         2,825,832            (1,102,875)

      TOTAL REVENUES                                    $     125,697,652       $     127,155,893   $   122,690,267    $       (4,465,626)

The note to the required supplementary information is an integral part of this statement.




                                                                    61
                                                                                                     Statement B-2


                                             CITY OF SANTA ROSA
                                                GENERAL FUND
                                SCHEDULE OF EXPENDITURES AND ENCUMBRANCES
                                     BUDGET AND ACTUAL (BUDGET BASIS)
                                   FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                                                                     Variance With
                                                                                    Actual           Final Budget
                                             Original             Final            (Budget             Positive
                                             Budget              Budget             Basis)            (Negative)
GENERAL GOVERNMENT
City Council:
  Salaries                               $         2,000     $      109,870    $       109,871   $               (1)
  Employee benefits                                  700             14,962             14,425                  537
  Services and supplies                          761,393            612,461            504,735              107,726
      TOTAL CITY COUNCIL                         764,093            737,293            629,031              108,262
City Manager:
  Salaries                                      1,160,018          1,164,504         1,164,503                    1
  Employee benefits                               352,832            365,334           365,334                  -
  Services and supplies                           616,660            702,472           330,996              371,476
      TOTAL CITY MANAGER                        2,129,510          2,232,310         1,860,833              371,477
City Attorney:
  Salaries                                      1,300,777          1,234,034         1,175,176               58,858
  Employee benefits                               405,455            405,455           368,505               36,950
  Services and supplies                           154,872            341,901           329,611               12,290
      TOTAL CITY ATTORNEY                       1,861,104          1,981,390         1,873,292              108,098
Human Resources:
 Salaries                                       1,058,643          1,083,599         1,075,675                7,924
 Employee benefits                                332,337            332,337           330,613                1,724
 Services and supplies                            359,884            377,525           377,525                  -
     TOTAL HUMAN RESOURCES                      1,750,864          1,793,461         1,783,813                9,648
Administrative Services:
 Salaries                                       2,177,602          2,113,384         1,864,167              249,217
 Employee benefits                                794,919            793,244           688,238              105,006
 Services and supplies                          4,100,852          3,963,976         3,487,139              476,837
 Capital outlay                                    30,000             30,000            26,441                3,559
     TOTAL ADMINISTRATIVE SERVICES              7,103,373          6,900,604         6,065,985              834,619
Finance:
  Salaries                                      2,615,741          2,693,824         2,693,824                  -
  Employee benefits                               978,145            979,820           979,820                  -
  Services and supplies                         1,455,297          1,626,173         1,548,011               78,162
  Capital outlay                                      -               97,500               -                 97,500
      TOTAL FINANCE                             5,049,183          5,397,317         5,221,655              175,662
Community Development:
 Salaries                                       4,689,221          4,720,087         4,673,092               46,995
 Employee benefits                              1,583,441          1,663,441         1,648,997               14,444
 Services and supplies                          2,209,925          2,639,873         1,971,094              668,779
     TOTAL COMMUNITY DEVELOPMENT                8,482,587          9,023,401         8,293,183              730,218
Nondepartmental:
 Salaries                                         400,000            400,000               -                400,000
 Liability and fire insurance                   1,006,399          1,006,399         1,006,399                  -
 Services and supplies                          1,338,489            510,886         2,724,051           (2,213,165)
     TOTAL NONDEPARTMENTAL                      2,744,888          1,917,285         3,730,450           (1,813,165)
     TOTAL GENERAL GOVERNMENT                 29,885,602          29,983,061        29,458,242             524,819
                                                                                                        (Continued)
                                                        62
                                                                                                 Statement B-2


                                         CITY OF SANTA ROSA
                                            GENERAL FUND
                            SCHEDULE OF EXPENDITURES AND ENCUMBRANCES
                                 BUDGET AND ACTUAL (BUDGET BASIS)
                               FOR THE FISCAL YEAR ENDED JUNE 30, 2007

(Continued)                                                                                      Variance With
                                                                                Actual           Final Budget
                                         Original             Final            (Budget             Positive
                                         Budget              Budget             Basis)            (Negative)
PUBLIC SAFETY
Fire:
  Salaries                                15,399,875          15,162,211        15,101,093               61,118
  Employee benefits                        7,250,594           7,589,154         7,589,154                  -
  Services and supplies                    3,166,662           3,170,927         2,561,183              609,744
  Capital outlay                              50,000              50,000            38,502               11,498
  Debt service:
    Principal                                397,960            397,960            397,960                  -
    Interest                                  88,346             88,346             88,346                  -
      TOTAL FIRE                          26,353,437          26,458,598        25,776,238              682,360
Police:
  Salaries                                24,278,243          24,618,350        23,861,365              756,985
  Employee benefits                       11,902,078          11,909,214        11,885,029               24,185
  Services and supplies                    6,492,575           7,253,278         6,694,254              559,024
  Capital outlay                              92,935             304,154           267,854               36,300
      TOTAL POLICE                        42,765,831          44,084,996        42,708,502            1,376,494
      TOTAL PUBLIC SAFETY                 69,119,268          70,543,594        68,484,740            2,058,854
PUBLIC WORKS
  Salaries                                  6,430,925          6,476,914         5,825,838              651,076
  Employee benefits                         2,773,973          2,789,308         2,789,307                    1
  Services and supplies                     5,771,100          6,344,971         4,204,512            2,140,459
  Capital outlay                               90,000            145,900           103,458               42,442
      TOTAL PUBLIC WORKS                  15,065,998          15,757,093        12,923,115            2,833,978
RECREATION AND PARKS
  Salaries                                  6,867,210          6,932,426         6,692,546              239,880
  Employee benefits                         2,428,172          2,429,253         2,429,253                  -
  Services and supplies                     4,178,777          4,238,036         4,078,735              159,301
  Capital outlay                               23,000             23,000            10,725               12,275
      TOTAL RECREATION AND PARKS          13,497,159          13,622,715        13,211,259              411,456
      TOTAL GENERAL FUND             $   127,568,027     $   129,906,463   $   124,077,356   $        5,829,107

                                                                                                    (Continued)




                                                    63
                                                                                                                              Statement B-2


                                                        GENERAL FUND
                                         SCHEDULE OF EXPENDITURES AND ENCUMBRANCES
                                              BUDGET AND ACTUAL (BUDGET BASIS)
                                            FOR THE FISCAL YEAR ENDED JUNE 30, 2007

(Continued)                                                                                                                   Variance With
                                                                                                            Actual            Final Budget
                                                             Original                  Final               (Budget              Positive
                                                             Budget                   Budget                Basis)             (Negative)
Salaries                                                $      66,380,255       $      66,709,203      $    64,237,150    $        2,472,053
Employee benefits                                              28,802,646              29,271,522           29,088,675               182,847
Services and supplies                                          30,606,486              31,782,479           28,811,846             2,970,633
Liability and fire insurance                                    1,006,399               1,006,399            1,006,399                   -
Capital outlay                                                    285,935                 650,554              446,980               203,574
Debt service:
  Principal                                                       397,960                   397,960            397,960                   -
  Interest                                                         88,346                    88,346             88,346                   -
      TOTAL GENERAL FUND                                $     127,568,027       $     129,906,463      $   124,077,356    $        5,829,107

EXPLANATION OF DIFFERENCES BETWEEN SCHEDULE OF EXPENDITURES AND
 ENCUMBRANCES AND GAAP EXPENDITURES:

        General government                                                                             $    29,431,801
        Public safety                                                                                       67,692,078
        Public works                                                                                        12,819,657
        Recreation and parks                                                                                13,200,534
        Capital outlay                                                                                         446,980
        Debt service:
          Principal                                                                                            397,960
          Interest                                                                                              88,346
          Actual amounts (budget basis) "Total Expenditures and Encumbrances":                             124,077,356

    Encumbrances for supplies and services ordered but not received is reported in the year the
     order is placed for budgetary purposes, but in the year the supplies are received for financial
     reporting purposes.
        General government                                                                                     266,030
        Public safety                                                                                         (211,156)
        Public works                                                                                           280,329
        Recreation and parks                                                                                  (154,899)
        Capital outlay                                                                                         (40,920)
          Total encumbrances                                                                                   139,384
    Transfers out to component units are not budgeted for budgetary purposes and
      are reported as other expenditures for financial reporting purposes.                                   1,664,774
          Total expenditures GAAP basis                                                                $   125,881,514

The note to the required supplementary information is an integral part of this statement.
                                                                                                                          (Concluded)




                                                                         64
                                                   CITY OF SANTA ROSA
                                          COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                      NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
                                                       JUNE 30, 2007

BUDGETS

Budgets are adopted for all governmental funds, except the Expendable Special Revenue Fund. All budgets are adopted on a basis
consistent with GAAP except for the accounting of encumbrances. The budget is legally required to be adopted prior to July 1 for the
ensuing year.

The City Manager is authorized to transfer an unlimited amount of appropriations within any fund so long as the total appropriations are
not increased. The City Manager is also authorized to transfer up to $50,000 of appropriations between funds. In addition, the City
Manager is authorized to transfer up to $100,000 of appropriations between funds within one Enterprise activity. Only the City Council has
the authority to increase total appropriations subject to the appropriation limitations established by state law. Budget appropriations lapse
at the end of the fiscal year, with the exception of contract commitments and capital improvements, which are carried over until the
commitment is met, or the project has been completed.

The legal level of budgetary control is by fund, although budgets are adopted within funds at the department/division level in all operating
funds and at the project level in the capital projects funds.




                                                                     65

                                                                     57
                                              CITY OF SANTA ROSA
                                     COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                           NONMAJOR GOVERNMENTAL FUNDS


                                                 SPECIAL REVENUE FUNDS

Special Revenue Funds are used to account for revenues derived from specific revenue sources. These funds are required by
statute, charter provisions or ordinance to finance particular functions or activities of government. The various funds and sources
are:

  (a) Homeless Shelter Operations Fund accounts for funding for the operations of the Brookwood Ave Shelter and future
      operations of the Samuel Jones Hall shelter.

  (b) Federal ISTEA Fund accounts for grants from the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
      program used to provide funds for construction of eligible transportation projects.

  (c) Federal Narcotics Asset Forfeiture Fund is used for specified police activities from confiscated assets of convicted drug
      felons.

  (d) State Narcotics Asset Forfeiture Fund is used for specified police activities from confiscated assets of convicted drug
      felons.

  (e) Traffic Safety Fund accounts for revenues received from misdemeanor moving violations.

  (f)   Gas Tax Fund accounts for funds from the State of California under the Street and Highway Code Sections 2105, 2106,
        2107 and 2107.5.

  (g) Traffic Congestion Relief Fund accounts for funds from the State of California under AB 2928.

  (h) Federal Grants Fund accounts for funds from various Federal grant programs such as Federal Revenue Sharing and
      Hazard Elimination Systems and Community Development Block Grant.

  (i)   State Grants Fund from State Library, Office of Traffic Safety, State Traffic System Management and Petroleum
        Violation Escrow Account.

  (j)   Environmental Crimes Fund accounts for restitution on environmental crimes used for future investigative expenditures.

  (k) Sonoma County Water Agency (SCWA) Zone 1A Fund receives funds from Sonoma County to provide for
      improvements to storm water systems.

  (l)   Public Facilities Improvement Fee Fund accounts for fees imposed on residential development for public facilities.

  (m) Capital Facilities Fee Fund accounts for fees imposed on residential and commercial development for public facilities.

  (n) Traffic Signal Fee Fund accounts for fees imposed on all development to fund new traffic signals.

  (o) Street Light Fee Fund accounts for fees imposed on developers to provide street lights.

  (p) Burbank Home and Gardens Fund accounts for revenues received from gift shop sales, included in other revenues and
      tour fees.

  (q) Park Acquisition and Development Fund accounts for revenues received from fees imposed on developers.

  (r)   AB 434 Fund accounts for funds from Bay Area Air Quality Management District to implement projects and programs to
        reduce air pollution from motor vehicles.

  (s) Special Tax District Fund accounts for special taxes levied to property owners for financing maintenance and other
      municipal services.

  (t)   Mobilehome Rent Stabilization Fund receives an annual fee to administer the mobilehome rent control ordinance 3072.



                                                                66

                                                                58
                                          CITY OF SANTA ROSA
                                 COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                        NONMAJOR GOVERNMENTAL FUNDS


                                        SPECIAL REVENUE FUNDS (Continued)

(u) Library Improvement Fund receives funds from the County Library system to make improvements to the City's libraries.

(v) Supplemental Law Enforcement Services Fund receives funds from the State of California to supplement local law
    enforcement activities.

(w) Law Enforcement Federal Block Grant Fund receives funds from the Department of Justice to fund front-line public
    safety activities.

(x) Utility Impact Fee Fund receives funds from Water and Wastewater enterprise funds for replacement of infrastructure
    damaged during enterprise capital improvement projects.

(y) Southeast Area Plan Recovery Fee Fund accounts for fees imposed on developers to reimburse the City for the cost of
    preparing the Southeast Area Plan.

(z) Southeast Area Development Impact Fee Fund accounts for fees imposed on developers for public improvements in the
    southeast area of the City.

(aa) Southwest Area Plan Recovery Fee Fund accounts for fees imposed on developers to reimburse the City for the cost of
     preparing the Southwest Area Plan.

(ab) Southwest Area Development Impact Fee Fund accounts for fees imposed on developers for public improvements in the
     southwest area of the City.

(ac) Sidewalk Program - Owner Contribution Fund accounts for funds from property owners used to reconstruct sidewalks.

(ad) Redevelopment Contribution Fund accounts for contributions from the City's Redevelopment Agency for capital
     improvements.

(ae) Measure M Fund receives funding from the County to provide funds for construction of eligible transportation projects.

(af) Economic Development Fund is used to account for efforts by the City to assist development opportunities.

(ag) Neighborhood Revitalization Program Fund is used for a multi-department effort to revitalize deteriorated
     neighborhoods.

(ah) Change for Kids Fund receives contributions for lower income youth recreation opportunities.

(ai) Brownfields Grant Fund receives grants from the Environmental Protection Agency to provide loans to private property
     owners for cleanup of toxic waste.

(aj) Measure O Fund receives sales tax used to fund enhanced Fire and Police services and Neighborhood Safety / Gang
     Prevention programs.

(ak) Administrative Hearing Fund receives fines and restitution paid by property owners to fund the costs of enforcing code
     compliance.

(al) Downtown Business Improvement Area (BIA) Fund accounts for assessments that have been levied on businesses within
     a business improvement area in downtown Santa Rosa. The funds are used for improvements and promoting activities
     that benefit the businesses in the specified area.

(am) Expendable Fund from revenues received for various purposes including but not limited to developer performance relief
     and/or default, recreation programs and other public needs and interests.




                                                            67

                                                            59
                                            CITY OF SANTA ROSA
                                   COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                         NONMAJOR GOVERNMENTAL FUNDS



                                                  DEBT SERVICE FUNDS
The Debt Service Funds account for the accumulation of resources for, and the payment of, general long-term debt principal and
interest. The various funds and sources are:

(a) The 2007 Building Acquisition Certificates of Participation (COP) Fund accounts for debt service receipts and expenditures
    related to the COPs maturing through fiscal year 2037-38. Proceeds from the issuance of the COPs were used for the
    acquisition of the Chamber Plaza building.




                                                             68

                                                             59
This Page Intentionally Left Blank
                                                                                                                                                 Statement C-1



                                                 CITY OF SANTA ROSA
                                              COMBINING BALANCE SHEET
                                            NONMAJOR GOVERNMENTAL FUNDS
                                                     JUNE 30, 2007


                                                                                    Special Revenue Funds

                                                     Homeless                             Federal            State
                                                      Shelter         Federal          Narcotics Asset   Narcotics Asset       Traffic       Gas
                                                     Operations       ISTEA              Forfeiture        Forfeiture          Safety        Tax
                                                       Fund            Fund                Fund              Fund               Fund         Fund

ASSETS
 Cash and investments                            $       21,587   $             -       $      2,138        $   122,177    $         -   $   3,017,243
 Receivables:
  Accounts                                                  -           322,245                  -                  -                -            -
  Interest                                                  -               -                    324              1,281              -         53,552
  Intergovernmental                                       4,286             -                    -                  -                -        266,125
  Assessments                                               -               -                    -                  -                -            -

   TOTAL ASSETS                                  $       25,873   $     322,245         $      2,462        $   123,458    $         -   $   3,336,920

LIABILITIES AND FUND BALANCES

LIABILITIES
 Accounts payable and accrued liabilities        $       17,344   $             -       $        -          $       -      $         -   $          -
 Due to other funds                                         -                   -                -                  -                -              -
 Advances from component unit                               -                   -                -                  -                -              -
 Deferred revenue                                         8,529                 -                -                  -                -              -

   TOTAL LIABILITIES                                     25,873                 -                -                  -                -              -

FUND BALANCES:
 Reserved for:
  Encumbrances                                               -                  -                -                  -                -              -
 Unreserved, reported in:
  Debt service                                               -              -                    -                  -                -             -
  Special revenue funds                                      -          322,245                2,462            123,458              -       3,336,920

   TOTAL FUND BALANCES                                       -          322,245                2,462            123,458              -       3,336,920

   TOTAL LIABILITIES AND FUND BALANCES           $       25,873   $     322,245         $      2,462        $   123,458    $         -   $   3,336,920




                                                                            70
                                                                                                                       Statement C-1




     Traffic                                                                             Public
    Congestion        Federal       State        Environmental        SCWA             Facilities       Capital
      Relief          Grants        Grants          Crimes           Zone 1A        Improvement Fee   Facilities Fee
      Fund             Fund         Fund             Fund              Fund               Fund            Fund


$        62,492   $         -   $            -   $     76,243    $         -         $ 1,199,720      $ 22,396,789

            -               -                -            -                -                  -            1,187,111
         23,949             -                -            -                -               21,093            317,905
            -               -                -            -                -                  -                  -
            -               -                -            -                -                  -                  -

$        86,441   $         -   $            -   $     76,243    $         -         $ 1,220,813      $ 23,901,805




$           -     $         -   $            -   $        -      $         -         $         -      $          -
            -               -                -            -                -                   -                 -
            -               -                -            -                -                   -                 -
            -               -                -            -                -                   -           1,187,111

            -               -                -            -                -                  -            1,187,111




            -               -                -            -                -                  -                  -

            -               -                -            -                -                   -                 -
         86,441             -                -         76,243              -             1,220,813        22,714,694

         86,441             -                -         76,243              -             1,220,813        22,714,694

$        86,441   $         -   $            -   $     76,243    $         -         $ 1,220,813      $ 23,901,805




                                                                               71
                                                                                                                                                 Statement C-1



                                                 CITY OF SANTA ROSA
                                              COMBINING BALANCE SHEET
                                            NONMAJOR GOVERNMENTAL FUNDS
                                                     JUNE 30, 2007


                                                                                  Special Revenue Funds

                                                                                          Burbank          Park
                                                       Traffic         Street             Home and       Acquisition                     Special
                                                     Signal Fee       Light Fee            Gardens    and Development       AB 434     Tax Districts
                                                        Fund            Fund                Fund           Fund              Fund         Fund

ASSETS
 Cash and investments                            $       80,068   $     114,481       $     256,144    $ 16,745,091     $        -     $     60,895
 Receivables:
  Accounts                                                  -                -                  -           2,028,340            -              -
  Interest                                                1,166              -                3,400           266,873            -              506
  Intergovernmental                                         -                -                  -                 -          154,206         16,222
  Assessments                                               -                -                  -                 -              -              989

   TOTAL ASSETS                                  $       81,234   $     114,481       $     259,544    $ 19,040,304     $    154,206   $     78,612

LIABILITIES AND FUND BALANCES

LIABILITIES
 Accounts payable and accrued liabilities        $           -    $          -        $       4,595    $          -     $         34   $         -
 Due to other funds                                          -               -                  -                 -          154,172             -
 Advances from component unit                                -               -                  -                 -              -               -
 Deferred revenue                                            -               -                  -           2,028,340            -               -

   TOTAL LIABILITIES                                         -               -                4,595         2,028,340        154,206             -

FUND BALANCES:
 Reserved for:
  Encumbrances                                               -               -                  -                 -              -               -
 Unreserved, reported in:
  Debt service                                              -               -                   -                 -              -              -
  Special revenue funds                                  81,234         114,481             254,949        17,011,964            -           78,612

   TOTAL FUND BALANCES                                   81,234         114,481             254,949        17,011,964            -           78,612

   TOTAL LIABILITIES AND FUND BALANCES           $       81,234   $     114,481       $     259,544    $ 19,040,304     $    154,206   $     78,612




                                                                             72
                                                                                                                Statement C-1




                              Supplemental       Law                                              Southeast
Mobilehome                        Law        Enforcement                          Southeast         Area
    Rent          Library     Enforcement      Federal           Utility          Area Plan     Development
Stabilization   Improvement     Services     Block Grant       Impact Fee        Recovery Fee    Impact Fee
    Fund           Fund          Fund           Fund             Fund               Fund            Fund


$    179,137    $   117,447   $     5,963    $     1,410   $          -          $       -      $ 1,774,117

         -              -             -              -                -                  -               -
       2,664          1,198         1,858            -                -                  -            21,570
         -              -             -              -                -                  -               -
         -              -             -              -                -                  -               -

$   181,801     $   118,645   $     7,821    $     1,410   $          -          $       -      $ 1,795,687




$        -      $       -     $       -      $       -     $          -          $       -      $         -
         -              -             -              -                -                  -                -
         -              -             -              -                -                  -                -
         -              -             -              -                -                  -                -

         -              -             -              -                -                  -                -




         -              -             -              -                -                  -               -

        -               -             -              -                -                  -                -
    181,801         118,645         7,821          1,410              -                  -          1,795,687

    181,801         118,645         7,821          1,410              -                  -          1,795,687

$   181,801     $   118,645   $     7,821    $     1,410   $          -          $       -      $ 1,795,687




                                                                            73
                                                                                                                                      Statement C-1



                                                           CITY OF SANTA ROSA
                                                        COMBINING BALANCE SHEET
                                                      NONMAJOR GOVERNMENTAL FUNDS
                                                               JUNE 30, 2007


                                                                                          Special Revenue Funds

                                              Southwest     Southwest Area  Sidewalk
                                              Area Plan      Development Program Owner Redevelopment                             Economic
                                             Recovery Fee     Impact Fee   Contribution Contribution              Measure M     Development
                                                Fund             Fund         Fund         Fund                     Fund           Fund

ASSETS
 Cash and investments                        $       760    $ 15,429,805     $   13,811     $        -       $        149,777   $    24,517
 Receivables:
   Accounts                                          -           1,449,587         -                 -                    -           9,500
   Interest                                          -             215,855         194               -                    -             -
   Intergovernmental                                 -                 -           -                 -                    -             -
   Assessments                                       -                 -           -                 -                    -             -

      TOTAL ASSETS                           $       760    $ 17,095,247     $   14,005     $        -       $        149,777   $    34,017

LIABILITIES AND FUND BALANCES

LIABILITIES
  Accounts payable and accrued liabilities   $       760    $          -     $      -       $        -       $            -     $    34,017
  Due to other funds                                 -                 -            -                -                    -             -
  Advances from component unit                       -           2,961,000          -                -                    -             -
  Deferred revenue                                   -           1,437,733          -                -                    -             -

      TOTAL LIABILITIES                              760         4,398,733          -                -                    -          34,017

FUND BALANCES:
 Reserved for:
   Encumbrances                                      -                 -            -                -                    -             -
 Unreserved, reported in:
   Debt service                                      -                 -            -                -                    -             -
   Special revenue funds                             -          12,696,514       14,005              -                149,777           -

      TOTAL FUND BALANCES                            -          12,696,514       14,005              -                149,777           -

      TOTAL LIABILITIES AND FUND BALANCES    $       760    $ 17,095,247     $   14,005     $        -       $        149,777   $    34,017




                                                                       74
                                                                                                                                                 Statement C-1




                                                                                                                       Debt Service Fund

Neighborhood
Revitalization   Change For   Brownfields                    Administrative             Downtown                        2007 Building
  Program          Kids          Grant          Measure O      Hearing                    BIA            Expendable    Acquistion COPs
    Fund           Fund          Fund             Fund          Fund                      Fund              Fund            Fund               Total


$      2,510     $   47,473   $       -     $ 6,331,268      $             7        $        5,102   $     5,566,794   $        722,262    $   74,527,228

          -             -             -                -               -                                         -                              4,996,783
          -             -             -             63,484             -                                      75,631                178         1,072,681
          -             -          51,233        1,137,033             -                                         -                              1,629,105
          -             -             -                -            73,209                                       -                                 74,198

$      2,510     $   47,473   $    51,233   $ 7,531,785      $      73,216          $        5,102   $     5,642,425   $        722,440    $   82,299,995




$      2,510     $      -     $        51   $      190,272   $           7          $         527    $        26,545   $            -      $      276,662
         -              -          15,835              -               -                                         -                  -             170,007
         -              -             -                -               -                       -                 -                  -           2,961,000
         -              -             -                -            73,209                                       -                  -           4,734,922

       2,510            -          15,886          190,272          73,216                    527             26,545                -           8,142,591




          -             -             -            185,714             -                       -                 -                  -            185,714

          -             -             -                -               -                       -                 -              722,440           722,440
          -          47,473        35,347        7,155,799             -                     4,575         5,615,880                -          73,249,250

          -          47,473        35,347        7,341,513             -                     4,575         5,615,880            722,440        74,157,404

$      2,510     $   47,473   $    51,233   $ 7,531,785      $      73,216          $        5,102   $     5,642,425   $        722,440    $   82,299,995




                                                                               75
                                                                                                                                                            Statement C-2




                                                       CITY OF SANTA ROSA
                                         COMBINING STATEMENT OF REVENUES, EXPENDITURES
                                                 AND CHANGES IN FUND BALANCES
                                                NONMAJOR GOVERNMENTAL FUNDS
                                             FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                                                       Special Revenue Funds

                                                         Homeless                             Federal            State
                                                          Shelter           Federal        Narcotics Asset   Narcotics Asset       Traffic           Gas
                                                         Operations         ISTEA            Forfeiture        Forfeiture          Safety            Tax
                                                           Fund              Fund              Fund              Fund               Fund             Fund

REVENUES:
 Sales taxes                                         $           -      $         -         $        -         $       -       $        -       $         -
 Charges for services                                            -                -                  -                 -                -                 -
 Development impact mitigation charges                           -                -                  -                 -                -                 -
 Intergovernmental                                            77,500          308,026                -                 -                -           2,913,087
 Fines and forfeitures                                           -                -                  -                 -            356,858               -
 Interest                                                        -                -                1,165             4,703              -             195,353
 Net change in the fair value of investments                     -                -                  302               129              -              17,447
 Contribution from property owners                               -                -                  -                 -                -                 -
 Other                                                       134,028              -                  -              74,148              -                 -
   TOTAL REVENUES                                            211,528          308,026              1,467            78,980          356,858         3,125,887
EXPENDITURES:
 Current:
  General government                                         778,644               -                 -                 -                 -                  -
  Public safety                                                  -                 -                 -                 -                 -                  -
  Public works                                                   -                 -                 -                 -                 -                  -
  Recreation and parks                                           -                 -                 -                 -                 -                  -
  Other                                                          -                 -                 -                 -                 -                  -
 Capital outlay                                                  -                 -                 -                 -                 -                  -
 Debt service:
  Bond issuance cost                                              -                -                 -                 -                 -                  -

   TOTAL EXPENDITURES                                        778,644               -                 -                 -                 -                  -
   EXCESS (DEFICIENCY) OF REVENUES
    OVER (UNDER) EXPENDITURES                               (567,116)         308,026              1,467            78,980          356,858         3,125,887
OTHER FINANCING SOURCES (USES):
 Issuance of long-term debt
 Discount on debt issuance
 Transfers in                                                567,116              -                  -                 -                 -              37,068
 Transfers out                                                   -             (6,395)           (20,995)          (28,000)         (356,858)       (3,158,040)

   TOTAL OTHER FINANCING SOURCES (USES)                      567,116           (6,395)           (20,995)          (28,000)         (356,858)       (3,120,972)

NET CHANGE IN FUND BALANCES                                      -            301,631            (19,528)           50,980               -              4,915

FUND BALANCES, beginning of year, as restated                     -            20,614             21,990            72,478               -          3,332,005

FUND BALANCES, end of year                           $           -      $     322,245       $      2,462       $   123,458     $         -      $ 3,336,920




                                                                              76
                                                                                                                       Statement C-2




     Traffic                                                                            Public
    Congestion         Federal       State        Environmental        SCWA           Facilities       Capital
      Relief           Grants        Grants          Crimes           Zone 1A      Improvement Fee   Facilities Fee
      Fund              Fund         Fund             Fund              Fund            Fund             Fund


$          -       $         -   $            -   $        -      $         -        $        -      $          -
           -                 -                -         21,500              -                 -                 -
           -                 -                -            -                -               1,200         4,696,523
     1,143,205               -                -            -            694,668               -                 -
           -                 -                -            -                -                 -                 -
        87,779               -                -            -                -              76,184         1,145,633
         1,056               -                -            -                -               7,310            65,854
           -                 -                -            -                -                 -                 -
           -                 -                -            -                -                 -                 -
     1,232,040               -                -         21,500          694,668            84,694         5,908,010



            -                -                -            -                -                  -                -
            -                -                -            -                -                  -                -
            -                -                -            -                -                  -                -
            -                -                -            -                -                  -                -
            -                -                -            -                -                  -                -
            -                -                -            -                -                  -                -

            -                -                -            -                -                  -                -

            -                -                -            -                -                  -                -

     1,232,040               -                -         21,500          694,668            84,694         5,908,010




            -                -            -                -                -             100,000               -
     (1,865,799)             -       (590,900)             -           (783,218)         (369,512)       (3,378,086)

     (1,865,799)             -       (590,900)             -           (783,218)         (269,512)       (3,378,086)

      (633,759)              -       (590,900)          21,500          (88,550)         (184,818)        2,529,924

       720,200               -        590,900           54,743           88,550          1,405,631       20,184,770

$       86,441     $         -   $            -   $     76,243    $         -        $   1,220,813   $ 22,714,694
                                                                                                       (Continued)




                                                                                77
                                                                                                                                                            Statement C-2




                                                      CITY OF SANTA ROSA
                                        COMBINING STATEMENT OF REVENUES, EXPENDITURES
                                                AND CHANGES IN FUND BALANCES
                                               NONMAJOR GOVERNMENTAL FUNDS
                                            FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                                                         Special Revenue Funds

                                                                                                 Burbank            Park
                                                           Traffic           Street              Home and         Acquisition                        Special
                                                         Signal Fee         Light Fee             Gardens      and Development        AB 434       Tax Districts
                                                            Fund              Fund                 Fund             Fund               Fund           Fund

REVENUES:
 Sales taxes                                         $          -       $          -         $         -        $          -      $        -       $        -
 Charges for services                                           -                  -                20,845                 -               -                -
 Development impact mitigation charges                            70             4,900                 -             6,501,676             -                -
 Intergovernmental                                              -                  -                   -                   -           262,772              -
 Fines and forfeitures                                          -                  -                   -                   -               -                -
 Interest                                                     4,192                -                12,329             967,652             -              2,460
 Net change in the fair value of investments                    330                -                   908              51,528             -                (82)
 Contribution from property owners                              -                  -                   -                   -               -             80,647
 Other                                                          -                  -                87,485                 -               -                -
   TOTAL REVENUES                                             4,592              4,900             121,567           7,520,856         262,772           83,025
EXPENDITURES:
 Current:
  General government                                             -                 -                   -                   -           302,621              -
  Public safety                                                  -                 -                   -                   -               -                -
  Public works                                                   -               4,825                 -                   -               -                -
  Recreation and parks                                           -                 -                65,212                 -               -              4,413
  Other                                                          -                 -                   -                   -               -                -
 Capital outlay                                                  -                 -                   -                   -               -                -
 Debt service:
  Bond issuance cost                                             -                  -                   -                  -                -               -

   TOTAL EXPENDITURES                                            -               4,825              65,212                 -           302,621            4,413
   EXCESS (DEFICIENCY) OF REVENUES
    OVER (UNDER) EXPENDITURES                                 4,592                 75              56,355           7,520,856          (39,849)         78,612
OTHER FINANCING SOURCES (USES):
 Issuance of long-term debt
 Discount on debt issuance
 Transfers in                                                    -                  -                   -                  -                -               -
 Transfers out                                                (2,948)               -               (11,102)        (6,282,951)        (114,651)            -

   TOTAL OTHER FINANCING SOURCES (USES)                       (2,948)               -               (11,102)        (6,282,951)        (114,651)            -

NET CHANGE IN FUND BALANCES                                   1,644                 75              45,253           1,237,905         (154,500)         78,612

FUND BALANCES, beginning of year, as restated                79,590            114,406             209,696          15,774,059         154,500              -

FUND BALANCES, end of year                           $       81,234     $      114,481       $     254,949      $ 17,011,964      $         -      $     78,612




                                                                               78
                                                                                                                    Statement C-2




                               Supplemental       Law                                                 Southeast
Mobilehome                         Law         Enforcement                           Southeast          Area
    Rent          Library      Enforcement       Federal            Utility          Area Plan      Development
Stabilization   Improvement      Services      Block Grant        Impact Fee        Recovery Fee     Impact Fee
   Fund            Fund           Fund            Fund              Fund               Fund             Fund


$        -      $       -      $       -       $       -      $           -         $       -       $        -
      61,991            -              -               -                  -                 -                -
         -              -              -               -                  -               2,938          396,635
         -           42,000        305,862             -                  -                 -                -
         -              -              -               -                  -                 -                -
       9,618          4,483          8,022             -                  -                 -             78,423
         592            247           (297)            -                  -                 -              6,531
         -              -              -               -                  -                 -                -
         -           20,391            -               -                  -                 -                -
      72,201         67,121        313,587             -                  -               2,938          481,589



      58,192            -               -              -                  -                  -                -
         -              -               -            1,056                -                  -                -
         -              -               -              -                  -                  -                -
                        -               -              -                  -                  -                -
         -              -               -              -                  -                  -                -
         -              -               -              -                  -                  -                -

         -              -               -              -                  -                  -                -

      58,192            -               -            1,056                -                  -                -

      14,009         67,121        313,587          (1,056)               -               2,938          481,589




         -              -               -              -            2,795,215                -                -
     (20,000)        (8,112)       (306,283)           -           (2,795,215)            (2,938)             -

     (20,000)        (8,112)       (306,283)           -                  -               (2,938)             -

      (5,991)        59,009           7,304         (1,056)               -                  -           481,589

    187,792          59,636            517           2,466                -                  -          1,314,098

$   181,801     $   118,645    $      7,821    $     1,410    $           -         $        -      $ 1,795,687
                                                                                                     (Continued)




                                                                               79
                                                                                                                                                Statement C-2




                                                              CITY OF SANTA ROSA
                                                COMBINING STATEMENT OF REVENUES, EXPENDITURES
                                                        AND CHANGES IN FUND BALANCES
                                                       NONMAJOR GOVERNMENTAL FUNDS
                                                    FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                                                                Special Revenue Funds

                                                 Southwest     Southwest Area       Sidewalk
                                                 Area Plan      Development      Program Owner     Redevelopment                        Economic
                                                Recovery Fee     Impact Fee       Contribution      Contribution        Measure M      Development
                                                   Fund             Fund              Fund             Fund               Fund            Fund

REVENUES:
 Sales taxes                                    $       -      $         -       $       -         $         -       $         -       $       -
 Charges for services                                   -                -               -                   -                 -               -
 Development impact mitigation charges                  823          964,567             -                   -                 -               -
 Intergovernmental                                      -                -               -             2,122,632         1,478,037             -
 Fines and forfeitures                                  -                -               -                   -                 -               -
 Interest                                               -            776,590             699                 -                 -               -
 Net change in the fair value of investments            -             57,384             (31)                -                 -               -
 Contribution from property owners                      -                -               -                   -                 -               -
 Other                                                  -                -               -                   -                 -            38,425
   TOTAL REVENUES                                       823         1,798,541            668           2,122,632         1,478,037          38,425
EXPENDITURES:
 Current:
  General government                                    -                 -               -                   -                 -          946,003
  Public safety                                         -                 -               -                   -                 -              -
  Public works                                          -                 -               -                   -                 -              -
  Recreation and parks                                  -                 -               -                   -                 -              -
  Other                                                 -                 -               -                   -                 -              -
 Capital outlay                                         -                 -               -                   -                 -              -
 Debt service:
  Bond issuance cost                                    -                 -               -                   -                 -               -

   TOTAL EXPENDITURES                                   -                 -               -                   -                 -          946,003
   EXCESS (DEFICIENCY) OF REVENUES
    OVER (UNDER) EXPENDITURES                           823         1,798,541            668           2,122,632         1,478,037         (907,578)
OTHER FINANCING SOURCES (USES):
 Issuance of long-term debt
 Discount on debt issuance
 Transfers in                                           -                 -               -                   -                 -          907,578
 Transfers out                                         (823)         (178,504)            -            (2,122,632)       (1,885,828)           -

   TOTAL OTHER FINANCING SOURCES (USES)                (823)         (178,504)            -            (2,122,632)       (1,885,828)       907,578

NET CHANGE IN FUND BALANCES                             -           1,620,037            668                  -           (407,791)             -

FUND BALANCES, beginning of year, as restated           -          11,076,477          13,337                 -            557,568              -

FUND BALANCES, end of year                      $       -      $   12,696,514    $     14,005      $          -      $     149,777     $        -




                                                                        80
                                                                                                                                                  Statement C-2




                                                                                                                       Debt Service Fund

Neighborhood
Revitalization   Change For   Brownfields                        Administrative       Downtown                          2007 Building
  Program          Kids          Grant            Measure O        Hearing              BIA            Expendable      Acquistion COPs
    Fund           Fund          Fund               Fund            Fund                Fund             Fund               Fund                 Total


$         -      $      -     $       -       $     7,864,900    $        -       $         -      $           -                    -      $    7,864,900
          -             -             -                   -               -                 -                  -                    -             104,336
          -             -             -                   -               -                 -                  -                    -          12,569,332
          -             -          51,234             108,000             -                 -                  -                    -           9,507,023
          -             -             -                   -               -                 -                  -                    -             356,858
                                      -               233,273             -                 -              265,436                  -           3,873,994
          -             -             -                 3,743             -                 -               21,048                  178           234,177
          -             -             -                   -               -                 -              469,515                  -             550,162
      135,994        28,605           -                   -            92,826           131,054            869,317                  -           1,612,273
     135,994         28,605        51,234           8,209,916          92,826           131,054          1,625,316                  178        36,673,055



      658,026           -          51,233                 -           191,181            126,479           371,404                  -           3,483,783
          -             -             -             1,578,461             -                  -                 -                    -           1,579,517
          -             -             -                   -               -                  -              50,225                  -              55,050
          -          14,855           -             1,226,796             -                  -             706,842                  -           2,018,118
          -             -             -                                                                      2,131                  -               2,131
          -             -             -               594,041              -                 -                 -                    -             594,041
                                      -
          -             -             -                   -                -                 -                  -               269,526           269,526

     658,026         14,855        51,233           3,399,298         191,181           126,479          1,130,602              269,526         8,002,166

     (522,032)       13,750               1         4,810,618         (98,355)             4,575           494,714             (269,348)       28,670,889

                                                                                                                              1,160,000          1,160,000
                                                                                                                               (168,212)          (168,212)
     522,032            -             -                   -            80,194                -                  -                   -            5,009,203
         -              -             -               (85,671)            -                  -               (9,286)                -          (24,384,747)

      522,032           -             -               (85,671)         80,194                -               (9,286)            991,788        (18,383,756)

          -          13,750               1         4,724,947         (18,161)             4,575           485,428              722,440        10,287,133

          -          33,723        35,346           2,616,566          18,161                -           5,130,452                  -          63,870,271

$         -      $   47,473   $    35,347     $     7,341,513    $         -      $        4,575   $     5,615,880     $        722,440    $ 74,157,404




                                                                         81
                                                                                                   Statement C-3


                                            CITY OF SANTA ROSA
                           HOMELESS SHELTER OPERATIONS SPECIAL REVENUE FUND
                         SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                       CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (BUDGET BASIS)
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                       Variance With
                                                                                     Actual            Final Budget
                                               Original            Final            (Budget              Positive
                                               Budget             Budget             Basis)             (Negative)
REVENUES
 Intergovernmental                         $       100,000    $      100,000    $       77,500     $          (22,500)
 Other                                             138,000           138,000           134,028                 (3,972)
     TOTAL REVENUES                                238,000           238,000           211,528                (26,472)
EXPENDITURES:
 General government                                980,551           980,551           769,621               210,930
    DEFICIENCY OF REVENUES
      UNDER EXPENDITURES                          (742,551)         (742,551)          (558,093)             184,458
OTHER FINANCING SOURCE
 Transfers in                                      706,742           706,742           567,116              (139,626)
NET CHANGE IN FUND BALANCE                 $       (35,809)   $      (35,809)             9,023    $          44,832
ADJUSTMENTS TO GAAP BASIS                                                                (9,023)
FUND BALANCE, beginning of year                                                               -
FUND BALANCE, end of year                                                       $             -




                                                   82
                                                                                                 Statement C-4


                                            CITY OF SANTA ROSA
                                   FEDERAL ISTEA SPECIAL REVENUE FUND
                          SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                               CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                     Variance With
                                                                                                     Final Budget
                                               Original            Final                               Positive
                                               Budget             Budget           Actual             (Negative)
REVENUES - Intergovernmental               $     2,923,891    $    3,728,734   $      308,026    $       (3,420,708)
OTHER FINANCING USES
 Transfers out                                            -                -           (6,395)               (6,395)
NET CHANGE IN FUND BALANCE                 $     2,923,891    $    3,728,734          301,631    $       (3,427,103)

FUND BALANCE, beginning of year                                                        20,614
FUND BALANCE, end of year                                                      $      322,245




                                                   83
                                                                                                      Statement C-5


                                                CITY OF SANTA ROSA
                             FEDERAL NARCOTICS ASSET FORFEITURE SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                          Variance With
                                                                                                          Final Budget
                                                   Original            Final                                Positive
                                                   Budget             Budget            Actual             (Negative)
REVENUES:
 Interest                                      $              -   $            -    $        1,165    $           1,165
 Net change in the fair value of investments                  -                -               302                  302
      TOTAL REVENUES                                          -                -             1,467                1,467
OTHER FINANCING USES
 Transfers out                                         (30,000)          (30,000)          (20,995)               9,005
NET CHANGE IN FUND BALANCE                     $       (30,000)   $      (30,000)          (19,528)   $          10,472

FUND BALANCE, beginning of year                                                             21,990
FUND BALANCE, end of year                                                           $        2,462




                                                       84
                                                                                                          Statement C-6


                                                 CITY OF SANTA ROSA
                               STATE NARCOTICS ASSET FORFEITURE SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                       FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                              Variance With
                                                                                                              Final Budget
                                                    Original              Final                                 Positive
                                                    Budget               Budget             Actual             (Negative)
REVENUES
 Interest                                       $              500   $            500   $        4,703    $           4,203
 Net change in the fair value of investments                   -                  -                129                  129
 Other                                                         -                  -             74,148               74,148
      TOTAL REVENUES                                           500                500           78,980               78,480
OTHER FINANCING USES
 Transfers out                                                 -            (28,000)           (28,000)                  -
NET CHANGE IN FUND BALANCE                      $              500   $      (27,500)            50,980    $          78,480

FUND BALANCE, beginning of year                                                                 72,478
FUND BALANCE, end of year                                                               $      123,458




                                                        85
                                                                                                    Statement C-7


                                              CITY OF SANTA ROSA
                                     TRAFFIC SAFETY SPECIAL REVENUE FUND
                            SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                 CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                    FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                        Variance With
                                                                                                        Final Budget
                                                 Original            Final                                Positive
                                                 Budget             Budget            Actual             (Negative)
REVENUES - Fines and forfeitures             $       200,000    $      200,000    $      356,858    $         156,858
OTHER FINANCING USES
 Transfers out                                      (200,000)         (200,000)         (356,858)             (156,858)
NET CHANGE IN FUND BALANCE                   $              -   $            -                 -    $              -

FUND BALANCE, beginning of year                                                                -
FUND BALANCE, end of year                                                         $            -




                                                     86
                                                                                                      Statement C-8


                                                CITY OF SANTA ROSA
                                           GAS TAX SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                          Variance With
                                                                                                          Final Budget
                                                   Original            Final                                Positive
                                                   Budget             Budget            Actual             (Negative)
REVENUES
 Intergovernmental                             $     2,763,000    $    2,763,000    $    2,913,087    $         150,087
 Interest                                               73,000            73,000           195,353              122,353
 Net change in the fair value of investments               -                 -              17,447               17,447
      TOTAL REVENUES                                 2,836,000         2,836,000         3,125,887              289,887
OTHER FINANCING SOURCES (USES)
 Transfer in                                               -              37,068            37,068                   -
 Transfers out                                      (5,668,545)          (37,068)       (3,158,040)           (3,120,972)
NET CHANGE IN FUND BALANCE                     $    (2,832,545)   $    2,836,000             4,915    $       (2,831,085)

FUND BALANCE, beginning of year                                                          3,332,005
FUND BALANCES, end of year                                                          $    3,336,920




                                                       87
                                                                                                      Statement C-9


                                                CITY OF SANTA ROSA
                                  TRAFFIC CONGESTION RELIEF SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                          Variance With
                                                                                                          Final Budget
                                                   Original            Final                                Positive
                                                   Budget             Budget            Actual             (Negative)
REVENUES
 Intergovernmental                             $       693,796    $      693,796    $    1,143,205    $         449,409
 Interest                                               10,000            10,000            87,779               77,779
 Net change in the fair value of investments               -                 -               1,056                1,056
      TOTAL REVENUES                                   703,796           703,796         1,232,040              528,244
OTHER FINANCING USES
 Transfers out                                        (703,796)       (1,919,131)       (1,865,799)              53,332
NET CHANGE IN FUND BALANCE                     $              -   $   (1,215,335)         (633,759)   $         581,576

FUND BALANCE, beginning of year                                                            720,200
FUND BALANCE, end of year                                                           $       86,441




                                                       88
                                                                                                Statement C-10


                                           CITY OF SANTA ROSA
                                 FEDERAL GRANTS SPECIAL REVENUE FUND
                         SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                              CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                 FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                     Variance With
                                                                                                     Final Budget
                                              Original            Final                                Positive
                                              Budget             Budget            Actual             (Negative)
REVENUES
 Intergovernmental                        $              -   $    2,165,525    $            -    $       (2,165,525)
OTHER FINANCING USES
 Transfers out                                           -       (3,230,437)                -             3,230,437
NET CHANGE IN FUND BALANCE                $              -   $   (1,064,912)                -    $        1,064,912

FUND BALANCE, beginning of year                                                             -
FUND BALANCE, end of year                                                      $            -




                                                  89
                                                                                                  Statement C-11


                                            CITY OF SANTA ROSA
                                    STATE GRANTS SPECIAL REVENUE FUND
                          SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                               CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                       Variance With
                                                                                                       Final Budget
                                               Original            Final                                 Positive
                                               Budget             Budget            Actual              (Negative)
REVENUES - Intergovernmental               $     9,146,630    $    6,693,310    $            -     $       (6,693,310)
OTHER FINANCING USES
 Transfers out                                  (9,736,630)       (6,692,310)         (590,900)             6,101,410
NET CHANGE IN FUND BALANCE                 $      (590,000)   $        1,000          (590,900)    $         (591,900)

FUND BALANCE, beginning of year                                                        590,900
FUND BALANCE, end of year                                                       $            -




                                                   90
                                                                                                Statement C-12


                                             CITY OF SANTA ROSA
                                ENVIRONMENTAL CRIMES SPECIAL REVENUE FUND
                           SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                   FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                     Variance With
                                                                                                     Final Budget
                                                Original           Final                               Positive
                                                Budget            Budget           Actual             (Negative)
REVENUES - Charges for services             $        40,000   $       40,000   $       21,500    $          (18,500)

NET CHANGE IN FUND BALANCE                  $        40,000   $       40,000           21,500    $          (18,500)

FUND BALANCE, beginning of year                                                        54,743
FUND BALANCE, end of year                                                      $       76,243




                                                    91
                                                                                                  Statement C-13


                                            CITY OF SANTA ROSA
                                    SCWA ZONE 1A SPECIAL REVENUE FUND
                          SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                               CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                       Variance With
                                                                                                       Final Budget
                                               Original            Final                                 Positive
                                               Budget             Budget            Actual              (Negative)
REVENUES - Intergovernmental               $     6,696,662    $    6,946,662    $      694,668     $       (6,251,994)
OTHER FINANCING USES
 Transfers out                                  (6,785,212)       (7,035,212)         (783,218)             6,251,994
NET CHANGE IN FUND BALANCE                 $       (88,550)   $      (88,550)          (88,550)    $              -

FUND BALANCE, beginning of year                                                         88,550
FUND BALANCE, end of year                                                       $            -




                                                   92
                                                                                                           Statement C-14


                                                   CITY OF SANTA ROSA
                               PUBLIC FACILITIES IMPROVEMENT FEE SPECIAL REVENUE FUND
                               SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                    CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                        FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                              Variance With
                                                                                                              Final Budget
                                                        Original            Final                               Positive
                                                        Budget             Budget            Actual            (Negative)
REVENUES
 Development impact mitigation charges              $         2,000    $        2,000    $       1,200       $         (800)
 Interest                                                     2,000             2,000           76,184               74,184
 Net change in the fair value of investments                    -                 -              7,310                7,310
      TOTAL REVENUES                                          4,000             4,000           84,694               80,694
OTHER FINANCING SOURCES (USES)
 Transfers in                                               100,000           100,000           100,000                 -
 Transfers out                                           (1,383,576)         (100,000)         (369,512)           (269,512)

      TOTAL OTHER FINANCING SOURCES (USES)               (1,283,576)                -          (269,512)           (269,512)
NET CHANGE IN FUND BALANCE                          $    (1,279,576)   $        4,000          (184,818)     $     (188,818)

FUND BALANCE, beginning of year                                                               1,405,631
FUND BALANCE, end of year                                                                $    1,220,813




                                                        93
                                                                                                       Statement C-15


                                                CITY OF SANTA ROSA
                                    CAPITAL FACILITIES FEE SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                            Variance With
                                                                                                            Final Budget
                                                   Original            Final                                  Positive
                                                   Budget             Budget             Actual              (Negative)
REVENUES
 Development impact mitigation charges         $     3,185,000    $    3,185,000     $    4,696,523     $        1,511,523
 Interest                                              300,000           300,000          1,145,633                845,633
 Net change in the fair value of investments               -                 -               65,854                 65,854
      TOTAL REVENUES                                 3,485,000         3,485,000          5,908,010              2,423,010
OTHER FINANCING USES
 Transfers out                                     (17,584,566)       (16,937,566)       (3,378,086)           13,559,480
NET CHANGE IN FUND BALANCE                     $   (14,099,566)   $   (13,452,566)        2,529,924     $      15,982,490

FUND BALANCE, beginning of year                                                          20,184,770
FUND BALANCE, end of year                                                            $   22,714,694




                                                       94
                                                                                                      Statement C-16


                                                CITY OF SANTA ROSA
                                     TRAFFIC SIGNAL FEE SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                           Variance With
                                                                                                           Final Budget
                                                   Original            Final                                 Positive
                                                   Budget             Budget            Actual              (Negative)
REVENUES
 Development impact mitigation charges         $         1,000    $        1,000    $           70     $            (930)
 Interest                                                  -                 -               4,192                 4,192
 Net change in the fair value of investments               -                 -                 330                   330
      TOTAL REVENUES                                     1,000             1,000             4,592                 3,592
OTHER FINANCING USES
 Transfers out                                         (77,585)          (77,585)           (2,948)               74,637
NET CHANGE IN FUND BALANCE                     $       (76,585)   $      (76,585)            1,644     $          78,229

FUND BALANCE, beginning of year                                                             79,590
FUND BALANCE, end of year                                                           $       81,234




                                                       95
                                                                                                           Statement C-17


                                            CITY OF SANTA ROSA
                                  STREET LIGHT FEE SPECIAL REVENUE FUND
                          SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                               CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                           Variance With
                                                                                                           Final Budget
                                                       Original             Final                            Positive
                                                       Budget              Budget            Actual         (Negative)
REVENUES - Development impact mitigation charges   $           1,000   $       1,000     $        4,900        $    3,900
EXPENDITURES - Public works                                    5,000           5,000              4,825               175
NET CHANGE IN FUND BALANCE                         $        (4,000)    $       (4,000)                75   $        4,075

FUND BALANCE, beginning of year                                                                114,406
FUND BALANCE, end of year                                                                $     114,481




                                                          96
                                                                                                      Statement C-18


                                                CITY OF SANTA ROSA
                                 BURBANK HOME AND GARDENS SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                  CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                           Variance With
                                                                                                           Final Budget
                                                   Original            Final                                 Positive
                                                   Budget             Budget            Actual              (Negative)
REVENUES
 Charges for services                          $        20,050    $       20,050    $       20,845     $             795
 Interest                                                6,000             6,000            12,329                 6,329
 Net change in the fair value of investments               -                 -                 908                   908
 Gift shop                                              50,000            50,000            54,215                 4,215
 Other                                                  18,000            18,000            33,270                15,270
      TOTAL REVENUE                                     94,050            94,050           121,567                27,517
EXPENDITURES
 Recreation and parks:
   Museum exhibits and collections                      54,684            54,684            30,387                24,297
   Gift shop                                            31,000            31,000            27,711                 3,289
   Special events                                       14,750            14,750             7,114                 7,636
      TOTAL EXPENDITURES                               100,434           100,434            65,212                35,222
EXCESS (DEFICIENCY) OF REVENUES
 OVER (UNDER) EXPENDITURES                              (6,384)           (6,384)           56,355                62,739
OTHER FINANCING USES
 Transfers out                                         (11,102)          (61,102)          (11,102)               50,000
NET CHANGE IN FUND BALANCE                     $       (17,486)   $      (67,486)           45,253     $         112,739

FUND BALANCE, beginning of year                                                            209,696
FUND BALANCE, end of year                                                           $      254,949




                                                       97
                                                                                                        Statement C-19


                                                CITY OF SANTA ROSA
                              PARK ACQUISITION AND DEVELOPMENT SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                             Variance With
                                                                                                             Final Budget
                                                    Original            Final                                  Positive
                                                    Budget             Budget             Actual              (Negative)
REVENUES
 Development impact mitigation charges
   Park acquisition fee zone #1                 $       906,000    $      906,000     $    3,459,948     $        2,553,948
   Park acquisition fee zone #2                         685,000           685,000          1,019,598                334,598
   Park acquisition fee zone #3                       1,031,000         1,031,000          1,114,347                 83,347
   Park acquisition fee zone #4                       1,170,000         1,170,000            907,783               (262,217)
 Interest                                               202,000           202,000            967,652                765,652
 Net change in the fair value of investments                -                 -               51,528                 51,528
      TOTAL REVENUES                                  3,994,000         3,994,000          7,520,856              3,526,856
OTHER FINANCING USES
 Transfers out                                      (14,561,222)       (13,361,881)       (6,282,951)             7,078,930
NET CHANGE IN FUND BALANCE                      $   (10,567,222)   $    (9,367,881)        1,237,905     $      10,605,786

FUND BALANCE, beginning of year                                                           15,774,059
FUND BALANCE, end of year                                                             $   17,011,964




                                                        98
                                                                                                  Statement C-20


                                             CITY OF SANTA ROSA
                                        AB 434 SPECIAL REVENUE FUND
                          SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                               CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                       Variance With
                                                                                                       Final Budget
                                               Original            Final                                 Positive
                                               Budget             Budget            Actual              (Negative)
REVENUES - Intergovernmental               $       280,635    $      280,635    $      262,772     $          (17,863)
EXPENDITURES - General government                  329,756           329,756           302,621                27,135
     EXCESS OF REVENUES
      OVER EXPENDITURES                            (49,121)          (49,121)          (39,849)                9,272
OTHER FINANCING USES
 Transfers out                                    (139,624)         (139,624)         (114,651)               24,973
NET CHANGE IN FUND BALANCE                 $      (188,745)   $     (188,745)         (154,500)    $          34,245

FUND BALANCE, beginning of year                                                        154,500
FUND BALANCE, end of year                                                       $            -




                                                   99
                                                                                                      Statement C-21


                                                 CITY OF SANTA ROSA
                                    SPECIAL TAX DISTRICTS SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                       FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                           Variance With
                                                                                                           Final Budget
                                                   Original             Final                                Positive
                                                   Budget              Budget           Actual              (Negative)
REVENUES
 Interest                                      $           -       $          -     $        2,460     $           2,460
 Net change in the fair value of investments               -                  -                (82)                  (82)
 Other                                                  44,240             44,216           80,647                36,431
      TOTAL REVENUES                                    44,240             44,216           83,025                38,809
EXPENDITURES - Recreation & Parks                       44,216             44,216            4,413                39,803
NET CHANGE IN FUND BALANCE                     $              24   $            -           78,612     $          78,612

FUND BALANCE, beginning of year                                                                  -
FUND BALANCE, end of year                                                           $       78,612




                                                      100
                                                                                                         Statement C-22


                                                 CITY OF SANTA ROSA
                               MOBILEHOME RENT STABILIZATION SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                            CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (BUDGET BASIS)
                                       FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                              Variance With
                                                                                          Actual              Final Budget
                                                    Original            Final            (Budget                Positive
                                                    Budget             Budget             Basis)               (Negative)
REVENUES
 Charges for services                           $        82,500    $       82,500    $       61,991       $          (20,509)
 Interest                                                   -                 -               9,618                    9,618
 Net change in the fair value of investments                -                 -                 592                      592
      TOTAL REVENUES                                     82,500            82,500            72,201                  (10,299)
EXPENDITURES - General government                        79,528            79,528            58,292                  21,236
      EXCESS OF REVENUES
       OVER EXPENDITURES                                  2,972             2,972            13,909                  10,937
OTHER FINANCING USES
 Transfers out                                          (20,000)          (20,000)           (20,000)                    -
NET CHANGE IN FUND BALANCE                      $       (17,028)   $      (17,028)            (6,091)     $          10,937

ADJUSTMENT TO GAAP BASIS                                                                           100
FUND BALANCE, beginning of year                                                             187,792
FUND BALANCE, end of year                                                            $      181,801




                                                       101
                                                                                                      Statement C-23


                                                 CITY OF SANTA ROSA
                                    LIBRARY IMPROVEMENT SPECIAL REVENUE FUND
                              SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                   CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                       FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                           Variance With
                                                                                                           Final Budget
                                                   Original            Final                                 Positive
                                                   Budget             Budget            Actual              (Negative)
REVENUES
 Intergovernmental                             $        42,000    $       42,000    $       42,000     $             -
 Interest                                                  -                 -               4,483                 4,483
 Net change in the fair value of investments               -                 -                 247                   247
 Other                                                     -                 -              20,391                20,391
      TOTAL REVENUES                                    42,000            42,000            67,121                25,121
OTHER FINANCING USES
 Transfers out                                         (92,987)          (92,987)           (8,112)               84,875
NET CHANGE IN FUND BALANCE                     $       (50,987)   $      (50,987)           59,009     $         109,996

FUND BALANCE, beginning of year                                                             59,636
FUND BALANCE, end of year                                                           $      118,645




                                                      102
                                                                                                       Statement C-24


                                               CITY OF SANTA ROSA
                          SUPPLEMENTAL LAW ENFORCEMENT SERVICES SPECIAL REVENUE FUND
                             SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                  CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                     FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                            Variance With
                                                                                                            Final Budget
                                                   Original            Final                                  Positive
                                                   Budget             Budget            Actual               (Negative)
REVENUES
 Intergovernmental                             $              -   $            -    $      305,862      $         305,862
 Interest                                                     -                -             8,022                  8,022
 Net change in the fair value of investments                  -                -              (297)                  (297)
      TOTAL REVENUES                                          -                -           313,587                313,587
OTHER FINANCING USES
 Transfers out                                                -         (306,283)         (306,283)                    -
NET CHANGE IN FUND BALANCE                     $              -   $     (306,283)            7,304      $         313,587

FUND BALANCE, beginning of year                                                                  517
FUND BALANCE, end of year                                                           $        7,821




                                                      103
                                                                                                 Statement C-25


                                           CITY OF SANTA ROSA
                       LAW ENFORCEMENT FEDERAL BLOCK GRANT SPECIAL REVENUE FUND
                         SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                              CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                 FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                      Variance With
                                                                                                      Final Budget
                                              Original            Final                                 Positive
                                              Budget             Budget            Actual              (Negative)
EXPENDITURES - Public safety              $        82,661    $       82,661    $        1,056     $          81,605
NET CHANGE IN FUND BALANCE                $       (82,661)   $      (82,661)           (1,056)    $          81,605

FUND BALANCE, beginning of year                                                         2,466
FUND BALANCE, end of year                                                      $        1,410




                                                 104
                                                                                                      Statement C-26


                                           CITY OF SANTA ROSA
                                         UTILITY IMPACT FEE FUND
                         SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                              CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                 FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                           Variance With
                                                                                                           Final Budget
                                              Original              Final                                    Positive
                                              Budget               Budget               Actual              (Negative)

OTHER FINANCING SOURCES (USES)
 Transfers in                             $     3,843,829      $    4,449,733       $    2,795,215     $       (1,654,518)
 Transfers out                                 (3,843,929)         (4,449,833)          (2,795,215)             1,654,618
NET CHANGE IN FUND BALANCE                $            (100)   $            (100)                -     $             100

FUND BALANCE, beginning of year                                                                  -
FUND BALANCE, end of year                                                           $            -




                                                 105
                                                                                                          Statement C-27



                                             CITY OF SANTA ROSA
                           SOUTHEAST AREA PLAN RECOVERY FEE SPECIAL REVENUE FUND
                           SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                   FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                              Variance With
                                                                                                              Final Budget
                                                       Original            Final                                Positive
                                                       Budget             Budget            Actual             (Negative)

REVENUES - Development impact mitigation charges   $         5,000    $        5,000    $        2,938    $           (2,062)
OTHER FINANCING USES
 Transfers out                                              (5,000)           (5,000)           (2,938)               2,062
NET CHANGE IN FUND BALANCE                         $              -   $            -                 -    $              -

FUND BALANCE, beginning of year                                                                      -
FUND BALANCE, end of year                                                               $            -




                                                           106
                                                                                                     Statement C-28


                                               CITY OF SANTA ROSA
                          SOUTHEAST AREA DEVELOPMENT IMPACT FEE SPECIAL REVENUE FUND
                             SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                  CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                     FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                          Variance With
                                                                                                          Final Budget
                                                   Original            Final                                Positive
                                                   Budget             Budget            Actual             (Negative)
REVENUES
 Development impact mitigation charges         $     1,140,000    $    1,140,000    $      396,635    $         (743,365)
 Interest                                               22,000            22,000            78,423                56,423
 Net change in the fair value of investments               -                 -               6,531                 6,531
      TOTAL REVENUES                                 1,162,000         1,162,000           481,589             (680,411)
OTHER FINANCING USES
 Transfers out                                        (504,271)         (504,271)                -              504,271
NET CHANGE IN FUND BALANCE                     $       657,729    $      657,729           481,589    $         (176,140)

FUND BALANCE, beginning of year                                                          1,314,098
FUND BALANCE, end of year                                                           $    1,795,687




                                                      107
                                                                                                             Statement C-29



                                             CITY OF SANTA ROSA
                             SOUTHWEST AREA RECOVERY FEE SPECIAL REVENUE FUND
                           SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                   FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                                 Variance With
                                                                                                                 Final Budget
                                                       Original            Final                                   Positive
                                                       Budget             Budget            Actual                (Negative)


REVENUES - Development impact mitigation charges   $         5,000    $        5,000    $            823     $           (4,177)
OTHER FINANCING USES
 Transfers out                                              (5,000)           (5,000)                (823)               4,177
NET CHANGE IN FUND BALANCE                         $              -   $            -                  -      $              -

FUND BALANCE, beginning of year                                                                       -
FUND BALANCE, end of year                                                               $             -




                                                           108
                                                                                                            Statement C-30


                                                CITY OF SANTA ROSA
                          SOUTHWEST AREA DEVELOPMENT IMPACT FEE SPECIAL REVENUE FUND
                             SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                           CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (BUDGET BASIS)
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                                 Variance With
                                                                                               Actual            Final Budget
                                                        Original            Final             (Budget              Positive
                                                        Budget             Budget              Basis)             (Negative)
REVENUES
 Development impact mitigation charges              $     1,100,000    $    1,100,000     $      964,567     $         (135,433)
 Interest                                                   122,000           122,000            776,590                654,590
 Net change in the fair value of investments                    -                 -               57,384                 57,384
      TOTAL REVENUES                                      1,222,000         1,222,000           1,798,541              576,541
EXPENDITURES
Public Safety                                               329,000           329,000            329,000                    -
EXCESS OF REVENUES
 OVER EXPENDITURES                                          893,000           893,000           1,469,541              576,541
OTHER FINANCING USES
 Transfers out                                          (14,201,699)       (14,201,699)         (178,504)           14,023,195
NET CHANGE IN FUND BALANCE                          $   (13,308,699)   $   (13,308,699)         1,291,037    $      14,599,736

ADJUSTMENTS TO GAAP BASIS:
 Long term loan payments recorded as expenditures                                                329,000
FUND BALANCES, beginning of year, as restated                                                 11,076,477
FUND BALANCE, end of year                                                                 $   12,696,514




                                                           109
                                                                                                           Statement C-31


                                               CITY OF SANTA ROSA
                          SIDEWALK PROGRAM - OWNER CONTRIBUTION SPECIAL REVENUE FUND
                             SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                  CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                     FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                                Variance With
                                                                                                                Final Budget
                                                   Original              Final                                    Positive
                                                   Budget               Budget             Actual                (Negative)
REVENUES
 Interest                                      $              100   $            100   $            699     $             599
 Net change in the fair value of investments                  -                  -                  (31)                  (31)
NET CHANGE IN FUND BALANCE                     $              100   $            100                668     $             568

FUND BALANCE, beginning of year                                                                13,337
FUND BALANCE, end of year                                                              $       14,005




                                                      110
                                                                                                   Statement C-32


                                            CITY OF SANTA ROSA
                            REDEVELOPMENT CONTRIBUTION SPECIAL REVENUE FUND
                          SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                               CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                        Variance With
                                                                                                        Final Budget
                                               Original            Final                                  Positive
                                               Budget             Budget             Actual              (Negative)
REVENUES - Intergovernmental               $    13,200,592    $   13,200,592     $    2,122,632     $      (11,077,960)
OTHER FINANCING USES
 Transfers out                                 (13,050,592)       (13,050,592)       (2,122,632)           10,927,960
NET CHANGE IN FUND BALANCE                 $       150,000    $      150,000                  -     $         (150,000)

FUND BALANCE, beginning of year                                                               -
FUND BALANCE, end of year                                                        $            -




                                                  111
                                                                                                         Statement C-33



                                           CITY OF SANTA ROSA
                                    MEASURE M SPECIAL REVENUE FUND
                         SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                             CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                 FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                     Variance With
                                                                                                     Final Budget
                                              Original            Final                                 Positive
                                              Budget             Budget            Actual             (Negative)
REVENUES - Intergovernmental              $     2,511,626    $    2,511,626    $    1,478,037    $       (1,033,589)
OTHER FINANCING USES
 Transfers out                                 (3,811,578)       (3,811,578)       (1,885,828)            1,925,750
NET CHANGE IN FUND BALANCE                $    (1,299,952)   $   (1,299,952)         (407,791)   $         892,161

FUND BALANCE, beginning of year                                                       557,568
FUND BALANCE, end of year                                                      $      149,777




                                                     112
                                                                                                        Statement C-34



                                          CITY OF SANTA ROSA
                             ECONOMIC DEVELOPMENT SPECIAL REVENUE FUND
                        SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                            CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                    Variance With
                                                                                                    Final Budget
                                             Original            Final                                 Positive
                                             Budget             Budget            Actual             (Negative)
REVENUES - Other                         $              -   $            -    $       38,425    $          38,425
EXPENDITURES - General government                921,806           961,806           946,003               15,803
DEFICIENCY OF REVENUES
 UNDER EXPENDITURES                             (921,806)         (961,806)         (907,578)              54,228
OTHER FINANCING SOURCES
 Transfers in                                    894,796           894,796           907,578               12,782
NET CHANGE IN FUND BALANCE               $       (27,010)   $      (67,010)                -    $          67,010

FUND BALANCE, beginning of year                                                            -
FUND BALANCE, end of year                                                     $            -




                                                    113
                                                                                                Statement C-35


                                          CITY OF SANTA ROSA
                      NEIGHBORHOOD REVITALIZATION PROGRAM SPECIAL REVENUE FUND
                        SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                             CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                     Variance With
                                                                                                     Final Budget
                                             Original            Final                                 Positive
                                             Budget             Budget            Actual              (Negative)

REVENUES - Other                         $       204,000    $      204,000    $      135,994     $          (68,006)
EXPENDITURES - General government                837,597           837,597           658,026               179,571
DEFICIENCY OF REVENUES
 UNDER EXPENDITURES                             (633,597)         (633,597)         (522,032)              111,565
OTHER FINANCING SOURCES
 Transfers in                                    625,254           625,254           522,032              (103,222)
NET CHANGE IN FUND BALANCE               $        (8,343)   $       (8,343)                -     $           8,343

FUND BALANCE, beginning of year                                                            -
FUND BALANCE, end of year                                                     $            -




                                                114
                                                                                                 Statement C-36


                                            CITY OF SANTA ROSA
                                  CHANGE FOR KIDS SPECIAL REVENUE FUND
                          SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                               CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                  FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                      Variance With
                                                                                                      Final Budget
                                               Original            Final                                Positive
                                               Budget             Budget            Actual             (Negative)


REVENUES - Other                           $        30,000    $       30,000    $       28,605    $           (1,395)
EXPENDITURES - Recreation and parks                 38,000            38,000            14,855               23,145
NET CHANGE IN FUND BALANCE                 $        (8,000)   $       (8,000)           13,750    $          21,750

FUND BALANCE, beginning of year                                                         33,723
FUND BALANCE, end of year                                                       $       47,473




                                                  115
                                                                                                 Statement C-37


                                             CITY OF SANTA ROSA
                                 BROWNFIELDS GRANT SPECIAL REVENUE FUND
                          SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                               CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                   FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                      Variance With
                                                                                                      Final Budget
                                               Original            Final                                Positive
                                               Budget             Budget            Actual             (Negative)
REVENUES - Intergovernmental               $              -   $            -    $       51,234    $          51,234
EXPENDITURES - General government                  963,746           963,746            51,233              912,513
NET CHANGE IN FUND BALANCE                 $      (963,746)   $     (963,746)                1    $         963,747

FUND BALANCE, beginning of year                                                         35,346
FUND BALANCE, end of year                                                       $       35,347




                                                  116
                                                                                                            Statement C-38


                                        CITY OF SANTA ROSA
                                 MEASURE O SPECIAL REVENUE FUND
                      SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                           CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                              FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                 Variance With
                                                                                                 Final Budget
                                                    Original          Final                        Positive
                                                    Budget           Budget         Actual        (Negative)
REVENUES
    Sales tax                                     $ 7,000,000     $ 7,000,000     $ 7,864,900    $     864,900
    Intergovernmental                                 108,000         108,000         108,000              -
    Interest                                              -               -           233,273          233,273
    Net change in the fair value of investments           -               -             3,743            3,743
    TOTAL REVENUE                                   7,108,000       7,108,000       8,209,916        1,101,916
EXPENDITURES
 Current:
   Public safety:
     Police                                          3,152,700       3,152,700      1,092,196        2,060,504
     Fire                                              514,094         514,094        486,265           27,829
   Recreation and parks                              1,390,569       1,390,569      1,226,796          163,773
 Capital outlay                                      1,279,429       1,279,429        594,041          685,388
      TOTAL EXPENDITURES                             6,336,792       6,336,792      3,399,298        2,937,494
EXCESS OF REVENUES
 OVER EXPENDITURES                                    771,208         771,208       4,810,618        4,039,410
OTHER FINANCING USES
 Transfers out                                      (1,942,000)     (1,942,000)       (85,671)       1,856,329
NET CHANGE IN FUND BALANCE                        $ (1,170,792)   $ (1,170,792)     4,724,947    $ 5,895,739

FUND BALANCE, beginning of year                                                     2,616,566
FUND BALANCE, end of year                                                         $ 7,341,513




                                                           117
                                                                                                 Statement C-39


                                           CITY OF SANTA ROSA
                              ADMINISTRATIVE HEARING SPECIAL REVENUE FUND
                         SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                              CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                 FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                      Variance With
                                                                                                      Final Budget
                                              Original            Final                                 Positive
                                              Budget             Budget            Actual              (Negative)
REVENUES - Other                          $       246,752    $      246,752    $       92,826     $         (153,926)
EXPENDITURES - General government                 540,877           260,877           191,181                69,696
DEFICIENCY OF REVENUES
 UNDER EXPENDITURES                              (294,125)          (14,125)          (98,355)               (84,230)
OTHER FINANCING SOURCES
 Transfers in                                     150,000           150,000            80,194                (69,806)
NET CHANGE IN FUND BALANCE                $      (144,125)   $      135,875           (18,161)    $         (154,036)

FUND BALANCE, beginning of year                                                        18,161
FUND BALANCE, end of year                                                      $            -




                                                 118
                                                                                                  Statement C-40


                                         CITY OF SANTA ROSA
                                        DOWNTOWN BIA FUND
                       SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                            CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                               FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                 Variance With
                                                                                                 Final Budget
                                          Original              Final                               Positive
                                          Budget               Budget           Actual            (Negative)

REVENUES - Other                      $              -     $      126,479   $      131,054   $           4,575
EXPENDITURES - General Government                    -            126,479          126,479                  -
NET CHANGE IN FUND BALANCE            $              -     $            -            4,575   $           4,575

FUND BALANCE, beginning of year                                                          -
FUND BALANCE, end of year                                                   $        4,575




                                                     119
                                                                                                                Statement C-41



                                                  CITY OF SANTA ROSA
                      2007 BUILDING ACQUISITION CERTIFICATES OF PARTICIPATION DEBT SERVICE FUND
                               SCHEDULE OF REVENUES, EXPENDITURES, ENCUMBRANCES AND
                                    CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
                                       FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                                                                Variance With
                                                                                                                Final Budget
                                                        Original            Final                                 Positive
                                                        Budget             Budget            Actual              (Negative)
REVENUES:
 Interest                                           $              -   $            -    $            178   $             178
EXPENDITURES
 Bond issuance cost                                                -          501,375           269,526               231,849

     EXCESS (DEFICIENCY) OF REVENUES
      OVER (UNDER) EXPENDITURES                                    -         (501,375)         (269,348)              232,027

OTHER FINANCING SOURCES (USES)
 Issuance of long-term debt                                        -        1,160,000         1,160,000                   -
 Discount on debt issuance                                         -              -            (168,212)             (168,212)

     TOTAL OTHER FINANCING SOURCES (USES)                          -        1,160,000           991,788              (168,212)

NET CHANGE IN FUND BALANCE                          $              -   $      658,625           722,440     $          63,815

FUND BALANCE, beginning of year                                                                       -

FUND BALANCE, end of year                                                                $      722,440




                                                        120
                                              CITY OF SANTA ROSA
                                     COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                              NONMAJOR ENTERPRISE FUNDS



Enterprise funds account for the financing of self-supporting activities which render services on a user charge basis to the general
public. The various nonmajor enterprise funds are:

(a) Municipal Transit Fund accounts for the revenues and expenses related to providing a public transit system throughout the
    City.

(b) Golf Course Fund accounts for the revenues and expenses related to maintaining and operating a public golf course.

(c) Storm Water Fund accounts for the revenues and expenses related to activities designated to improve storm water quality.




                                                                121

                                                                110
                                                                                                                    Statement D-1


                                                      CITY OF SANTA ROSA
                                            COMBINING STATEMENT OF FUND NET ASSETS
                                                 NONMAJOR ENTERPRISE FUNDS
                                                          JUNE 30, 2007

                                                                     Municipal          Golf            Storm
                                                                      Transit          Course           Water
                                                                       Fund             Fund            Fund                Total
ASSETS
 CURRENT ASSETS:
   Cash and investments                                          $      802,524    $    1,950,187   $    669,375       $    3,422,086
   Account receivables, net of
     allowance for uncollectible accounts                                20,333           12,564         147,528              180,425
   Interest receivable                                                      -             54,287           8,106               62,393
   Intergovernmental                                                  3,388,955              -               -              3,388,955
   Inventory of supplies                                                 84,927              -               -                 84,927
 RESTRICTED ASSETS
   For interest, bond redemption and construction
     Cash and investments                                                   -            403,927                -            403,927
     Interest receivable                                                    -              4,690                -              4,690
        TOTAL CURRENT ASSETS                                          4,296,739         2,425,655        825,009            7,547,403

  NONCURRENT ASSETS
   Deferred charges                                                         -            228,872                -            228,872
   Capital assets
    Nondepreciable                                                      670,224         9,674,468            -             10,344,692
    Depreciable, net                                                  8,065,590         1,393,874         26,817            9,486,281
        TOTAL NONCURRENT ASSETS                                       8,735,814        11,297,214         26,817           20,059,845
      TOTAL ASSETS                                                   13,032,553        13,722,869        851,826           27,607,248
LIABILITIES
  PAYABLES FROM UNRESTRICTED ASSETS
   Accounts payable and accrued liabilities                             391,175           12,961           7,247              411,383
   Unearned revenue                                                   3,738,610              -               -              3,738,610
   Accrued interest payable                                              27,808              -               -                 27,808
   Compensated absences payable                                         172,401              -               -                172,401
      TOTAL PAYABLE FROM UNRESTRICTED ASSETS                          4,329,994           12,961           7,247            4,350,202
  PAYABLES FROM RESTRICTED ASSETS
   Accounts payable and accrued liabilities                                 -             62,112                -             62,112
   Accrued interest payable                                                 -            125,722                -            125,722
   Bonds payable - current portion                                          -             55,000                -             55,000
      TOTAL CURRENT LIABILITIES                                       4,329,994          255,795           7,247            4,593,036
  LONG-TERM OBLIGATIONS
   Compensated absences payable                                          24,845               -                 -              24,845
   Bonds payable                                                            -           5,482,233               -           5,482,233
      TOTAL LONG-TERM OBLIGATIONS                                        24,845         5,482,233               -           5,507,078

      TOTAL LIABILITIES                                               4,354,839         5,738,028          7,247           10,100,114
NET ASSETS
 Invested in capital assets, net of related debt                      8,735,814         5,759,981         26,817           14,522,612
 Unrestricted                                                           (58,100)        2,224,860        817,762            2,984,522
      TOTAL NET ASSETS                                           $    8,677,714    $    7,984,841   $    844,579       $ 17,507,134




                                                           122
                                                                                                           Statement D-2


                                                CITY OF SANTA ROSA
                                    COMBINING STATEMENT OF REVENUES, EXPENSES
                                         AND CHANGES IN FUND NET ASSETS
                                           NONMAJOR ENTERPRISE FUNDS
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                           Municipal           Golf            Storm
                                                            Transit           Course           Water
                                                             Fund              Fund            Fund              Total
OPERATING REVENUES
 Charges for services                                  $    1,570,627     $   1,181,524    $   1,736,129    $    4,488,280
OPERATING EXPENSES
 Maintenance and operation                                  8,689,004         1,003,094        1,097,512        10,789,610
 Administration                                             1,313,322               -            460,813         1,774,135
 Depreciation                                               1,211,980           105,092           27,814         1,344,886
     TOTAL OPERATING EXPENSES                              11,214,306         1,108,186        1,586,139        13,908,631
     OPERATING INCOME (LOSS)                                (9,643,679)          73,338         149,990         (9,420,351)
NONOPERATING REVENUES (EXPENSES)
 Intergovernmental revenue                                  7,138,472               -           110,000          7,248,472
 Measure M revenue                                            774,801               -               -              774,801
 Interest revenue                                                 -             254,850          29,586            284,436
 Net change in the fair value of investments                    2,350            19,514           4,099             25,963
 Interest expense                                             (85,623)         (263,036)            -             (348,659)
 Loss on disposal of capital assets                            (1,747)              -               -               (1,747)
 Other                                                         (4,511)           14,105         107,700            117,294
     NET NONOPERATING REVENUES                              7,823,742            25,433         251,385          8,100,560
     INCOME (LOSS) BEFORE CAPITAL
     CONTRIBUTIONS AND TRANSFERS                            (1,819,937)          98,771         401,375         (1,319,791)
 Capital contributions                                        554,198               -               -              554,198
 Transfers in                                                     -           1,531,012             -            1,531,012
 Transfers out                                               (117,827)              -          (505,512)          (623,339)
     NET CHANGE IN NET ASSETS                               (1,383,566)       1,629,783        (104,137)          142,080
NET ASSETS, beginning of year                              10,061,280         6,355,058         948,716         17,365,054
NET ASSETS, end of year                                $    8,677,714     $   7,984,841    $    844,579     $   17,507,134




                                                     123
                                                                                                                      Statement D-3



                                                     CITY OF SANTA ROSA
                                            COMBINING STATEMENT OF CASH FLOWS
                                                NONMAJOR ENTERPRISE FUNDS
                                           FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                                   Municipal          Golf            Storm
                                                                    Transit          Course           Water
                                                                     Fund             Fund            Fund              Total
CASH FLOWS FROM OPERATING ACTIVITIES
 Cash received from customers                                 $      1,562,122    $ 1,181,753     $ 1,687,113     $     4,430,988
 Cash paid to suppliers for goods and services                      (1,436,318)     (1,008,081)     (1,465,433)        (3,909,832)
 Cash paid to employees for services                                (5,154,664)            -               -           (5,154,664)
 Cash paid for interfund services used                              (3,040,776)         (2,092)        (94,931)        (3,137,799)
 Cash paid for other                                                    (4,511)            -               -               (4,511)
 Cash inflow from other sources                                            -            14,105         107,700            121,805
   NET CASH PROVIDED BY (USED IN)
    OPERATING ACTIVITIES                                            (8,074,147)       185,685          234,449         (7,654,013)
CASH FLOWS FROM NONCAPITAL
 FINANCING ACTIVITIES
  Operating grants received                                         10,348,848             -           110,000         10,458,848
  Transfers in from other funds                                            -         1,531,012             -            1,531,012
  Transfers out to other funds                                        (117,827)            -          (505,512)          (623,339)
  Payment on interfund loan                                         (1,494,500)            -               -           (1,494,500)
   NET CASH PROVIDED BY (USED IN) NONCAPITAL
    FINANCING ACTIVITIES                                             8,736,521       1,531,012        (395,512)         9,872,021
CASH FLOWS FROM CAPITAL AND
 RELATED FINANCING ACTIVITIES
  Proceeds from sale of capital assets                                   2,369             -                  -             2,369
  Acquisition and construction of capital assets                      (357,380)     (6,487,823)               -        (6,845,203)
  Interest paid on bonds and notes                                         -          (251,443)               -          (251,443)
  Capital contributions from other governmental agencies               554,198             -                  -           554,198
   NET CASH PROVIDED BY (USED IN) CAPITAL AND
    RELATED FINANCING ACTIVITIES                                      199,187       (6,739,266)               -        (6,540,079)
CASH FLOWS FROM INVESTING ACTIVITIES:
 Interest on investments                                               (61,387)       256,778           30,530            225,921
 Change in fair value of investments                                     2,350         19,514            4,099             25,963
   NET CASH PROVIDED BY (USED IN)
    INVESTING ACTIVITIES                                               (59,037)       276,292           34,629            251,884
   NET CHANGE IN CASH AND CASH EQUIVALENTS                            802,524       (4,746,277)       (126,434)        (4,070,187)
   CASH AND CASH EQUIVALENTS, beginning of year                            -         7,100,391         795,809          7,896,200
   CASH AND CASH EQUIVALENTS, end of year                     $       802,524     $ 2,354,114     $    669,375    $     3,826,013




                                                             113


                                                              124
                                                                                                                 Statement D-3



                                               CITY OF SANTA ROSA
                                      COMBINING STATEMENT OF CASH FLOWS
                                          NONMAJOR ENTERPRISE FUNDS
                                     FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                            Municipal            Golf            Storm
                                                             Transit            Course           Water
                                                              Fund               Fund            Fund              Total
RECONCILIATION OF OPERATING INCOME (LOSS)
 TO NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES:
 Operating income (loss)                                $     (9,643,679)   $     73,338     $    149,990    $    (9,420,351)
ADJUSTMENTS TO RECONCILE OPERATING INCOME
 (LOSS) TO NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES:
  Depreciation                                                1,211,980          105,092           27,814          1,344,886
  Miscellaneous nonoperating income                              (4,511)          14,105          107,700            117,294
  Changes in assets and liabilities:
   Accounts receivable                                           (8,505)              229         (49,016)           (57,292)
   Inventory of supplies                                         47,333               -               -               47,333
   Prepaid items                                                 25,893               -               -               25,893
   Accounts payable and accrued liabilities                     266,131            (7,079)         (2,039)           257,013
   Compensated absences payable                                  31,211               -               -               31,211
  NET CASH PROVIDED BY (USED IN)
   OPERATING ACTIVITIES                                 $     (8,074,147)   $    185,685     $    234,449    $    (7,654,013)

RECONCILIATION OF CASH AND CASH EQUIVALENTS
 TO THE STATEMENT OF NET ASSETS
  Cash and investments                                  $       802,524     $ 1,950,187      $    669,375    $     3,422,086
  Restricted cash and investments                                   -           403,927               -              403,927

   Total cash and cash equivalents                      $       802,524     $ 2,354,114      $    669,375    $     3,826,013

NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
 Acquisition of capital assets on accounts payable $                -       $     57,424     $           -   $        57,424
 Book value on disposed capital assets                            4,116              -                   -             4,116
 Amortization of deferred charges                                   -              9,951                 -             9,951




                                                        125
                                                                                                               Statement D-4



                                                CITY OF SANTA ROSA
                              COMBINING SCHEDULE OF CAPITAL ASSETS AND DEPRECIATION
                                              ALL ENTERPRISE FUNDS
                                      FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                                                           COST

                                                          Balances                                                 Balances
                                                           July 1              Additions          Deletions        June 30
WATER UTILITY FUND
 Land                                                $        963,575      $          -       $          -     $       963,575
 Buildings                                                  3,343,991                 -                  -           3,343,991
 Improvements other than buildings                         94,892,023           4,343,226             40,500        99,194,749
 Equipment                                                 11,734,912             173,854             33,901        11,874,865
 Construction in progress                                  15,181,170          11,689,765          2,002,100        24,868,835
                                                          126,115,671          16,206,845          2,076,501       140,246,015
WASTEWATER UTILITY FUND
 Land                                                       8,303,114             677,661                -           8,980,775
 Buildings                                                156,822,824              50,873                -         156,873,697
 Improvements other than buildings                        278,592,174           4,297,838             24,675       282,865,337
 Equipment                                                 35,455,191             464,223             91,747        35,827,667
 Construction in progress                                  68,974,614           6,382,417          2,151,003        73,206,028
                                                          548,147,917          11,873,012          2,267,425       557,753,504
PARKING FUND
 Land                                                       1,772,952                 -                   -          1,772,952
 Buildings                                                 16,104,330                 -                   -         16,104,330
 Improvements other than buildings                          4,415,688                 -                   -          4,415,688
 Equipment                                                    186,314             687,314                 -            873,628
 Construction in progress                                   1,104,481              91,203                 -          1,195,684
                                                           23,583,765             778,517                 -         24,362,282
MUNICIPAL TRANSIT FUND
 Land                                                         440,801                 -                  -             440,801
 Buildings                                                  5,707,877                 -                7,022         5,700,855
 Improvements other than buildings                            309,532                 -                  -             309,532
 Equipment                                                 10,599,859             128,937             96,156        10,632,640
 Construction in progress                                         980             229,423                980           229,423
                                                           17,059,049             358,360            104,158        17,313,251
GOLF COURSE FUND
 Land                                                            427,800              -                  -             427,800
 Buildings                                                     1,156,439              -                  -           1,156,439
 Improvements other than buildings                               932,421              -                  -             932,421
 Equipment                                                       624,422           87,966              9,741           702,647
 Construction in progress                                      2,789,387        6,457,281                -           9,246,668
                                                               5,930,469        6,545,247              9,741        12,465,975
STORM WATER FUND
 Equipment                                                      256,259                -                  -           256,259
   TOTAL                                             $    721,093,130      $ 35,761,981       $    4,457,825   $ 752,397,286




                                                          115
                                                         126
                                                                                        Statement D-4




                  ACCUMULATED DEPRECIATION
                                                                          June 30
    Balances       Depreciation                         Balances          Net book
     July 1         Expense            Deletions        June 30            value


$           -     $          -     $          -     $           -     $       963,575
      1,653,186           70,305              -           1,723,491         1,620,500
     38,055,192        2,629,150               86        40,684,256        58,510,493
      3,542,768          937,006           33,901         4,445,873         7,428,992
            -                -                -                 -          24,868,835
     43,251,146        3,636,461           33,987        46,853,620        93,392,395


            -                                                   -           8,980,775
     46,949,649        4,104,875              -          51,054,524       105,819,173
     76,224,622        7,073,430               51        83,298,001       199,567,336
     19,304,957        3,119,353           91,747        22,332,563        13,495,104
            -                -                -                 -          73,206,028
    142,479,228       14,297,658           91,798       156,685,088       401,068,416


            -               -                   -               -           1,772,952
      6,618,998         338,430                 -         6,957,428         9,146,902
      4,304,955          12,713                 -         4,317,668            98,020
         76,624          29,415                 -           106,039           767,589
            -               -                   -               -           1,195,684
     11,000,577         380,558                 -        11,381,135        12,981,147


            -                -                -                 -             440,801
        943,994          135,327            2,906         1,076,415         4,624,440
        148,637           15,477              -             164,114           145,418
      6,371,888        1,061,176           96,156         7,336,908         3,295,732
            -                -                -                 -             229,423
      7,464,519        1,211,980           99,062         8,577,437         8,735,814


           -                -                 -                 -             427,800
       321,050           35,886               -             356,936           799,503
       602,870           24,176               -             627,046           305,375
       378,362           45,030             9,741           413,651           288,996
           -                -                 -                 -           9,246,668
      1,302,282         105,092             9,741         1,397,633        11,068,342


       201,628           27,814                 -           229,442            26,817
$ 205,699,380     $ 19,659,563     $      234,588   $   225,124,355   $   527,272,931




                                          116
                                                          127
                                                                                                           Statement D-5


                                           CITY OF SANTA ROSA
                             SCHEDULE OF REVENUES, EXPENSES AND TRANSFERS
                                       WASTEWATER UTILITY FUND
                                 FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                                Local         Subregional           Wastewater
                                                              Wastewater      Wastewater            Utility Fund
                                                               System           System                 Total
OPERATING REVENUES
 Charges for services                                     $ 44,988,957       $    3,083,049     $     48,072,006
 Subregional participants:
   Cotati                                                             -             648,809              648,809
   County of Sonoma                                                   -             868,275              868,275
   Rohnert Park                                                       -           3,926,560            3,926,560
   Sebastopol                                                         -             639,209              639,209
     TOTAL OPERATING REVENUES                                  44,988,957         9,165,902           54,154,859
OPERATING EXPENSES
 Maintenance and operation                                      4,619,445        28,332,038           32,951,483
 Administration                                                 3,777,520         3,479,365            7,256,885
 Depreciation                                                   3,756,553        10,541,105           14,297,658
     TOTAL OPERATING EXPENSES                                  12,153,518        42,352,508           54,506,026
     OPERATING INCOME (LOSS)                                   32,835,439        (33,186,606)           (351,167)
NONOPERATING REVENUES (EXPENSES)
 Intergovernmental revenue                                        451,089                -               451,089
 Interest revenue                                               1,941,391          2,137,711           4,079,102
 Net change in the fair value of investments                      156,193            125,876             282,069
 Interest expense                                                     -          (11,833,450)        (11,833,450)
 Other                                                             45,786            264,935             310,721
     NET NONOPERATING REVENUES (EXPENSES)                       2,594,459         (9,304,928)         (6,710,469)
     INCOME (LOSS) BEFORE CAPITAL
     CONTRIBUTIONS AND TRANSFERS                               35,429,898        (42,491,534)         (7,061,636)
 Capital contributions                                          8,192,271         3,114,301           11,306,572
 Intrafund transfers in (out):
   Subregional System to Local Wastewater System              (35,632,644)       35,632,644                   -
 Transfers in:
   Water Fund                                                      24,850           763,342              788,192
   Special Revenue Fund                                           302,952               -                302,952
 Transfers (out):
   General Fund                                                  (141,196)         (142,642)            (283,838)
   Water Fund                                                     (58,390)         (309,139)            (367,529)
   Capital Projects Fund                                                           (300,000)            (300,000)
   Internal Service Funds                                        (346,369)          (85,000)            (431,369)
   Special Revenue Fund                                          (531,505)              -               (531,505)
     CHANGE IN NET ASSETS                                 $     7,239,867    $ (3,818,028)      $      3,421,839




                                                    128
                                             CITY OF SANTA ROSA
                                    COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                                INTERNAL SERVICE FUNDS



Internal Service Funds are used to finance and account for special activities and services performed by organizational units
within a governmental jurisdiction for other organizational units within the same governmental jurisdiction on a cost
reimbursement basis. The various funds and sources are:

(a) Equipment and Replacement Fund accounts for maintenance and accumulation of resources for replacement of equipment
    used by most departments within the City.

(b) Insurance Fund accounts for the costs of providing various types of insurance to all the departments within the City.

(c) Information Services Fund accounts for the costs of providing various types of computer and phone services to all the
    departments within the City.

(d) Pension Benefit Fund accounts for the costs of providing funded pension benefits to all the departments within the City.




                                                              129

                                                              118
                                                                                                                           Statement E-1



                                                        CITY OF SANTA ROSA
                                              COMBINING STATEMENT OF FUND NET ASSETS
                                                      INTERNAL SERVICE FUNDS
                                                            JUNE 30, 2007

                                                       Equipment and                         Information       Pension
                                                        Replacement             Insurance      Services        Benefit
                                                           Fund                   Fund          Fund            Fund           Total
ASSETS
 CURRENT ASSETS
   Cash and investments                            $       16,094,766       $ 16,616,051     $ 1,008,581     $ 2,569,600   $ 36,288,998
   Account receivables, net of
     allowance for uncollectible accounts                      11,380                  -            4,000            -           15,380
   Interest receivable                                        217,369              214,497         14,519            -          446,385
   Inventory of supplies                                       87,043                  -              -              -           87,043
   Prepaid items                                                  -              1,628,659            -              -        1,628,659
        TOTAL CURRENT ASSETS                               16,410,558           18,459,207       1,027,100     2,569,600     38,466,465
  NONCURRENT ASSETS
   Deferred charges                                               -                     -              -         681,942        681,942
   Net pension asset                                              -                     -              -      51,638,547     51,638,547
    Capital assets
     Equipment                                             14,771,781                   -         201,929            -       14,973,710
     Accumulated depreciation                              (9,650,434)                  -        (155,014)           -       (9,805,448)
        CAPITAL ASSETS - NET                                5,121,347                   -          46,915            -        5,168,262
        TOTAL NONCURRENT ASSETS                             5,121,347                   -          46,915     52,320,489     57,488,751
        TOTAL ASSETS                                       21,531,905           18,459,207       1,074,015    54,890,089     95,955,216

LIABILITIES
  CURRENT LIABILITIES
   Accounts payable and accrued liabilities                   103,601              176,989         62,733            -          343,323
   Interest payable                                               -                    -              -          614,727        614,727
   Workers' compensation and
     general liabilities claims                                   -              1,956,000            -              -        1,956,000
   Compensated absences payable                                97,804               13,167         65,050            -          176,021
   Pension obligation bonds                                       -                    -              -        1,829,849      1,829,849
        TOTAL CURRENT LIABILITIES                             201,405            2,146,156        127,783      2,444,576      4,919,920
  NONCURRENT LIABILITIES
   Workers' compensation and
     general liabilities claims                                   -             11,340,000            -              -       11,340,000
   Compensated absences                                        17,961                9,346         54,624            -           81,931
   Pension obligation bonds                                       -                                   -       48,102,578     48,102,578
        TOTAL NONCURRENT LIABILITIES                           17,961           11,349,346         54,624     48,102,578     59,524,509
        TOTAL LIABILITIES                                     219,366           13,495,502        182,407     50,547,154     64,444,429
NET ASSETS
 Invested in capital assets                                 5,121,347                  -           46,915            -        5,168,262
 Unrestricted                                              16,191,192            4,963,705        844,693      4,342,935     26,342,525
      TOTAL NET ASSETS                             $       21,312,539       $    4,963,705   $    891,608    $ 4,342,935   $ 31,510,787




                                                                      130
                                                                                                                     Statement E-2



                                             CITY OF SANTA ROSA
                  COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
                                          INTERNAL SERVICE FUNDS
                                   FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                Equipment and                        Information       Pension
                                                 Replacement           Insurance       Services        Benefit
                                                    Fund                 Fund           Fund            Fund             Total
OPERATING REVENUES:
 Charges for services                           $    7,217,932     $ 21,696,119      $ 3,745,902     $ 4,246,969     $ 36,906,922
OPERATING EXPENSES:
 Maintenance and operation                           2,690,423                -          1,777,718           -           4,468,141
 Personnel services                                  2,564,713            667,388        2,195,041     1,817,857         7,244,999
 Self-insurance claims                                     -            2,996,570              -             -           2,996,570
 Workers' compensation and liability expenses              -            2,503,165              -             -           2,503,165
 Property insurance                                        -              572,092              -             -             572,092
 Life and disability insurance                             -              478,268              -             -             478,268
 Health and dental insurance                               -           13,391,253              -             -          13,391,253
 Unemployment insurance                                    -               63,370              -             -              63,370
 Depreciation                                        1,034,303                -             31,906           -           1,066,209
     TOTAL OPERATING EXPENSES                        6,289,439         20,672,106        4,004,665     1,817,857        32,784,067
     OPERATING INCOME (LOSS)                          928,493           1,024,013        (258,763)     2,429,112         4,122,855
NONOPERATING REVENUES (EXPENSES):
 Interest revenue                                     783,177             777,227          52,107          10,638        1,623,149
 Net change in the fair value of investments           58,756              50,391           1,223             -            110,370
 Interest expense                                         -                   -               -        (2,752,616)      (2,752,616)
 Gain on disposal of capital assets                    30,093                 -               -               -             30,093
 Other                                                 19,117                 -            27,559             -             46,676
     NET NONOPERATING REVENUES
      (EXPENSES)                                      891,143             827,618          80,889      (2,741,978)        (942,328)
     INCOME (LOSS) BEFORE TRANSFERS                  1,819,636          1,851,631        (177,874)      (312,866)        3,180,527
TRANSFERS IN (OUT):
 General fund                                          25,000            (126,000)         67,500             -            (33,500)
 Enterprise funds                                     331,369                 -           125,000             -            456,369
     TOTAL TRANSFERS IN (OUT)                         356,369            (126,000)        192,500             -            422,869
     CHANGE IN NET ASSETS                            2,176,005          1,725,631          14,626       (312,866)        3,603,396
NET ASSETS, beginning of year                       19,136,534          3,238,074         876,982      4,655,801        27,907,391
NET ASSETS, end of year                         $ 21,312,539       $    4,963,705    $    891,608    $ 4,342,935     $ 31,510,787




                                                             131
                                                                                                                           Statement E-3



                                                          CITY OF SANTA ROSA
                                                 COMBINING STATEMENT OF CASH FLOWS
                                                       INTERNAL SERVICE FUNDS
                                                FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                        Equipment and                      Information       Pension
                                                         Replacement        Insurance        Services        Benefit
                                                            Fund              Fund            Fund            Fund             Total
CASH FLOWS FROM OPERATING ACTIVITIES:
  Cash received from other funds                        $    7,219,577    $ 21,696,119     $ 3,742,302     $ 4,246,969     $ 36,904,967
  Cash paid to suppliers for goods and services             (1,840,325)     (19,890,567)     (1,418,360)           -         (23,149,252)
  Cash paid to employees for services                       (2,561,539)        (502,146)     (2,162,131)           -          (5,225,816)
  Cash paid for interfund services used                       (912,967)         (94,100)       (313,765)           -          (1,320,832)
  Cash inflow from other sources                                19,117              -            27,559            -              46,676
     NET CASH PROVIDED BY (USED IN)
      OPERATING ACTIVITIES                                   1,923,863        1,209,306        (124,395)     4,246,969         7,255,743

CASH FLOWS FROM NONCAPITAL
 FINANCING ACTIVITIES:
   Transfers in from other funds                              356,369               -          192,500              -            548,869
   Transfers out to other funds                                   -            (126,000)           -                -           (126,000)
   Principal paid on pension obligation bonds                     -                 -              -         (1,634,848)      (1,634,848)
   Interest paid on pension obligation bonds                      -                 -              -         (2,739,594)      (2,739,594)
     NET CASH PROVIDED BY (USED IN)
      NONCAPITAL FINANCING ACTIVITIES                         356,369          (126,000)       192,500       (4,374,442)      (3,951,573)
CASH FLOWS FROM CAPITAL AND RELATED
 FINANCING ACTIVITIES:
   Proceeds from sale of capital assets                         30,093              -               -               -             30,093
   Acquisition and construction of capital assets           (1,740,702)             -               -               -         (1,740,702)
     NET CASH USED IN CAPITAL AND
      RELATED FINANCING ACTIVITIES                          (1,710,609)             -               -               -         (1,710,609)
CASH FLOWS FROM INVESTING ACTIVITIES:
 Interest on investments                                      722,836          704,982           43,554         10,638         1,482,010
 Change in fair value of investments                           58,756           50,391            1,223            -             110,370
     NET CASH PROVIDED BY INVESTING
      ACTIVITIES                                              781,592          755,373          44,777          10,638         1,592,380
     NET CHANGE IN CASH AND
      CASH EQUIVALENTS                                       1,351,215        1,838,679        112,882        (116,835)        3,185,941
     CASH AND CASH EQUIVALENTS,
      Beginning of year                                     14,743,551       14,777,372        895,699       2,686,435        33,103,057
       End of year                                      $ 16,094,766      $ 16,616,051     $ 1,008,581     $ 2,569,600     $ 36,288,998




                                                                    121
                                                                    132
                                                                                                                      Statement E-3




                                                  CITY OF SANTA ROSA
                                         COMBINING STATEMENT OF CASH FLOWS
                                               INTERNAL SERVICE FUNDS
                                        FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                                Equipment and                         Information         Pension
                                                 Replacement            Insurance       Services          Benefit
                                                    Fund                  Fund           Fund              Fund           Total
RECONCILIATION OF OPERATING INCOME
 (LOSS) TO NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES -
 Operating income (loss)                        $    928,493        $    1,024,013    $   (258,763)   $ 2,429,112     $   4,122,855
ADJUSTMENTS TO RECONCILE OPERATING
 INCOME (LOSS) TO NET CASH PROVIDED BY
 (USED IN) OPERATING ACTIVITIES:
   Depreciation                                     1,034,303                   -          31,906               -         1,066,209
   Miscellaneous nonoperating income                   19,117                   -          27,559               -            46,676
   Changes in assets and liabilities:
    Accounts receivable                                 1,645                  -           (3,600)              -            (1,955)
    Inventory of supplies                              49,940                  -              -                 -            49,940
    Prepaid items                                      14,401             (632,189)        11,711               -          (606,077)
    Net pension asset                                     -                    -              -           1,817,857       1,817,857
    Accounts payable and accrued liabilities         (127,210)            (232,665)        33,882               -          (325,993)
    Claims payable                                        -              1,041,000            -                 -         1,041,000
    Compensated absences payable                        3,174                9,147         32,910               -            45,231
     NET CASH PROVIDED BY (USED IN)
      OPERATING ACTIVITIES                      $   1,923,863       $    1,209,306    $   (124,395)   $ 4,246,969     $   7,255,743

NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
 Amortization of deferred charges        $                -         $           -     $        -      $      40,114   $      40,114




                                                              122
                                                              133
                                                                                                  Statement E-4



                                      CITY OF SANTA ROSA
                    COMBINING SCHEDULE OF CAPITAL ASSETS AND DEPRECIATION
                                   INTERNAL SERVICE FUNDS
                            FOR THE FISCAL YEAR ENDED JUNE 30, 2007




                                                                             COST


                                             Balances                                              Balances
                                              July 1             Additions          Deletions      June 30
EQUIPMENT AND REPLACEMENT FUND
 Equipment                                 $ 13,135,939      $    1,740,702     $      104,860   $ 14,771,781


INFORMATION SERVICE FUND
  Equipment                                        201,929               -                  -         201,929
  TOTAL                                    $ 13,337,868      $    1,740,702     $      104,860   $ 14,973,710




                                             123
                                             134
                                                                                           Statement E-4




                 ACCUMULATED DEPRECIATION
                                                                               June 30
    Balances      Depreciation                            Balances            Net Book
     July 1        Expense            Deletions           June 30               Value


$    8,720,991    $   1,034,303   $         104,860   $    9,650,434      $    5,121,347



       123,108          31,906                  -               155,014           46,915
$    8,844,099    $   1,066,209   $         104,860   $    9,805,448      $    5,168,262




                                      124
                                                          135
                                             CITY OF SANTA ROSA
                                    COMPREHENSIVE ANNUAL FINANCIAL REPORT

                                                      AGENCY FUNDS
                                                       JUNE 30, 2007


The Agency Funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations,
other governments and/or other funds.

(a) Payroll Fund receives employee deductions and City contributions for paying Federal and State Income taxes and other
    employee benefits.

(b) General Deposits Fund holds temporary deposits of monies pending fulfillment of contractual agreements with the City.

(c) Special Assessments Fund holds deposits made by property owners for payment of special benefit assessments made upon
    their properties.

(d) Agency Replacement Fund holds amounts received from other local government agencies set-aside for replacement of
    shared communication equipment.




                                                              136

                                                              125
                                                                                                                                Statement F-1



                                                    CITY OF SANTA ROSA
                                 COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
                                                       AGENCY FUNDS
                                          FOR THE FISCAL YEAR ENDED JUNE 30, 2007


                                                            Balance                                                    Balance
                    PAYROLL FUND                          July 1, 2006        Additions          Deductions         June 30, 2007
ASSETS
 Cash and investments                                 $       2,746,087   $     55,030,573   $     54,469,409   $        3,307,251
 Intergovernmental receivable                                     3,357             13,266              7,682                8,941
 Deposits                                                           -                4,168                -                  4,168
   TOTAL ASSETS                                       $       2,749,444   $     55,048,007   $     54,477,091   $        3,320,360

LIABILITIES
 Accounts payable                                     $       1,114,343   $     38,661,750   $     38,529,729   $        1,246,364
 Payroll payable                                              1,635,101         96,361,935         95,923,040            2,073,996
   TOTAL LIABILITIES                                  $       2,749,444   $   135,023,685    $    134,452,769   $        3,320,360



              GENERAL DEPOSITS FUND
ASSETS
 Cash and investments                                 $         388,895   $      1,129,673   $      1,293,404   $         225,164
 Accounts receivable                                            122,558              6,819             25,854             103,523
   TOTAL ASSETS                                       $         511,453   $      1,136,492   $      1,319,258   $         328,687

LIABILITIES - Accounts payable                        $         511,453   $      2,367,402   $      2,550,168   $         328,687



               SPECIAL ASSESSMENTS
ASSETS
 Cash and investments                                 $       4,794,885   $      2,466,193   $      2,539,880   $        4,721,198
 Interest receivable                                             19,852             33,402             19,852               33,402
 Intergovernmental receivable                                    69,244             81,180             69,244               81,180
   TOTAL ASSETS                                       $       4,883,981   $      2,580,775   $      2,628,976   $        4,835,780

LIABILITIES
 Accounts payable                                     $         274,441   $          4,555   $        250,404   $           28,592
 Deposits                                                     4,609,540          2,576,220          2,378,572            4,807,188
   TOTAL LIABILITIES                                  $       4,883,981   $      2,580,775   $      2,628,976   $        4,835,780



            AGENCY REPLACEMENT FUND
ASSETS
 Cash and investments                                 $       1,776,751   $       397,056    $        197,750   $        1,976,057
 Accounts receivable                                                -             891,113                 -                891,113
 Interest receivable                                             16,371            25,548              16,371               25,548
   TOTAL ASSETS                                       $       1,793,122   $      1,313,717   $        214,121   $        2,892,718

LIABILITIES - Deposits                                $       1,793,122   $      1,313,717   $        214,121   $        2,892,718

            TOTALS - ALL AGENCY FUNDS
ASSETS
 Cash and investments                                 $       9,706,618   $     59,023,495   $     58,500,443   $       10,229,670
 Accounts receivable                                            122,558            897,932             25,854              994,636
 Interest receivable                                             36,223             58,950             36,223               58,950
 Intergovernmental receivable                                    72,601             94,446             76,926               90,121
 Deposits                                                           -                4,168                -                  4,168
   TOTAL ASSETS                                       $       9,938,000   $     60,078,991   $     58,639,446   $       11,377,545

LIABILITIES
 Accounts payable                                     $       1,900,237   $     41,033,707   $     41,330,301   $        1,603,643
 Payroll payable                                              1,635,101         96,361,935         95,923,040            2,073,996
 Deposits                                                     6,402,662          3,889,937          2,592,693            7,699,906
   TOTAL LIABILITIES                                  $       9,938,000   $   141,285,579    $    139,846,034   $       11,377,545
                                                                  137
This Page Intentionally Left Blank
STATISTICAL SECTION
This Page Intentionally Left Blank
                                                     Statistical Section
This part of the City’s Comprehensive Annual Financial Report presents detailed information as a context for understanding
what the information in the financial statements, note disclosures, and required supplementary information says about the City’s
overall financial health.

Financial Trends Information

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

         Net Assets by components, last six years
         Changes in Net Assets, last six years
         Fund Balances, Governmental Funds, last six fiscal years
         Change in Fund Balances, Governmental Funds, last six fiscal years
         Tax Revenue by source, last six fiscal years

Revenue Capacity Information

         These schedules contain trend information to help the reader understand the City’s most significant local revenue
         source, property taxes.

         Assessed value and estimated actual value of taxable property, last ten years
         Direct and overlapping property tax rates, last six years
         Principal property taxpayers, current year and nine years ago
         Property tax levies and collections, last ten years
         Taxable sales by category, last ten years
         Direct and overlapping sales tax rates, last ten years
         Sales tax revenue payers, current year and nine years ago
         Water and Wastewater revenue by source, last ten years

Debt Capacity Information

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

         Ratios of outstanding debt by type, last six years
         Direct and overlapping governmental activities debt
         Legal debt margin information, last ten years
         Pledged-revenue coverage, last ten years

Demographic and Economic Information

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

         Demographic and Economic statistics, last ten years
         Principal employers, current year and nine years ago

Operating Information

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

         Full-time equivalent city government employees by function/ program, last ten years
         Operating indicators by function/program, last ten years
         Capital assets statistics by function/program, last ten years




                                                                142
                                                                                                                                                     Table 1



                                                                   CITY OF SANTA ROSA
                                                                NET ASSETS BY COMPONENT
                                                                  LAST SIX FISCAL YEARS
                                                                       (in thousands)


                                                                                                       Fiscal Year
                                                           2001-02           2002-03            2003-04          2004-05         2005-06         2006-07

Governmental activities
   Invested in capital assets, net of related debt     $     143,900     $     251,380     $      260,276     $    273,226   $     276,541   $     287,735
   Restricted                                                 51,227            50,735             48,229           58,836          67,160          82,205
   Unrestricted                                               63,188            54,089             52,587           57,496          68,140          55,744

        Total governmental activities net assets       $     258,315     $     356,204      $     361,092     $    389,558   $     411,841   $     425,684

Business-type activities
   Invested in capital assets, net of related debt     $     143,748     $      68,499      $     174,080     $    190,824   $     195,896   $     233,349
   Restricted                                                 27,660           128,419             22,287           23,951          25,782              89
   Unrestricted                                              112,477           101,552            111,835          103,661         109,796         113,483
        Total business-type activities net assets      $     283,885     $     298,470      $     308,202     $    318,436   $     331,474   $     346,921

Primary government
    Invested in capital assets, net of related debt    $     287,648     $     319,879      $     434,356     $    464,050   $     472,437   $     521,084
    Restricted                                                78,887           179,154             70,516           82,787          92,942          82,294
    Unrestricted                                             175,665           155,641            164,422          161,157         177,936         169,227

Total primary government net assets                    $     542,200     $     654,674      $     669,294     $    707,994   $     743,315   $     772,605

NOTE:        The city began reporting accrual information when it implemented GASB Statement 34 in fiscal year 2002.




                                                                               143
                                                                                                                                                      Table 2




                                                                   CITY OF SANTA ROSA
                                                                  CHANGES IN NET ASSETS
                                                                  LAST SIX FISCAL YEARS
                                                                       (in thousands)


                                                                                                     Fiscal Year
                                                              2001-02         2002-03         2003-04          2004-05         2005-06           2006-07
Expenses
Governmental activities:
   General government                                     $      22,454   $      21,910   $      19,129     $     20,590   $      25,253     $      29,959
   Public safety                                                 50,403          63,783          54,615           58,357          65,861            69,263
   Public Works                                                  19,913          23,792          28,710           25,272          25,609            26,589
   Recreation and Parks                                          13,405          14,744          14,400           14,362          15,756            17,875
   Housing opportunity and other                                  1,016           1,926             196              954           1,900             1,752
   Interest on long-term liabilities                                495             496           2,147            2,474           2,746             2,835
       Total governmental activities expenses             $     107,686   $     126,651   $     119,197     $    122,009   $     137,125     $     148,273
Business-type activities:
       Water Utility                                      $      22,116   $      23,025   $      23,553     $     23,641   $      24,626     $      28,756
       Wastewater Utility                                        43,731          46,180          53,372           54,867          58,285            65,909
       Parking                                                    3,650           3,780           3,596            3,343           3,579             4,209
       Municipal Transit                                          7,586           8,599           8,451            9,063           9,986            10,943
       Golf Course                                                  869           1,010           1,178            1,021           1,259             1,371
       Storm Water                                                  981           1,009           1,163            1,201           1,521             1,573

        Total business-type activities expenses                  78,933          83,603          91,313           93,136          99,256           112,761

        Total primary government expenses                 $     186,619   $     210,254   $     210,510     $    215,145   $     236,381     $     261,034

Program Revenues
Governmental activities:
       Charges for Services:
         General Government                               $       6,984   $       6,230   $       8,128     $     10,139   $      13,172     $       9,730
         Public Safety                                            2,172           2,408           2,791            3,359           3,841             5,149
         Public Works                                               731             772           1,161            2,696           2,848               835
         Recreation and parks                                     2,660           3,061           3,184            3,236           3,218             3,505
         Housing opportunity and other                              -               -               -                -               -                 -
         Interest on long-term liabilities                          -               -               -                -               -                 -
       Operating Grants and Contributions                         9,007           9,779           6,596            7,702           8,510            10,013
       Capital Grants and Contributions                           4,842          25,230          14,319           19,128          11,942            11,456

Total governmental activities program revenues            $      26,396   $      47,480   $      36,179     $     46,260   $      43,531     $      40,688
Business-type activities:
        Charges for services:
          Water Utility                                   $      24,539   $      23,774   $      27,421     $     26,690   $      31,835     $      29,821
          Wastewater Utility                                     49,444          45,507          52,893           49,116          55,036            54,155
          Parking                                                 2,415           3,046           3,227            3,988           4,057             4,245
          Municipal Transit                                       1,540           1,521           1,464            1,491           1,526             1,571
          Golf Course                                             1,105           1,212           1,173            1,144           1,042             1,182
          Storm Water                                             1,476           1,574           1,616            1,659           1,678             1,736
        Operating Grants and Contributions                        6,881           6,338           6,828            6,903           7,635            12,237
        Capital Grants and Contributions                          8,650          11,468           5,008           10,292           6,644            16,260

        Total business-type activities program revenues          96,050          94,440          99,630          101,283         109,453           121,207
        Total primary government program revenues         $     122,446   $     141,920   $     135,809     $    147,543   $     152,984     $     161,895

                                                                                                                               (continued)




                                                                              144
                                                                                                                                                     Table 2



                                                                  CITY OF SANTA ROSA
                                                                 CHANGES IN NET ASSETS
                                                                 LAST SIX FISCAL YEARS
                                                                      (in thousands)


(continued)                                                                                         Fiscal Year
                                                           2001-02          2002-03          2003-04          2004-05          2005-06           2006-07
Net (Expense)/Revenue
Governmental activities                                $     (81,290)   $     (79,171)   $     (83,018)    $    (75,749)   $      (93,594)   $    (107,585)
Business-type activities                                      17,117           10,837            8,317            8,147            10,197            8,446

        Total primary government net expense                 (64,173)         (68,334)         (74,701)         (67,602)          (83,397)         (99,139)

General Revenues and Other Changes in Net Assets
Governmental activities:
   Taxes
        Property taxes                                 $      13,906    $      14,902    $      15,882     $     15,409    $      17,922     $      21,038
        Utility use taxes                                      8,328            8,329            8,307            8,893            9,106             9,376
        Other taxes                                           12,287           13,115           14,896           16,239           17,302            16,927
   Contributions not restricted to specific programs
        Sales taxes                                           28,616           27,869           29,237           31,159           38,445            39,856
        Motor vehicle in lieu fees                             8,438            8,653            7,113           11,695           11,044            11,925
        Infrastructure maintenance contributions               9,660            4,608            6,672           12,133           10,866            12,569
   Unrestricted investment income                              4,797            3,073            1,242            2,747            4,605             7,906
   Other                                                       8,154            2,627            3,028            2,651            3,107             3,386
   Transfers                                                     223              533            1,529            3,289            3,480             1,735

       Total governmental activities                          94,409           83,709           87,906          104,215          115,877           124,718
Business-type activities:
   Unrestricted investment income                              4,388            3,203            1,093            3,060             4,896            7,104
   Other                                                         430            1,078            1,851            2,316             1,425            1,632
   Transfers                                                    (223)            (533)          (1,529)          (3,289)           (3,480)          (1,735)
       Total business-type activities                          4,595            3,748            1,415            2,087             2,841            7,001
        Total primary government                              99,004           87,457           89,321          106,302          118,718           131,719

Change in Net Assets
Governmental activities                                $      13,119    $       4,538    $       4,888     $     28,466    $      22,283     $      17,133
Business-type activities                                      21,712           14,585            9,732           10,234           13,038            15,447
        Total primary government                       $      34,831    $      19,123    $      14,620     $     38,700    $      35,321     $      32,580

                                                                                                                               (concluded)




                                                                            145
                                                                                                                                                  Table 3



                                                            CITY OF SANTA ROSA
                                                    FUND BALANCES, GOVERNMENTAL FUNDS
                                                           LAST SIX FISCAL YEARS
                                                                (in thousands)


                                                                                               Fiscal Year
                                                   2001-02           2002-03            2003-04           2004-05            2005-06          2006-07

General Fund
   Reserved                                    $       9,078     $       7,230      $       7,602     $       8,100      $       9,943    $       8,884
   Unreserved                                         25,817            31,025             29,471            33,953             39,273           29,268

        Total general fund                     $      34,895     $      38,255      $      37,073     $      42,053      $      49,216    $      38,152

All Other Governmental Funds
    Reserved                                   $      22,942     $      13,866      $       9,793     $       4,333      $       8,256    $      14,659
    Unreserved, reported in:
        Special revenue funds                         50,633            (9,790)            48,198            57,724             66,585           73,250
        Capital projects fund                        (10,561)           50,412             (6,581)           (2,923)            (5,026)           3,729

        Total all other governmental funds     $      63,014     $      54,488      $      51,410     $      59,134      $      69,815    $      91,638



NOTE:     The City implemented GASB 34 in 2002 and is therefore is required to show financial data from 2002 forward instead of the 10
          year requirement.




                                                                          146
                                                                                                                                        Table 4



                                                      CITY OF SANTA ROSA
                                        CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
                                                     LAST SIX FISCAL YEARS
                                                          (in thousands)


                                                                                       Fiscal Year
                                              2001-02          2002-03          2003-04          2004-05          2005-06           2006-07
Revenues

Taxes                                     $      72,244    $      73,721    $      76,336     $     84,404    $      94,854     $     100,072
Licenses, fees, and permits                       1,648            1,260            1,585            1,805            2,123             1,988
Fines and penalties                               1,517            1,755            1,955            1,898            1,953             2,174
Charges for services                             12,824           13,547           15,707           18,979           22,049            18,753
Development impact mitigation charges             9,660            4,608            6,672           12,133           10,866            12,570
Intergovernmental                                13,033           26,095           10,785           12,755           16,241            13,085
Interest                                          3,637            2,580            1,756            2,248            3,811             5,784
Net change in fair value                              3             (132)            (689)             (62)             (74)              309
Contribution from Prop Own                          744            1,386              874            2,078            1,158               891
Other revenues                                    2,984            2,814            3,556            3,025            3,131             4,438

    Total revenues                              118,294          127,634          118,537          139,263          156,112           160,064



Expenditures

General government                               25,702           25,320           24,760           25,668           29,679            33,743
Public safety                                    49,178           60,725           55,810           58,831           66,604            69,158
Public works                                     15,234           15,708           18,541           17,972           18,366            19,238
Recreation and parks                             11,944           12,763           12,873           12,747           14,211            16,051
Other                                                54            1,818              234              882            1,882             1,667
Capital outlay                                   16,638           17,069           11,605           13,546           13,100            16,543
Debt service
   Principal                                       313              513               551             305              320               398
   Bond issuance cost                              -                -                 -               -                -                 270
   Interest                                         84              127                89              65               50                88


    Total expenditures                          119,147          134,043          124,463          130,016          144,212           157,156
Excess of revenues
over (under)
expenditures                                       (853)          (6,409)          (5,926)           9,247           11,900 #           2,908

Other Financing
Sources (Uses)

Proceeds sale of capital assets                   1,617             678                  37           129             2,393                36
Proceeds capital lease obligations                  -               -                   -             -                 -                 -
Issuance of long-term debt                          -               -                   -             -                 -               9,960
Discount at issuance                                                                                                                     (168)
Transfers in                                     17,569           21,735           22,348           22,281           31,646            37,816
Transfer in from component unit                     808              -                -                -                -                 -
Transfers out                                   (18,150)         (21,170)         (20,719)         (18,953)         (28,095)          (36,503)
Transfers out to component units                 (1,721)             -                -                -                -                 -
Total other financing
 sources (uses)                                    123             1,243            1,666            3,457            5,944            11,141

Net change in
fund balances                             $        (730)   $      (5,166)   $      (4,260)    $     12,704    $      17,844     $      14,049


Debt service as a
percentage of noncapital
expenditures                                  0.39%            0.55%            0.57%             0.32%           0.28%             0.35%




                                                                   147
                                                                                                                Table 5



                                              CITY OF SANTA ROSA
                                  TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS
                                             LAST SIX FISCAL YEARS
                                                   (in thousands)




                                                                       Other Taxes
                                                 Motor                   Real
                                                Vehicle                Property
  Fiscal                Sales        Utility    In-Lieu     Business   Transfer    Occupancy    Other
  Year      Property    Taxes       Use Taxes    Fees         Tax        Tax          Tax       Taxes        Total

 2001-02    $ 13,905   $ 29,410      $ 8,328    $ 8,438     $ 3,322    $ 3,101     $ 3,054     $ 2,686   $    72,244
 2002-03      14,902     27,869        8,329      8,653       3,470      3,549       3,077       3,019        72,868
 2003-04      15,882     30,138        8,307      7,113       3,535      4,182       3,038       4,141        76,336
 2004-05      15,409     31,159        8,893     11,695       3,700      5,195       3,012       4,332        83,395
 2005-06      17,922     39,480        9,106     11,046       3,988      5,167       3,555       4,590        94,854
 2006-07      21,038     40,887        9,376     11,924       4,054      3,800       3,877       5,116       100,072


Change
2002-2007       51%        39%           13%        41%         22%        23%         27%         90%           39%




                                                          148
                                                                                                                     Table 6


                                  CITY OF SANTA ROSA
            ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
                                 LAST TEN FISCAL YEARS
                                      (in thousands)


              Real Property        Personal Property          Total             Percentage of
   Fiscal    Assessed/Market       Assessed/Market       Assessed/Market         Increase in          Total Direct
   Year           Value                 Value                 Value             Market Value           Tax Rate

  1997-98   $       7,889,439      $       441,415       $     8,330,854                  2.7%            0%
  1998-99           8,395,590              505,782             8,901,372                  6.8%            0%
  1999-00           9,045,560              502,248             9,547,808                  7.3%            0%
  2000-01           9,876,920              582,116            10,459,036                  9.5%            0%
  2001-02          11,091,590              662,746            11,754,336                 12.4%            0%
  2002-03          12,040,505              663,984            12,704,489                  8.1%            0%
  2003-04          13,167,977              649,898            13,817,875                  8.8%            0%
  2004-05          14,289,643              613,132            14,902,775                  7.9%            0%
  2005-06          15,725,609              589,269            16,314,878                  9.5%            0%
  2006-07          17,523,321              621,807            18,145,128                 11.2%            0%


NOTES:      (1) The State of California Constitution Article XIII A provides that the combined maximum property tax rate
                on any given property may not exceed one percent of its assessed value unless an additional amount for
                general obligation debt has been approved by voters. Assessed value is calculated at 100 percent of
                market value as defined by Article XIII A and may be adjusted no more than two percent per year unless
                the property is improved, sold or transferred. Because of this method of assessment, the City does not
                have a reasonable basis for estimating the actual value of taxable property and this information is not
                presented above.
            (2) The State Legislature has determined the method of distribution of receipts from a one percent tax levy
                among the counties, cities, school districts, and other districts.
            (3) The City participates in the County Teeter Plan whereby all taxes are remitted to the City each year.

SOURCE:     Sonoma County Assessor's and Auditor's Offices




                                                       149
                                                                                                                      Table 7



                                    CITY OF SANTA ROSA
                       DIRECT AND OVERLAPPING PROPERTY TAX RATES
                                  LAST SIX FISCAL YEARS
                                (rate per $100 of assessed value)


                                                                     Overlapping Rates

                         City                                                                       Misc
    Fiscal              Direct                                            School                   Special
    Year                Rate                     County                   District                 Districts

   2001-02        $               -                       1.00                       0.08                      0.01
   2002-03                        -                       1.00                       0.11                      0.01
   2003-04                        -                       1.00                       0.11                      0.01
   2004-05                        -                       1.00                       0.11                      0.01
   2005-06                        -                       1.00                       0.12                      0.01
   2006-07                        -                       1.00                       0.11                      0.01

NOTES:       (1) Overlapping rates are those of local and county governments that apply to property owners
                 within the City of Santa Rosa. Not all overlapping rates apply to all Santa Rosa property owners;
                 for example, although the County of Sonoma property tax rates apply to all City property
                 owners, school districts' rates apply only to property owners within those districts' geographic
                 boundaries.
             (2) The State of California Constitution Article XIII A provides that the combined maximum
                 property tax rate on any given property may not exceed one percent of its assessed value unless
                 an additional amount for general obligation debt has been approved by voters.


SOURCE:      Sonoma County's Assessor's Office




                                                   150
                                                                                                                          Table 8



                                                    CITY OF SANTA ROSA
                                              PRINCIPAL PROPERTY TAX PAYERS
                                             CURRENT YEAR AND NINE YEARS AGO
                                                        (in thousands)


                                                         FY 2006-07                                   FY 1997-98
                                                                       Percentage                                   Percentage
                                                                      of Total City                                of Total City
                                             Taxable                     Taxable          Taxable                     Taxable
                                             Assessed                   Assessed          Assessed                   Assessed
              Taxpayer                        Value        Rank           Value            Value        Rank           Value

Agilent Technologies                     $     159,948      1            0.88%        $     165,282      1            1.98%
Optical Coating Laboratory, Inc.                89,168      2            0.49%               84,254      2            1.01%
Codding Enterprises                             57,210      3            0.32%               38,601      4            0.46%
EMI Santa Rosa Limited Partnership              55,322      4            0.30%               57,683      3            0.69%
Donahue Schriber Realty Group                   39,022      5            0.22%               32,943       5           0.40%
FIT REN Paulin Creek LP                         37,807       6           0.21%                  -          -                  -
Montgomery Village Limited Partnership          34,741       7           0.19%                  -          -                  -
Apple Creek LLC et al                           35,973       8           0.20%                  -          -                  -
Arterial Vascular Engineering Inc.              31,252       9           0.17%               28,683       6           0.34%
Santa Rosa Town Center LLC                      29,836      10           0.16%                  -          -                  -
Sutter Somona Medical Center                       -          -                  -           20,808       7           0.25%
Value Center Ventures Ltd.                         -          -                  -           16,500       8           0.20%
Kawamoto Genshiro                                  -          -                  -           16,275       9           0.20%
Spieker Properties LP                              -          -                  -           16,034      10           0.19%


Total                                    $     570,279                   3.14%        $     477,063                   5.72%


SOURCE:     Sonoma County Tax Collector's Office




                                                              151
                                                                                                                           Table 9


                                           CITY OF SANTA ROSA
                                   PROPERTY TAX LEVIES AND COLLECTIONS
                                          LAST TEN FISCAL YEARS
                                               (in thousands)


                                        Collected within the
               Taxes Levied            Fiscal Year of the Levy             Collections           Total Collections to Date
   Fiscal         for the                              Percentage        in Subsequent                           Percentage
   Year         Fiscal Year           Amount             of Levy             Years              Amount              of Levy

  1997-98      $       9,072      $       9,072          100%            $         -        $       9,072           100%
  1998-99              9,644              9,644          100%                      -                9,644           100%
  1999-00             10,438             10,438          100%                      -               10,438           100%
  2000-01             11,152             11,152          100%                      -               11,152           100%
  2001-02             12,505             12,505          100%                      -               12,505           100%
  2002-03             13,588             13,588          100%                      -               13,588           100%
  2003-04             14,581             14,581          100%                      -               14,581           100%
  2004-05             14,560             14,560          100%                      -               14,560           100%
  2005-06             16,097             16,097          100%                      -               16,097           100%
  2006-07             19,747             19,747          100%                      -               19,747           100%

NOTE:       The City participates in the County Teeter Plan whereby all taxes are remitted to the City each year.

SOURCE:     Sonoma County Assessor's and Auditor's Offices




                                                           152
                                                                                                                                                                                                               Table 10

                                                                                                     CITY OF SANTA ROSA
                                                                                                 TAXABLE SALES BY CATEGORY
                                                                                                   LAST TEN FISCAL YEARS
                                                                                                         (in thousands)




                                                   1997-98           1998-99           1999-00           2000-01           2001-02           2002-03        2003-04        2004-05         2005-06         2006-07

      Apparel stores                           $     88,010      $     97,573      $    105,540      $    117,558      $    120,752      $    122,427   $    133,540   $    143,740    $    147,206    $    150,231
      Auto dealers and supplies                     390,295           450,680           520,594           551,874           555,127           542,236        565,540        556,932         548,452         533,952
      Building materials and farm tools             163,672           212,036           229,885           243,465           230,150           230,941        273,932        311,355         343,578         283,919
      Drug stores                                    40,539            40,430            40,502            42,401            43,463            41,424         39,255         39,517          39,638          39,933
      Eating and drinking places                    150,330           156,765           166,591           178,602           183,323           183,152        189,964        202,498         204,285         207,537
      Food stores                                   101,445           108,934           115,384           124,718           126,679           128,211        136,331        137,038         139,154         142,388
      General merchandise                           335,435           366,249           384,342           407,289           399,430           366,928        366,130        367,387         395,290         395,239
      Home furnishings & appliances                 147,342           158,307           175,249           184,543           170,976           169,125        180,944        186,615         187,370         186,864
      Other retail                                  311,381           332,844           411,654           440,748           403,561           406,519        418,031        444,588         453,052         443,306
      Packaged liquor stores                         13,388            14,351            15,844            18,120            18,716            18,519         18,922         19,302          19,388          23,393
      Service stations                               98,628            96,647           114,749           138,547           121,082           132,120        146,101        174,005         197,211         221,695
      All other outlets                             307,276           325,510           386,458           357,096           316,368           288,880        288,394        303,058         323,446         361,002
      Total                                    $ 2,147,741       $ 2,360,326       $ 2,666,792       $ 2,804,961       $ 2,689,627       $ 2,630,482    $ 2,757,084    $ 2,886,035     $ 2,998,070     $ 2,989,459


      City direct sales tax rate                         -                 -                 -                 -                 -                 -              -          0-0.25%           0.25%           0.25%




153
      NOTES:           (1) Food stores taxable sales are for prepared food items and nonfood items; general grocery items are not taxable.


      SOURCE:          MuniServices, LLC
                                                                                                        Table 11



                        CITY OF SANTA ROSA
              DIRECT AND OVERLAPPING SALES TAX RATES
                       LAST TEN FISCAL YEARS



                                                                        Overlapping Rate
                                        City
     Fiscal                            Direct                                Sonoma
     Year                              Rate                                  County

    1997-98                                      -                           1.25%
    1998-99                                      -                           1.25%
    1999-00                                      -                           1.25%
    2000-01                                      -                           1.25%
    2001-02                                      -                           1.25%
    2002-03                                      -                           1.25%
    2003-04                                      -                           1.25%
    2004-05                          0 - 0.25%                               0.75%
    2005-06                            0.25%                                 0.75%
    2006-07                            0.25%                                 0.75%

NOTES:        (1) The City direct tax rate [City of Santa Rosa Public Safety Transactions and Use Tax
                  (SRPS)] was approved by Santa Rosa citizens in November 2004 and went into effect
                  on April 1, 2005. The tax funds critical public safety improvements in Police, Fire
                  and Recreation & Parks.


              (2) Any increases to the City direct tax rate must be approved by the Citizens of Santa
                  Rosa.

SOURCE:       California State Board of Equalization




                                                 154
                                                                                                                                                         Table 12



                                                             CITY OF SANTA ROSA
                                                    SALES TAX REVENUE PAYERS BY INDUSTRY
                                                      CURRENT YEAR AND NINE YEARS AGO
                                                                 (in thousands)


                                                             FY 2006-07                                                   FY 1997-98

                                        Number        Percentage         Tax        Percentage       Number        Percentage         Tax         Percentage
                                        of Filers      of Total        Liability     of Total        of Filers      of Total        Liability      of Total

Apparel stores                                172         3.8%        $ 1,502          5.0%                157        2.7%         $      880        4.1%
Auto dealers & auto supplies                  122         2.7%          5,340         17.9%                137        2.4%              3,903       18.2%
Bldg matrl & farm implmts                     127         2.8%          2,839          9.5%                117        2.0%              1,637        7.6%
Drug stores                                    16         0.4%            399          1.3%                 17        0.3%                405        1.9%
Eating and Drinking places                    442         9.8%          2,075          6.9%                429        7.4%              1,503        7.0%
Food stores                                   159         3.5%          1,424          4.8%                136        2.3%              1,015        4.7%
General merchandise                            23         0.5%          3,952         13.2%                 20        0.3%              3,354       15.6%
Home furnishings & appliances                 172        3.8%           1,869         6.3%                 188       3.2%               1,473       6.9%
Other retail                                1,208        26.7%          4,433         14.8%               1026       17.7%              3,114       14.5%
Packaged liquor stores                         22        0.5%             234         0.8%                  25       0.4%                 134       0.6%
Services stations                              56        1.2%           2,217         7.4%                  59       1.0%                 986       4.6%
All other outlets                           2,008        44.4%          3,610         12.1%               3500       60.2%              3,073       14.3%

Total                                       4,527        100%         $ 29,894         100%              5,811        100%         $ 21,477          100%

NOTE:           Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to
                provide alternative information regarding the sources of the state's revenue.


SOURCE:         MuniServices, LLC




                                                                           155
                                                                                                               Table 13


                                     CITY OF SANTA ROSA
                          WATER AND WASTEWATER REVENUE BY SOURCE
                                   LAST TEN FISCAL YEARS
                                         (in thousands)

                        Collected within the                         Collected within the
                       Water Enterprise Fund                      Wastewater Enterprise Fund
  Fiscal   Charges for       Sale of         Demand Fee          Charges for     Demand Fee
  Year      Services          Water           Revenue             Services         Revenue           Total

 1997-98   $     2,737     $   11,025           $ 2,465          $   24,613            $ 6,506   $    47,346
 1998-99         2,995         13,096             2,586              26,373              5,026        50,076
 1999-00         3,250         14,536             2,515              29,342              4,744        54,387
 2000-01         3,672         16,474             2,507              33,618              4,586        60,857
 2001-02         4,062         17,387             3,090              42,973              6,471        73,983
 2002-03         3,979         17,876             1,919              42,734              2,773        69,281
 2003-04         4,444         19,905             3,072              43,474              9,419        80,314
 2004-05         4,860         19,395             2,434              46,510              2,606        75,805
 2005-06         6,169         21,353             4,313              50,297              4,739        86,871
 2006-07         5,779         24,042             3,713              54,155              7,543        95,232




SOURCE:    City of Santa Rosa Water and Wastewater Utility Fund Financial Statements




                                                          156
                                                                                                                                                                              Table 14




                                                                              CITY OF SANTA ROSA
                                                                     RATIOS OF OUTSTANDING DEBT BY TYPE
                                                                             LAST SIX FISCAL YEARS
                                                                          (in thousands, except per capita)



                                Governmental Activities                                                Business-type Activities

            Building                                                                                                   Golf Course
           Acquisition           Pension         Special         Capital          Wastewater         Parking          Improvement                    Total      Percentage
 Fiscal   Certificates of       Obligation      Assessment        Lease          Improvement       Improvement        Certificates of    State      Primary     of Personal    Per
 Year     Participation           Bonds           Bonds         Obligations         Bonds             Bonds           Participation      Loans     Government     Income      Capita

2001-02   $           -     $        5,645      $         500   $     1,426      $    316,088      $        5,130      $          -     $ 51,768   $ 380,557       0.12 %     $ 2.49
2002-03               -              5,000                260         1,779           311,883               4,865                 -     137,023      460,810       0.14         3.00
2003-04               -             54,975                  -         1,488           228,603               4,590                 -     146,719      436,375       0.13         2.83
2004-05               -             53,030                  -         1,182           223,208               4,300                 -     140,200      421,920       0.12         2.70
2005-06               -             51,570                  -         2,271           217,293               3,995             5,575     133,206      413,910       0.12         2.63
2006-07           9,960             49,935                  -         1,873           210,163               3,680             5,575      126,028     407,214       0.11         2.58

NOTES:                      (1) Details regarding the City's outstanding debt can be found in the notes to the financial statements.
                            (2) The City issued $9,960 in new certificates of participation in fiscal year 2007.
                            (3) Refer to Table 18 for personal income and population data.




                                                                                           157
                                                                                                          Table 15




                                       CITY OF SANTA ROSA
                       DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
                                           JUNE 30, 2007
                                            (in thousands)


                                                                                           Estimated
                                                                                            Share of
                                                                            Estimated      Direct and
                                                                Debt       Percentage     Overlapping
                      Governmental Unit                      Outstanding   Applicable a      Debt

Debt repaid with property taxes
             Santa Rosa High School
                  #17R                                       $     7,880      75.3959%    $     5,941
                  #19R                                            27,420      75.3959%         20,674
                  #21                                             15,340      75.3959%         11,566
                  #22                                             13,980      75.3959%         10,540
                  #23                                             13,825      75.3959%         10,423
                  #24                                             13,775      75.3959%         10,386
                  #25                                             23,305      75.3959%         17,571
                  #26                                             31,835      75.3959%         24,002
                  #27                                             18,120      75.3959%         13,662

              Santa Rosa Elementary
                  #10                                              4,615      98.9573%          4,567
                  #11                                              5,115      98.9573%          5,062
                  #12                                              5,795      98.9573%          5,735
                  #13                                              6,150      98.9573%          6,086
                  #14                                              6,255      98.9573%          6,190

              Sonoma County Junior College District
                 #1R                                              30,413      29.2296%          8,890
                 #2                                              103,940      29.2296%         30,381

              Rincon Valley Union Elementary
                  #16                                             16,420      86.1603%         14,148
                  #17                                              7,399      86.1603%          6,375

              Wright Elementary
                 #9                                                1,100      93.7998%          1,032
                 #9R                                                 260      93.7998%            244
                 #10                                               3,100      93.7998%          2,908

              Piner-Olivet Union Elementary
                  #8                                               3,965      73.6888%          2,922
                  #8R                                              3,740      73.6888%          2,756
                  #9                                               4,025      73.6888%          2,966

              Bennett Valley Elementary #10                          995      64.5235%            642

              Bellevue Elementary
                  #6                                               4,883      52.9222%          2,584
                  #7                                               3,261      52.9222%          1,726

              Mark West Union Elementary
                 #11                                               7,319      17.7370%          1,298
                 #12                                               3,486      17.7370%            618

              Sebastopol Unified Elementary
                 #7R                                               2,785       0.0117%                0
                 #8                                                2,775       0.0117%                0
                 #9                                                1,995       0.0117%                0

              West Sonoma County Unified High School
                 #1R                                               5,395       0.0027%                0
                 #2                                                5,372       0.0027%                0

Subtotal, overlapping debt                                                                    231,894

Other debt                                                                                        -

City direct debt                                                                                  -

Total direct and overlapping debt                                                         $   231,894



Source: Sonoma County Auditor-Controller

                                                       158
                                                                                                                                                                                                                               Table 16

                                                                                           CITY OF SANTA ROSA
                                                                                     LEGAL DEBT MARGIN INFORMATION
                                                                                         LAST TEN FISCAL YEARS
                                                                                               (in thousands)


                                                                                                                                                                       Legal Debt Margin Calculation for Fiscal Year 2007
                                                                                                                                                             Assessed value                                          $ 18,145,128
                                                                                                                                                             Debt limit (3.75% of assessed value)                         680,442
                                                                                                                                                             Debt applicable to limit
                                                                                                                                                             Legal debt margin                                       $    680,442



                                                                                                                                         Fiscal Year
                                                    1997-98         1998-99         1999-00          2000-01              2001-02             2002-03            2003-04            2004-05            2005-06            2006-07

      Debt Limit                                  $ 312,407        $ 333,801       $ 358,043       $ 392,214        $       440,788       $    476,418       $     518,170      $     558,854      $     611,808      $     680,442

      Total net debt applicable to limit                  -               -                -               -                    -                   -                  -                  -                  -                  -

      Legal debt margin                           $ 312,407        $ 333,801       $ 358,043       $ 392,214        $       440,788       $    476,418       $     518,170      $     558,854      $     611,808      $     680,442

      Total net debt applicable to the limit
       as a percentage of debt limit                       0%              0%              0%               0%                      0%                  0%                 0%                 0%                 0%                 0%




159
      NOTE:          Assessed value of property subject to taxation at full market value as a result of Proposition 13.

      SOURCE:        Sonoma County Assessor's Office
                                                                                                                                Table 17



                                             CITY OF SANTA ROSA
                                         PLEDGED-REVENUE COVERAGE
                                            LAST TEN FISCAL YEARS
                                                  (in thousands)


                                                        Wastewater Revenue Bonds
                                     Less:                Net                                     Coverage Ratios
  Fiscal        Gross               Operating           Available                           Including        Excluding
  Year         Revenue              Expenses            Revenue        Debt Service        Demand Fees      Demand Fees

 1997-98   $        38,980      $       18,795      $       20,185     $      10,446               1.93%               1.56%
 1998-99            42,800              19,053              23,747            11,722               2.03%               1.60%
 1999-00            44,024              19,128              24,896            13,164               1.89%               1.53%
 2000-01            49,849              20,680              29,169            13,036               2.24%               1.89%
 2001-02            58,761              22,286              36,475            14,642               2.49%               2.05%
 2002-03            53,070              23,487              29,583            14,602               2.03%               1.83%
 2003-04            57,184              24,146              33,038            18,757               1.76%               1.61%
 2004-05            61,399              26,516              34,883            21,565               1.62%               1.49%
 2005-06            64,412              27,832              36,580            22,443               1.63%               1.42%
 2006-07            70,190              30,105              40,085            22,117               1.81%               1.47%

NOTES:     (1) Gross revenue and expenses are based upon bond counsel interpretation.
           (2) Net Revenues are equal to gross revenues less operating expenses.
           (3) Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating
               expenses do not include interest, depreciation, or amortization expenses.

SOURCE:    City of Santa Rosa Wastewater Utility Fund Financial Statements




                                                              160
                                                                                                             Table 18



                                CITY OF SANTA ROSA
                        DEMOGRAPHIC AND ECONOMIC STATISTICS
                              LAST TEN FISCAL YEARS


                                                                      Per
                                            Personal                 Capita
   Fiscal                                    Income                 Personal             Unemployment
   Year          Population              (in thousands)             Income                   Rate
  1997-98               136,148                 2,464,279                  18,100           3.5%
  1998-99               138,700                 2,584,397                  18,633           2.8%
  1999-00               142,000                 2,750,114                  19,367           3.1%
  2000-01               151,000                 3,110,600                  20,600           2.9%
  2001-02               152,900                 3,231,236                  21,133           3.8%
  2002-03               153,400                 3,293,038                  21,467           4.4%
  2003-04               154,400                 3,455,935                  22,383           4.7%
  2004-05               156,300                 3,498,463                  22,383           4.6%
  2005-06               157,100                 3,539,934                  22,533           4.3%
  2006-07               157,985                 3,559,876                  22,533           4.6%


NOTES:      (1) Personal income is calculated as per capita personal income multiplied by the City's
                population.
            (2) Per capita personal income is calculated as median household income divided by median
                household size (three persons).

SOURCES:    (1) Population data source - State Department of Finance
            (2) Per capita personal income data source (calculated from median household income) - City of
                Santa Rosa Housing and Redevelopment Department (from U.S. Housing and Urban
                Development data)
            (3) Unemployment rate data source - State Department of Employment Development and U.S.
                Bureau of Labor Statistics: www.calmis.ca.gov




                                                161
                                                                                                                   Table 19



                                                   CITY OF SANTA ROSA
                                                  PRINCIPAL EMPLOYERS
                                             CURRENT YEAR AND NINE YEARS AGO


                                                            2007                                     1998
                                                                         Percentage                          Percentage
                                                                        of Total City                       of Total City
Employer                                   Employees        Rank        Employment      Employees    Rank   Employment

County of Sonoma                                    3,979     1            4.93%             3,558     2       5.08%
Santa Rosa Junior College                           3,387     2            4.20%             3,271     3       4.67%
State of California                                 3,274     3            4.06%             3,248     4       4.63%
St. Joseph Health System                            2,800     4            3.47%               -        -      0.00%
Kaiser Permanente                                   2,325     5            2.88%             1,250     8       1.78%
U.S. Government                                     1,929     6            2.39%             2,225     5       3.17%
Santa Rosa School District                          1,549     7            1.92%             1,582     6       2.26%
Agilent Technologies/Hewlett Packard                1,500     8            1.86%             4,570     1       6.52%
Safeway                                             1,500     9            1.86%             1,234    10       1.76%
City of Santa Rosa                                  1,437    10            1.66%               -        -         -
Optical Coating Laboratories                          -       -                    -         1,240    9        1.77%
Arterial Vascular Engineering                         -       -                    -         1,500    7        2.14%

Total                                              23,680                 29.23%            23,678            33.78%


Source: The Press Democrat, City payroll records




                                                                  162
                                                                                                                                                                        Table 20




                                                                       CITY OF SANTA ROSA
                                             FULL-TIME-EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
                                                                     LAST TEN FISCAL YEARS




            Function/Program                1998          1999           2000          2001          2002            2003           2004            2005       2006     2007

Governmental Activities:
   General government                       189.85        189.85         190.85        202.25         209.45          208.45         201.20         203.55     218.10   258.25
   Public safety
      Police                                260.75        263.75         275.25        280.25         280.25          279.75         273.00         278.75     285.75   292.75
      Fire                                  121.00        121.00         123.00        134.00         140.00          140.00         138.00         141.00     145.00   149.75
   Public works                             152.00        148.75         161.75        166.25         178.25          178.25         170.25         171.25     188.00   223.00
   Recreation and parks                     103.55        103.35         108.35        109.35         117.45          118.70         111.70         112.70     118.30   119.40
   Housing opportunity and other             18.50         18.50          20.00         21.00          26.00           26.00          27.00          32.00      33.00    37.00
Business-type activities:
   Water utility                             76.00         75.00          75.00         78.75          89.75           90.00          92.75          97.75     105.75   104.50
   Wastewater utility                       119.50        120.50         121.50        118.50         124.50          125.25         124.50         125.50     125.50   134.50
   Parking                                   15.00         15.00          16.00         16.00          17.00           17.00          17.00          17.00      23.00    32.00
   Municipal transit                         58.30         65.05          69.55         70.55          74.05           76.05          76.05          77.55      84.30    86.00
    Total                                    1,114          1,121         1,161         1,197          1,257           1,259          1,231           1,257     1,327    1,437

    NOTES:            (1) The employees that support the housing opportunity and other function are included in other primary government functions/programs.


    SOURCE:           Various City departments.




                                                                                           163
                                                                                                                                                                                                                             Table 21



                                                                                             CITY OF SANTA ROSA
                                                                                 OPERATING INDICATORS BY FUNCTION/PROGRAM
                                                                                           LAST TEN FISCAL YEARS


                                                                                                                                            Fiscal Year
                                                                      1997-98           1998-99        1999-00        2000-01         2001-02        2002-03           2003-04         2004-05         2005-06         2006-07

      Governmental Activities:
         General government
                  Building permits issued                                4,345             4,794          4,773          5,198           5,056            4,437           5,246           5,128           5,590           5,116
                  Value of building permits $M                           240.5             266.7          259.0          277.3           266.9            182.0           200.8           260.3           315.1           303.3
         Public safety
             Police
                  Arrests                                               10,611             9,493          8,480          8,972            9027            8,752           8,751           9,435           9,810          10,687
                  Traffic citations                                     15,441            14,036         13,084         13,631           13409            9,565           8,761          12,262           8,679          18,498
             Fire
                  Emergency responses                                   11,953            12,528         13,440         15,291          16,338           16,301          16,969          17,084          17,691          18,557
                  Fire losses (thousands)                         $      3,505      $      3,429   $      3,725   $      2,830    $      4,327     $      4,647    $      3,106    $      6,587    $      4,973    $      3,601
         Public works
                  Vehicles serviced                                        874               889            907            920             950               950             980             980             980          1,072
                  Storm Drain miles cleaned                               12.6              12.4           35.0           34.5            25.5              46.7            42.0            31.6            29.3           42.0
         Recreation and parks
                  Picnic Reservations                                      520               530            540            550             611              560             581             623             598             751
                  Participant Registrations                             36,000            36,500         37,000         38,000          40,221           40,927          38,793          40,598          38,494          39,507
      Business-type Activities:




164
         Water utility
                  Billions of gallons sold                                 6.6               7.5            7.4            7.5             7.3               7.3             7.3             7.4             8.1             7.9
                  Unaccounted for water                                    -                 -              -              -               -                 -3%              3%              2%              5%              6%
                  Miles of water line replaced                            1.55              2.92           1.67           1.74            2.92              1.48            3.68            3.69            3.02            2.40

          Wastewater utility
                                                                                                                                                                                                                                   (1)
                Billion gallons wastewater treated                        7.48              8.67           7.72           7.64            7.39              7.38            7.51            7.40            8.06            6.86
                Miles of sewer lines flushed                               -                 -              -              -               -                 157             224             144             220             163
                Miles of CCTV inspection of sewer main                     -                 -              -              -               -                 100              68              60              79              92
                Miles of sewer main replaced                              3.40              2.75           2.09           0.94            3.03              3.87            5.64            4.21            3.02            3.10

          Parking
                  Average daily users                                    9,000             9,000          9,300          9,400           9,400            9,600           9,600           9,600           9,800           9,900
          Municipal transit
                  Revenue service miles                                737,246           737,516        873,610        944,391         944,391         1,006,105       1,006,105       1,013,239       1,037,551       1,128,904
                  Average daily riders                                   6,795             6,815          7,679          8,279           8,279             9,156           9,192           9,100           9,347           9,648
          Golf course
                  Rounds of play                                        74,340            83,503         83,439         87,802          81,132           85,642          82,087          78,726          66,744          77,933
          Storm water
                  Storm drains - miles cleaned                            12.6              12.4           35.0           34.5            25.5              46.7            42.0            31.6            29.3            42.0

      NOTES:
        (1)
            The 2006/07 decrease in wastewater treated can be attributed to an unusually dry winter and an increase in conservation efforts.

      SOURCE:         Various City departments
                                                                                                                                                                                Table 22

                                                                                   CITY OF SANTA ROSA
                                                                      CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
                                                                                  LAST TEN FISCAL YEARS


                                                                                                             As of June 30,
                       Function/Program                    1998         1999       2000       2001       2002           2003        2004        2005        2006        2007

      Governmental Activities:
         General government
             Administrative Buildings                             4            4          4          4        4                 4           4           4           4           5
         Public safety
             Police
                  Stations                                     1            1          1          1           1                 1           1           1           1           1
                  Vehicular patrol units                      50           56         55         58          59                60          62          63          63          63
             Fire
                  Stations                                        8            8          8          8        8                 8           8           8           9          10
         Public works
                  Streets (miles maintained)                  487          490        500        516        528            530         530         535         542         543
                  Street lights                            13,250       13,500     13,700     14,000     14,350         14,500      14,500      15,000      15,500      15,802
                  Traffic signals                             168          172        176        180        184            200         210         215         219         227
         Recreation and parks
                  Parks - Number of developed acres        444.75       444.75     453.00     460.70     531.00         484.00      450.00      521.15      521.15      521.65
                  Number of parks                              47           48         50         51         56             56          57          57          57          58
                  Number of swimming facilities                 2            2          2          2          2              2           2           2           2           2




165
                  Number of clubhouses                          3            3          3          3          3              3           2           3           3           3
                  Number of community recreation centers        2            2          2          2          2              2           2           2           2           2
                  Number of senior centers                      1            1          1          1          1              1           1           1           1           1
                  Number of tennis courts                      25           22         22         22         22             22          22          20          20          20
      Business-type Activities:
         Water utility
                  Number of water accounts                 43,600       44,797     45,772     46,149     47,268         47,878      48,443      48,766      49,429      50,489
                  Miles of water main in system               437          440        449        554        563            575         580         585         609         618
         Wastewater utility
                  Number of sewer accounts                 40,860       41,913     42,762     43,779     44,817         45,315      45,818      46,489      47,052      47,853
                  Plant treatment capacity                     18           18         18         19       19.2           19.2        21.3        21.3        21.3        21.3
                  Plant flow capacity                          65           67         67         67       67.0           66.0        66.0        66.9        66.9        66.9
                  Miles of sewer line in system               504          514        516        544      550.0          557.0       563.0       566.0       575.0       584.0
         Parking
                  Number of garages                               5            5          5          5        5                 5           5           5           5           5
                  Number of lots                                  9            9          9          9        9                 9           9           9           8           8
         Municipal transit
                  Number of fixed route buses                 25           36         28         33          29                35          35          34          30          30
                  Number of paratransit vans                   9            9          9          8           8                 7           7           9          12          12
         Golf course
                  City-owned courses                              1            1          1          1        1                1           1           1           1           1
         Storm Water
                  Storm Drains - miles in system              268          272        278        305         315           320         325         330         336         340
      NOTES:


      SOURCE:         Various City departments.
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