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6.G. - Pa <br />f Reel Of $i� <br />City <br />Notes to the Basic Financial Statements <br />For the fiscal year ended June 30, 2018 <br />NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br />A. Reporting Entity <br />The City of Redwood City was incorporated in 1867, became a Charter City in 1929, and operates under <br />a council-manager form of government. The City has defined its reporting entity in accordance with <br />generally accepted accounting principles ("GAAP") in the United States of America, which provide <br />guidance for determining which governmental activities, organizations, and functions should be included <br />in the reporting entity. In evaluating how to define the City for financial reporting purposes, <br />management has considered all potential component units. The primary criteria for including a potential <br />component unit within the reporting entity are the governing body's financial accountability and a <br />financial benefit or burden relationship and whether it is misleading to exclude. A primary government is <br />financially accountable and shares a financial benefit or burden relationship if it appoints a voting <br />majority of an organization's governing body and it is able to impose its will on the organization, or if <br />there is a potential for the organization to provide specific financial benefits to, or impose specific <br />financial burdens on the primary government. A primary government may also be financially <br />accountable if an organization is fiscally dependent on the primary government regardless of whether <br />the organization has a separately elected governing board, a governing board appointed by a higher <br />level of government, or a jointly appointed board, and there is a potential for the organization to <br />provide specific financial benefits to, or impose specific financial burdens on the primary government. <br />Based upon the application of these criteria, the following is a brief description of each component unit <br />included within the City's reporting entity. All such component units have been "blended" as though <br />they are part of the primary government because the component unit's governing body is substantially <br />the same as the City's primary government and there is a financial benefit or burden relationship <br />between the City and the component unit, management of the City has operational responsibilities for <br />the component unit, and/or the component units provide services entirely to the City or otherwise <br />exclusively benefits the City, even though it does not provide services directly to it. <br />Redwood City Facilities and Infrastructure Authority (RCFISA) was established in 1986 to finance the <br />construction of certain public facilities such as the Main Fire Station, City Hall, and Main Library. After <br />acquiring certain properties from the City, RCFISA leased them back to the City. The lease money <br />provided the funds for the debt service for the certificates of participation issued by the RCFISA to <br />acquire the properties from the City. <br />The Public Financing Authority (PFA) was established in 1991 to finance construction of the new Police <br />Facility, to finance the defeasance of outstanding certificates of participation issued by the RCFISA, and <br />to issue tax increment bonds on behalf of the former Redevelopment Agency. The PFA has since issued <br />various types of debt on behalf of the City and the former Redevelopment Agency. <br />The Port of Redwood City was established under the City Charter as a department of the City and is <br />managed by the Port Commission of Redwood City, whose members are appointed by the City Council. <br />This commission is a semi -autonomous body and has full authority to manage the Port. Its financial <br />system is maintained separately from the City by the Port's own financial staff. The Port's treasurer and <br />legal counsel are the City's Finance Director and the City Attorney, respectively. The financial <br />transactions of the Port are incorporated as an enterprise fund. Financial statements for the Port of <br />Redwood City may be obtained from the Port at 675 Seaport Blvd., Redwood City, CA 94063. <br />Separate financial statements are not prepared for other component units. <br />37 243 <br />