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2006 Basic Financial Statements■ ■ ■ ■ City of Rosemead, California ■ Basic Financial Statements ■ Fiscal Year Ended June 30, 2006 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Required Supplementary Information ■ Schedule of revenues, expenditures and changes in fund balances— budgetary ■ comparison — General Fund 31 and 32 ■ Schedule of revenues, expenditures and changes in fund balances— budgetary ■ comparison — Community Development Block Grant Fund 33 Contents ■ comparison — Federal Highway Grant Fund 34 ■ Financial Section ■ Independent Auditors Report 1 and 2 Basic Financial Statements: ■ Government -wide Financial Statements: 36 Statement of net assets —governmental activities 3 ■ Statement of activities — governmental activities 4 Fund Financial Statements: ■ Balance sheet - governmental funds 5 and 6 Reconciliation of total governmental fund balances to net assets of governmental activities in the ■ statement of net assets 7 Statement of revenues, expenditures and changes in fund balances— ■ governmental funds 8 and 9 Reconciliation of the statement of revenues, expenditures and changes in fund balances of 45 ■ governmental funds to the statement of activities 10 ■ Statement of fiduciary net assets —trust and agency funds 11 ■ Statement of changes in fiduciary net assets — Pension Trust Fund 12 ■ Notes to the financial statements 13-30 ■ ■ Required Supplementary Information Schedule of revenues, expenditures and changes in fund balances— budgetary ■ comparison — General Fund 31 and 32 Schedule of revenues, expenditures and changes in fund balances— budgetary comparison — Community Development Block Grant Fund 33 Schedule of revenues, expenditures and changes in fund balances— budgetary comparison — Federal Highway Grant Fund 34 Schedule of revenues, expenditures and changes in fund balances— budgetary ■ comparison — Public Transportation Fund 35 Schedule of revenues, expenditures and changes in fund balances— budgetary ■ comparison —State Gas Tax Fund 36 Notes to required supplementary information 37 ■ Other Supplementary Information ■ Combining balance sheet — nonmajor governmental funds — special revenue funds 38 and 39 Combining statement of revenues, expenditures and changes in fund balances — nonmajor ■ governmental funds — special revenue funds 40 and 41 Combining schedule of revenues and expenditures— budget and actual — nonmajor ■ governmental funds — special revenue funds 42 -44 Combining schedule of revenues and expenditures— budget and actual —Debt Service Fund 45 ■ Statement of changes in assets and liabilities— Agency Fund 46 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 11 ■ ■ ■ ■ ■ Financial Section ■ ■ McGladrey &Pullen ■ Certified Public Accountants ■ ■ ■ Independent Auditor's Report ■ The Honorable Mayor and ■ Members of the City Council City of Rosemead, California ■ We have audited the accompanying financial statements of the governmental activities, each major fund and the ■ aggregate remaining fund information of the City of Rosemead, California, (the City) as of and for the year ended June 30, 2006, which collectively comprise the City's basic financial statements, as listed in the accompanying table ■ of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. ■ We conducted our audit in accordance with auditing standards generally accepted in the United States of America ■ and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain ■ reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as ■ evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. ■ In our opinion, the financial statements referred to above present fairly, in all material respects, the respective ■ financial position of the governmental activities, each major fund and the aggregate remaining fund information of the City as of June 30, 2006, and the respective changes in financial position for the year then ended, in conformity with ■ accounting principles generally accepted in the United States of America. ■ The City has not presented a Management's Discussion and Analysis as required by Governmental Accounting Standards Board (GASB) Statement No. 34 that the GASB has determined is necessary to supplement, although not ■ required to be part of, the basic financial statements. ■ In accordance with Govemment Auditing Standards, we have also issued our report dated January 15, 2007 on our consideration of the City's intemal control over financial reporting and our tests of its compliance with certain ■ provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that ■ testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered IN in assessing the results of our audit. ■ The Management's Discussion and Analysis and supplementary budgetary comparison schedules, as listed in the ■ accompanying table of contents, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied ■ certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information ■ and express no opinion on it. ■ McGladrey 8 Pullen, LLP is a member fin of RSM International, ■ an affiliation of separate and independent legal entities. 1 ■ ■ ■ ■ Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise ■ the City's basic financial statements. The combining and individual nonmajor fund financial statements and other schedules, listed in the table of contents as other supplementary information, are presented for purposes of ■ additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in ■ all material respects, in relation to the basic financial statements taken as a whole. Pasadena, California ■ January 15, 2007 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Ll ■ ■ ■ ■ 2 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ City of Rosemead, California Statement of Net Assets — Governmental Activities June 30, 2006 Assets Cash and investments $ 36,785,425 Receivables 3,948,972 Deferred charges 550,323 Restricted assets, cash and investments 6,804,123 48,088,843 Capital assets Land 2,953,234 Construction in process 2,725,784 Buildings and improvements 22,634,585 Improvements other than buildings 868,483 Machinery and equipment 711,789 Autos and trucks 370,440 Fumiture and equipment 2,395,612 Infrastructure 38,849,600 71,509,527 Less accumulated depreciation 27,443,061 Total capital assets, net 44,066,466 Total assets $ 92,155,309 Liabilities Accounts payable and accrued liabilities $ 3,771,588 Deferred revenue 97,203 Noncurrent liabilities Due within one year 898,000 Due in more than one year 36,842,516 Total liabilities 41,609,307 Invested in capital assets, net of related debt 13,345,433 Restricted for: Capital projects 6,030,655 Low - moderate income housing 870,799 Unrestricted 30,299,115 Total net assets $ 50,546,002 See Notes to Financial Statements. 3 City of Rosemead, California Statement of Activities — Governmental Activities Year Ended June 30, 2006 See Notes to Financial Statements. General revenues: Property taxes Sales and use taxes Transient occupancy taxes Franchise taxes Real property transfer tax Intergovernmental / In -lieu VLF Vehicle license fees Income from property and investments Other general revenues Change in net assets Net assets at beginning of year Net assets at end of year 4 3,915,980 3,525,557 1,207,298 921,446 155,360 2,966,002 1,290,667 1,930,059 32,853 15,945,222 1,266,089 49,279,913 $ 50,546,002 Program Revenues Net (Expense) Operating Revenue and Charges for Grants and Changes in Functions /Programs Expenses Services Contributions Net Assets Governmental activities: General government $ 5,629,316 $ 1,786,009 $ 1,502,216 $ (2,341,091) Public safety 6,065,066 843,840 56,519 (5,164,707) Public works 3,403,699 8,000 4,136,733 741,034 Public health 51,286 - - (51,286) Public recreation 3,959,590 337,815 - (3,621,775) Community services 3,223,843 34,819 779,935 (2,409,089) Interest on long -term debt 1,832,219 - - (1,832,219) Total governmental activities $ 24,165,019 $ 3,010,483 $ 6,475,403 (14,679,133) See Notes to Financial Statements. General revenues: Property taxes Sales and use taxes Transient occupancy taxes Franchise taxes Real property transfer tax Intergovernmental / In -lieu VLF Vehicle license fees Income from property and investments Other general revenues Change in net assets Net assets at beginning of year Net assets at end of year 4 3,915,980 3,525,557 1,207,298 921,446 155,360 2,966,002 1,290,667 1,930,059 32,853 15,945,222 1,266,089 49,279,913 $ 50,546,002 This page intentionally left blank. 0 City of Rosemead, California Balance Sheet — Governmental Funds June 30, 2006 Community Development Federal Public General Block Grant Highway Transportation Assets Fund Fund Grant Fund Cash and investments $ 22,750,979 $ 10,921 $ - $ 4,492,903 Receivables 2,378,176 252,319 50,650 310,127 Restricted cash and investments - - - - Due from other funds 43,426 - - - Total assets $ 25,172,581 $ 263,240 $ 50,650 $ 4,803,030 Liabilities and Municioal Eaui Liabilities Accounts payable and accrued liabilities $ 1,954,952 $ 166,037 $ $ 128,601 Deferred revenue 729,253 97,203 - Due to other funds 3,270 - - Totalliabilities 2,687,475 263,240 128,601 Municipal Equity, fund balance Reserved: Long -term receivable 256,765 Debt service - - - - Low- moderate income housing - - - - Capital projects - - - - Unreserved: Designated for: Redevelopment projects - - - - Building and equipment replacement 4,000,000 - - - Litigation settlements 2,000,000 - - - Self- insurance 1,000,000 - - - Contingencies 4,000,000 - - - Undesignated: General fund 11,228,341 - - - Special revenue funds - - 50,650 4,674,429 Total municipal equity 22,485,106 - 50,650 4,674,429 Total liabilities and municipal equity $ 25,172,581 $ 263,240 $ 50,650 $ 4,803,030 See Notes to Financial Statements. 5 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ $ 515,289 $ $ 397,151 $ 114,254 $ 3,276,284 - - - 826,456 - - 40,156 43,426 515,289 397,151 154,410 4,146,166 - - - 256,765 1,342,085 - 1,342,085 - - 870,799 870,799 5,480,332 - 5,480,332 6,435,798 209,438 6,645,236 - - 4,000,000 - - 2,000,000 - - 1,000,000 - - 4,000,000 - - 11,228,341 400,690 - - 1,486,453 6,612,222 400,690 1,342,085 11,916,130 2,566,690 43,435,780 $ 915,979 $ 1,342,085 $ 12,313,281 $ 2,721,100 $ 47,581,946 Debt Capital Other Total State Gas Tax Service Projects Governmental Governmental Fund Fund Fund Funds Funds $ 907,979 $ - $ 6,087,841 $ 2,534,802 $ 36,785,425 8,000 18,294 745,108 186,298 3,948,972 - 1,323,791 5,480,332 - 6,804,123 - - - - 43,426 $ 915,979 $ 1,342,085 $ 12,313,281 $ 2,721,100 $ 47,581,946 $ 515,289 $ $ 397,151 $ 114,254 $ 3,276,284 - - - 826,456 - - 40,156 43,426 515,289 397,151 154,410 4,146,166 - - - 256,765 1,342,085 - 1,342,085 - - 870,799 870,799 5,480,332 - 5,480,332 6,435,798 209,438 6,645,236 - - 4,000,000 - - 2,000,000 - - 1,000,000 - - 4,000,000 - - 11,228,341 400,690 - - 1,486,453 6,612,222 400,690 1,342,085 11,916,130 2,566,690 43,435,780 $ 915,979 $ 1,342,085 $ 12,313,281 $ 2,721,100 $ 47,581,946 City of Rosemead, California Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities in the Statement of Net Assets June 30, 2006 Total fund balances, governmental funds. $ 43,435,780 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 funds. 44,066,466 Accrued interest is not due and payable in the current period and, therefore, is not reported in the funds. (495,304) Revenues that are not available to pay current period expenditures are deferred in the funds. 729,253 Long -term liabilities, including bonds payable and compensated absences, are not due and payable from current available resources and, therefore, are not reported in the funds. (37,740,516) Debt issuance costs are not current financial resources and, therefore, are not reported in the governmental funds. 550,323 Net assets of governmental activities $ 50,546,002 See Notes to Financial Statements. 7 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ This page intentionally left blank. City of Rosemead, California Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds Year Ended June 30, 2006 Revenues: Taxes Intergovernmental Licenses and permits Charges for services Fines, forfeitures and penalties Use of money and property Other Total revenues Expenditures: Current: General government Public safety Public works Public health Public recreation Community services Capital outlay Debt service: Principal Interest Bond issuance cost Total expenditures Revenues over (under) expenditures Other financing sources (uses): Long -term debt issued Premium on debt issued Payment to refunded bond escrow agent Transfers: From other funds (To) other funds Total other financing sources (uses) Net change in fund balances Fund balance, beginning Fund balance, ending Community $ - $ Development Federal Public General Block Grant Highway Transportation Fund Fund Grant Fund $ 5,616,272 $ - $ - $ - 5,747,997 1,281,935 904,514 1,699,099 1,528,864 - - - 652,890 - - 524,730 - - - 836,110 - - 158,868 29,042 - - - 14,935,905 1,281,935 904,514 1,857,967 3,366,361 - - - 5,897,081 - - - 110,120 362,535 631,761 890,136 51,286 - - - 3,881,469 - - - 2,265,663 944,411 - - 127,251 19,783 - - 15,699,231 1,326,729 631,761 890,136 (763,326) (44,794) 272,753 967,831 2,085,367 44,794 (452,560) - (407,547) 1,632,807 44,794 869,481 - 21,615,625 185,444 3,706,598 $ 22,485,106 $ $ 50,650 $ 4,674,429 See Notes to Financial Statements. 8 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 148,474 Debt Capital Other Total State Gas Tax Service Projects Governmental Governmental Fund Fund Fund Funds Funds $ - $ $ 3,310,295 $ 600,817 $ 9,527,384 1,029,924 490,000 - - 122,122 10,785,591 - 1,559,114 - - 550,323 - 1,528,864 8,000 1,047,511 26,290,422 - 660,890 - $ 400,690 $ 1,342,085 - 228,494 753,224 31,609 118,000 388,037 414,942 1,947,566 - - 290 - 29,332 1,069,533 118,000 3,698,622 1,366,375 25,232,851 148,474 275,796 3,790,631 - - 638,962 6,536,043 1,524,844 2,419,692 125,892 6,064,980 - - - 51,286 10,487,392 - 3,881,469 - 6,861 3,216,935 - 2,607 - 149,641 490,000 - - 490,000 1,559,114 - - 1,559,114 - - 550,323 - 550,323 1.524.844 2,049,114 3,121,096 1,047,511 26,290,422 (455,311) (1,931,114) 577,526 318,864 (1,057,571) 9) 14,005,000 14,005,000 316,830 316,830 (9,569,028) - - (9,569,028) 10,487,392 396,544 286,222 13,300,319 - (11,813,612) (626,600) (13,300,319) 918,364 2,904,762 (340,378) 4,752,802 (455,311) (1,012,750) 3,482,288 (21,514) 3,695,231 856,001 2,354,835 8,433,842 2,588,204 39,740,549 $ 400,690 $ 1,342,085 $ 11,916,130 $ 2,566,690 $ 43,435,780 9) City of Rosemead, California Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2006 Net change in fund balances, total governmental funds. Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. These expenditures are recorded in Public Works, Public Safety and Capital Outlay. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount of capital assets recorded in the current period. Depreciation expense on capital assets is reported in the government -wide statement of activities and changes in net assets, but does not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in governmental funds. The repayment of long -term debt is an expenditure in the governmental funds, but the repayment reduces long -term liabilities in the statement of net assets. 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 the governmental funds. Some revenue is not available to pay for current period expenditures and, therefore, is deferred in the funds. Bond proceeds are reported as financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net assets, however, acquiring debt increases long -term liabilities and does not affect the statement of activities, net of debt defeased of $9,335,000. Governmental funds report the effect of issuance costs whereas these amounts are deferred and amortized in the statement of activities. Change in net assets of governmental activities See Notes to Financial Statements. 10 $ 3,695,231 3,290,099 (1,951,882) 490,000 (39,077) 198,257 (4,966,862) 550,323 $ 1,266,089 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ City of Rosemead, California Statement of Fiduciary Net Assets —Trust and Agency Funds June 30, 2006 Pension Assets Trust Fund Agency Fund Cash and investments $ - $ 302,957 Investment in mutual funds 80,978 - Total assets $ 80,978 $ 302,957 Liabilities and Net Assets Refundable deposits Net assets, held for employees' retirement Total liabilities and net assets See Notes to Financial Statements. $ - $ 302,957 80,978 $ 80,978 $ 302,957 City of Rosemead, California Statement of Changes in Fiduciary Net Assets — Pension Trust Fund Year Ended June 30, 2006 Additions, investment income on investments pool Total additions Deductions: Benefits paid to participants and beneficiaries Administrative expenses Total deductions Change in net assets Net assets, beginning Net assets, ending See Notes to Financial Statements. 12 $ 5,278 18,223 3,581 21,804 (16,526) 97,504 $ 80,978 ■ City of Rosemead, California ■ Notes to the Financial Statements ■ Note 1. Summary of Significant Accounting Policies ■ ■ Nature of operations: ■ City of Rosemead, California: The City of Rosemead, California. (the City) was incorporated in August 1959 under the general laws of the State of California. The City operates under an elected Council /City Manager form of ■ government. It provides a broad range of services to its citizens, including general government, public safety, streets, sanitation and health, cultural and park facilities, and social services. ■ Many of the functions often provided by municipal government are, in the City, provided by special districts. Examples ■ of some of these special districts, which usually encompass areas larger than the City itself, are the Fire Protection District, the Library District and the County Flood Control District. Certain other governmental functions are paid for by ■ the City, but performed by a variety of other public and private agencies under contract. Some of the contracts now in effect are for police, street maintenance and animal control. ■ Description and scope of the reporting entity: As required by accounting principles generally accepted in the ■ United States of America, these financial statements present the financial position of the City and its component units, entities for which the City is considered to be financially accountable. The City is considered to be financially ■ accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on that organization, or there is a potential for that organization to provide specific ■ financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable for an organization if that organization is fiscally dependent upon the City (i.e., it is unable to adopt its ■ budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other ■ organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. ■ Based upon the above criteria, the blended component units of the City are the Rosemead Financing Authority (the ■ Authority), the Rosemead Community Development Commission (the Commission) and the Rosemead Housing Development Corporation (the Corporation). ■ Rosemead Financing Authority: The Authority provides for the financing or refinancing of public capital ■ improvements and working capital requirements of local agencies that enter into contractual arrangements with the Authority. ■ Rosemead Community Development Commission: The Commission's purpose is to prepare and carry out plans ■ for the improvement, rehabilitation and redevelopment of blighted areas within the City. ■ The Commission finances street, park and utility improvements, and also acquires and constructs major capital facilities, all within the Rosemead Project Area No. 1. ■ Rosemead Housing Development Corporation: The Corporation accounts for the construction, financing and ■ operations of low- and moderate - income housing. It is a California nonprofit benefit corporation organized under Section 501(c)(3) of the Internal Revenue Code. ■ Since the City Council and/or other City officials serve as the Governing Board for these component units, all of the ■ City's component units are considered to be blended component units. Blended component units, although legally ■ separate entities, are, in substance, part of the City's operations. Therefore, data from these units are reported with the funds of the primary government, the City. The Commission and the Corporation issue separate component unit ■ financial statements. The financial statements of these component units can be obtained from the Finance Department. ■ 13 ■ City of Rosemead, California Notes to the Financial Statements Note 1. Summary of Significant Accounting Policies, Continued Government -wide and fund financial statements: The government -wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the City and its blended component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities are supported by taxes and intergovernmental revenues. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable to a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly classified as program revenues are reported as general revenues. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds are reported in separate columns in the fund financial statements. Measurement focus, basis of accounting and financial statement presentation: The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash Flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Amounts reported as program revenues include (1) charges to customers or applicants for goods, services or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources, such as taxes, are reported as general revenues rather than as program revenues. Net assets are reported as restricted when constraints placed on their use are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or imposed by law through local enabling legislation. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Principal and interest on long -term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. Revenues that are accrued generally include real property taxes, sales tax, transient occupancy taxes, franchise taxes, vehicle license fees, highway users tax and interest. Real property taxes are levied on October 15 against property owners of record on January 1 of that year. The taxes are due in two installments, on November 1 and February 1, and become delinquent after December 10 and April 10, respectively. Tax liens attach annually as of 12:01 a.m. on the first day of January in the fiscal year for which the taxes are levied. Under the provisions of NCGA Interpretation 3, property tax revenue is recognized in the fiscal year for which the taxes have been levied, provided it is collected within 60 days of the end of the fiscal year. 14 ■ City of Rosemead, California ■ Notes to the Financial Statements ■ Note 1. Summary of Significant Accounting Policies, Continued ■ The City's fiduciary fund types are trust and agency funds. The Agency Fund accounts for assets held as an agent on ■ behalf of others. The trust fund is custodial in nature (assets equal liabilities) and does not involve measurement of ■ results of operations. ■ The City reports the following major governmental funds: ■ The General Fund accounts for all financial resources except those required to be accounted for in another fund. These resources are devoted to financing the general services that the City performs for its citizens. ■ The Community Development Block Grant Fund accounts for Community Development Block Grants received ■ from the U.S. Department of Housing and Urban Development. The Federal Highway Grant Fund accounts for Federal Highway Grants received from the California Department of Transportation. ■ The State Gas Tax Fund accounts for revenues and expenditures a portion under the Streets and Highways Code of ■ the State of California including federal and state grants. Expenditures may be made for street - related purposes of the City's systems of streets, including maintenance thereof. ■ The Public Transportation Fund accounts for revenues and expenditures received under Proposition A and ■ Proposition C. ■ The Debt Service Fund accounts for the accumulation of resources for the payment of general long -term debt ■ principal, interest and related costs. ■ The Capital Projects Fund accounts for financial resources to be used for the improvement and rehabilitation of the community redevelopment project areas and acquisition or construction of major capital facilities within the City. ■ Additionally, the City reports the following fund types: ■ Fiduciary funds account for assets held by the government in a trustee capacity or as an agent on behalf of others. ■ Trust funds account for assets held by the government under the terms of a formal trust agreement. The City's fiduciary fund types are as follows: ■ The Pension Trust Fund accounts for the activity of the retirement plan for employees of the City using the accrual ■ basis of accounting. ■ The Agency Fund accounts for the assets held in a trustee capacity or as an agent. The cash being held primarily represents amounts placed on deposit for refundable permits and performance bonds. The Agency Fund is ■ custodial in nature and does not present results of operations or have a measurement focus. ■ Management has the ultimate responsibility for the appropriateness of the accounting policies and procedures used ■ by the City. ■ Cash and investments: Cash includes amounts in demand and time deposits. Investments are reported in the accompanying balance sheet at fair value, except for certain money market and investment contracts that are ■ reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. ■ 15 ■ City of Rosemead, California Notes to the Financial Statements Note 1. Summary of Significant Accounting Policies, Continued Changes in fair value that occur during a fiscal year are recognized as income from property and investments reported for that fiscal year. Income from property and investments includes interest earnings; changes in fair value; any gains or losses realized upon the liquidation, maturity or sale of investments; property rentals and the sale of City -owned property. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds on a monthly basis, based on each fund's average cash and investments balance, except for investment income associated with funds not legally required to receive pooled investment income which has been assigned to and recorded as revenue of the General Fund, as provided by California Government Code Section 53647. Restricted cash and investments represent amounts that are restricted under the terms of debt agreements. Prepaid items: Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. Capital assets: Capital assets, which include land, buildings, equipment and infrastructure assets (e.g., roads, bridges, traffic signals and similar items), are reported in the govemment -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $500 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The cost of normal maintenance and repairs that does not add to the value of an asset or materially extend an asset's useful life is not capitalized. Construction -in- progress costs are transferred to their respective capital asset category upon completion. Depreciation is charged to operations using the straight -line method based on the estimated useful life of an asset. The estimated useful lives of depreciable assets are as follows: Years Buildings 50 Improvements other than buildings 15 Machinery and equipment 7 Autos and trucks 5 Furniture and office equipment 7 Infrastructure: Bridges, sewer, storm drains 50 Medians /monuments, sidewalks 40 Local /collector streets, plants and irrigation, traffic signals 30 Arterial streets, bus stop improvements 20 16 ■ City of Rosemead, California Notes to the Financial Statements Note 1. Summary of Significant Accounting Policies, Continued GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, was adopted during the year ended June 30, 2006. Statement No. 42 requires an evaluation of ■ prominent events or changes in circumstances to determine whether an impairment loss should be recorded and whether any insurance recoveries should be offset against the impairment loss. The effect of the implementation of ■ GASB Statement No. 42 was not significant to the City's net assets or changes in net assets for the year ended June 30, 2006. Compensated absences: Vacation and sick leave pay are payable to employees at the time used or upon termination of employment. All vacation is accrued when incurred in the govemment -wide level financial statements. Sick pay is accrued to the extent it is probable that the benefits will result in termination payments (i.e., rather than be taken as absences due to illness or other contingencies, such as medical appointments and funerals). The sick leave liability is estimated based on the City's past experience of making termination payments from sick leave, adjusted for the effect of changes in its termination payment policy and other current factors. A liability for these amounts is reported in governmental funds only if it has matured or will be paid from available resources of the current period. City employees accumulate vacation hours that may be paid upon termination, death or retirement. Employees can accumulate up to three weeks of accrued vacation per year depending on the length of employment. Employees can accumulate up to 160 hours of sick leave. Any hours in excess of 160 are considered to be vested and are paid to the employee based on a vesting schedule. In addition, employees can accrue compensatory time. The City allows employees who have earned vacation time an opportunity to have the City buy back up to two weeks of vacation time per year. In order to participate in the Vacation Buy -Back Program, an employee must take at least ■ 40 consecutive hours of vacation at one time. ■ Deferred revenue: The deferred revenue reported in the City's financial statements represents money received during the current or previous fiscal years that has not been earned by, or has been earned but is not available to, ■ the City as of the end of the fiscal year. These monies will be recognized as revenues in subsequent fiscal years once the revenue has been earned. Receivables and payables: Activity between funds that is representative of lending /borrowing arrangements outstanding at the end of the fiscal year is referred to as either "due to /from other funds" (short-term interfund loans) or "advances to /from other funds" (long -term interfund loans). Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in the applicable governmental fund to indicate that they are not available for appropriation and are not expendable, available financial resources. All trade, service and tax receivables are shown net of an allowance for uncollectibles. Long -term obligations: In the government -wide financial statements, long -term debt and other long -term obligations are reported as liabilities in the statement of net assets. Bond premiums, discounts and issuance costs are deferred and amortized over the life of the bonds using the effective - interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the ■ term of the related debt. 17 City of Rosemead, California Notes to the Financial Statements Note 1. Summary of Significant Accounting Policies, Continued In the fund financial statements, governmental fund types recognize bond premiums, discounts and issuance costs during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund equity: In the fund financial statements, governmental funds report reservations of fund balances for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balances represent tentative management plans and are subject to change. Net assets: Represents the difference between assets and liabilities. Net assets invested in capital assets, net of related debt, consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net assets invested in capital assets, net of related debt excludes unspent debt proceeds. Net assets are reported as restricted when there are limitations imposed on their use, whether through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Restricted resources are used first to fund appropriations. Note 2. Cash and Investments Summary of cash and investments: Cash and investments are reported in the accompanying financial statements at June 30, 2006 as follows: Cash and investments $ 36,785,425 Restricted cash and investments 6,804,123 Cash and investments, Agency Fund 302,957 Investment in mutual funds, Pension Trust Fund 80,978 $ 43,973,483 Components of the City's cash and investments at June 30, 2006 are as follows: Unrestricted cash and investments: Cash $ 5,144,550 California State Local Agency Investment Fund (LAIF) 20,612,366 Time certificates of deposit 11,331,466 Investments in external pool 80,978 Total unrestricted investments 32,024,810 Total unrestricted cash and investments 37,169,360 Restricted cash in time certificates of deposit 5,480,332 Restricted investment in corporate note 1,323,791 Total restricted cash and investments 6,804,123 $ 43,973,483 18 ■ City of Rosemead, California Notes to the Financial Statements Note 2. Cash and Investments, Continued Investments authorized in accordance with California Government Code Section 3601 and under the provisions of the City's policy: The table below identifies the investment types that are authorized by the City's investment policy. The table also identifies certain provisions of the City's investment policy that address interest rate risk, default credit risk and concentration risk. This table does not address investments of bond proceeds held by ■ bond trustee that are governed by provisions of debt agreements of the City's, rather than general provisions of the City's investment policy. Maximum Maximum . Maximum Percentage of Investment in One Authorized Investment Type Maturity Portfolio Issuer U.S.:Treasury obligations 5 years None None U.S..agency securities 5 years None None Bankers acceptances 180 days 40% 10% Commercial paper 270 days 25% 10% Negotiable certificates of deposit 36 months 30% None Medium -term notes 36 months 15% 5% LAIF N/A None None Nonnegotiable certificates of deposit 1 year 10% None ■ Money market mutual funds N/A None None . Investments authorized by debt agreements: Investments held by the bond trustee are governed by the provisions of the debt agreement rather than the general provisions of California Government Code or the City's investment . policy. The table below identifies the investment types that are authorized for investments held by the bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk and ■ concentration risk. . Maximum Maximum Maximum Percentage Investment in Authorized Investment Type Maturity of Portfolio One Issuer U.S. Treasury obligations 5 years None None U.S. agency securities 5 years None None Banker's acceptances 270 days 40% 10% Commercial paper 180 days 25% 10% Money market portfolio 1 year None None The City has monies held by a trustee pledged for the payment or security of their outstanding tax allocation bonds. The California Government Code provides that these monies, in absence of specific statutory provisions governing the issuance of bonds or certificates, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its trustees or fiscal agents may make. These ordinances, resolutions or indentures are generally more restrictive than the City's general investment policy. At June 30, 2006, the monies held . by the trustee were invested in a taxable 5.8% corporate note payable that matures on October 1, 2023. ■ Disclosures related to interest rate risk: Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways the City manages its exposure to interest rate risk is by investing in pooled investments, such as LAIF. 19 City of Rosemead, California Notes to the Financial Statements Note 2. Cash and Investments, Continued Custodial credit risk: Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterpart (e.g., broker - dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party, The California Government Code and the City's Investment Policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2006, the City has deposits with a bank balance of $5,854,974 with several financial institutions. Of the bank balance, $490,335 is federally insured by the Federal Depository Insurance Corporation. While collateralized in accordance with California Law, the collateral is not held in the name of the City. The City's Investment Policy requires that a third -party bank trust department hold all investment securities owned by the City. The City's investments in certificates of deposit are held by banks. Accordingly, the certificates are covered by the same collateral requirements as the City's deposits. Disclosures related to credit risk: Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of an investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of June 30, 2006 for each investment type: Investment type Unrated AAA" A* A -1' LAIF $ 20,612,366 $ 20,612,366 $ $ S - Investment in Corporate Note 1,323,791 - 1,323,791 S External Investment Pool 80,978 80,978 - $ 22,017,135 $ 20,693,344 $ $ $ 1,323,791 Source: Standard and Poor's S Concentration of credit risk: For concentration of investments in any one issuer, the City's investment policy w requires that no more than 10% of investments in bankers acceptances and commercial paper and 5% of investments in medium -term notes be in any one issuer. As of June 30, 2006, the City's investment portfolio was in compliance with this requirement. Governmental accounting standards require disclosure of investment concentrations that are 5% or more of total investments. Investments issued or explicitly guaranteed by the U.S. Government and investments in mutual funds, external investment pools and other investment pools are excluded from this requirement. The City had no investments that meet this disclosure requirement. -_J 20 L City of Rosemead, California Notes to the Financial Statements Note 2. Cash and Investments, Continued Investment in investment pools: The City is a voluntary participant in the LAIF that is regulated by California Government Code Section 16429 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 estimated fair value invested by all public entities agencies in LAIF is . $63,616,592,927. Of that amount, 100% is invested in nonderivative financial products. As of June 30, 2006, the average maturity of the LAIF investments was 142 days. The balance in the City's investment in the external pool of $80,978 represents funds invested with a life insurance company in mutual funds for retired employees who are not participants in CaIPERS (see Note 8). The mutual funds invest in various debt and equity securities, similar to the types of investments in LAIF. Note 3. Receivables Receivables as of June 30, 2006 consist of the following: Community Development Fed Public State Debt Capital Other General Block Grant Hwy Transportation Gas Tax Service Projects Nonmajor Fund Fund Fund Fund Fund Fund Fund Funds Total Othertaxes $ 1,102,255 $ - $ - $ - $ - $ $ - $ - $ 1,102,255 Due from other ■ govern- mental ■ agencies 536,719 252,180 50,650 310,127 8,000 587,205 123,869 1,868,750 Accrued Interest 324,010 - - - - 18,294 111,712 259 454,275 Due from . local utility compa- ■ vies(") 256,765 - - - 256,765 Other 158,427 139 - - - - 46,191 62,170 266,927 ■ $ 2,378,176 $ 252,319 $ 50,650 $ 310,127 $ 8,000 $ 18,294 $ 745,108 $ 186,298 $ 3,948,972 (A' During the fiscal year ended June 30, 1987, the Commission approved a reimbursement agreement with a local utility company, advancing the utility company funds required to install a water line and a water main extension. The total original amount advanced was $550,200. The Commission then contributed the receivable to the City at the present value amount of $456,766. The City is to collect this receivable from the utility company in 40 annual non - interest bearing installments of $12,345, with the final installment due June 30, 2027. 21 City of Rosemead, California Notes to the Financial Statements Note 4. Capital Assets Capital asset activity was as follows for the year ended June 30, 2006: Balance at Balance at June 30, 2005 Increases Decreases June 30, 2006 Governmental activities: Capital assets not being depreciated: Land $ 2,953,234 $ - $ - $ 2,953,234 Construction in progress 3,794,541 3,024,037 4,092,794 2,725,784 Total capital assets not being depreciated 6,747,775 3,024,037 4,092,794 5,679,018 Capital assets being depreciated: Buildings and improvements Improvements other than building Machinery and equipment Autos and trucks Furniture and office equipment Infrastructure Total capital assets being depreciated Less accumulated depreciation for: Buildings and improvements Improvements other than building Machinery and equipment Autos and trucks Furniture and office equipment Infrastructure Total accumulated depreciation Total capital assets being depreciated, net Governmental activities capital assets, net 21,690,602 943,983 22,634,585 868,483 - 868,483 710,263 1,526 - 711,789 353,616 71,256 54,432 370,440 2,302,716 92,896 - 2,395,612 36,603,803 3,249,195 1,003,398 38,849,600 62,529,483 4,358,856 1,057,830 65,830,509 4,625,110 564,296 5,189,406 868,483 - 868,483 668,102 22,583 - 690,685 291,708 79,174 54,432 316,450 1,869,170 163,965 - 2,033,135 18, 226, 436 1,121, 864 1,003,398 18, 344, 902 26,549,009 1,951,882 1,057,830 27,443,061 35,980,474 2,406,974 - 38,387,448 $ 42,728,249 $ 5,431,011 $ 4,092,794 $ 44,066,466 Infrastructure assets include projects that were in progress as of June 30, 2006. The estimated cost to complete these projects as of June 30, 2006 is approximately $1,395,831. Depreciation expense was charged to functions /programs of the primary government as follows: Governmental activities: General government Parks and recreation Public safety Community services Total depreciation expense 22 $ 1,858,653 78,121 8,200 6,908 $ 1,951,882 ■ City of Rosemead, California Notes to the Financial Statements Note 5. Long-term Debt The folowing is a summary of changes in the principal balance of long -term debt for the year ended June 30, 2006: ■ Principal Principal Balance at Balance at Due Within June 30, 2005 Additions Reductions June 30, 2006 One Year Governmental activities: Tax allocation bonds, series 1993A $ 32,920,000 $ - $ 9,825,000 $ 23,095,000 $ - Tax allocation bonds, ■ series 2006A - 14,005,000 - 14,005,000 780,000 Deferred amount for issuance of premiums - 316,830 - 316,830 - Compensated absences 343,654 192,369 212,337 323,686 118,000 $ 33,263,654 $ 14,514,199 $ 10,037,337 $ 37,740,516 $ 898,000 The City records expenditures related to compensated absences through the City's General Fund. Tax allocation bonds, Series 1993A: In November 1993, the Commission issued tax allocation bonds in the amount ■ of $34,275,000 (Series 1993A) to finance a portion of the cost of the redevelopment area known as Project Area No. 1. The bonds bear interest ranging from 4.6% to 5.6 %. The bonds mature before October 1, 2033. The bond issue reallocated $6,813,850 of proceeds from the 1991 bond issue deposited in the Low - Moderate Income Housing Set -Aside Fund in October 1991. The reallocation had the effect of satisfying the present value effect of the $423,574 borrowed from the Educational Revenue Augmentation Fund (ERAF) in fiscal year ended June 30, 1993 and satisfying the present value effect of the set -aside requirements as follows: $812,342 for fiscal year ended June 30, 1992, $847,147 for fiscal year ended June 30, 1993 and $469,142 for each of the fiscal years ended /ending June 30, 1997 through June 30, 2022, Additional Low - Moderate Income Housing Set -Aside commitments are addressed in Note 9. In 2006 an additional $9,335,000 of principal was defeased by the issuance of the Series 2006A bonds. On March 9, 2006, the City of Rosemead Community Development Commission (Commission), sold $14,005,000 of Tax Allocation Bonds, Series 2006A with a true interest cost of 3.95% to provide project funds and to advance refund $9,335,000, a portion of previously outstanding 1993A Tax Allocation Bonds, The Commission completed the advance refunding to reduce aggregate debt service payment over the next 13 years by approximately $2,341,000 and to obtain an economic gain (difference between present value of the old and new debt service payments) of ■ $537,000. ■ Tax Allocation Bonds, Series 2006A: In February 2006, the Commission issued tax allocation bonds in the amount of $14,005,000 (Series 2006A) to primarily (1) refund a portion of the Commission's outstanding Series 1993A bonds ■ and (2) to finance redevelopment activity in Redevelopment Project Area No. 1. The bonds bear interest ranging from 3.25% to 5.00% and mature in annual installments of $780,000 to $1,250,000 on various dates through October 1, ■ 2022. The Commission posted a surety bond in lieu of cash reserve in the amount of $1,323,238. Portions of the bonds are subject to early redemption, at the option of the Commission, beginning October 1, 2017. 23 City of Rosemead, California Notes to the Financial Statements Note 5. Long -term Debt, Continued The Tax Reform Act instituted certain arbitrage restrictions with respect to the issuance of tax - exempt bonds. Arbitrage regulations deal with the investment of all tax - exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not paid to the federal government at least every five years. During the current year, the City performed calculations of excess investment earnings on various bonds and financings in accordance with arbitrage regulations. The City has determined that no arbitrage rebate liability exists as of June 30, 2006. At June 30, 2006, debt service requirements to maturity for governmental activities long -term debt (excluding compensated absences) for which minimum annual debt service payments have not been established are as follows: Fiscal Years Ending June 30, 2007 2008 2009 2010 2011 2012 -2016 2017 -2021 2022 -2026 2027 -2031 2032 -2034 Note 6. Interfund Balances and Transactions Long -term Debt Principal Interest $ 780,000 $ 1,881,698 810,000 1,815,114 845,000 1,785,183 870,000 1,757,314 900,000 1,727,989 5,020,000 8,094,444 6,265,000 6,862,793 6,985,000 5,229,198 8,380,000 3,208,240 6,245,000 712,040 $ 37,100,000 $ 33,074,013 Interfund receivables and payables balances as of June 30, 2006 were as follows: Governmental activities: Major governmental activities: General Nonmajor governmental funds: Special Revenue Funds: Traffic Safety Local Transportation 24 Due to Due from Other Funds Other Funds $ 3,270 $ 43,426 40,097 59 - $ 43,426 $ 43,426 ■ City of Rosemead, California Notes to the Financial Statements Note 6. Interfund Transactions, Continued There were no outstanding advances to and from other funds as of June 30, 2006. Interfund balances result from the lag time between the dates that interfund goods and services are provided, or reimbursable expenditures occur, ■ and payments between funds are made. ■ Interfund transfers for the year ended June 30, 2006 consisted of the following: Transfers from Transfers to Amount General Fund Capital Projects Fund $ 396,544 Nonmajor other governmental funds 11,222 Community Development Block Grant Fund 44,794 Capital Projects Fund General Fund 1,326,220 Debt Service Fund 10,487,392 Federal Highway Grant Fund General Fund 407,547 Nonmajor other governmental funds General Fund 351,600 . Nonmajor other governmental funds 275,000 $ 13,300,319 Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, and (2) move receipts collected in debt service to other funds after debt service requirements have been met. Note 7. Risk Management Self - insurance pool pursuant to joint powers agreement: The City is a member of the California Joint Powers ■ Insurance Authority (the Authority). The Authority is composed of 107 California public entities and is organized under a joint powers agreement pursuant to California Government Code 6500 et seq. The purpose of the Authority is . to arrange and administer programs for the pooling of self- insured losses, to purchase excess insurance or reinsurance, and to arrange for group - purchased insurance for property and other coverages. The Authority's pool ■ began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine - member Executive Committee. The City participates in the Authority's general liability program for which each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). Six months after the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Costs are spread to members as follows: the first $30,000 of each occurrence is charged directly to the member costs, from $30,001 to $750,000 are pooled based on a member's share of costs under $30,000; costs from $750,001 to $15,000,000 are pooled based on payroll. Costs of covered claims above $15,000,000 are currently paid by reinsurance. The protection for each member is $50,000,000 per occurrence and $50,000,000 annual aggregate. N 0 25 Li City of Rosemead, California Notes to the Financial Statements Note 7. Risk Management, Continued The City also participates in the workers' compensation pool administered by the Authority. Members retain the first $50,000 of each claim. Claims are pooled separately between public safety and nonpublic safety. Loss development reserves are allocated by pool and by loss layer ($0 to $100,000 allocated by retained amount and $100,000 to $2,000,000 by payroll). Losses from $50,000 to $100,000 and the loss development reserve associated with losses up to $100,000 are pooled based on the member's share of losses under $50,000. Losses from $100,000 to $2,000,000 and loss development reserves associated with losses from $100,000 to $2,000,000 are pooled based on payroll. Costs from $2,000,000 to $50,000,000 are transferred to an excess insurance policy. Costs in excess of $50,000,000 are pooled among the members based on payroll. Administrative expenses are paid from the Authority's investment earnings. The City participates in the pollution legal liability and remediation legal liability insurance which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets and storm drains owned by the City. Coverage is on a claims -made basis. There is a $50,000 deductible. The Authority has a limit of $120,000,000 for the three -year period from July 1, 2005 through July 1, 2008. Each member of the Authority has $10,000,000 limit during the three -year term of the policy. During the past three fiscal years, none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. Other coverage: The City has also purchased property protection and employee dishonesty insurance from a casualty insurance company. However, the City does not carry insurance coverage for natural disasters. There is a $1,000 per loss deductible. Premiums for the coverage are paid annually and are not subject to retroactive adjustments. Note 8. Retirement Plan Defined contribution pension plan: The City had a defined contribution pension plan that covered substantially all retired employees and was funded by a group annuity contract. Plan participants became vested upon the dissolution of the plan on September 8, 1992. There were no subsequent contributions to this plan. On September 8, 1992, participants of the plan who were current employees had their share of the annuity contract transferred to the California Public Employees' Retirement System (PERS). The value of the external investment pool for retired employees is $80,978 as of June 30, 2006 (See Note 2). Defined benefit pension plan: Plan description: The City contracts with the Public Employees' Retirement System (PERS) of the State of California (Plan) to provide its salaried employees retirement and disability benefits which are paid by the State of California under a cost - sharing multiple - employer plan. Copies of PERS' annual financial report may be obtained from its executive office located at 400 P Street, Sacramento, California 95814. 26 ■ E City of Rosemead, California M Notes to the Financial Statements M Note 8. Retirement Plan, Continued M Through June 30, 2003, the PERS retirement and disability plan was an agent multiple - employer retirement plan. M Effective July 1, 2003, due to the City having under 100 employees, the City's PERS pension plan was converted ■ from an agent multi - employer plan (former plan) to a cost - sharing multiple - employer plan. The former plan is an aggregate of single employer plans where separate accounts are maintained for each employer and contributions by ■ the employer benefit only the employees of the employer. Under this plan, separate actuarial valuations are performed for each employer and the results are attributed to and accounted for by the employer. The cost - sharing IN attributed plan is a "Pooling" arrangement whereby risks, rewards and benefit costs are shared and not attributed individually to any single employer. Periodic employer pension expense can be significantly different M between the plan types. The change to the pooling arrangement was initially effective for the City's required contribution rate during the fiscal year ended June 30, 2006. M At the time of joining the risk pool under the cost - sharing multiple - employer plan, a side fund (the amount that M approximates what the City would owe PERS if it exited the plan) was created to account for the difference between the funded status of the pool and the funded status of the City's plan. As of the June 30, 2004 valuation (the most M current valuation available), the estimated amount of the side fund liability was $2,931,948. Cal PERS estimates that the side fund liability at the June 30, 2005 and 2006 actuarial valuation dates will be $3,041,058 and $2,972,414, M respectively. All permanent City employees are eligible to participate in the System. Employees attaining the age of 55 with five years of credited California service (service) are eligible for normal retirement and are entitled to a monthly benefit of 2.0% of their final compensation for each year of service. Final compensation is defined as the highest annual salary ■ earned. Retirement may begin at age 50 with a reduced benefit rate. The plan also credits employees for unused sick leave. Upon separation from the plan prior to retirement, members' accumulated contributions are refundable with ■ interest credited through the date of separation. . The City pays the employees' required contribution of 7% of regular earnings. The City is required to contribute at an actuarially determined rate; the current rate is 20.889% of annual covered payroll for miscellaneous employees. The contribution requirements of plan members and the City are established and may be amended by CalPERS. Three -year trend information for CalPERS: Annual Percentage Pension Cost of APC Net Pension Fiscal Years Ended June 30, (APC) Contributed Obligation 2004 $ 276,002 100 $ ■ 2005 269,457 100 2006 440,687 100 M M 0 27 City of Rosemead, California Notes to the Financial Statements Note 8. Retirement Plan, Continued Supplemental retirement plan: Plan description: In addition, effective July 1, 2000, the City entered into an agreement with Phase II Systems whereby the City will contribute to a supplemental employee pension plan (the plan II), a single - employer defined benefit pension plan administered by Phase II Systems. The plan II will provide a supplemental retirement benefit of 1% for each year of service to plan members and beneficiaries. Employees with at least 20 years of service and City Council members with at least 12 years of service are eligible to participate at age 60 and receive an annual benefit equal to 3% of the highest annual gross pay for each year of service. Benefits are determined using the same method as CalPERS benefits. Phase II Systems issues a publicly available financial report that includes financial statements and required supplementary information for the plan II. That report may be obtained by writing to Phase II Systems, 3961 MacArthur Boulevard, Suite 200, Newport Beach, California, 92660, or by calling 1 -800- 540 -6369. Funding policy: Plan members are not required to contribute any of their annual covered salary, as the City will be required to contribute the actuarially determined rate. The current rate is 11.48% of annual covered payroll. The City expects to fund the initial actuarial calculated accrued benefit over the first few years of the plan II. Annual pension cost: The required contribution is determined as part of the latest actuarial valuation, June 30, 2004, using the entry-age actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions used were the same as used for CaIPERS. Three -year trend information for Phase II Systems: Fiscal Years Ended June 30, 2004 2005 2006 Required supplementary information, funded status of plan: Governmental activities: General government Parks and recreation Public safety Community services Total depreciation expense Annual Percentage Pension Cost of APC Net Pension (APC) Contributed Obligation $ 196,797 100 214,294 100 204,740 100 $ 1,858,653 78,121 8,200 6,908 $ 1,951,882 ■ City of Rosemead, California Notes to the Financial Statements Note 8. Retirement Plan, Continued Postemployment healthcare plan: On July 10, 2001, the City adopted a resolution whereby, effective July 1, 2002, retired City employees will be entitled to receive amounts from the City necessary to pay the cost of their enrollment, . including the enrollment of spouses and eligible family members, in a health benefit plan, up to a maximum of the rate that CaIPERS charges to family enrollments. This healthcare premium subsidy will be available to any City . employee who reaches retirement age and retires from the City and who does not then work for another government employer. The City has not addressed how it will fund this program as of June 30, 2006. Currently, expenditures are recorded as incurred. There were no expenditures incurred during the year ended June 30, 2006. Note 9. Commitments and Contingencies Low - Moderate Income Housing Set -aside Fund: Under state law, the Commission is required to set aside a portion of its property tax increment revenue for low- and moderate - income housing. The Commission has made findings that, for the years ended June 30, 1986 through 1991, it was allowed to defer funding of the set - aside. The set -aside amounts incurred during the fiscal years ended June 30, 1994, 1995 and 1996 were also deferred until the fiscal year ending June 30, 2023, as provided by the Commission's adoption of the housing deficit repayment plan. As of June 30, 2006, the accumulated set -aside amount not yet funded was approximately $4,947,000. As required by law, the Commission devised a plan to fund the accumulating amount. To help fund the completion of the Senior Citizen Housing project construction, the Capital Projects Fund transferred an additional $849,863 to the Low - Moderate Income Housing Set -Aside Fund during the fiscal year ended June 30, 2002, over and above the 20% requirement of $299,993, and an additional $1,279,548 to the Low- Moderate Income Housing Set -aside Fund during the fiscal year ended June 30, 2003, over and above the 20% requirement of ■ $290,868. These additional amounts, which total $2,129,411, are considered an advance on future set -aside requirements and will be deducted from future transfers for the set -aside over future years. During the fiscal years ■ ended June 30, 2006, 2005 and 2004, the 20% requirements of $512,609, $448,578 and $394,533, respectively, were funded using the cumulative advance. As of June 30, 2006, the remaining advance was $773,692. Litigation: The City is a member of the Los Angeles County Liability Trust Fund (the Trust Fund), which was set up . to pay for litigation involving the Los Angeles County Sheriffs' Department within any of the 40 cities that are served by the Los Angeles County Sheriffs' Department. The Trust Fund was and is being funded by the 40 cities based upon each city's allocated surcharge, calculated as a percentage of each city's contribution to the total contracted amount with the County paid to Los Angeles County for the use of its deputies. Based upon the agreement signed by all of the 40 cities at the time the Trust Fund originated, the cities will be jointly liable for any and all claims fled against the Los Angeles County Sheriffs' Department, regardless of the location within the 40 cities. In 1998 the County of Los Angeles lost a litigation matter that resulted in a $25,000,000 judgment against the Los Angeles County Sheriffs' Department, which Los Angeles County has since paid. The City believes its share of this liability is approximately 3 %, or $600,000, which will accrue interest at 4% and be paid by the Trust Fund to Los Angeles County (from amounts on deposit with the Trust Fund) over the next 10 years. No additional liability will be incurred by the City. However, if the City decided to terminate its association with the Trust Fund, it would become immediately liable for its share of the remaining liability. Advance agreement: In February 1995, the Commission approved an agreement with a local utility company to ■ advance the utility company $117,600 to install water distribution mains within the Commission redevelopment area. The agreement was put on hold by the Commission and, as of January 16, 2007, the agreement remains on hold. 0 E 29 City of Rosemead, California Notes to the Financial Statements Note 9. Commitments and Contingencies, Continued Collateral held: The City obtains various forms of collateral with respect to the numerous contracts that it enters into. The collateral takes the form of performance bonds, payment bonds, surety bonds, certificates of deposit, escrow agreements, etc. The purpose of the collateral is to protect the City from loss in case the terms of a contract are not filled or complied with. The City may not convert the collateral to its use unless a breach of contract occurs; therefore, this collateral is not recorded on the City's books as an asset. At June 30, 2006, the City held approximately $3,059,000 in performance collateral. The GASB has issued several pronouncements prior to June 30, 2006 that have effective dates that may impact future financial presentations. Management has not currently determined what, if any, impact implementation of the following statements may have on the financial statements of the City. • GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. • GASB Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra- Entity Transfers of Assets and Future Revenues. • GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations. Note 10. Subsequent Events In December 2006, the Commission issued Tax Allocation Refunding Bonds, Series 2006B, at a coupon rate of 3.25% to 4.5 %. The principal amount of the bonds was $24,230,000 which was issued to primarily refund the Commission's outstanding Series 1993A, Tax Allocation Bonds. As of June 30, 2006, the Series 1993A Bonds had an outstanding balance of $23,095,000. 30 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Required Supplementary Information ■ ■ City of Rosemead, California ■ Schedule of Revenues, Expenditures and Changes in Fund Balances - Budgetary Comparison - General Fund ■ Year Ended June 30, 2006 ■ Variance from ■ Budgeted Amounts Final Budget- Original Final Actual Amounts Over (Under) ■ Fund balance, July 1, 2005 $ 20,846,720 $ 20,846,720 $ 21,615,625 $ 768,905 ■ Resources (inflows): Property taxes and special assessments 2,000 2,000 4,868 2,868 ■ Othertaxes 5,056,000 5,056,000 5,611,404 555,404 Intergovernmental 5,757,360 5,757,360 5,747,997 (9,363) ■ Licenses and permits 1,497,500 1,497,500 1,528,864 31,364 Charges for services 517,530 517,530 652,890 135,360 ■ Fines, forfeitures and penalties 383,000 383,000 524,730 141,730 Use of money and property 464,300 464,300 836,110 371,810 ■ Other 20,300 20,300 29,042 8,742 Transfer from other funds 1,677,820 1,677,820 2,085,367 407,547 ■ Amount available for appropriations 15,375,810 15,375,810 17,021,272 1,645,462 ■ Charges to appropriations (outflows), current: ■ General government: City council 307,200 307,200 296,709 (10,491) ■ City administration 1,089,570 1,089,570 1,056,563 (33,007) City clerk 187,680 482,490 375,173 (107,317) ■ Finance 528,790 528,790 477,033 (51,757) City treasurer 300 300 - (300) ■ City attorney 165,300 165,300 159,834 (5,466) Buildings 587,900 587,900 559,713 (28,187) ■ Community promotions 317,100 317,100 377,477 60,377 City garage 34,000 34,000 63,859 29,859 ■ Appropriation reserves 100,000 - - - Public safety: ■ Law enforcement 5,258,710 5,258,710 5,434,444 175,734 ■ Parking control 319,390 319,390 270,809 (48,581) Crossing guards 136,830 136,830 116,569 (20,261) ■ Animal regulations 84,000 84,000 74,520 (9,480) Emergency services 7,000 7,000 739 (6,261) ■ Subtotals 9,123,770 9,318,580 9,263,442 (55,138) ■ See Nate to Required Supplementary Information. ■ ■ ■ ■ ■ 31 ■ City of Rosemead, California Schedule of Revenues, Expenditures and Changes in Fund Balances= Budgetary Comparison - General Fund, Continued Year Ended June 30, 2006 See Note to Required Supplementary Information. 32 Variance from Budgeted Amounts Final Budget - Original Final Actual Amounts Over (Under) Charges to appropriations (outflows), current, continued: Subtotals carried forward $ 9,123,770 $ 9,318,580 $ 9,263,442 $ (55,138) Public works: Street and highways 65,000 65,000 70,242 5,242 Traffic administration 46,860 46,860 45,650 (1,210) Traffic signals - 19,740 20,205 465 Street maintenance 28,000 742 (27,258) Tree & parkway maintenance - - (26,719) (26,719) Public health: Solid waste 80,560 80,560 51,286 (29,274) Public recreation: Parks administration 356,260 356,260 342,063 (14,197) Parks 1,579,450 1,579,450 1,647,734 68,284 Recreation 993,460 993,460 1,003,602 10,142 Aquatics 413,540 470,250 490,407 20,157 Fee and charge 334,920 366,820 362,830 (3,990) Dinsmoor heritage house 25,500 25,500 34,833 9,333 Community services: Planning 462,960 462,960 509,445 46,485 Building regulation 1,106,250 1,106,250 1,015,685 (90,565) Engineering 471,350 471,350 346,477 (124,873) Community improvements 330,820 394,800 394,056 (744) Capital outlay 442,450 462,450 127,251 (335,199) Transfer to other funds 65,860 65,860 452,560 386,700 Total charges to appropriations 15,899,010 16,314,150 16,151,791 (162,359) Net change in fund balance (523,200) (938,340) 869,481 1,807,821 Fund balance, June 30, 2006 $ 20,323,520 $ 19,908,380 $ 22,485,106 $ 2,576,726 See Note to Required Supplementary Information. 32 ■ ■ City of Rosemead, California ■ Schedule of Revenues, Expenditures and Changes in Fund Balances — Budgetary Comparison — Community Development Block Grant Fund ■ Year Ended June 30, 2006 ■ ■ Variance from Budgeted Amounts Final Budget— Original Final Actual Amounts Over (Under) ■ Fund balance, July 1, 2005 $ - $ - $ - $ ■ Resources (inflows): ■ Intergovernmental 3,124,135 3,124,135 1,281,935 (1,842,200) Transfers from other funds - - 44,794 44,794 ■ Amount available for appropriations 3,124,135 3,124,135 1,326,729 (1,797,406) ■ Charges to appropriations (outflows), current: ■ Public works 1,281,013 1,281,013 362,535 (918,478) Community services 1,818,122 1,818,122 944,411 (873,711) ■ Capital outlay 25,000 25,000 19,783 (5,217) Total charges to appropriations 3,124,135 3,124,135 1,326,729 (1,797,406) ■ Net change in fund balances - - - ■ Fund balance, June 30, 2006 $ - $ - $ - $ ■ See Note to Required Supplementary Information. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 33 ■ City of Rosemead, California Schedule of Revenues, Expenditures and Changes in Fund Balances — Budgetary Comparison — Federal Highway Grant Fund Year Ended June 30, 2006 Fund balance, July 1, 2005 Variance from Budgeted Amounts Final Budget — Original Final Actual Amounts Over (Under) $ $ $ 185,444 $ 185,444 Resources (inflows): Intergovernmental 7,951,300 7,951,300 904,514 (7,046,786) Amount available for appropriations 7,951,300 7,951,300 904,514 (7,046,786) Charges to appropriations (outflows), current Streets and highways 7,951,300 7,951,300 631,761 (7,319,539) Transfer to other funds - - 407,547 407,547 Net change in fund balances (134,794) (134,794) Fund balance, June 30, 2006 $ $ $ 50,650 $ 50,650 See Note to Required Supplementary Information. 34 ■ . City of Rosemead, California Schedule of Revenues, Expenditures and Changes in Fund Balances- Budgetary Comparison — Public Transportation Fund Year Ended June 30, 2006 Budgeted Amounts Original Final Actual Amounts Variance from Final Budget— Over (Under) Fund balance, July 1, 2005 $ 3,520,704 $ 3,520,704 $ 3,706,598 $ 185,894 Resources (inflows): Intergovernmental 1,330,000 1,330,000 1,699,099 369,099 Use of money and property 55,000 55,000 158,868 103,868 Amount available for appropriations 1,385,000 1,385,000 1,857,967 472,967 Charges to appropriations (outflows), current: Public works 1,902,000 1,902,000 890,136 (1,011,864) Total charges to appropriations 1,902,000 1,902,000 890,136 (1,011,864) Net change in fund balances (517,000) (517,000) 967,831 1,484,831 Fund balance, June 30, 2006 $ 3,003,704 $ 3,003,704 $ 4,674,429 $ 1,670,725 See Note to Required Supplementary Information. 35 City of Rosemead, California Schedule of Revenues, Expenditures and Changes in Fund Balances — Budgetary Comparison —State Gas Tax Fund Year Ended June 30, 2006 Fund balance, July 1, 2005 Resources (inflows): Intergovernmental Charges for services Use of money and property Amount available for appropriations Charges to appropriations (outflows), current: Public works Total charges to appropriations Net change in fund balances Fund balance, June 30, 2006 See Note to Required Supplementary Information. Variance from Budgeted Amounts Final Budget — Original Final Actual Amounts Over (Under) $ 851,936 $ 851,936 $ 856,001 $ 4,065 987,500 987,500 1,029,924 42,424 8,000 8,000 8,000 - - - 31,609 31,609 995,500 995,500 1,069,533 74,033 1,826,500 1,887,300 1,524,844 (362,456) 1,826,500 1,887,300 1,524,844 (362,456) (831,000) (891,800) (455,311) 436,489 $ 20,936 $ (39,864) $ 400,690 $ 440,554 W. City of Rosemead, California Note to Required Supplementary Information Budgetary Information Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds except the Capital Projects fund, which adopts project - length budgets. All . annual appropriations lapse at fiscal year end. ■ On or before the last day in March of each year, all agencies of the government submit requests for appropriations to the government's manager so that a budget may be prepared. Before the first Thursday of June, the proposed ■ budget is presented to the govemmenfs Council for review. The Council holds public hearings and a final budget must be prepared and adopted no later than June 30. The appropriated budget is prepared by fund, function and department. The City's department heads, with approval of the Finance Director and City Manager, may make transfers of appropriations within a department. Transfers of appropriations between departments within a fund must be approved by the City Council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. The council made several supplemental budgetary appropriations throughout the year. The supplemental budgetary appropriations made in the various governmental funds are detailed in the required supplementary information. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be reappropriated and honored during the subsequent year. 37 This page intentionally left blank. Other Supplementary Information ■ ■ ■ ■ ■ ■ ■ ■ ■ Fund Balances Reserved for: Low - moderate income housing Unreserved, designated for redevelopment projects Unreserved, undesignated Total fund balances Total liabilities and fund balances 191,983 (59) 1,294,529 - 191,983 (59) 1,294,529 $ 40,097 $ 216,610 $ - $ 1,322,038 38 t City of Rosemead, California ■ Combining Balance Sheet — Nonmajor Governmental Funds — Special Revenue Funds jj♦ June 30, 2006 Air Quality Traffic Management Local Street Assets Safety District Transportation Lighting Cash and investments $ - $ 181,843 $ $ 1,273,033 Receivables 40,097 34,767 49,005 . Total assets $ 40,097 $ 216,610 $ $ 1,322,038 Liabilities and Fund Balances Liabilities Accounts payable and accrued liabilities $ - $ 24,627 $ - $ 27,509 Due to other funds 40,097 - 59 - Totalliabilities 40,097 24,627 59 27,509 Fund Balances Reserved for: Low - moderate income housing Unreserved, designated for redevelopment projects Unreserved, undesignated Total fund balances Total liabilities and fund balances 191,983 (59) 1,294,529 - 191,983 (59) 1,294,529 $ 40,097 $ 216,610 $ - $ 1,322,038 38 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Low- Moderate Rosemead Income Housing Narcotics Housing Development Seizure Set -Aside Corporation Total $ 14,995 $ 870,540 $ 194,391 $ 2,534,802 - 259 62,170 186,298 $ 14,995 $ 870,799 $ 256,561 $ 2,721,100 $ 14,995 $ $ 47,123 $ 114,254 - 40,156 14.995 47,123 154,410 870,799 870,799 209,438 209,438 - - 1,486,453 - 870,799 209,438 2,566,690 $ 14,995 $ 870,799 $ 256,561 $ 2,721,100 39 City of Rosemead, California Combining.Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds — Special Revenue Funds Year Ended June 30, 2006 Expenditures: Current: General government Public safety Public works Community services Capital outlay Total expenditures Revenues over(under)expenditures Other financing sources (uses): Transfers: From other funds (To) other funds Total other financing sources Net change in fund balances Fund balance, beginning Fund balance, ending 228,494 - - 344,531 - 125,458 434 - 6,861 - 228,494 132,319 434 344,531 - (56,618) (422) 256,286 (56,618) (422) 256,286 248,601 363 1,038,243 $ $ 191,983 $ (59) $ 1,294,529 40 Air Quality Traffic Management Local Street Safety District Transportation Lighting Revenues: Property taxes and special assessments $ $ - $ $ 600,817 Intergovernmental 67,407 - Fines, forfeitures and penalties 228,494 - Use of money and property - 8,294 12 - Total revenues 228,494 75,701 12 600,817 Expenditures: Current: General government Public safety Public works Community services Capital outlay Total expenditures Revenues over(under)expenditures Other financing sources (uses): Transfers: From other funds (To) other funds Total other financing sources Net change in fund balances Fund balance, beginning Fund balance, ending 228,494 - - 344,531 - 125,458 434 - 6,861 - 228,494 132,319 434 344,531 - (56,618) (422) 256,286 (56,618) (422) 256,286 248,601 363 1,038,243 $ $ 191,983 $ (59) $ 1,294,529 40 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Low- Moderate Rosemead Income Housing Narcotics Housing Development Seizure Set -Aside Corporation Total $ - $ $ $ 600,817 54,715 122,122 - 228,494 - 136 406,500 414,942 54,715 136 406,500 1,366,375 - 275,796 275,796 65,937 - 638,962 - 125,892 6,861 65,937 - 275,796 1,047,511 (11,222) 136 130,704 318,864 11,222 275,000 286,222 - (626,600) (626,600) 11,222 - (351,600) (340,378) - 136 (220,896) (21,514) 870,663 430,334 2,588,204 $ $ 870,799 $ 209,438 $ 2,566,690 41 City of Rosemead, California Combining Schedule of Revenues and Expenditures— Budget and Actual — Nonmajor Governmental Funds — Special Revenue Funds Year Ended June 30, 2006 Variance from Final Budget — Budget Actual Over (Under) Traffic Safety Total revenues $ 240,000 $ 228,494 $ (11,506) Expenditures: Law enforcement 240,000 228,494 (11,506) Net change in fund balance $ - $ - $ Air Quality Management District Total revenues Expenditures: Public works Community service, planning Total expenditures Net change in fund balance Local Transportation Total revenues Expenditures: Public works, streets and highways Net change in fund balance 42 $ 60,300 $ 75,701 $ 15,401 290,000 125,458 (164,542) 7,000 6,861 (139) 297,000 132,319 (164,681) $ (236,700) $ (56,618) $ 180,082 $ 49,500 $ 12 $ (49,488) 49,500 434 (49,066) $ - $ (422) $ (422) 43 City of Rosemead, California Combining Schedule of Revenues and Expenditures— Budget and Actual — Nonmajor Governmental Funds — Special Revenue Funds, Continued ■ Year Ended June 30, 2006 Variance from Final Budget— Budget Actual Over (Under) Street Lighting ! Total revenues $ 550,000 $ 600,817 $ 50,817 a Expenditures: Public safety, street lighting 332,500 344,531 12,031 Net change in fund balance $ 217,500 $ 256,286 $ 38,786 Narcotics Seizure Total revenues $ - $ 54,715 $ 54,715 Expenditures: Public safety, narcotics 67,960 65,937 (2,023) . Net operating transfers 65,860 11,222 (54,638) Net change in fund balance $ (2,100) $ - $ 2,100 Low- Moderate Income Housing Set -Aside Total revenues $ 17,700 $ 136 $ (17,564) Total expenditures - - Net operating transfers 40,000 - (40,000) Net change in fund balance $ 57,700 $ 136 $ (57,564) 43 City of Rosemead, California Combining Schedule of Revenues and Expenditures— Budget and Actual — Nonmajor Governmental Funds — Special Revenue Funds, Continued Year Ended June 30, 2006 Rosemead Housing Development Total revenues Expenditures: General government: Administration Special projects Total expenditures Net operating transfers Net change in fund balance Totals Total revenues Total expenditures Net operating transfers Net change in fund balance 44 Variance from Final Budget — Actual Over(Unde6 $ 451,300 $ 406,500 $ (44,800) 16,300 279,291 262,991 439,000 (31495) (442,495) 455,300 275,796 (179,504) (311,600) (351,600) (40,000) $ (315,600) $ (220,896) $ 94,704 $ 1,368,800 $ 1,366,375 $ (2,425) 1,442,260 1,047,511 (394,749) (205,740) (340,378) (134,638) $ (279,200) $ (21,514) $ 257,686 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ City of Rosemead, California Combining Schedule of Revenues and Expenditures— Budget and Actual — Debt Service Fund Year Ended June 30, 2006 Debt Service Fund Total revenues Expenditures: Principal expenditures Interest expenditures Total expenditures Payment to refunded bond escrow agent Transfers from other funds Net change in fund balance ■ 45 ■ Variance from Final Budget — Actual Over $ 135,000 $ 118,000 $ (17,000) 465,000 490,000 25,000 1,836,760 1,559,114 (277,646) 2,301,760 2,049,114 (252,646) - (9,569,028) (9,569,028) 2,301,760 10,487,392 8,185,632 $ 135,000 $ (1,012,750) $ (1,147,750) ■ City of Rosemead, California ■ Statement of Changes in Assets and Liabilities — Agency Fund ■ Year Ended June 30, 2006 ■ ■ Balance Balance ■ June 30, 2005 Additions Deductions June 30, 2006 Refundable Deposits ■ Assets, cash $ 239,677 $ 141,048 $ (77,768) $ 302,957 ■ Liabilities, refundable deposits and ■ deferred compensation $ 239,677 $ 141,048 $ (77,768) $ 302,957 l ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ .■ ■ .■ ■ ■ ■ ■ .■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ r a I 0