CC - Item 8A - Transmittal of City, CDC and Housing Corporation FY 2008-09 Audited Financial ReportsROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: JEFF ALLRED, CITY MANAGER
DATE: JANUARY 12, 2010
SUBJECT: TRANSMITTAL OF CITY, COMMUNITY DEVELOPMENT COMMISSION
AND HOUSING CORPORATION FY 2008-09 AUDITED FINANCIAL REPORTS
SUMMARY
As of December 18, 2009 the City's independent auditors, Mayer Hoffman McCann
P.C., completed their audit field work and helped City staff prepare the fiscal year ended
June 30, 2009 Comprehensive Annual Financial Report (CAFR), the Rosemead
Community Development Commission (RCDC) audited financial report, the Rosemead
Housing Development Corporation (RHDC) audited financial report and the Single Audit
Report on Federal Awards. The four financial reports are included with this staff report
as well as the auditor's internal control controls letter, the auditor's responsibility under
OMB Circular A-133 letter and the auditor's report on agreed upon procedures for City
Council review.
Staff Recommendation
Staff, recommends that the City Council receive and file the following attachments:
1. The City's FY 2008-09 CAFR
2. The Rosemead Community Development Commission's audited financial report
3. The Rosemead Housing Development Corporation's audited financial report
4. The Single Audit Report on Federal Awards
5. The Auditor's internal controls letter
6. The Auditor's responsibility under OMB Circular A-133 letter
7. The Auditor's Report on Agreed Upon Procedures
ANALYSIS
The City's CAFR and the financial reports for its component units (RCDC and RHDC)
have each received audit opinions stating that the financial statements present fairly, in
all material respects, the financial positions of the governmental activities and each
major fund as of June 30, 2009 as well as changes in financial position, in conformity
with accounting principles generally accepted in the United States of America.
APPROVED FOR CITY COUNCIL AGENDA: ITEM NUMBER:
City Council Meeting
January 12, 2010
Paqe 2 of 2
As in prior years, the City's CAFR has been submitted to the Government Finance
Officers' Association of the United States and Canada (GFOA) for consideration to
receive the Certificate of Achievement for Excellence in Financial Reporting
(Certificate). When submitted for the Certificate the City's CAFR is evaluated by
qualified peers throughout the country and is graded based upon strict criteria for
accuracy, completeness, presentation format, and understandability. The Certificate is
a recognition that the CAFR is, overall, a quality document in conformity with the_high
standards of excellence defined by the GFOA.
Only the CAFR of the primary government is qualified for submittal to the GFOA for
consideration for the Certificate. Accordingly, the financial reports for the RCDC and
the RHDC are not submitted.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Submitted by:
Steve Brisco
Finance Director
Attachment A: CAFR, RCDC Financial Report, RHDC Financial Report, Single Audit
Report on Federal Awards
Attachment B: Auditor's internal controls letter
Attachment C: Auditor's responsibility under OMB Circular A-133 letter
Attachment D: Auditor's Report on Agreed Upon Procedures
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CITY OF ROSEMEAD
Rosemead, California
Single Audit Report on
Federal Awards
Year ended June 30, 2009
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CITY OF ROSEMEAD
Single Audit Report on Federal Awards
Year ended June 30, 2009
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TABLE OF CONTENTS
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Report on Compliance and Other Matters and on Internal Control over
Financial Reporting Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards
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Report on Compliance with Requirements Applicable to Each
Major Program, Internal Control over Compliance and on the
Schedule of Expenditures of Federal Awards in Accordance with OMB
Circular A-133
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Schedule of Expenditures of Federal Awards
5
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Notes to the Schedule of Expenditures of Federal Awards
6
Schedule of Findings and Questioned Costs
7
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Summary Schedule of Prior Audit Findings
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Mayer Hoffman McCann RC.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-474-2020 ph
949-263-5520 fx
www.mhm-pc.com
Honorable Mayor and City Council
City of Rosemead
Rosemead, California
REPORT ON COMPLIANCE AND OTHER MATTERS AND ON INTERNAL CONTROL OVER
FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
We have audited the financial statements of the governmental activities and 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, 2009, which collectively comprise the City's basic financial
statements and have issued our report thereon dated December 18, 2009. 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.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no material
instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinions on the financial statements, but nor for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
deficiency, or combination of control deficiencies, that adversely affects the City's ability to
initiate, authorize, record, process, or report financial data reliably in accordance with generally-
accepted accounting principles such that there is more than a remote likelihood that a
misstatement of the City's financial statements that is more than inconsequential will not be
prevented or detected by the City's internal control. The matter described in the accompanying
Schedule of Findings and Questioned Costs conforms to this definition.
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Honorable Mayor and City Council
City of Rosemead
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A material weakness is a significant deficiency, or combination of significant deficiencies, that
• results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the City's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily disclose all
deficiencies in internal control that might be significant deficiencies or material weaknesses. We
t did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above.
We noted certain matters we reported to the management of the City of Rosemead in a
separate letter dated December 18, 2009.
• The City's written response to the significant deficiency identified in our audit have not been
subjected to the audit procedures applied in the audit of financial statements and, accordingly,
we express no opinion on them.
This report is intended solely for the information and use of the City Council, management and
federal awarding agencies and pass-through entities, and is not intended to be, and should not
• be, used by anyone other than those specified parties.
/Y 41 l 4e7790,1 04-,6417 / 14.
Irvine, California
December 18, 2009
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0 Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-474-2020 ph
949-263-5520 fx
www.mhm-pc.com
. Honorable Mayor and Members of
the City Council
City of Rosemead
Rosemead, California
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR
PROGRAM, INTERNAL CONTROL OVER COMPLIANCE AND ON THE SCHEDULE OF
EXPENDITURES OF FEDERAL AWARDS IN ACCORDANCE WITH OMB CIRCULAR A-133
Compliance
We have audited the compliance of the City of Rosemead, California, (the City) with the types
of compliance requirements described in the U.S. Office of Management and Budget (OMB)
Circular A-133 Compliance Supplement that are applicable to its major federal programs for the
year ended June 30, 2009. The City's major federal programs are identified in the summary of
auditors' results section of the accompanying schedule of findings and questioned costs.
Compliance with the requirements of laws, regulations, contracts and grants applicable to its
major federal programs are the responsibility of the City's management. Our responsibility is to
express an opinion on the City's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally
accepted in the United States of America; the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States and
OMB Circular A-133, Audits of States, Local Governments, and. Non-Profit Organizations.
Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance
requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the City's
compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination on the City's compliance with those
requirements.
In our opinion, the City complied, in all material respects, with the requirements referred to
above that are applicable to its major federal programs for the year ended June 30, 2009.
Internal Control Over Compliance
The management of the City is responsible for establishing and maintaining effective internal
control over compliance with requirements of laws, regulations, contracts and grants applicable
to federal programs. In planning and performing our audit, we considered the City's internal
control over compliance with requirements that could have a direct and material effect on a
major federal program in order to determine our auditing procedures for the purpose of
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Honorable Mayor and Members of
the City Council
• City of Rosemead
Page Two
expressing our opinion on compliance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on
the effectiveness of the City's internal control over compliance.
A control deficiency in an entity's internal control over compliance exists when the design or
operation of a control does not allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect noncompliance with a type of
compliance requirement of a federal program on a timely basis. A significant deficiency is a
control deficiency, or combination of control deficiencies, that adversely affects the City's ability
to administer a federal program such that there is more than a remote likelihood that
noncompliance with a type of compliance requirement of a federal program that is more than
inconsequential will not be prevented or detected by the City's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that material noncompliance with a type of compliance
requirement of a federal program will not be prevented or detected by the City's internal control.
Our consideration of internal control over compliance was for the limited purpose described in
the first paragraph of this section and would not necessarily identify all deficiencies in the City's
internal control that might be significant deficiencies or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above.
Schedule of Federal Awards
We have audited the basic financial statements of the governmental activities, each major fund
and the aggregate remaining fund information of the City as of and for the year ended June 30,
2009,_ which collectively comprise the City's basic financial statements, and have issued our
report thereon dated December 18, 2009. Our audit was performed for the purpose of forming
our opinions on the financial statements that collectively comprise the City's basic financial
statements. The accompanying Schedule of Expenditures of Federal Awards is presented for
purposes of additional analysis in accordance with the requirements of OMB Circular A-133 and
is not a required part of the basic financial statements. Such information has been subjected to
the e3uditing 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.
This report is intended solely for the information of the City Council, management, federal
awarding agencies and pass-through entities and is not intended to be and should not be used
by ari/yyone~ other than ,these ~specified parties. /j
Irvine, California
December 18, 2009
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CITY OF ROSEMEAD
Schedule of Expenditures of Federal Awards
Year ended June 30, 2009
Federal
. Amount
Federal Grantor/Pass-through
Grantor/Program Title
CFDA
Number
Federal
Expenditures
Provided to
Subrecipieots
U.S. Department of Housing and Urban Development
Direct Programs:
Community Development Block Grants
14.218
$ 1,403,324 -
113,473
HOME
14.239
782,231 '
-
Total Federal Awards Expended
$ 2,185,555
113,473
Denotes a Major Program
CFDA = Catalog of Federal Domestic Assistance
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See accompanying notes to the schedule of expenditures of federal awards
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CITY OF ROSEMEAD
Notes to the Schedule of Expenditures of Federal Awards
• Year ended June 30, 2009
(1)
Summary of Significant Accounting Policies Applicable to the Schedule of Federal Awards
(a) Scope of Presentation
The accompanying schedule presents only the expenditures incurred by the City of
Rosemead that are reimbursable by agencies providing federal assistance. For the
purposes of this schedule, federal financial assistance includes both federal
financial assistance received directly from a federal agency, as well as federal
funds received indirectly from a non-federal agency or other organization. Only the
portion of program expenditures reimbursable with such federal funds are reported
in the accompanying schedule. Program expenditures in excess of the maximum
federal reimbursement authorized or the portion of the program expenditures that
local or other non-federal funds are excluded from the
were funded with state
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accompanying schedule.
(b) Basis of Accounting
The expenditures included in the accompanying schedule were reported on the
modified accrual basis of accounting. Under the modified accrual basis of
accounting, expenditures are recognized when the agency becomes obligated for
payment as a result of the receipt of the related goods and services. Expenditures
reported include any property or equipment acquisitions incurred under the federal
program.
(c) Subrecipient Expenditures
Payments to subrecipients totaled $113,473 for the Community Development Block
Grant for the fiscal year ended June 30, 2009.
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CITY OF ROSEMEAD
Schedule of Findings and Questioned Costs
Year ended June 30, 2009
6 (A) Summary of Auditors' Results
1. An unqualified report was issued by the auditors on the financial statements of the
auditee.
2. There were no material weaknesses in internal control over financial reporting.
There was one significant deficiency in internal control over financial reporting that
we described as item 09-1.
3. The audit disclosed no noncompliance which is material to the financial statements
of the auditee.
0 4. There were no significant deficiencies or material weaknesses in internal control
over the major program of the auditee.
5. An unqualified opinion was issued by the auditors on compliance for major
programs.
6. The audit disclosed no audit finding that is required to be reported under paragraph
.510(a) of OMB Circular A-133.
7. The major programs of the auditee were U.S. Department of Housing and Urban
Development, HOME, CFDA No. 14.239 and U.S. Department of Housing and
Urban Development, Community Development Block Grants, CFDA No. 14.218.
8. The dollar threshold used to distinguish Type A and Type B programs was
$300,000.
9. The auditee did not qualify as a low risk auditee, as defined by OMB Circular A-
133, paragraph .530, for the year ended June 30, 2009 for the purpose of
determining major programs.
(B) Findings Related to the Financial Statements which are Required to be Reported in
Accordance with GAGAS
(09-1) Establishment of System Access Rights
Although individual bank account activity had been reconciled during the year, the City
had not comprehensively reconciled all bank and investment accounts to the total cash
and investment balances per the accounting records during the year.
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CITY OF ROSEMEAD
Schedule of Findings and Questioned Costs
(Continued)
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(09-1) Establishment of System Access Rights (Continued)
In accordance with the implementation of the new audit risk assessment standards, we
modified our approach to testing accounting system access controls. During our
procedures, we noted that all finance personnel have the ability to perform the following
functions:
Establish vendors and process invoices for payment
• Make changes to the payroll master file (adding and deleting employees, making
pay rate changes, etc.)
• Process payroll
• Electronically transfer funds from the City's checking account
Recommendation
We recommend that the City restrict key accounting system processes to a minimum
number of individuals. Each individual in the Finance Department should have different
access rights depending on their accounting duties.
Management's Corrective Actions Planned
Access rights are currently being defined based on job duties. Particular attention is
being paid to assigning access rights based on internal controls as well as job duties.
• For example, check printing access will be assigned to one person and data input
access to a different person.
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There are no auditors' findings to be reported in accordance with OMB Circular A-133.
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CITY OF ROSEMEAD
Summary Schedule of Prior Audit Findings
Year ended June 30, 2009
The following is the status of prior audit findings for the year ended June 30, 2008:
(08-1) Controls over Bank Reconciliations
Resolved.
40 (08-2) Establishment of System Access Rights
Matter was not resolved and therefore was repeated as a current year finding. See
accompanying Schedule of Findings and Questioned Costs as item 09-1.
(08-3) Controls over Cash Disbursements
Resolved.
(08-4) Competitive Bidding Process
Resolved.
(08-5) Controls over Misstatements Reflected in the Financial Statements
0 Resolved.
(08-6) Adjustments Detected by the Audit Process
Resolved.
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CITY OF ROSEMEAD
California
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2009
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CITY OF ROSEMEAD
Rosemead, California
Comprehensive Annual Financial
Fiscal Year Ended June 30, 2009
Prepared by the Finance De
Steve Brisco
Director of Finance
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' CITY OF ROSEMEAD
' Comprehensive Annual Financial Rer
Fiscal Year Ended June 30, 2009
I TABLE OF CONTENTS
' INTRODUCTORY SECTION
Letter of Transmittal
' Directory of Officials
Certificate of Achievement for Excellence in Financial Reporting i
Organizational Chart
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FINANCIAL SECTION
Independent Auditors' Report
Management's Discussion and Analysis (Required Supplementa
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets
Statement of Activities
Fund Financial Statements:
Governmental Funds:
Balance Sheet
Reconciliation of the Balance Sheet of Governmental I
to the Statement of Net Assets
Statement of Revenues, Expenditures and Changes it
Reconciliation of the Statement of Revenues, Expendi
in Fund Balances of Governmental Funds to the Stat
Proprietary Funds:
Statement of Net Assets
Statement of Revenues, Expenses, and Changes in F
Statement of Cash Flows
Statement of Fiduciary Assets and Liabilities - Agency Fui
Notes to the Basic Financial Statements
3FOA)
Information)
Fund Balances
ues, and Changes
ment of Activities
nd Net Assets
REQUIRED SUPPLEMENTARY INFORMATION:
Notes to Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - General Fund
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CITY OF ROSEMEAD
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2009
TABLE OF CONTENTS, (Continued)
FINANCIAL SECTION, (Continued)
Pape
REQUIRED SUPPLEMENTARY INFORMATION, (Continued)
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Low-Moderate Income Housing Set-Aside
60
OTHER SUPPLEMENTARY INFORMATION
Combining Balance Sheet - Non-Major Governmental Funds
64
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances - Non-Major Governmental Funds
66
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Traffic Safety
68
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Community Development Block Grant
69
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - HOME Program
70
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Proposition A
71
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Proposition C
72
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Federal Highway Grant
73
Schedule of Revenues. Expenditures and Changes in Fund Balances - Budget
and Actual - State Gas Tax
74
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Air Quality Management District 75
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Local Transportation 76
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Street Lighting 77
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Narcotics Forfeiture and Seizure 78
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Rosemead Housing Development Corporation 79
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget '
and Actual - City Capital Projects 80
Major Fund Budget and Actual Schedules:
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Redevelopment Agency Debt Service Fund 81
CITY OF ROSEMEAD
' Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2009
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TABLE OF CONTENTS (Cont
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FINANCIAL SECTION (Continued) Pape
OTHER SUPPLEMENTARY INFORMATION, (Continued)
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Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Redevelopment Agency Capital Projects Fund
82
Internal Service Funds:
'
Combining Statement of Net Assets
84
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets
85
Combining Statement of Cash Flows
86
Statement of Changes in Assets and Liabilities - Agency Fund
87
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STATISTICAL SECTION
Net Assets by Component
90
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Changes in Net Assets
91
Fund Balances of Governmental Funds
92
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Changes in Fund Balances of Governmental Funds
93
Assessed Value and Estimated Actual Value of Taxable Property
94
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Direct and Overlapping Property Tax Rates
95
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Principal Property Tax Payers
Property Tax Levies and Collections
97
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Ratios of Outstanding Debt by Type
98
Ratio of General Bonded Debt Outstanding
99
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Direct and Overlapping Governmental Activities Debt
100
Legal Debt Margin
101
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Pledged Revenue Coverage
Demographic and Economic Statistics
102
103
Principal Employers
104
Full-time and Part-time City Employees
105
Operating Indicators by Function
106
Capital Asset Statistics by Function
107
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MAYOR:
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MARGARET CLARK
MAYOR PRO TEM:
GARY TAYLOR
COUNCIL MEMBERS:
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SANDRA ARMENTA
POLLY LOW
STEVEN LY
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December 18, 2009
oscmcad
8838 E. VALLEY BOULEVARD • P.O. BOX 399
ROSEMEAD, CALIFORNIA 91770
TELEPHONE (626) 569-2100
FAX (626) 307-9218
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Rosemead:
Sound financial practice dictates that all general-purpose local governments publish within six
months of the close of each fiscal year a complete set of financial statements presented in
conformity with generally accepted accounting principles (GAAP) and audited in accordance
with generally accepted auditing standards by a firm of licensed certified public accountants.
Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the
City of Rosemead for the fiscal year ended June 30, 2009.
This report consists of management's representations concerning the finances of the City of
Rosemead. Consequently, management assumes full responsibility for the completeness and
reliability of all of the information presented in this report. To provide a reasonable basis for
making these representations, management of the City of Rosemead has established a
comprehensive internal control framework that is designed both to protect the government's
assets from loss, theft, or misuse and to compile sufficient reliable information for the
preparation of the City of Rosemead's financial statements in conformity with GAAP. Because
the cost of internal controls should not outweigh their benefits, the City of Rosemead's
comprehensive framework of internal controls has been designed to provide reasonable rather
than absolute assurance that the financial statements will be free from material misstatement. As
management, we assert that, to the best of our knowledge and belief, this financial report is
complete and reliable in all material respects.
The City of Rosemead's financial statements have been audited by Mayer Hoffman McCann
P.C., a firm of licensed certified public accountants. The goal of the independent audit was to
provide reasonable assurance that the financial statements of the City of Rosemead for the fiscal
year ended June 30, 2009, are free of material misstatement. The independent audit involved
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The independent
auditor concluded, based upon the audit, that there was a reasonable basis for rendering an
unqualified opinion that the City of Rosemead's financial statements for the fiscal year ended
June 30, 2009, are fairly presented in conformity with GAAP. The independent auditor's report
is presented as the first component of the financial section of this report.
The independent audit of the financial statements of the City of Rosemead was part of a broader,
federally mandated "Single Audit" designed to meet the special needs of federal grantor
agencies. The standards governing Single Audit engagements require the independent auditor to
report not only on the fair presentation of the financial statements, but also on the audited
government's internal controls and compliance with legal requirements, with special emphasis
on internal controls and legal requirements involving the administration of federal awards. These
reports are available in the City of Rosemead's separately issued Single Audit Report. GAAP
require that management provide a narrative introduction, overview, and analysis to accompany
the basic financial statements in the form of Management's Discussion and Analysis (MD&A).
This letter of transmittal is designed to complement MD&A and should be read in conjunction
with it. The City of Rosemead's MD&A can be found immediately following the report of the
independent auditors.
Profile of the Government
The City of Rosemead, incorporated in 1959, is located in the southwestern part of the state,
which is considered to be the top growth area in the state, and one of the top growth areas in the
country. The City of Rosemead currently occupies a land area of 5.5 square miles and serves a
population of more than 57,000. Property tax is levied and collected by the County of Los
Angeles. The City and Community Development Commission's portion is remitted to the City
by the County.
The City of Rosemead has operated under the council-manager form of government since 1959.
Policy-making and legislative authority are vested in a governing council consisting of the mayor
and four other members. The governing council is responsible, among other things, for passing
ordinances, adopting the budget, appointing committees, and hiring the government's manager,
attorney and clerk. The government's manager is responsible for carrying out the policies and
ordinances of the governing council, for overseeing the day-to-day operations of the government,
and for appointing the heads of the various departments. The council is elected on a non-partisan
basis. Council members serve four-year staggered terms, with three council members elected
every two years and two elected the opposite two years. The mayor is selected from among the
five council members, by the council members, and serves for a one year term.
' Many of the functions often provided by municipal government are provided by special districts.
' Examples of some of Rosemead's 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 in effect
during the fiscal year were for police, street maintenance and animal control. Animal Control
will fall under the direct control of the City in FY 2009-10. The City also has three blended
component units: 1) the Rosemead Financing Authority (the Authority), 2) the Rosemead
Community Development Commission (the RCDC) and 3) the Rosemead Housing Development
' Corporation (RHDC). The City of Rosemead also provides a full range of services, including
recreational activities and cultural events. Additional information on all three of these legally
' separate entities can be found in Note 1(a) in the notes to the financial statements.
' The annual budget serves as the foundation for the City of Rosemead and its component unit's
financial planning and control. All business units and component units of the City of Rosemead
' are required to submit requests for appropriation to the City Manager in mid March of each year.
The City Manager uses these requests as the starting point for developing a proposed budget. The
City Manager then presents this proposed budget to the City Council for review prior to June 30.
' The City Council is required to hold public hearings on the proposed budget and to adopt a final
budget by no later than June 30, the close of the City of Rosemead's fiscal year. The
appropriated budget is prepared by fund and department (e.g., public safety). Department heads,
' with City Manager approval, may make transfers of appropriations within a department.
Transfers of appropriations between departments, however, require the approval of the City
' Council. Budgetrto-actual comparisons are provided in this report for each individual
governmental fund for which an appropriated annual budget has been adopted. For the general
fund, this comparison is presented on page 59 as part of the basic financial statements for the
' governmental funds. For governmental funds, other than the general fund, with appropriated
annual budgets, this comparison is presented in the governmental fund subsection of this report,
which starts on page 60.
' Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the specific environment within which the City of
' Rosemead operates.
Local economy. Considering the current recessionary economy, the City of Rosemead currently
enjoys a reasonably favorable economic environment and local indicators point to moderate
1 iii
declines due to the current economy. The region has a varied retail and industrial base including
two national general merchandise stores that historically perform well in a recessionary
economy. They have continued to perform relatively well and helped the City's sales tax decline
only 10.3% compared to a 16.4% decline County average. Lower than County average sales tax
losses have helped keep Rosemead's unemployment rates down to 11.1% whereas the larger
Los Angeles, Long Beach, Glendale area is at 12.6% . Major employers are listed in the
statistical section of the accompanying financial report. A new grocery store and major gym
have been approved to open during FY 2009-10 and should help relieve some of the City's
unemployment.
Long-term Financial Planning. On December 8, 2009 the City Council approved a strategic
long-term plan that identifies three Key Organizational Goals: 1) Beautify Community
Infrastructure and Improve Public Facilities. 2) Enhance Public Safety and Quality of Life. 3)
Ensure the City's Financial Viability With Balanced Budgets and Prudent Reserves. To meet
these goals the City Council has approved capital improvement projects for street resurfacing
and slurry sealing, curb and ramp improvements, tree planting as well as other park and facility
renovations and improvements Additionally new revenue sources such as the 2009 American
Recovery and Reinvestment Act (ARRA) grants have been applied for and awarded to the City.
The new grant awards will provide funding for infrastructure improvements during FY 2009-10.
Also, a new ten-year comprehensive capital improvement program (CIP) is scheduled for
development during FY 2009-10 and a facilities master plan is nearing completion.
Cash management policies and practices. Cash, temporarily idle during the year, was invested
in a money market account and the State Treasurer's Local Agency Investment Fund (LAIF).
Due to the unsettled state of California finances, $2.25 million remained invested in a money
market account which has a lower yield than LAIF, but will avoid some potential LAIF
liquidity risk in the event that the State should withdraw significant amounts of cash from LAIF.
The State also invests in LAIF and although they are legally prohibited from borrowing local
agency cash, a large run on the State's LAIF cash could potentially limit the amount of liquid
cash available for local withdrawals. With LAIF yields declining and other investments
increasing in yield without unnecessary safety risks, City staff is preparing to diversify
investments. In accordance with State law, all City investment strictly adhere to the priorities, in
order of importance, of: 1) safety, 2) liquidity and 3) yield.
Risk Management. 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 and reinsurance, and to arrange for group-purchased
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insurance for property and other coverage. Additional information can be found in Note 9 in the
notes to the financial statements.
Pension and other postemployment benefits. The City of Rosemead is contracted with the
California Public Employees Retirement System (CalPERS) for retirement benefits for full time
employees. Supplemental retirement benefits are offered to qualified full-time employees,
retirees and part-time employees through Public Agency Retirement Services (PARS). The City
also provides health insurance benefits for certain qualified retirees. In accordance with GASB
45, additional information on the City of Rosemead's pension arrangements and postemployment
benefits can be found in Note 8 in the notes to the financial statements.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Rosemead for its comprehensive annual financial report (CAFR) for the fiscal year ended June
30, 2008. In order to be awarded a Certificate of Achievement, the government had to publish an
easily readable and efficiently organized CAFR that satisfied both generally accepted accounting
principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
CAFR continues to meet the Certificate of Achievement Program's requirements and we are
submitting it to the GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated
services of the entire team of the finance and administration departments. We would like to
express our appreciation to all members of the department who assisted and contributed to the
preparation of this report. Credit also must be given to the mayor and the governing council for
their unfailing support for maintaining the highest standards of professionalism in the
management of the City of Rosemead's finances.
Respectfully submitted,
a .
Steven L. Brisco
Finance Director
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City of Rosemead
Directory of Officials
June 30, 2009
CITY COUNCIL
Margaret Clark, Mayor
Gary Taylor, Mayor Pro Tern
Polly Low, Council Member
Sandra Armenta, Council Member
Steven Ly, Council Member
CITY MANAGEMENT
Jeff Allred, City Manager
Matthew E. Hawkesworth, Assistant City Manager
Brian Saeki, Community Development Director
Steve Brisco, Director of Finance
Lt. Tim Murakami, Chief of Police (Contracted)
David Montgomery-Scott, Director of Parks and Recreation
Chris Marcarello, Deputy Public Works Director
Gloria Molleda, City Clerk
Joseph M. Montes, City Attorney (Contracted)
Vi
Certificate of
Achievement
for Excellence
in Financial
Reporting
'
Presented to
City of Rosemead
'
California
For its Comprehensive Annual
'
Financial Report
for the Fiscal Year Ended
'
June 30, 2008
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
'
government units and public employee retirement
systems whose comprehensive annual financial
'
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
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' ~ ~1[O~Si4kS~~T
E nA1p1 J1U
nuovmn s'
s~ a President
~AKW
' *'f~oe ~%Ok"
' Executive Director
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City of Rosemead
Function Based Organizational Chart
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FINANCIAL SECTION
(This page intentionally left blank)
'
Mayer Hoffman McCann P.C.
An Independent CPA Firm
t
2301 Dupont Drive, Suite.200
Irvine, California 92612
949-474-2020 ph
949-263-5520 fx
'
www.mhm-pc.com
' The Honorable Mayor and City Council
City of Rosemead
Rosemead, California
' INDEPENDENT AUDITORS' REPORT
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,
as of and for the year ended June 30, 2009, which collectively comprise the City's basic
financial statements, as listed in the table of contents. These financial statements are the
' responsibility of the management of the City of Rosemead. 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 of Rosemead, California, as of June 30, 2009,
' and the respective changes in financial position of the City of Rosemead, California for the year
then ended in conformity with accounting principles generally accepted in the United States of
America.
' As described further in note 8 to the financial statements, the City changed its method of
accounting for postemployement benefits for the years ending on and after June 30, 2009.
' The information identified in the accompanying table of contents as management's discussion
and analysis and required supplementary information 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 supplementary information. However, we did not audit the information
I and express no opinion on it
The Honorable Mayor and City Council
City of Rosemead
Rosemead, California
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Rosemead's basic financial statements. The introductory
section, combining and individual fund financial statements and schedules and statistical tables
listed in the table of contents are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The combining and individual fund financial
statements and schedules have been subjected to the auditing procedures applied in the audit
of the basic financial statements, and in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole. The introductory section and
statistical tables have not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we express no opinion on them.
In accordance with Government Auditing Standards, we have also issued a report dated
December 18, 2009 on our consideration of the City's internal 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 assessing the results of our audit.
Irvine, California
December 18, 2009
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Management's Discussion and Analysis
As management of the City of Rosemead, we offer readers of the City of Rosemead's financial
statements this narrative overview and analysis of the financial activities of the City of Rosemead for the
fiscal year ended June 30, 2009. We encourage readers to consider the information presented here in
conjunction with additional information that we have furnished in our letter of transmittal, which can be
found on pages i -v of this report. All amounts, unless otherwise indicated, are in thousands of dollars.
Financial Highlights
• The assets of the City of Rosemead exceed its liabilities at the close of the most recent fiscal
year by $50,073 (net assets). Of this amount, $24,883 (unrestricted) may be used to meet the
government's ongoing obligations to citizens and creditors.
• The government's total net assets increased by $473 primarily due to the addition of the
Rosemead Park walking/jogging trail.
• As of the of the current fiscal year, the City of Rosemead's governmental funds reported
combined ending fund balances of $40,032, a decrease of $16 in comparison with the prior year.
Approximately 70 percent of this total amount, $27,908, is available for spending at the
governments discretion (unreserved, undesignated fund balance).
• At the end of the current fiscal year, unreserved, undesignated fund balance for the General
Fund was $16,135 or 81 percent of total General Fund expenditures.
• The City of Rosemead's total long-term debt decreased by $673 (-1.8 percent) during the
current fiscal year. The decrease was less than the prior year due to the recognition of Other
Post Employment Benefits (OPEB) as required by Governmental Accounting Standards Board
(GASB) Statement No. 45, recognition of a retrospective insurance deposit and an increase in
the compensated absences balance.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Rosemead's basic
financial statements. The City of Rosemead's basic financial statements comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplemental information in addition to the basic financial
statements themselves.
Government-wide Financial Statements. The government-wide financial statements are designed to
provide readers with a broad overview of the City of Rosemead's finances, in a manner similar to
private-sector business.
The statement of net assets presents information on all of the City of Rosemead's assets and liabilities,
with the difference between the two reported as net assets. Over time, increases or decreases in net
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assets may serve as a useful indicator of whether the financial position of the City of Rosemead is
improving or deteriorating.
The statement of activities presents information showing how the government's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City of Rosemead that
are principally supported by taxes and intergovernmental revenues (governmental activities) from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business-type activities). The City of Rosemead does not have any business-type activities. The
governmental activities of the City of Rosemead include general government, public safety, public
works, community services, community development, and parks and recreation.
The government-wide financial statements include not only the City of Rosemead itself (known as the
primary government), but also a legally separate redevelopment agency and a legally separate low
income housing corporation, for which the City of Rosemead is financially accountable. Financial
information for the component units is reported separately from the financial information presented for
the primary government itself.
The government-wide financial statements can be found on pages 14-15 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City of Rosemead, like
other state and local governments, uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements. All of the funds of the City of Rosemead can be divided into three
categories: governmental funds, internal service funds and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government's near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact of the government's near-term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
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The City of Rosemead and its component units maintain 17 active governmental funds. Information is
presented separately in the governmental fund balance sheet and in the governmental fund statement
of revenues, expenditures, and changes in fund balances for the General Fund, Low-Moderate Income
Housing Set-Aside Fund, Debt Service Funds and Capital Projects Funds, all four of which are considered
to be major funds. Data from the other 10 governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these non-major governmental funds is provided in the
form of combining statements elsewhere in this report.
The City of Rosemead adopts an annual appropriated budget for all its funds. A budgetary comparison
statement has been provided for the General Fund, Low-Moderate Income Housing Set-Aside Fund,
Traffic Safety Fund, Community Development Block Grant Fund, HOME Program Fund, Proposition A
Fund, Proposition C Fund, Federal Highway Grant Fund, State Gas Tax Fund, Air Quality Management
District Fund, Street Lighting Fund, Narcotic Forfeiture and Seizure Fund, Rosemead Housing
Development Corporation Fund, City Capital Projects Fund, Redevelopment Agency debt Service Fund
and the Redevelopment Agency Capital Projects Fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 16-21 of this report.
Fiduciaryfunds. Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statement because
the resources of those funds are not available to support the City of Rosemead's own programs. The
accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statements can be found on page 26 of this report.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes
to the financial statements can be found on pages 27-55 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information concerning the City of Rosemead's progress in
funding its obligation to provide pension benefits to its employees. Required supplementary
information can be found on page 57 of this report.
The combining statements referred to earlier in connection with non-major governmental funds and
internal service funds are presented immediately following the required supplementary information on
pensions. Combining and individual fund statements and schedules can be found on pages 57-87 of this
report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City of Rosemead, assets exceeded liabilities by $50,073 at the close of the
most recent fiscal year.
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The largest portion of the City of Rosemead's net assets (24 percent) reflects its investment in capital
assets (e.g. land, buildings, machinery, and equipment); less any related debt used to acquire those
assets that is still outstanding. The City of Rosemead uses these capital assets to provide services to the
citizens; consequently, these assets are not available for future spending. Although the City of
Rosemead's investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
City of Rosemead's Net Assets
As of June 30, 2009 and 2008
(thousands)
r " " Gdverrimental'Actrvrties
0 , 2008:"
209
Current and other assets
$ 44,504
$ 46,278
Capital assets
46,369
47,965
Total assets
90,873
94,243
Long-term liabilities outstanding
36,476
37,149
Other liabilities
4,324
4,963
Total liabilities
40,800
42,112
Net assets:
Invested in capital assets, net of related debt
11,829
12,982
Restricted
13,361
11,443
Unrestricted
24,883
27,706
Total net assets
$ 50,073
$ 52,131
An additional portion of the City of Rosemead's net assets (27 percent) represents resources that are
subject to external restrictions on how they may be used. The remaining balance of unrestricted net
assets ($24,883) may be used to meet the government's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of Rosemead is able to report positive net asset balances.
The situation also held true for the prior fiscal year.
The government's net assets decreased by $2,058 during the current fiscal year. The two main
contributors to the decrease in net assets are: 1) Payment of AB 1290 tax increment pass-through
payments of $1,336 which consisted of FY 2008-09 obligations of $771 and FY 2005-06 through
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1 FY 2007-08 one-time reconciling obligations of $565. 2) Rapidly falling interest rates resulted in a $794
decline in interest earned over.the previous year, in spite of the ending balance of cash and investments
1 increasing by $2,227. Most of the City's surplus cash was invested in the State's Local Agency
Investment Fund (LAIF) investment pool which suffered a 48.6 percent decline in average annual yields
for the year.
1 Governmental activities. Governmental activities decreased the City of Rosemead's net assets by
$2,058, thereby accounting for all of the reduction in the net assets of the City of Rosemead. Key
1 elements of this decrease are as follows:
Total revenues declined by $5,508. The loss of revenue is attributable to a $2,392 loss in charges for
1 services. As expected, with the current recessionary economy, building permit revenue declined by
$331 because construction projects started in the previous year were in FY 2008-09. Final inspections
1 were completed in the current year and contracted inspections were charged to the City in FY 2008-09.
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City of Rosemead's Changes in Net Assets
Years Ended June 30, 2009 and 2008
(thousands)
;Governmental
'Activities-
2009 2008-
Program revenues:
Charges for services
$ 3,006
$ 5,398
Operating grants and contributions
6,403
3,490
Capital grants and contributions
1,748
6,718
General revenues:
Property taxes
12,288
13,182
Othertaxes
6,624
6,108
Investment income
885
1,679
Intergovernmental, unrestricted
195
255
Other
134
143
Total revenues
31,283
36,973
Expenses:
General government
12,177
7,259
Public safety
9,082
8,044
Public works
6,465
13,550
Community services
773
670
Community development
1,290
3,645
Parks and recreation
2,031
4,079
Interest on long-term debt
1,523
1,790
Total expenses
33,341
39,037
Increase in net assets before transfers
(2,058)
(2,064)
Net assets - June 30, 2008
52,131
54,195
Net assets - June 30, 2009
$50,073
$52,131
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Expenses and Program Revenues
Governmental Activities
14.000.000
12,000.000
10,000,000
8,000,000
6,000,000
4,000,000
2.000.000
Cks-e~` sa`p~J 3~~y ~cy5
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0 expenses
sa revenues
Revenues by Source - Governmental
Activities
Motor vehicle
in-lieu, 1%
Investment
incorme d4°
anrs
taxes, 4°.
Transient
occupant
taxes, 6°i
Sales and use
taxes, 23%
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Property
axes, 61%
Other
revenue. 1%
Financial Analysis of the Government's Funds
The focus of the City of Rosemead's governmental funds is to provide information on the near-term
inflows, and balances of spendable resources. Such information is useful in assessing the City of
Rosemead's financing requirements. In particular, unreserved fund balance may serve as a useful
measure of a government's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City of Rosemead's governmental funds reported combined
fund balances of $40,016 a decrease of $16 in comparison with the prior year. Approximately 70% of
this total amount ($27,908) constitutes unreserved, undesignated fund balance, which is available for
spending at the government's discretion. The remainder of the fund balance is reserved or designated
to indicate that it is not available for new spending because it has already been committed 1) to
liquidate contracts and purchase orders of the prior period ($115) 2) for advances to other funds
($6,976) 3) for land held for resale ($4,408) 4) for prepaid expenses ($310) or 5) for a variety of purposes
($299).
General Fund. The general fund is the chief operating fund of the City of Rosemead. At the end of the
current fiscal year, unreserved, undesignated fund balance of the general fund was $16,135, while total
fund balance reached $19,242. As a measure of the general fund's liquidity, it may be useful to compare
both unreserved fund balance and total fund balance to total fund expenditures. Unreserved,
undesignated fund balance represents 81 percent of total general fund expenditures, while total fund
balance represents 96 percent of that same amount.
The fund balance of the City of Rosemead's general fund decreased by $2,466 during the current year.
Key factors in this decline are as follows:
• General Fund revenue increased $896 over last year primarily due to the recovery of miss-
allocated sales tax revenue, an increase in property tax revenue and cleanup payments of
property tax in- lieu payments from the State. However, the State is projecting a decline in
future year property tax in-lieu payments as their allocation formulas "catch up" with current
years. At the same time, building permit revenues were $331 below last year's building permit
revenues due to current economic conditions.
• Salaries and benefits that were charged to the Community Development Commission in prior
years were shifted to the General Fund to more accurately reflect payment for services provided
Also, about $425 was expended for severance pay and leave payouts and buy-back..
• Extraordinary special legal matters costing $321 were paid during the year.
• The cost of contracted building inspections increased $396 over the prior year due to timing
differences between when building permit revenue was collected (FY 2007-08) and when the
projects were completed and final inspections were made (FY 2008-09). Consequently revenue
was received in the prior year with costs for inspections being paid by the City in the subsequent
year.
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• The City contracts with a sales tax consultant to find and collect mis-allocated (by the State)
sales tax. During the year a sizeable mis-allocation was identified and paid to the City. For their
work in recovering the mis-allocated sales tax, the consultant was paid $187.
• Engineering costs were $171 more than the previous year. During the year the City transitioned
from contract engineering services to in-house engineering services. Included in the increased
costs were computers, office furniture and equipment and costs related to an increased level of
construction activity by the City. There were also costs related to planning and engineering for
Federal government stimulus related projects. Beginning in FY 2009-10 a significant portion of
engineering costs will be allocated to specific projects funded by sources other than the General
Fund.
Proposition C Fund. Proposition C expenditures have dropped from $2,317 in FY 2007-08 to $1,403 in FY
2008-09. The reconstruction of the Garvey Avenue Bridge was completed in FY 2007-08 thus eliminating
further expenditures for bridge construction in FY 2008-09. However, almost $300 was spent for
resurfacing of Del Mar Avenue. The balance of the fund's expenditures was for transportation related
costs.
Low-Moderate Income Housing Fund. The Low-Moderate Income Housing Fund (Low-Mode Fund),
including transfers, finished the year with a $444 increase in fund balance. The Low-Mod Fund receives
its funding primarily from transfers of property tax increment from the Community Development
Commision and then transfers $250 to the Rosemead Housing Development Corporation to subsidize
operations of the Corporations' senior low income housing apartments. Additionally, $256 was spent on
planning and administrative costs related to low income housing planning and fund administration.
Federal Highway Grant Fund. As described in the discussion of Proposition C fund balance, the only
activity in this fund is a final receipt for retention totaling $1,012. This fund will not be used in the
foreseeable future.
Vehicle Replacement and Technology Replacement Funds. For the first time in Rosemead's history
internal service funds have been used. The Vehicle Replacement Fund received $92 for the year and the
Technology Replacement Fund received $48 from other City funds. Using departments are assessed
charges for equipment used by the departments. The charges are accumulated in the internal service
funds for future replacement of vehicles and equipment.
Community Development Commission Funds. The combined Community Development Commission
(CDC) funds, debt service and capital projects, decreased fund balance by $433. The CDC Capital
Projects Fund paid for salaries and benefits for general government and public safety as well as
contributing $388 for the Rosemead park walking/jogging trail. Debt service of $2, 447 and $1,034 pass-
through obligations was paid from the debt service funds. Included in the $1,034 of pass-through
payments was $543 of additional pass-through payments required by AB 1389, legislation that
mandated a recalculation of pass-through agreements back to FY 2003-04. AB 1389 was a one-time
adjustment that will not impact the City in future years.
11
Capital Asset and Debt Administration
Capital assets. The City of Rosemead's investment in capital assets for its governmental activities as of
June 30, 2009, amounts to $46,369 (net of accumulated depreciation). This investment in capital assets
includes land, buildings and improvements, machinery and equipment, park facilities, roads, highways,
and bridges. The total increase in the City of Rosemead's investment in capital assets for the current
fiscal year was 0.6 percent.
Major capital asset events during the current fiscal year included the following:
• Construction of Rosemead Park walking/jogging trail
• City web site development
City of Rosemead's Capital Assets
(net of depreciation)
(thousands)
Govern'mental Activities
2009
=`=2008
Land
$ 2,969
$ 2,969
Buildings
17,365
17,930
Improvements other than
Buildings
120
68
Machinery and equipment
205
151
Autos and trucks
204
283
Furniture and office equipment
157
223
Infrastructure
25,349
25,953
Construction in progress
0
388
Total
$ 469,369
$ 47,965
Additional information on the City of Rosemead's capital assets can be found in note 6 on pages 44-45
of this report.
Long-term debt. At the end of the current fiscal year, the Rosemead Community Development
Commission had total bonded debt outstanding of $35,435. Of this amount, all of it is backed by future
property tax increment revenues.
12
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d
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I
City of Rosemead's Outstanding Debt
Tax Allocation Bonds
The Rosemead Community Development Commission's total debt decreased by $915 during the current
fiscal year due to debt service payments on bonded indebtedness of $36,350.
Economic Factors and Next Year's Budgets and Rates
• The unemployment rate for the City of Rosemead is currently 11.1 percent. Rosemead is
included in the Bureau of Labor Statistics (BLS) Los Angeles , Long Beach, Glendale
unemployment data set which has unemployment of 12.6 percent compared to 4.1 percent a
year ago. The City's unemployment rate compares favorably to the state's average
unemployment rate of 12.3 percent and the national average rate of 9.8 percent.
• Sales tax in the City has remained remarkably stable. Even in the current troubled economy
sales tax for the 2ntl quarter 2009 declined 10.3 percent year over year but compares favorably
to other cities in the County. The City has a diverse sales tax base including a three year old
Super Wal-Mart store. Nationally, Wal-Mart stores have shown continued solid sales during the
current down economy and the City's Wal-Mart is no exception. The sales tax projection for FY
2009-10 is expected to be relatively flat for the year, however, this may need to be adjusted
downward somewhat in the mid-year analysis.
• Recent inflation was slightly negative and news sources project only moderate increases for the
year.
All of these factors were considered in preparing the City of Rosemead's budget for the 2010 fiscal year.
During the current fiscal year, unreserved, undesignated fund balance in the general fund decreased to
$16,135. The City of Rosemead did not appropriate any General Fund unreserved, undesignated fund
balance for spending in the 2010 fiscal year budget.
Requests for Information
This financial report is designed to provide a general overview of the City of Rosemead's finances for all
those with an interest in the government's finances. Questions concerning any of the information
provided in this report or requests for additional financial information should be addressed to the Office
of the Finance Director, 8838 East Valley Boulevard, Rosemead, CA 91770.
13
CITY OF ROSEMEAD
Statement of Net Assets
June 30, 2009
Governmental
Activities
Assets:
Cash and investments (note 2)
$ 36,830,249
Receivables:
Accounts
2,071,746
Accrued interest
131,867
Notes
219,730
Prepaid expenses
310,106
Deposits
79,161
Deferred charges
453,207
Land held for resale
4,407,616
Capital assets (note 6):
Land
2,968,824
Other capital assets, net
43,399,763
Total assets
90,872,269
Liabilities
Accounts payable and accrued liabilities
2,441,418
Accrued salaries and benefits
365,351
Deposits payable
34,527
Retentions payable
48,141
Accrued interest payable
618,346
Unearned revenue
815,473
Noncurrent liabilities (note 7 to 9):
Due within one year
1,207,964
Due in more than one year
35,268,077
Total liabilities
40,799,297
Net assets
Invested in capital assets, net of related debt
11,828,993
Restricted for:
Public works
5,008,317
Public safety
2,386,928
Low-moderate income housing
5,966,004
Unrestricted
24,882,730
Total net assets
$ 50,072,972
See accompanying notes to the basic financial statements.
14
CITY OF ROSEMEAD
' Statement of Activities
Fiscal Year ended June 30, 2009
I
Governmental activities:
General government
Public safety
Public works
Community services
Community development
Parks and recreation
Interest expense
Total governmental
activities
Pro
gram Revenues
Net (Expense)
Operating
Capital
Revenue and
Charges for Contributions
Contributions
Changes in
Expenses
Services
and Grants
and Grants
Net Assets
$ 12,176,877
547,327
250
-
(11,629,300)
9,081,719
549,979
226,262
736,234
(7,569,244)
6,465,355
1,064,394
5,505,147
1,012,260
1,116,446
773,374
187,315
671,494
-
85,435
1,290,108
621,375
-
-
(668,733)
2,030,698
36,000
-
(1,994,698)
1,523,391
-
-
(1,523,391)
$ 33,341,522
3,006,390
6,403,153
1,748,494
(22,183,485)
General revenues:
Taxes:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Investment income
Motor vehicle in lieu, unrestricted
Other general revenues
Total general revenues
Change in net assets
' Net assets at beginning of year
Net assets at end of year
1
I
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' See accompanying notes to the basic financial statements.
15
1
12,288,177
4,589,998
1,272,092
761,410
884,847
195,273
133,825
20,125,622
(2,057,863)
52,130,835
$ 50,072,972
CITY OF ROSEMEAD
Balance Sheet - Governmental Funds
June 30, 2009
Special Revenue
Debt Service
Low-Moderate
Income Housing
Redevelopment
General
Set-Aside
Agency
Assets:
Cash and investments
$ 15,885,533
1,499,153
7,551,374
Receivables:
Accounts
989,992
-
104,557
Accrued interest
79,842
1,773
26,951
Notes
219,730
-
-
Prepaid items
310,106
-
-
Due from other funds (note 4)
1,218,036
-
-
Deposits
79,161
-
-
Land held for resale
-
-
-
Advances to other funds (note 4)
2,497,920
4,477,945
-
Total assets
$ 21,280,320
5,978,871
7,682,882
Liabilities and Fund Balance
Liabilities:
Accounts payable and accrued liabilities
$ 1,584,972
2,615
401,011
Accrued salaries and benefits
298,865
-
16
Deposits payable
-
-
Retentions payable
6,085
-
Due to other funds (note 4)
140,243
10,252
Deferred revenue
8,136
-
-
Advances from other funds (note 4)
-
4,477,945
Total liabilities
2,038,301
12,867
4,878,972
Fund balance:
Reserved for:
Encumbrances
-
-
-
Notes receivable
219,730
-
-
Prepaid items
310,106
-
-
Deposits
79,161
-
-
Land held for Resale
-
-
-
Advances to other funds
2,497,920
4,477,945
-
Unreserved, reported in:
General fund
16,135,102
-
-
Special revenue funds
-
1,488,059
-
Debt service funds
-
2,803,910
Capital projects funds
-
-
-
Total fund balance
19,242,019
5,966,004
2,803,910
Total liabilities and fund balance
$ 21,280,320
5,978,871
7,682,882
See accompanying notes to the basic financial statements.
16
' Capital Projects
Redevelopment
' Agency
2,714,105
1 -
23,301
351
' 4,407,616
' 7,145,373
' 55,820
110
123,230
' 2,497,920
2,677,080
' 115,000
' 4,407,616
(54,323)
4,468,293
' 7,145,373
1
Non-Major
Governmental
Total
9,180,084
36,830,249
977,197
2,071,746
-
131,867
219,730
-
310,106
50,974
1,269,361
-
79,161
4,407,616
6,975,865
10,208,255 52,295,701
397,000 2,441,418
66,360
365,351
34,527
34,527
42,056
48,141
1,135, 630
1,409, 355
997,254
1,005,390
-
6,975,865
2,672,827 12,280,047
115,000
219,730
310,106
79,161
4,407,616
6,975,865
- 16,135,102
7,535,428 9,023,487
- 2,803,910
- (54,323)
7,535,428 40,015,654
10,208,255 52,295,701
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18
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I CITY OF ROSEMEAD
Governmental Funds
'
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
'
June 30, 2009
Fund balances of governmental funds $ 40,015,654
' Amounts reported for governmental activities in the statement of
net assets are different because:
' Capital assets, net of depreciation, have not been included
as financial resources in governmental fund activity.
' Capital assets 79,307,775
Accumulated depreciation (32,939,188)
' Long-term debt and compensated absences that have not been included
in the governmental fund activity:
Compensated absences (422,850)
'
Other post employment benefits
(153,291)
Retrospective deposits payable
(207,476)
Unamortized bond premiums
(257,424)
t
Tax allocation bonds
(35,435,000)
Debt issuance costs are not current financial resources and, therefore,
'
are not reported in the governmental funds.
453,207
Accrued interest payable for the current portion of interest due on
'
bonds payable has not been reported in the governmental funds.
(618,346)
Revenues that are measurable but not available. Amounts are recorded
'
as deferred revenue under the modified accrual basis of accounting.
189,917
'
Internal service funds are used by management to charge the costs of
certain activates, such as equipment management, to individual funds.
The assets of the internal service funds must be added to the statement
of net assets.
139,994
'
Net assets of governmental activities
$ 50,072.972
See accompanying notes to the basic financial statements.
19
CITY OF ROSEMEAD
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
Fiscal Year ended June 30, 2009
Special Revenue
Debt Service
Low-Moderate
Income Housing
Redevelopment
General
Set-Aside
Agency
Revenues:
Taxes
$ 11,485,062
-
5,649,896
Intergovernmental
3,107,790
-
-
Licenses and permits
1,178,362
-
-
Charges for services
638,244
-
-
Fines, forfeitures and penalties
394,117
-
-
Special assessments
-
-
-
Investment income
397,881
22,643
261,591
Other
380,823
-
606
Total revenues
17,582,279
22,643
5,912,093
Expenditures:
Current:
General government
9,947,996
-
103,885
Public safety
7,071,584
-
1,016,479
Public works
417,174
-
-
Community services
363,531
-
Community development
-
256,220
Parks and recreation
2,030,698
-
Capital outlay
202,752
-
Debt service:
Principal
-
915,000
Interest and fiscal charges
1,531,986
Total expenditures
20,033,735
256,220
3,567,350
Excess (deficiency) of revenues
over (under) expenditures
(2,451,456)
(233,577)
2,344,743
Other financing sources (uses):
Transfers in (note 5)
-
928,000
-
Transfers out (note 5)
(14,175)
(250,000)
(3,258,531)
Total other financing sources (uses)
(14,175)
678,000
(3,258,531)
Change in fund balances
(2,465,631)
444,423
(913,788)
Fund balances at beginning of year
21,707,650
5,521,581
3,717,698
Fund balances at end of year
$ 19,242,019
5,966,004
2,803,910
See accompanying notes to the basic financial statements,
20
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1
1
1
1
Capital Projects
Redevelopment Non-Major
Agency Governmental
Total
18,667 -
17,153,625
- 7,884,445
10,992,235
-
1,178,362
638,244
171,526
565,643
- 736,213
736,213
6,818 195,914
884,847
- -
381,429
25,485 8,988,098 32,530,598
1,184,280 720,018
11,956,179
- 1,025,946
9,114,009
303,371 4,244,322
4,964,867
- 419,921
783,452
791,309
1,047, 529
-
2,030,698
-
202,752
-
915,000
-
1,531,986
1,487,651 7,201,516 32,546,472
(1,462,166) 1,786,582 (15,874)
2,330,533
819,950
4,078,483
(388,020)
(167,757)
(4,078,483)
1,942,513
652,193
480,347
2,438,775
(15,874)
3,987,946
5,096,653
40,031,528
4,468,293
7,535,428
40,015,654
21
CITY OF ROSEMEAD
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Fiscal Year ended June 30, 2009
Net changes in fund balances of governmental funds $ (15,874)
Amounts reported for governmental activities in the statement of
activities is different because:
Governmental funds report capital outlay as expenditures. However, in
the statement of activities, the cost of those assets is allocated over their
estimated useful lives as depreciation expense. This is the amount by which
capital outlays exceeded depreciation in the current period.
Capital outlay 522,753
Depreciation expense (2,119,183)
Repayment of bond principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the statement of net assets. 915,000
To record as an expense the net change in the other post employment benefit
obligation in the statement of activities. (153,291)
To record as an expense the net change in retrospective deposit payable
in the statement of activities. (207,476)
Bond issuance costs, premiums, discounts, and similar items are recorded
as expenditures in governmental funds when debt is first issued, whereas
these amounts are deferred and amortized in the statement of activities.
This amount is the net offset of the differences. (12,570)
The statement of net assets includes accrued interest on long term debt. 21,165
To record as an expense the net change in compensated absences in the
statement of activities. 98,558
Revenues that are measurable but not available. Amounts are not recorded
as revenue under the modified accrual basis of accounting. (1,246,939)
Internal service funds are used by management to charge the costs of certain
activities, such as equipment management, to individual funds. The net revenues
(expenses) of the internal service funds is reported with governmental activities. 139,994
Change in net assets of governmental activities $ (2,057,863)
See accompanying notes to the basic financial statements.
22
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CITY OF ROSEMEAD
Statement of Net Assets
Proprietary Funds
June 30, 2009
Internal
Assets Service
Current assets:
Due from other funds (note 4) $ 139,994
Total assets 139,994
Net assets
Unrestricted 139,994
Total net assets $ 139,994
See accompanying notes to the basic financial statements.
23
CITY OF ROSEMEAD
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
Year ended June 30, 2009
Internal
Operating revenues:
Charges for services $ 139,994
Total operating revenues 139,994
Changes in net assets 139,994
Net assets at beginning of year
Net assets at end of year $ 139,994
See accompanying notes to the basic financial statements.
24
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1
1
CITY OF ROSEMEAD
Statement of Cash Flows
Proprietary Funds
Year ended June 30, 2009
Net cash provided by (used for)
operating activities
Net cash proved by (used for) capital
and related financing activities
Net cash provided by (used for)
investing activities
Net increase (decrease) in cash
and cash equivalents
Cash and cash equivalents at
beginning of year
Cash and cash equivalents at end of year
Reconciliation of operating income
to net cash provided by (used for)
operating activities:
Operating income (loss)
Adjustments to reconcile operating
income (loss) to net cash provided
by (used for) operating activities:
Increase (decrease) in due to other funds
Total adjustments
Net cash provided by
operating activities
Internal
Service
$ 139,994
(139,994)
(139,994)
See accompanying notes to the basic financial statements.
25
CITY OF ROSEMEAD
Statement of Fiduciary Assets and Liabilities
Agency Fund
June 30, 2009
Assets
Cash and investments (note 2) $ 360,557
Total assets $ 360,557
Liabilities
Deposits payable $ 360.557
Total liabilities $ 360,557
See accompanying notes to the basic financial statements.
26
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CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2009
(1) Summary of Significant Accounting Policies
1
1
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(a) Reporting Entity
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.
The accounting policies of the City conform to generally accepted accounting
principles as applicable to governments. As required by generally accepted
accounting principles, these financial statements present the government and its
component units, which are entities for which the government 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 if an organization is fiscally dependent (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).
27
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(a) Reporting Entity. (Continued)
Rosemead Financing Authorit
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.
Although the Agency is legally separate, it is reported as if it were part of the City
because the City Council also serves as the governing board of the Agency.
Separate financial statements of the Agency can be obtained from the Finance
Department.
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.
28
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CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
1
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(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
• Government-wide financial statements
• Fund financial statements
Notes to the basic financial statements
Financial reporting is based upon all GASB pronouncements, as well as the
FASB Statements and Interpretations, APB Opinions, and Accounting Research
Bulletins that were.issued on or before November 30, 1989 that do not conflict
with or contradict GASB pronouncements.
Government-wide Financial Statements
Government-wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental and business-type activities of
the primary government (including its blended component units), as well as its
presented component units. The City of Rosemead has no discretely presented
component units. Eliminations have been made in the Statement of Activities so
that certain allocated expenses are recorded only once (by function to which they
were allocated). However, general governmental expenses have not been
allocated as indirect expenses to the various functions of the City.
Government-wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long-term)
economic resources and obligations of the reporting government are reported in
the government-wide financial statements. Basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the
financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange-like
transactions are . recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from nonexchange
transactions are recognized in accordance with the requirements of GASB
Statement No. 33.
29
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Program revenues include charges for services, special assessments, and
payments made by parties outside of the reporting government's citizenry if that
money is restricted to a particular program. Program revenues are netted with
program expenses in the statement of activities to present the net cost of each
program.
Amounts paid to acquire capital assets are capitalized as assets in the
government-wide financial statements, rather than reported as expenditure.
Proceeds of long-term debt are recorded as a liability in the government-wide
financial statements, rather than as other financing source. Amounts paid to
reduce long-term indebtedness of the reporting government are reported as a
reduction of the related liability, rather than as expenditure.
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the
basis of separate funds, each of which is considered to be a separate accounting
entity. The operations of each fund are accounted for with a separate set of self-
balancing accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures or expenses, as appropriate. Governmental resources are allocated
to and accounted for in individual funds based upon the purposes for which they
are to be spent and the means by which spending activities are controlled.
Fund financial statements for the primary government's governmental,
proprietary, and fiduciary funds are presented after the government-wide
financial statements. These statements display information about major funds
individually and nonmajor funds in the aggregate for governmental and enterprise
funds. Fiduciary statements include financial information for fiduciary funds and
similar component units. Fiduciary funds of the City primarily represent assets
held by the City in a custodial capacity for other individuals or organizations.
Governmental Funds
In the fund financial statements, governmental funds are presented using the
modified-accrual basis of accounting. Their revenues are recognized when they
become measurable and available as net current assets. Measurable means that
the amounts can be estimated, or otherwise determined. Available means that
the amounts were collected during the reporting period or soon enough thereafter
to be available to finance the expenditures accrued for the reporting period. The
City uses a sixty day availability period.
30
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CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Revenue recognition is subject to the measurable and available criteria for the
governmental funds in the.fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
recognized as revenues in the period in which the underlying exchange
transaction on which they are based takes place. Imposed non-exchange
transactions are recognized as revenues in the period for which they were
imposed. If the period of use is not specified, they are recognized as revenues
when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government-mandated and voluntary non-
exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
assets and current liabilities are generally included on their balance sheets. The
reported fund balance (net current assets) is considered to be a measure of.
"available spendable resources." Governmental fund operating statements
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable
resources" during a period.
Non-current portions of long-term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not
be considered "available spendable resources," since they do not represent net
current assets. Recognition of governmental fund type revenues represented by
noncurrent receivables are deferred until they become current receivables.
Noncurrent portions of other long-term receivables are offset by fund balance
reserve accounts.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities.
Since they do not affect net current assets, such long-term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long-term debt are recorded as other financing sources rather than as a fund liability.
Amounts paid to reduce long-term indebtedness are reported as fund expenditures.
31
CITY OF ROSEMEAD. CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies (Continued)
(b) Basis of Accounting and Measurement Focus. (Continued)
When both restricted and unrestricted resources are combined in a fund,
expenses are considered to be paid first from restricted resources, and then from
unrestricted resources.
Fiduciary Funds
The City's 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.
(c) Major and Fiduciary Fund Types
The City's major governmental funds are as follows:
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.
Low-Moderate Income Housing Set-Aside Special Revenue Fund - Accounts for
20% of gross property tax increment revenue received by the Commission to
fund future projects involving the replacement or rehabilitation of low and
moderate-income housing within City limits.
Redevelopment Agency Debt Service Fund - Accounts for the accumulation of
resources for the payment of general long-term debt principal, interest and
related costs.
Redevelopment Agency Capital Proiects 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.
Internal Service Funds - These funds are used to account for vehicle and
technology replacement. Departments of the City are charged for the services
provided or benefits received from these funds.
32
I
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
I
(1) Summary of Significant Accounting Policies, (Continued)
(c) Ma or and Fiduciary Fund Types, (Continued)
' The City's Fiduciary Fund is as follows:
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.
' (d) Investments
For financial reporting purposes, investments are adjusted to their fair value
' whenever the difference between fair market value and the carrying amount is
material.
Changes in fair value that occur during a fiscal year are recognized as
investment income reported for that fiscal year. Investment income includes
interest earnings, changes in fair value, and any gains or losses realized upon
the liquidation or sale of investments.
' 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 based on each fund's average cash
and investment balance.
' (e) Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as
' short-term, highly liquid investments that are both readily convertible to known
amounts of cash or so near their maturity that they present insignificant risk of
changes in value because of changes in interest rates. Cash equivalents also
' represent the proprietary funds' share in the cash and investment pool of the City
of Rosemead. Cash equivalents have an original maturity date of three months or
less from the date of purchase. For purposes of the statement of cash flows, the
' entire balance of cash and investments on the combined balance sheet for the
internal service fund is considered cash and cash equivalents.
I
33
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies (Continued)
(f)
Capital Assets
Capital assets (including infrastructure) are recorded at cost where historical
records are available and at an estimated historical cost where no historical
records exist. Contributed capital assets are valued at their estimated fair market
value at the date of the contribution. Generally, capital asset purchases in excess
of $10,000 are capitalized if they have an expected useful life of one year or
more.
Capital assets include public domain (infrastructure) general capital assets
consisting of certain improvements including roads, streets, sidewalks, medians,
and storm drains.
Capital assets used in operations are depreciated over their estimated useful
lives using the straight-line method in the government-wide financial statements
and in the fund financial statements of the internal service funds. Depreciation is
charged as an expense against operations and accumulated depreciation is
reported on the respective balance sheet.
The following schedule summarizes capital asset useful lives:
Buildings
Improvements other than buildings
Machinery and equipment
Autos and trucks
Furniture and office equipment
Infrastructure:
Bridges
Sewer system and storm drain system
Medians and sidewalks
Traffic signals
Streets
(g)
Compensated Absences
50 years
15 years
7 years
5 years
7 years
50 years
50-100 years
40 years
30 years
20 years
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
government-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).
34
I
I
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
1
I
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(g) Compensated Absences, (Continued)
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.
'
(h) 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.
' (i) Fund Equity
In the fund financial statements, governmental funds report reservations of fund
' balance for amounts that are not available for appropriation or are legally
restricted by outside parties for use for a specific purpose. Designations of fund
balance represent tentative management plans that are subject to change.
' (j) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
1
35
CITY OF ROSEMEAD, CALIFORNIA '
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(k) Low-Moderate Income Housing Set-Aside
On October 9, 1991 the Commission prepaid its housing obligation. in the amount
of $6,813,850 from proceeds from its 1987 tax allocation notes. This pre-
payment was restructured in 1993 along with the 1993 series tax allocation
bonds. As a result, the Commission's housing obligation has been reduced by
$469,142 per year until the 2021-22 fiscal year.
(2) Cash and Investments
Cash and investments as of June 30, 2009 are classified in the accompanying financial
statements as follows:
Statement of Net Assets:
Cash and investments
$36,830,249
Statement of Fiduciary Assets and Liabilities:
Cash and investments
360,557
Total cash and investments
$37.190 806
Cash and investments as of June 30, 2009 consist of the following:
a
Deposits with financial institutions
$ 4,042,796
Investments
33.148, 010
Total cash and investments
$37,190,806
.0
U
U
0
36
I
I
I
U
1
I
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Investments Authorized by the California Government Code and the City's Investment
Policy .
The table below identifies the investment types that are authorized for the City by the
California Government Code and the City's investment policy. The table also identifies
certain provisions of the California Government Code (or the City's investment policy, if
more restrictive) that address interest rate risk, credit risk, and concentration of credit
risk. This table does not address investments of debt proceeds held by bond trustee that
are governed by the provisions of debt agreements of the City, rather than the general
provisions of the California Government Code or the City's investment policy.
Investment Types
Authorized by State Law
U.S. Treasury Obligations
U.S. Agency Securities
Banker's Acceptances
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements
Reverse Repurchase Agreements
Medium-Term Notes
Money Market Mutual Funds
Local Agency Investment Fund
(LAIF)
Authorized `Maximum 'Maximum
By Investment 'Maximum Percentage Investment
Policy Maturity Of Portfolio In One Issuer
Yes
5 years
None
None
Yes
5 years
None
None
Yes
270 days
40%
10%
Yes
270 days
25%
10%
Yes
3 years
30%
None
No
N/A
N/A
N/A
No
N/A
N/A
N/A
Yes
3 years
15%
10%
Yes
N/A
None
None
Yes
N/A
None
None
Based on state law requirements or investment policy requirements, whichever is more
restrictive.
37
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued) .
(2) Cash and Investments, (Continued)
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt
agreements, rather than the general provisions of the California Government Code or
the City's investment policy. The table below identifies the investment types that are
authorized for investments held by bond trustee. The table also identifies certain
provisions of these debt agreements that address interest rate risk, credit risk, and
concentration of credit risk.
Maximum
Maximum
Authorized
Maximum
Percentage
Investment
Investment Type
Maturity
Allowed
in 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
10%
10%
Money Market Portfolio
1 year
None
None
Investment Agreements
None
None
None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates. One of the
ways that the City manages its exposure to interest rate risk is by investing in pooled
investments, such as LAIF.
38
i
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the
' following table that shows the distribution of the City's investments by maturity:
Remaining Maturity (in Months)
' 12 Months 13 to 24 25 Months
Investment Type Total Or.Less Months or Greater
' State investment pool $ 31,995,180 31,995,180
Held by bond trustee:
' Money market funds 4 4 _ -
Investment agreement _ 1,152,826 1,152,826
Total $ 33.148.010 31.995.184 1 152 826
' Disclosures Relating to Credit Risk
' Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation
to the holder of the investment. This is measured by the assignment of a rating by a
nationally recognized statistical rating organization. Presented below is the minimum
rating required by (where applicable) the California Government Code, the City's
investment policy, or debt agreements, and the actual rating as of year end for each
investment type.
' Minimum
Legal Not
t Investment Type Total . Rating AAA Rated
State investment pool $ 31,995,180 N/A 31,995,180
Held by bond trustee:
' Money market funds 4 A 4
Investment agreement 1,152.826 N/A 1,152,826
Total $ 33 148 010 4 33 148 006
I
39
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments. (Continued)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be
able to recover collateral securities that are in the possession of an outside party. The
custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty (e.g., broker-dealer) to a transaction, a government will not be able to
recover the value of its investment or collateral securities that are in the possession of
another party. The California Government Code and the 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 fair 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, 2009,
$2,844,316 of the City's deposits with financial institutions in excess of federal
depository insurance limits were held in uncollate ralized accounts
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by the California Government Code under the oversight of the Treasurer of the
State of California. The fair value of the City's investment in this pool is reported in the
accompanying financial statements at amounts based upon the City's pro-rata share of
the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized
cost of that portfolio). The balance available for withdrawal is based on the accounting
records maintained by LAIF, which are recorded on an amortized cost basis.
40
I
E
1
0
1
I
Under California law, property taxes are assessed and collected by the counties up to
1% of assessed value, plus other increases approved by the voters. The property taxes
are recorded initially in a pool, and are then allocated to the cities based on complex
formulas. Accordingly, the City of Rosemead accrues only those taxes that are received
from the County within sixty days after year-end.
Lien date January 1
Levy date July 1
Due dates November 1 and February 1
'
Collection dates December 10 and April 10
The Community Development Commission of the City of Rosemead's primary source of
revenue comes from property taxes. Property taxes allocated to the Commission are
computed in the following manner:
(a) The assessed valuation of all property within the project area is determined on
'
the date of adoption of the Redevelopment Plan.
(b) Property taxes related to the incremental increase in assessed values after the
'
adoption of the Redevelopment Plan are allocated to the Commission; all taxes
on the "frozen" assessed valuation of the property are allocated to the City and
other districts.
'
The Commission has no power to levy and collect taxes and any legislative property tax
shift might reduce the amount of tax revenues that would otherwise be available to pay
'
the principal of, and interest on, debt. Broadened property tax exemptions could have a
similar effect. Conversely, any increase in the tax rate or assessed valuation, or any
reduction or elimination of present exemptions would increase the amount of tax
revenues that would be available to pay principal and interest on debt.
I
1
I
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(3) Property Taxes
41
1
CITY OF ROSEMEAD, CALIFORNIA
'
Notes to the Basic Financial Statements
(Continued)
(4) Interfund Receivables and Pavables
Current interfund receivables and payables balances at June 30, 2009 are as follows:
Due from other funds Due to other funds
Amount
General Fund Low-Moderate Income
$ 10,252
Redevelopment Agency
Capital Projects Fund
72,256
Non-Major Governmental Fund
1,135,528 (A)
Total General Fund
1,218,036
Non-Major Redevelopment Agency
Governmental Fund Capital Projects Fund
50,974
Redevelopment Agency
Capital Projects Fund General Fund
249
Non-Major Governmental Fund
102
Total RDA Capital Projects Fund
351
Internal Service Funds General Fund
139,994(A)
Total
$ 1.409.355
A
Sh
t-t
i
t
t
h d
f
b
it
(
)
or
erm
orrow
ng
o cover
emporary cas
ic
e
s.
Noncurrent interfund receivable and payable balances at June 30, 2009
are as follows:
Advances to other funds Advances from other funds
Amount
Low-Moderate Income Redevelopment Agency
a
Housing Set-Aside Debt Service Fund
$ 4,477,945 (B)
General Fund Redevelopment Agency
Capital Projects Fund
2,497,920 (C)
Total
$ 6.975.865
u
42
0
0
I
I
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(4) Interfund Receivables and Payables (Continued)
(B) 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, 2009, the accumulated set-
aside amount not yet funded was $4,477,945. As required by law, the
Commission devised a plan to fund the accumulating amount.
(C) In September 2007 the General Fund advanced the Redevelopment Agency
Capital Projects Fund $2,497,920 at an interest rate of 5.25% per annum.
Accrued interest is payable in annual installments of $131,141 beginning on
September 28, 2008, and continuing until September 28, 2027, at which time the
remaining principal and interest shall be due in full.
(5) Interfund Transfers
' Interfund transfers were as follows for the year ended June 30, 2009:
Transfer In Transfer Out Amount
' Low-Moderate Income Redevelopment Agency
Housing Set-Aside Debt Service Fund $ 928,000 (A)
' Redevelopment Agency Redevelopment Agency
Capital Projects Fund Debt Service Fund 2,148,421 (B)
General Fund 14,175
Non-Major Governmental
' Funds 167,937
Total Redevelopment Agency
Capital Projects Fund 2,330,533
' Non-Major Governmental Low-Moderate Income
Housing Set-Aside
Redevelopment Agency
Capital Projects Fund
250,000
388,020
'
Redevelopment Agency
Debt Service Fund
181,930
I, Total Non-Major Governmental
Funds
819,950
Total $ 4 078 483
' The following describes the significant transfers in and transfers out included in the
financial statements:
' (A) To record the low and moderate income housing set-aside for the year
ended June 30, 2009.
(B) To transfer remaining tax increment, net of pass-through payments, 20%
set aside and debt service payments to the Capital Projects Fund.
t
t 43
i
CITY OF ROSEMEAD, CALIFORNIA '
Notes to the Basic Financial Statements
(Continued)
(6) Capital Assets
Capital asset activity was as follows for the year ended June 30, 2009:
Governmental activities:
Capital assets not depreciated:
Land
Construction in progress
Total capital assets
not being depreciated
Capital assets being depreciated:
Buildings
Improvements other than
Balance at
June 30, 2008
$ 2,968,824
388,448
3,357,272
23, 994, 956
Balance at
Increases Decreases June 30, 2009
2,968,824
(388,448)
388 448) 2,968,824
23,994,956
buildings 936,931 90,166 1,027,097
Machinery and equipment 892,864 84,167 977,031
Autos and trucks 686,296 - (49,167) 637,129
Furniture and office equipment 2,469,526 31,860 2,501,386
Infrastructure 46,496,344 705,008 47,201,352
Total capital assets
being depreciated
Less accumulated depreciation for:
Buildings (6,064,583) (565,735) (6,630,318)
Improvements other than
buildings (868,483) (38,993) (907,476)
Machinery and equipment
Autos and trucks
Furniture and office equipment
Infrastructure (20
Total accumulated
depreciation
Total capital assets being
depreciated, net
Governmental activities
capital assets, net
-
(742,030)
(30,289)
- (772,319)
(403,066)
(78,601)
49,167 (432,500)
(2,247,228)
(97,167)
- (2,344,395)
,543,782)
1 308 398)
(21 ,852,180)
(30,869,172) 2119183) 49,167 (32,939.188)
44,607,745 (1,207,982) 43,399,763
$47.965.017 C1 2W 982 388 448) 46.368.587
75,476.917 911.201 49 167) 76,338,951
-
44
I
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(6) Capital Assets, (Continued)
'
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities:
Public works
$ 1,870,842
Community development
248,341
'
Total depreciation expense
$2.119.183
1
(7) Changes in Long-Term Liabilities
Long-term debt consists of the following at June 30, 2009:
I
1
1
1
Balance at Balance at Due within Due Beyond
June 30, 2008 Additions Reductions June 30, 2009 One Year One Year
Governmental activities:
Tax allocation bonds,
Series 2006A
$12,415,000
845,000
11,570,000
870,000
10,700,000
Tax allocation bonds,
Series 20068
23,935,000
70,000
23,865,000
75,000
23,790,000
Unamortized bond
premiums
277,226 -
19,802
257,424
19,802
237,622
Other post employment
benefits
- 284,778
131,487
153,291
-
153,291
Retrospective deposit
- 207,476
-
207,476
69,159
138,317
Compensated
absences
521,408 116,002
214,560
422,850.
174,003
248,847
5 77
37 148 634 548 2~Fz 1 2~4 849 36 476 041 1,207,964
The City records expenditures related to compensated absences through the City's
General Fund.
45
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(7) Changes in Long-Term Liabilities, (Continued)
Tax Allocation Bonds. Series 2006A
On March 9, 2006, the Commission issued tax allocation bonds in the amount of
$14,005,000 (Series 2006A) to: (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 purchased 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.
A surety bond has been acquired to satisfy the reserve requirements. As of June 30,
2009 the outstanding balance was $11,570,000.
Tax Allocation Bonds Series 2006B
In December 2006, the Commission issued $24,230,000 in Project Area No. 1 Tax
Allocation Bonds. The bonds mature in amounts ranging from $70,000 to $1,430,000
with interest rates ranging from 3.25% to 4.25% through October 1, 2025. The net
proceeds were used to refund the remaining $23,095,000 amount outstanding on the
1993 Tax Allocation Bonds. The securities were deposited in an irrevocable trust with
an escrow agent to provide for all future debt service payments on the 1993 Bonds. As
a result, the entire 1993 Bonds are considered to be defeased and the liability for those
bonds has been removed from the government-wide financial statements.
A surety bond has been acquired to satisfy the reserve requirements. As of June 30
2009, $23,865,000 of the bonds are outstanding.
46
' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
' (Continued)
(7) Changes in Long-Term Liabilities, (Continued)
At June 30, 2009, debt service requirements to maturity fo
r governmental
activities long-
term debt are as follows:
'
2006A Tax Allocation Bonds
2006B Tax Allocation Bonds
Year Ending June 30
Principal
Interest
Principal
Interest
'
2010
$ 870,000
478,131
75,000
1,037,674
2011
900,000
449,856
75,000
1,035,049
2012
930,000
419,481
80,000
1,032,336
2013
965,000
386,931
80,000
1,029,536
2014
1,000,000
353,156
85,000
1,026,649
2015-2019
5,720,000
1,032,780
460,000
5,088,680
2020-2024
1,185,000
124,223
6,110,000
4,437,556.
'
2025-2029
7,510,000
2,992,678
2030-2034
9,390,000
1,084,064
'
$11.570.000
3.244.558
23.865.000
18.764.222
1 (8) Post Employment Benefit Plan
' Plan Description: The City administers a multi-employer defined benefit plan which
provides medical insurance benefits to eligible retirees and their spouses in accordance
with various labor agreements. The City has not established a trust that is administered
by the City for the purpose of holding assets accumulated for plan benefits. After age
' 65, Medicare automatically becomes the primary provider of health coverage. The City's
defined benefit plan becomes the secondary provider. Eligible retirees will have no
noticeable change in health benefits or plan administration; however, there is a reduction
' in the City's cost of health coverage as the secondary provider. The City's defined
benefit plan administrator establishes the cost of secondary provider rates annually. The
City will pay 100% for eligible retirees' health coverage.
' Eligibility. Employees are eligible for retiree health benefits if they retire from the City on
or after age 50 with at least 5 years of service, and are eligible for a PERS pension.
' Membership of the plan consisted of the following at January 1, 2008, the date of the
latest actuarial valuation:
' Retirees and beneficiaries receiving benefits 14
Active plan members 30
Total 44
47
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(8) Post Employment Benefit Plan, (Continued)
City's Funding Policy: The contribution requirements of plan members and the City are
established and may be amended by City Council. The contribution required to be made
under City Council and labor agreement requirements is based on a pay-as-you-go basis
(i.e., as medical insurance premiums become due). For fiscal year 2008-09, the City
contributed $131,487 to the plan for current premiums.
Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment
benefit (OPEB) cost (expense) is calculated based on the annual required contribution of
the employer (ARC), an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The ARC represents a level of funding that, if
paid on an ongoing basis, is projected to cover normal cost each year and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The following table shows the components of the City's annual OPEB cost for the year,
the amount actually contributed to the plan, and changes in the City's net OPEB
obligation for these benefits:
Annual required contribution
$284,778
Interest on net OPEB obligation
-
Adjustments to annual required contributions
-
Annual OPEB cost (expense)
284,778
Contributions made (including premiums paid)
13( 1.487)
Increase in net OPEB obligation
153,291
Net OPEB obligation-beginning of year
Net OPEB obligation-end of year
153 291
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2009 and the two preceding years were as follows:
Percentage of
Annual Net
Fiscal Annual OPEB Cost OPEB
Year OPEB Cost Contributed Obligation
6/30/07 N/A N/A N/A
6/30/08 N/A N/A N/A
6/30/09 $284,778 54% $153,291
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Notes to the Basic Financial Statements
(Continued)
(8) Post Employment Benefit Plan, (Continued)
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and the
healthcare cost trend. Amounts determined regarding the funded status of the plan and
the annual required contributions of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about
the future. The schedule of funding progress, presented as required supplementary
information following the notes to the financial statements, presents multi-year trend
information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for the benefits.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting
purposes are based on the substantive plan (the plan as understood by the employer
and the plan members) and include the types of benefits provided at the time of each
valuation and the historical pattern of sharing of benefit costs between employer and
plan members to that point. The actuarial methods and assumptions used include
techniques that are designed to reduce the effects of short-term volatility in actuarial
accrued liabilities and the actuarial assets, consistent with the long-term perspective of
the calculations.
The actuarial cost method used for determining the benefit obligations is the Frozen
Entry Age Actuarial Cost Method. The actuarial assumptions included a 4.5 percent
investment rate of return, which is the assumed rate of the expected long-term
investment returns on plan assets calculated based on the funded level of the plan at the
valuation date, and an annual healthcare cost trend rate of 10 percent initially, reduced
by decrements of 0.5 per year to an ultimate rate of 5 percent after the tenth year. The
UAAL is being amortized as a level percentage of projected payroll over 30 years. It is
assumed the City's payroll will increase 3.25% per year.
SCHEDULE OF FUNDING PROGRESS
Actuarial
Accrued
Date u M (b-a)
1/01/06 N/A N/A N/A
1/01/07 N/A N/A N/A
1/01/08 $0 $3,548,605 $3,548,605
UAAL as a
(ate u ba /c
N/A N/A N/A
N/A N/A N/A
0% $1,682,985 211%
49
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(9) Risk Management
Self-insurance pool pursuant to joint powers agreement
The City is a member of the California Joint Powers Insurance Authority (Authority). The
Authority is composed of 122 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 9-
member Executive Committee.
Each member government pays a primary deposit to cover estimated losses for a fiscal
year (claims year). After the close of a fiscal year, outstanding claims are valued. A
retrospective deposit computation is then made for each open claims year. Claims are
pooled separately between police and non-police. Costs are allocated to members by
the following methods within each of the four layers of coverage: (1) the first $30,000 of
each occurrence is charged directly to the member's primary deposit; (2) costs from
$30,000 to $750,000 and the loss development reserves associated with losses up to
$750,000 are pooled based on the member's share of losses under $30,000; (3) losses
from $750,000 to $2,000,000 and the associated loss development reserves are pooled
based on payroll; (4a) costs of covered claims from $2,000,000 to $50,000,000 are paid
under reinsurance and excess insurance policies (4b) subject to a $3,000,000 annual
aggregate deductible (4c) and a quota-sharing agreement whereby the Authority is
financially responsible for 40% of losses occurring within the $2,000,000 to $10,000,000
layer. The costs associated with 4a-c are estimated using actuarial models and pre-
funded as part of the primary and retrospective deposits.
The overall policy limit for each member including all layers of coverage is $50,000,000
per occurrence. Costs of covered claims for subsidence losses are paid by excess
insurance with the following sub-limits per member: $25,000,000 per occurrence with a
$15,000,000 annual aggregate.
The City also participates in the workers' compensation pool administered by the
Authority. Each member pays a primary deposit to cover estimated losses for a fiscal
year (claims year). After the close of a fiscal year, outstanding claims are valued. A
retrospective deposit computation is then made for each open claims year. Claims are
pooled separately between public safety and non-public safety.
50
' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
' (Continued)
I
9) Risk Management. (Continued
' Costs are allocated to members by the following methods within each of the four layers
of coverage: (1) the first $50,000 of each loss is charged directly to the member's
primary deposit; (2) 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; (3) losses from $100,000 to $2,000,000 and the loss development
' reserves associated with those losses are pooled based on payroll; (4) losses from
$2,000,000 up to statutory limits are paid under an excess insurance policy. Protection
is provided per statutory liability under California Workers' Compensation law.
1 Employer's Liability losses are pooled among members to $2,000,000, coverage from
$2,000,000 to $4,000,000 is purchased as part of an excess insurance policy, and
losses from $4,000,000 to $10,000,000 are pooled among members.
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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 City of Rosemead. Coverage
is on a claims-made basis. There is a $50,000 deductible. The Authority has a limit of
$50,000,000 for the 3-year period from July 1, 2008 through July 1, 2011. Each member
of the Authority has a $10,000,000 sub-limit during the 3-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.
As of June 30, 2009 the City had retrospective deposits payable to the Authority in the
amount of $207,476. The deposit will be repaid through adjustments to premiums over
the next three years.
(10) Retirement Plans
Defined Benefit Pension Plan
The City of Rosemead contributes to the California Public Employees Retirement
System (PERS), a cost-sharing multiple-employer public employee defined benefit
pension plan. PERS provides retirement, disability benefits, and death benefits to plan
members and beneficiaries. PERS acts as a common investment and administrative
agent for participating public entities within the State of California. PERS issues a
51
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(10) Retirement Plans, (Continued)
Defined Benefit Pension Plan. (Continued
publicly available financial report that includes financial statements and required
supplementary information for the cost sharing plans that are administered by PERS.
Copies of PERS' annual financial report may be obtained by writing to 400 "P" Street,
Sacramento, California 95814.
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 2.7% 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.
For each of the fiscal years shown below, the City has contributed at the actuarially
determined rate provided by PERS' actuaries. Under GASB 27, an employer reports an
annual pension cost (APC) equal to the annual required contribution (ARC) plus an
adjustment for the cumulative difference between the APC and the employer's actual
plan contributions for the year. The cumulative difference is called the net pension
obligation (NPO). The ARC for the period July 1, 2008 to June 30, 2009 has been
determined by an actuarial valuation of the plan as of June 30, 2006. The City's covered
payroll for PERS was $4,160,179 for the year ended June 30, 2009, while the City's total
payroll for all employees was $6,946,135 during the same period. In order to calculate
the dollar value of the ARC for inclusion in financial statements prepared as of June 30,
2009, the contribution rate is multiplied by the payroll of covered employees that were
paid during the period from July 1, 2008 to June 30, 2009.
Three-year trend information:
Annual Pension Cost (Miscellaneous)
Employer
Net
Fiscal Years
Contribution
Employer
Percentage Pension
Ended June 30
Rate
Contribution
Contributed Obligation
2007
20.889%
$ 471,068
100%
2008
19.802%
828,584
100%
2009
26.100%
1,428,348
100%
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CITY OF ROSEMEAD, CALIFORNIA
' Notes to the Basic Financial Statements
(Continued)
1
(10) Retirement Plan, (Continued)
' Supplemental Defined Benefit Pension Plan
' Effective July 1, 2000, the City entered into an agreement with Public Agency
Retirement Services (PARS) whereby the City contributes to a supplemental employee
pension plan (the plan II), a single-employer defined benefit pension plan administered
' by Phase II Systems. The plan II provides a supplemental retirement benefit of 1% for
each year of service to plan members and beneficiaries. Employees with at least 10
years of service and City Council members with at least 10 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
CaIPERS benefits.
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PARS 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 PARS, 3961 MacArthur Boulevard, Suite 200, Newport Beach, California,
92660.
An actuarial valuation of the City of Rosemead Supplemental Defined Benefit Pension
Plan was performed as of July 1, 2008 to determine the funding level requirement of the
plan for the current fiscal period. Actuarial valuations are performed once every two
years. The employer contribution rate for the plan years 2009 and 2010 was 5.83%.
A summary of principle assumptions and methods used to determine the ARC is shown
below.
Valuation Date
Actuarial Cost Method
Amortization Method
Asset Valuation Method
Actuarial Assumptions:
Investment Rate of Return
Inflation Rate
Retirement
Cost of Living Adjustment
July 1, 2008
Entry Age Normal
Level Dollar
Market Value
7.50% for funding purposes
3%
For miscellaneous employees and the contract City
Attorney: Retirement rate of 20% at ages 60 and
older with between 10 and 20 years of service, and
retirement rate of 30% at ages 55 and older with
more than 20 years of service. For City Council
members: Retirement rates of 30% per year.
2% compounded annually
Initial unfunded liabilities are amortized over a closed 20 year period from July 1,
2002 with amortization payments increasing 3.25% annually. Payments are assumed
to be made throughout the year.
53
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(10) Retirement Plan. (Continued)
Supplemental Defined Benefit Pension Plan, (Continued)
The Schedule of Funding Progress below shows the recent history of the actuarial value
of assets, actuarial accrued liability, their relationship, and the relationship of the
unfunded actuarial accrued liability to payroll.
Required Supplementary Information
Entry Age
Valuation
Normal
Actuarial
Unfunded
Date
Accrued
Value of
Liability (UAL)/
July 1
Liability
Assets
(Excess Assets)
2004
$2,582,633
828,182
1,754,451
2006
2,973,299
1,438,282
1,535,017
2008
2,242,154
1,910,854
331,300
Three-year trend information:
UAL As a
Funded. Valuation % of
Status Payroll Payroll
32.07%
2,037,432
86.11%
48.37%
2,367,310
64.84%
85.22%
3,747,667
8.84%
Annual Pension Cost (Employer Contribution)
Net
Fiscal Years Employer Percentage Pension
Ended June 30 Contribution Contributed Obligation
2007
$ 298,238
100%
2008
246,265
100%
2009
74,317
100%
(11) Commitments and Contingencies
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 filed
against the Los Angeles County Sheriffs' Department, regardless of the location within
the 40 cities.
54
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CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(11) Commitments and Contingencies, (Continued)
In 1998 the County of Los Angeles lost a litigation mailer 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.
(12) Fund Deficits
The following funds had deficit balances as of June 30, 2009:
Fund Name
CDBG
HOME
Federal Highway Grant
Local Transportation
CDBG
Deficit Fund
Balance
$ 947
339,043
72,093
252
The fund deficit primarily relates to expenditures that were charged to the grant during
the fiscal year, ended June 30, 2009, which were submitted for reimbursement.
However, the reimbursement was not received within the availability period and
therefore has been deferred.
(13) Expenditures in Excess of Ap
propriations
'
Expenditures exceeded appropriations in the following funds:
Fund
Budget
Actual
Variance
'
Proposition A
$ 469,910
625,435
(155,525)
Street Lighting
365,000
425,946
(60,946)
AQMD
9,000
13,970
(4,970)
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Required Supplementary Information
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CITY OF ROSEMEAD, CALIFORNIA
Note to the Required Supplementary Information
Fiscal Year Ended June 30, 2009
(1) Budgetary Information
Annual budgets are legally adopted on a basis consistent with accounting principles
generally accepted in the United States of America for all governmental funds. 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 City Manager so that a budget may be prepared.
Before the first Thursday of June, the proposed budget is presented to the City 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 and between departments within a fund.
Transfers of appropriations between funds 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 fund 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.
58
CITY OF ROSEMEAD
General Fund
'
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and
Actual
Fiscal Year ended June 30, 2009
Variance-
'
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
'
Revenues:
Taxes:
Property taxes
$ 5,596,600
5,596,600
5,713,769
117,169
'
Business license tax
40,700
40,700
48,257
7,557
Sales and use tax
3,853,000
3,853,000
3,589,817
(263,183)
Transient occupancy tax
1,386,400
1,386,400
1,272,092
(114,308)
'
Franchise tax
781,020
781,020
761,410
(19,610)
Real estate transfer tax
130,000
130,000
99,717
(30,283)
'
Total taxes
11,787,720
11,787,720
11,485,062
(302,658)
Intergovernmental
2,764,600
2,764,600
3,107,790
343,190
Licenses and permits
1,718,700
1,718,700
1,178,362
(540,338)
'
Charges for services
643,200
643,200
638,244
(4,956)
Fines and penalties
454,500
454,500
394,117
(60,383)
Investment income
536,000
536,000
397,881
(138,119)
'
Other
226,280
226,280
380,823
154,543
Total revenues
18,131,000
18,131,000
17,582,279
(548,721)
'
Expenditures:
Current:
General government
9,970,001
9,970,001
9,947,996
22,005
'
Public safety
6,884,150
6,884,150
7,071,584
(187,434)
Public works
358,900
358,900
417,174
(58,274)
'
Community services
404,200
404,200
363,531
40,669
Parks and recreation
1,627,474
1,627,474
2,030,698
(403,224)
Capital outlay
251,137
251,137
202,752
48,385
'
Total expenditures
19,495,862
19,495,862
20,033,735
(537,873)
Excess (deficiency) of revenues
'
over (under) expenditures
(1,364,862)
(1,364,862)
(2,451,456)
(1,086,594)
Other financing sources (uses):
'
Transfers out
(14,175)
(14,175)
Total other financing
'
sources (uses)
(14,175)
(14,175)
Change in fund balances
(1,364,862)
(1,364,862)
(2,465,631)
(1,100,769)
Fund balances at beginning
ofyear
21,707,650
21,707,650
21,707,650
Fund balances at end of year
$ 20,342,788
20,342,788
19,242,019
(1,100,769)
'
59
CITY OF ROSEMEAD
Low-Moderate Income Housing Set-Aside
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Revenues:
Investment income
Total revenues
Expenditures:
Current:
Community development
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance-
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 22,643 22,643
22,643 22,643
336,520
336,520
256,220
80,300
336,520
336,520
256,220
80,300
(336,520) (336,520) (233,577) 102,943
1,299,000 1,299,000 928,000 (371,000)
(17,800) (17,800) (250,000) (232,200)
1,281,200
1,281,200
678,000 (603,200)
944,680
944,680
444,423 (500,257)
5,521,581
5,521,581
5,521,581
$ 6,466,261
6,466,261
5,966,004 (500,257)
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NONMAJOR GOVERNMENTAL FUNDS
Traffic Safety Fund - This fund is used to account for the receipt of vehicle code fines which are
expended for construction, maintenance of traffic control devices, streets, crossing guard salaries,
and equipment and supplies for traffic enforcement and accident prevention.
Community Development Block Grant Fund - Accounts for Community Development Block Grants
received from the U.S. Department of Housing and Urban Development.
HOME Program Fund - This fund is used to account for HOME Investment Partnerships Program
monies received to create and retain affordable housing.
Proposition A Fund - This fund is used to finance public transportation projects. Effective July 1,
1982, this fund accounts for the City's share of additional sales tax collected in the County of Los
Angeles as a result of Proposition A.
Proposition C- This fund is to be used by the cities for public transit to increase safety and improve
road conditions by repairing and maintaining streets heavily used by public transit.
Federal Highway Grant- Accounts for Federal Highway Grants received from the California
Department of Transportation.
State Gas Tax Fund - This fund is used to account for monies that are collected by the State under
the title of Motor Vehicle Fuel License Tax and represent an additional + or - $.10 per gallon of gas
sold. Gas Tax money is distributed to the City based upon population and vehicle registration.
Funds may be used for: Select Streets: Right-of-way acquisition, construction or maintenance.
Minor Streets: Right-of-way acquisition or construction is allowed as the City Council has determined
that 90% or more of the City's street system has already been constructed.
Air Quality Management District Fund - This fund accounts for the receipt of monies from the Air
Quality Maintenance District. These funds shall be used to implement programs to reduce air
pollution from mobile sources pursuant to the California Clean Air Act.
Local Transportation Fund - This fund is used to account for monies'made available by the State for
mass transit, bike paths, and pedestrian walkways. City policy has been to use this money for
construction of sidewalks, pedestrian access to schools, parks or commercial areas.
Street Lighting Fund - This fund is used to account for monies collected by ad valorem property tax
based on $.2495 per $1000 of assessed property value to provide for energy cost and maintenance
of the Rosemead Lighting District, whose boundaries, with the exception of the Southern California
Edison company property, coincide with the city's boundaries. Proposition 13 has limited the ad
valorem tax that can be collected.
Narcotics Seizure Fund - This fund is used to account for funds received from the County of Los
Angeles for monies forfeited, and the proceeds from the sale of assets seized from illegal narcotic
activities within the City of Rosemead. The forfeited funds must be used by the law enforcement
and prosecutorial agencies exclusively to support law enforcement and prosecutorial efforts.
Rosemead Housing Development Corporation - This fund is used to account for the construction,
financing and operations of low and moderate income housing. The Corporation is a blended
component until of the City of Rosemead.
City Capital Proiects Fund - To account for the acquisition and construction of major capital facilities
63
CITY OF ROSEMEAD
Non-Major Governmental Funds
Combining Balance Sheet
June 30, 2009
Special Revenue Funds
Federal
Traffic
CDBG
HOME
Proposition
Proposition
Highway
Safe
Grant
Grant
A
C
Grant
Assets
Cash and investments
$ -
-
-
921,912
2,234,678
Receivables:
Accounts
15,270
333,789
316,848
64,228
52,299
Due from other funds
-
-
-
-
-
-
Total assets
$ 15,270
333,789
316,848
986,140
2,286,977
-
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities
$ -
26,849
26,916
4,317
140,793
-
Accrued salaries and benefits
-
30,657
2,025
14,444
9,930
-
Deposits payable
-
-
-
-
-
-
Retentions payable
-
15,919
-
26,137
-
Due to other funds
2,343
79,530
626,950
-
72,093
Deferred revenue
181,781
Total liabilities
2,343
334,736
655,891
18,761
176,860
72,093
Fund balances:
Unreserved, reported in:
Special revenue funds
12,927
947
33( 9,043)
967,379
2,110,117
:
(72,093
Total fund balances (deficit)
12,927
947
33( 9,043)
967,379
2,110,117
;
(72,093
Total liabilities and
fund balances
$ 15,270
333,789
316,848
986,140
2,286,977
-
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Capital Projects
Special Revenue Funds Fund
Rosemead
Air Quality Housing City
State Gas Management Local Street Narcotics Development Capital
Tax District Transportation Lighting Seizure Corporation Projects Total
2,298,834 32,834 - 2,374,342 31 512,628 804,825 9,180,084
123,368 16,787 2,760 38,166 13,682 - 977,197
- - - 50,974 50,974
2,422,202 49,621 2,760 2,412,508 31 526,310 855,799 10,208,255
120,026 38,538
8,641 -
3,012
39,561
397,000
- 663
66,360
34,527 -
34,527
- -
42,056
351,600 102
1,135,630
- 815,473
997,254
128,667
3,012
38,538
386,127
855,799 2,672,827
2,293,535
49,621 (252)
2,373,970
31 140,183
- 7,535,428
2,293,535
49,621 (252)
2,373,970
31 140,183
- 7,535,428
2,422,202
49,621 2,760
2,412,508
31 526,310
855,799 10,208,255
65
CITY OF ROSEMEAD
Non-Major Governmental Funds
'
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Fiscal Year ended June 30, 2009
'
Special Revenue Funds
'
Federal
Traffic CDBG HOME Proposition Proposition Highway
Safety Grant Grant A C Grant
Revenues:
Intergovernmental
Fines, forfeitures and penalties
Special assessments
Investment income
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community services
Community development
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing
sources (uses)
Change in fund balances
Fund balance (deficit) at beginning of year
Fund balance (deficit) at end of year
$ - 1,332,765 801,901 828,340 689,330 1,012,260
171,526 - - - - -
8,390 2,160 - 14,706 70,735
179,916 1,334,925 801,901 843,046 760,065 1,012,260
600,000 - - -
- 982,946 459,892 1,403,744
419,921 - - -
- - 782,231 -
600,000 1,402,867 782,231 459,892 1,403,744
420,084 (67,942) 19,670 383,154 (643,679) 1,012.260
(457) - - (12,198)
(457)
(12,198)
-
(420,084) (68,399) 19,670
383,154 (655,877)
1,012,260
433,011 67,452 35( 8,713)
584,225 2,765,994
1,084,353
$ 12,927 (947) 33( 9,043)
967,379 2,110,117
(72,093)
66
1
1
Capital Projects
Special Revenue Funds
Fund
Rosemead
Air Quality
Housing
City
State Gas
Management
Local
Street
Narcotics Development
Capital
Tax
District
Transportation
Lighting
Seizure Corporation
Projects
Total
2,584,854
64,743
155,102
415,150
-
7,884,445
_
_
_
_
-
-
171,526
-
736,213
-
-
736,213
46,077
-
-
53,705
1 140
-
195,914
2
630
931.
64,743
155,102
789,918
1 415,290
-
8,988,098
,
,
_
_
-
-
720,018
-
720,018
425,946
-
-
1,025,946
822,898
4,892
569,950
4,244,322
_
_
-
419,921
-
9,078
-
791,309
822
898
13,970
-
425.946
720,018
569,950
7,201,516
,
1,808,033
50,773
155,102
363,972
1 (304,728)
(569,950)
1,786,582
(155,102)
250,000. 569,950 819,950
- 167,757
-
(155,102)
250,000
569,950 652,193
1,808,033 50,773
- 363,972
1 (54,728)
- 2,438,775
485,502 (1,152)
(252) 2,009,998
30 194,911
- 5,096,653
2,293,535 49,621
(252) 2,373,970
31 140,183
- .7.535,428
67
CITY OF ROSEMEAD
Traffic Safety
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Revenues:
Fines, forfeitures and penalties
Investment income
Total revenues
Expenditures:
Current:
Public safety
Total expenditures
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance-
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 200,000 200,000 171,526 (28,474)
8,390 8,390
200,000 200,000 179,916 (20,084)
600,000
600,000
600,000
600,000
600,000
600,000
(400,000)
(400,000)
(420,084) (20,084)
433,011
433,011
433,011
$ 33,011
33,011
12,927
68
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1
U
I
CITY OF ROSEMEAD
Community Development Block Grant
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public works
Community services
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Transfers out
Total other financing
sources (uses)
Net change in fund balance
Fund balance at beginning of year
Fund balance (deficit) at end of year
Variance-
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 1,953,481 1,953,481 1,332,765 (620,716)
- - 2.160 2,160
1,953,481 1,953,481 1,334,925 (618,556)
1,530,480
1,530,480
982,946
547,534
566,970
566,970
419,921
147,049
2,097,450
2,097,450
1,402,867
694,583
(143,969) (143,969) (67,942) 76,027
(457) (457)
(457) (457)
(143,969) (143,969) (68,399) 75,570
67,452 67,452 67,452
$ (76,517) (76,517) (947) 75,570
69
CITY OF ROSEMEAD
HOME Program
'
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended J
2009
30
'
une
,
Budgeted Amounts
Original Final
Revenues
Variance-
Positive
Actual (Negative)
Intergovernmental
$ 2,208,805
2,208,805
801,901
(1,406,904)
Total revenues
2,208,805
2,208,805
801,901
(1,406,904)
Expenditures:
Current:
Community development
2,207,770
2,207,770
782,231
1,425,539
Total expenditures
2,207,770
2,207,770
782,231
1,425,539
Net change in fund balance
1,035
1,035
19,670
18,635
Fund balance (deficit) at beginning of year
(358,713)
(358,713)
(358,713)
-
Fund balance (deficit) at end of year
$ 357,678
357,678
(339,043)
18,635
70
CITY OF ROSEMEAD
Proposition A
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
'
l Y
ar ended June 30
Fi
2009
,
sca
e
'
Budgeted Amounts
Variance-
Positive
Original .
Final
Actual
(Negative)
Revenues:
Intergovernmental
$ 916,000
916,000
828,340
(87,660)
'
Investment income
16,600
16,600
14,706
(1,894)
Total revenues
932,600
932,600
843,046
(89,554)
'
Expenditures:
Current:
Public works
469,910
469,910
459,892
10,018
Total expenditures
469,910
469,910
459,892
10,018
Change in fund balances
462,690
462,690
383,154
(79,536)
Fund balance at beginning of year
584,225
584,225
584,225
'
Fund balance at end of year
$ 1,046,915
1,046,915
967,379
(79,536)
1
71
CITY OF ROSEMEAD
Proposition C
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Transfers out
Total other financing
sources (uses)
Net change in fund balance
Fund balance at beginning of year
Fund balance at end of year
Variance-
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
$ 760,000
760,000
689,330
(70,670)
48,000
48,000
70,735
22,735
808,000
808,000
760,065
(47,935)
1,471,960
1,471.960
1.403.744
68.216
1,471,960
1,471,960
1,403,744
68,216
(663,960) (663,960) (643,679) 20,281
166,000 166,000 (12,198) (178,198)
166,000 166,000 (12,198) (178,198)
(497,960) (497,960) (655,877) (157,917)
2,765,994 2,765,994 2,765,994
$ 2,268,034 2,268,034 2,110,117 (157,917)
72
CITY OF ROSEMEAD
Federal Highway Grant
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Variance-
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues
Intergovernmental $ - 1,012,260 1,012,260
Total revenues 1,012,260 1,012,260
Net change in fund balance 1,012,260 1,012,260
Fund balance (deficit) at beginning of year (1,084,353) (1,084,353) (1,084,353) -
Fund balance (deficit) at end of year X1,084,353) (1,084,353) (72,093) 1,012,260
73
CITY OF ROSEMEAD
State Gas Tax
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public works
Total expenditures
Change in fund balance
Fund balance at beginning of year
Fund balance at end of year
Variance-
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
$ 1,964,174
1,964,174
2,584,854
620,680
28,000
28,000
46,077
18,077
1,992,174
1,992,174
2,630,931
638,757
3,495,934
3,495,934
822,898 2,673,036
3,495,934
3,495,934
822,898 2,673,036
(1,503,760)
(1,503,760)
1,808,033 3,311,793
485,502
485,502
485,502 -
$ (1,018,258) (1,018,258) 2,293,535 3,311,793
74
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CITY OF ROSEMEAD
Air Quality Management District
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
I
Revenues:
Intergovernmental
'
Total revenues
Expenditures:
Current:
Public works
Community development
1
i
1
1
1]
1
1
Fiscal Year ended June 30, 2009
Total expenditures
Change in fund balances
Fund balance (deficit) at beginning of year
Fund balance (deficit) at end of year
Variance-
Budgeted Amounts
Positive
Original Final
Actual (Negative)
$ 70,000 70,000
64,743 (5,257)
70,000 70,000
64,743 (5,257)
4,892 (4,892)
9,000
9,000
9,078
(78)
9,000
9,000
13,970
(4,970)
61,000
61,000
50,773
(10,227)
(1,152)
(1,152)
(1,152)
$ 59,848
59,848
49,621
(10,227)
75
CITY OF ROSEMEAD
Local Transportation !
Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual
Fiscal Year ended June 30, 2009 !
i
Revenues:
Intergovernmental
Total revenues
Budgeted Amounts
Original Final
$ 225,000
225,000
155,102
(69,898)
225,000
225,000
155,102
(69,898)
Variance- !
Positive
Actual (Negative)
I
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers out
Total other financing
sources (uses)
Change in fund balances
Fund balance (deficit) at beginning of year
Fund balance (deficit) at end of year
225,000 225,000 155,102 (69,898)
155,000 155,000 (155,102) (310,102)
155,000 155,000 (155,102) (310,102)
380,000 380,000 - (380,000)
(252) (252) (252)
$ 379,748 379,748 (252) (3
76
CITY OF ROSEMEAD
Street Lighting
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Variance-
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
Revenues:
Special assessments
$ 737,000 737,000
736,213
(787)
Investment income
- -
53,705
53,705
Total revenues
737,000 737,000
789,918
52,918
'
Expenditures:
Current:
Public safety
365,000 365,000
425,946
(60,946)
l
dit
s
T
000 365
000
365
425
946
(60
946)
expen
ure
ota
,
,
,
,
Change in fund balances
372,000 372,000
363,972
(8,028)
Fund balance at beginning of year
2,009,998 2,009,998
2,009,998
Fund balance at end of year
$ 2,381,998 2,381,998
2,373,970
(8,028)
'
i
F
77
1
CITY OF ROSEMEAD
Narcotics Forfeiture and Seizure
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Revenues:
Investment income
Total revenues
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance-
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 600 600
600 600
30 30
$ 630 630
1 (599)
1 (599)
1 (599)
30 -
31
78
CITY OF ROSEMEAD
'
Rosemead Housing Development Corporation
Schedule of Revenues, Expenditures and Changes in Fund Balances
- Budget and Actual
Fiscal Year ended June 30, 2009
Variance-
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
'
Revenues:
Intergovernmental
$ 421,700 421,700
415,150
(6,550)
Investment income
- -
140
140
Totalrevenues
421,700 421,700
415,290
(6,410)
'
Expenditures:
Current:
General government
694,400 694,400
720,018
(25,618)
'
0
8
25
618
Total expenditures
694,400 694,400
720,
1
,
)
(
Excess (deficiency) of
revenues over
(under) expenditures
(272,700) (272,700)
(304,728)
(32.028)
'
Other financing sources (uses):
Transfers in
250,000 250,000
250.000
Total other financing
sources (uses)
250,000 250,000
250,000
'
Change in fund balances
(22,700) (22,700)
(54,728)
(32,028)
Fund balance at beginning of year
194,911 194,911
194,911
'
Fund balance at end of year
$ 172,211 172,211
140,183
(32,028)
I
1 79
CITY OF ROSEMEAD
City Capital Projects
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
Expenditures:
Current:
Public Works
Total expenditures
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers in
Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Budgeted Amounts
Original Final
Variance-
Positive
Actual (Negative)
$ 1,647,000
1,647,000
569,950 1
,077,050
1,647,000
1,647,000
569,950 1
.077.050
(1,647,000) (1,647,000) (569.950) 1.077.050
1,177,000 1,177,000 569,950 (607,050)
1,177,000 1,177,000 569,950 (607,050)
(470,000) (470,000) - 470,000
$ (a7o,oo0) (x701000)
470,000
80
1
CITY OF ROSEMEAD
Rede
velopment Agency Debt Service Fund
Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual
'
Fiscal Year ended June 30, 2009
Variance-
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
Revenues:
Taxes
$ 6,496,000
6,496,000
5,649,896
(846,104)
Investment income
261,591
261,591
'
Other
_
606
606
Total revenues
6,496,000
6,496,000
5,912,093
(583,907)
e
Expenditur
s:
Current:
'
General government
593,000
593,000
103,885
489,115
Public safety
962,900
962,900
1,016,479
(53,579)
'
Debt service:
Principal
915,000
915,000
915,000
Interest and fiscal charges
1,531,990
1,531,990
1,531,986
4
Total expenditures
4,002,890
4,002,890
3,567,350
435,540
'
Excess (deficiency) of
revenues over (under)
expenditures
2,493,110
2,493,110
2,344,743
(148,367)
Other financing sources (uses):
Transfers out
(3,258,531)
(3.258,531)
t
Total other financing
sources (uses)
(3,258,531)
(3,258,531)
l
N
t
h
i
f
d b
2
493
110
2
493
110
913
788
406
898
3
ance
e
c
ange
n
un
a
,
,
,
,
(
,
)
,
)
(
,
Fund balance at beginning of year
3,717,698
3,717,698
3,717,698
-
'
Fund balance at end of year
$ 6,210,808
6,210,808
2,803,910
(3,406,898)
I
81
CITY OF ROSEMEAD
Redevelopment Agency Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
I
I
Revenues:
Taxes
Investment income
Total revenues
Budgeted Amounts
Original Final
$ - - 18,667 18,667
465,600 465,600 6,818 (458,782)
465,600 465,600 25,485 (440,115)
Variance- '
Positive
Actual (Negative)
t
Expenditures:
Current:
General government
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance at beginning of year
Fund balance at end of year
1,625,040
1,625,040
1,184,280
440,760
4,955,240
4,955,240
303,371
4,651,869
6,580,280
6,580,280
1,487,651
5,092,629
(6,114,680) (6,114,680) (1,462,166) 4,652,514
2,330,533 2,330,533
(388,020) (388,020)
1,942,513 1,942,513
(6,114,680) (6,114,680) 480,347 6,595,027
3,987,946 3,987,946 3,987,946
$ (2,126,734) (2,126,734) 4,468,293 6,595,027
82
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INTERNAL SERVICE FUNDS
1 The internal service funds. are used to account for goods and services provided by one City
department to other City departments on a cost reimbursements basis.
1 The City of Rosemead has the following Internal Service Funds:
1 Vehicle Replacement - To account for the accumulation and allocation of costs associated with
the repair and maintenance of City owned vehicles.
1 Technology Replacement - To account for the accumulation and allocation of costs associated
with the repair and maintenance of the City's technological equipment.
1
1
i
n
1
1
1
i
1
1
83
CITY OF ROSEMEAD
Combining Statement of Net Assets
Internal Service Funds
June 30, 2009
Vehicle Technology
Assets Replacement Replacement
Current assets:
Due from other funds $ 91,804 48,190
Total assets 91,804 48,190
Net assets
Unrestricted 91,804 48,190
Total net assets $ 91,804 48,190
Total
139,994
139,994
139,994
139,994
84
t
1
1
1
1
1
CITY OF ROSEMEAD
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets
Internal Service Funds
Year ended June 30, 2009
Vehicle Technology
Replacement Replacement
Operating revenues:
Charges for services $ 91,804 48,190
Total operating revenues 91,804 48,190
Changes in net assets 91,804 48,190
Net assets at beginning of year - -
Net assets at end of year $ 91,804 48,190
85
Total
139,994
139,994
139,994
139,994
CITY OF ROSEMEAD
Combining Statement of Cash Flows-Internal Service Funds
Year ended June 30, 2009
Vehicle Technology
Replacement Replacement Total
Net cash provided by (used for)
operating activities $
Net cash provided by (used for)
noncapital financing activities
Net cash proved by (used for) capital
and related financing activities
Net cash provided by (used for)
investing activities
Net increase (decrease) in cash
and cash equivalents
Cash and cash equivalents at
beginning of year
Cash and cash equivalents at end of year
$
Reconciliation of operating income
to net cash provided by (used for)
operating activities:
Operating income (loss)
$ 91,804 48,190 139,994
Adjustments to reconcile operating
income (loss) to net cash provided
by (used for) operating activities:.
(Increase) decrease in due from other funds
(91,804) (48,190) (139,994)
Total adjustments
(91,804) (48,190) (139,994)
Net cash provided by
operating activities $
86
1
1
Assets
Cash and investments
Total assets
Liabilities
Deposits payable
Total liabilities
CITY OF ROSEMEAD
Agency Fund
Statement of Changes in Assets and Liabilities
Fiscal Year ended June 30, 2009
Balance at
June 30, 2008 Additions
Balance at
Deletions June 30, 2009
$ 469,691 121,409 (230,543) 360,557
$ 469,691 121,409 (230,543) 360,557
$ 469,691 121,409 (230,543) 360,557
$ 469,691 121,409 (230,543) 360,557
87
STATISTICAL SECTION
This part of the City of Rosemead's Comprehensive Annual Financial Report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the government's overall
financial heath.
Contents
Pape
Financial Trends 90
These schedules contain trend information to help the reader understand how
the government's financial performance and well-being have changed over time.
Revenue Capacity 94
These schedules contain trend information to help the reader asses the
government's most significant local revenue source, the property tax.
Debt Capacity 98
These schedules present information to help the reader assess the affordability
of the government's current levels of outstanding debt and the government's
ability to issue additional debt in the future.
Demographic and Economic Information 103
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities
take place.
Operating Information 105
These schedules contain service and infrastructure data to help the reader
understand how the information in the government's financial report relates to the
services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive Annual Financial Reports for the relevant year.
88
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89
CITY OF ROSEMEAD
Net Assets by Component
Last Sin Fiscal Years
(accrual basis of accounting)
2004
2005
2006
2007
2008
2009
Governmental activities:
Invested in capital assets,
net of related debt
$ 10,4391445
12,130,249
13,345.433
10.541.606
12,981.537
11,828,993
Restricted
6,526,788
6,035,250
6,901,454
8,181,231
111443,583
13,361,249
Unrestricted
26.498.620
31,114,414
30.299115
35,293.732
27.705,715
24,882,730
Total governmental activities net assets
$ 41464.853
49.279.913
50.546.002
54.016.569
51130.835
50.071972
The City of Rosemead implemented GASB 34 for the fiscal year ended June 30,
2004. Information prior to the implementation ofGASB 34 is not available.
90 1
a
CITY OF ROSEMEAD
Changes in Net Assets
Last Six Fiscal Years
(accrual basis of accounting)
Fiscal Year
2004
2005
2006
2007
2008
2009
Expenses:
Governmental activities.
General government
$ 4,803,476
$ 4,800,168
5,629316
4,980,519
7,259,587
12,176,877
Public safety
5,797,080
6,058,824
6,065,066
6,618,779
8,043,771
9,081,719
Public works
2,058,252
3,252,252
3,403,699
6,120,563
13,550,042
6,465,355
Public health
65,583
60,828
51,286
-
-
-
'
Community services
3,121,996
2,862,328
3,221843
602,114
669,827
773,374
Community development
-
-
-
2,467,842
3,645 207
1,290,108
'
Parks and recreation
Interest expense
3,201,236
1,854,185
3,456,308
1,830,836
3,959,590
1,832,219
4,178,000
2,698,372
4,078,631
1,790,348
2,030,698
1,523,391
overnmental activities expenses
Total
20
901
808
22.321.544
24.165,019
27,666,189
39,037,413
33,341.522
g
,
,
'
Program revenues:
Governmental activities:
Charges for services:
General government
7,026.282
6,299,415
3,288,225
316,849
642,716
547,577
Public safety
726,345
984,965
900,359
1,598,159
1,547,182
1,5122475
t
Public works
3,091,146
3,760,495
4,144,733
7,600,778
11,729,725
7,581,801
Public health
-
-
-
Community services
1,691,586
1,211,615
814,754
1,403,059
166,118
858,809
Community development
-
-
-
206.303
1,484.065
621,375
Parks and recreation
287,137
266,398
337.815
36,800
36.000
Total governmental activities
program revenues
12.822,496
12,522,888
9,485,886
14,125,148
15,606,606
11.158.037
'
Net revenues (expenses):
Governmental activities
Total net revenues (expenses)
(8,079,312)
(9,798,656)
(14 679,133)
(13.541,041)
(23 430,807)
(22.183,485)
'
General revenues and other changes in net assets:
Governmental activities:
Taxes:
1
Property taxes
Sales and use taxes
3,941,383
2.865,887
4,077.332
3,518.657
3,915,980
3,525,557
9,121,682
2,501,106
13,181.837
3,747,416
12,289,177
4.589,998
Transient occupancy taxes
1,081,174
1,102,756
1.207.298
1,311,697
1,411 421
1,272,092
Othertaxes
149,737
765,215
1,076,806
713,821
949,007
761,410
Intergovernmental/ in-lieu VLF
3,165,148
2,966,002
Investment income
187,278
1,260,095
1,930,059
2,028,128
1.678,791
884.847
Motor vehicle in-lieu, unrestricted
-
1,716,656
1,290,667
856,701
254,527
195,273
Other general revenues
-
7,857
32,853
478,473
143,748
133,825
'
overnmental activities
Total
8
225
459
15,613 716
15,945222
17,011,608
21,366,747
20,125,622
g
,
,
Changes in net assets
Governmental activities
'
Total primary government
$ 146,147
$ 5,815,060
$ 1,266,089
$ 3,470,567
$ (2,064,060)
LL ,057,863)
' The City of Rosemead implemented GASB 34 for the fiscal year ended June 30, 2004.
Information prior to the implementation of GASB 34 is not available.
1
1
91
1
CITY OF ROSEMEAD
Fund Balances of Governmental Funds
Last Six Fiscal Years
(modified accrual basis of accounting)
2004
2005
2006
2007
2008
2009
General fund:
Reserved
$ 353.616
1,719.044
256.765
150,000
3.074.496
3.106,917
Unreserved
20.051506
19,896,581
22.228341
21460.545
18.633.154
16.135.102
Total general fund
$20.407.122
21.615.625
21485.106
22.610.545
21,707.650
19242,019
All other governmental funds
Reserved
$ 3,195,415
-
7,693,216
Unreserved, reported in:
Special revenue funds
5,653.208
7,336.247
6,821,660
Debt service funds
31835
2.354,835
-
Capital projects funds
6.264.457
8.433.842
6,435,798
Total all other governmental funds
$15,145,915
18,124,924
20,950,674
The City of Rosemead has elected to show only six
years of data jar this schedule.
4.947,087 9.000.561 9,000.561
6,142,833 6,140.289 9.023,487
552 691475 2.803.910
7.397.454 2.490,553 (54.323)
18.487.926 18.323.878 20.773.635
92
A
1
1
1
1
1
CITY OF ROSEMEAD
Changes in Fund Balances of Governmental Funds
Last Six Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2004
2005
2006
2007
2008
2009
Revenues:
Taxes
$ 9,041,026
$ 9,189,326
$ 9,527,384
$13,648306
$17,841,792
$17353,625
Intergovernmental
83826,909
14379,314
10,785,591
9,419,698
151716,610
10,992235
Licenses and permits
1,508,009
1,595,115
1,528,864
1,683,204
1,503,659
1,178,362
Charees for services
581,848
550.478
660,890
414375
537.430
638,244
Fines, forfeitures and penalties
589,890
857,135
753,224
437,117
641,566
565,643
Special assessments
-
-
-
789,089
687,568
736,213
Investment income
1,3727591
1,260,286
1,947,566
2,028,128
1,678,791
88047
Other
37
30316
29332
478.473
141.930
381.429
Total revenues
21.920,310
27.861,970
25,232,851
28,898,390
38,749346
32,530598
Expenditures
Current:
General government
2;965,572
3,023,192
3,790,631
4,780.837
7.356,665
11,956,179
Public safety
5,797,080
6,087,918
6,536,043
6,737,912
8,043,771
9,1147009
Public works
3,144,358
5208,142
6,064,980
8;898,768
12,116.508
4,964,867
Community services
65,583
60.828
51,286
1.419.424
669.827
783.452
Community development
3,259.505
3,424,954
3,216,935
2,6907420
3;408;691
1,0477529
Parks and recreation
3,201,236
3,383,358
3.881,469
4,249,462
4,078,631
2,030,698
Capital outlay
267639
184301
149,641
-
1,647,673
202,752
Debt service:
-
Principal
445,000
465,000
490.000
780;000
17105,000
915;000
Interest and fiscal charges
13859,747
1,836,765
1,559,114
2,512,725
1,562849
1;531,986
Payment to bond escrow agent
-
-
550,323
1,323.238
-
-
enditures
Total ex
20.764.720
23,674.458
26.290.422
33.392.786
39.994.615
32.546.472
p
Excess (deficiency) of
revenues over (under)
enditures
ex
155.590
1
4,187512
(1.052571
(4,494,396)
(1245.269)
(15.874)
p
,
Other financing sources (uses):
Transfers in
3,9055993
4,941,103
13300,319
26,183,078
2,962,087
4,078,483
Transfers out
(3,905.993)
(4,941103)
(137300,319)
(26,181078)
(2,962,087)
(4,078,483)
Proceeds of bonds
-
-
14,005,000
24,230,000
-
-
Premium on debt issued
-
-
316,830
-
-
-
Payment to bond escrow agent
-
-
9,569,028
(22,075,305)
-
-
Total other financing
sources (uses)
-
-
4,752,802
23 54,695
-
-
Net change in fund balances
$ 1,155.590
4,187,512
3,6951231
(2,339,701)
(I 245,269)
(15.874)
Debt service as a percentage of
noncapital expenditures
11.1%
9.8%
9.9%
16.6%
7.0%
7.6%
The City of Rosemead has elected to show only six vears of dam for this schedule
93
CITY OF ROSEMEAD
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(in thousands of dollars)
Fiscal Year
Ended
June 30 Secured
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
$ 1,733,311,605
1,801,399,282
1,894,448,049
2,017,936,508
2,168,666,818
2,345,083,686
2,561,631,859
2,826,876,615
3,085,354,513
3,277,256,282
Unsecured
$ 44,424,487
48,058,831
49,217,140
50,453,472
52,904,496
57,368,008
64,776,971
55,851,646
61,564,235
66,506,103
SBE
Non-Unitary
$ 1,415,275
664,802
1.632,754
2,601,128
19,367,174
20,426,612
18,555,208
19,173,832
18,883,761
18,883,761
Taxable
Assessed
Value
$1,779,151,367
1, 850,121915
1,945,297.943
2,070,991,108
2,240,938;488
2,422,878306
2,644,964;038
2,901,902.093
3,165,802; 509
3,362;646;146
Beginning with the fiscal year ended June 30, 2002, exemptions are netted directly against the
individual property categories.
NOTE:
In 1978 the voters of the State of California passed Proposition 13 which limited property
taxes to a total maximum rate of 1% based upon the assessed value of the property being
taxed. Each year, the assessed value of property may be increased by an "inflation factor"
(limited to a maximum increase of 2%). With few exceptions, property is only re-assessed
at the time that it is sold to a new owner. At that point, the new assessed value is reassessed
at the purchase price of the property sold. The assessed valuation data shown above
represents the only data currently available with respect to the actual market value of taxable
property and is subject to the limitations described above.
Source: HDL Coren & Cone and Los Angeles County Assessor's Office
Total Direct
20.62%
20.30%
21.07%
20.82%
21.36%
22.57%
21.89%
23.35%
24.57%
25.29%
94
U
I
I
I
1
k
1
1
1
I
CITY OF ROSEMEAD
Direct and Overlapping Property Tax Rates
(Rate per $100 of Taxable Value)
Last Ten Fiscal Years
Agency
Basic Lery
Detention Facilities 1987 Debts
L,A. Co. Flood Control Bonds
San Gabriel Valley Mwd Bonds
El Monte School Districts
Garvey, School Districts
Rosemead School Districts
El Monte Union High School
Los Angeles Community College
Pasadena Area Community College
Rio Hondo Community College
Montebello Unified School District
San Gabriel Unified School District
Metropolitan Water District
Total Direct & Overlapping' Tax Rates
City's Share of 1% Levy Per Prop 13 3
General Obligation Debt Rate
Redevelopment Rate °
Total Direct Rate 5
, _ jliasf 10 -Fiscal Years '
,,R..
1999/110 2000101 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 21107/08 2008/09
1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 100000 1,00000 1.00000
0.00142 0.00131 0.00113 0.00103 0.00099 0,00092 0,00080 0.00066 0.00000 0.00000
0.00176 0.00156 0.00106 0,00088 0.00047 0.00024 0.00005 0.00005 0,00000 0.00000
0.02500 0,02400 0.02400 0.02400 0.02200 0.02000 0.02000 0.02000 0.02000 0.01800
0.00000 0.04196 0.05196 0,06592 0.05072 0.07246 0.08056 0.06402 0.08067 0.09044
0.00000 0.00000 0.03118 0,05286 0.02471 0.02319 0.05221 0.05075 0.05061 0.06835
0.00000 0.00000 0.08858 000540 0.04517 0.07095 0.07515 0.05420 0.08282 0.06875
0.00000 0.00000 0.00000 0.00000 0.03573 0.03928 0.05425 0.05846 0.02820 0.05159
0.00000 0.00000 0.01600 0,01460 0.01986 0.01810 0.01430 0.02146 0,00878 0.02212
0.00000 0.00000 0.00000 0.00000 0.00681 0,00879 0.00410 0.02080 0,01972 001741
0.00000 0.00000 0.00000 0.00000 0.00000 0.02170 0.01802 0.01469 0.01370 0.02320
0.03049 0.03423 0.04370 0.03983 0.04077 0.04172 0.0705 0.06731 0.06681 0.08065
0.00000 0.00000 0.00000 0.05803 0,05224 0.05729 0.05284 0.04930 0.05742 0.09293
0.00890 0.00880 0.00770 0,00670 0.00610 0.00580 0.00520 0.00470 0.00450 0.00430
1.06758 1.11186 1.26531 1.26925 1.30556 1.38044 1.44801 1.42640 1.43323 1.53775
0.06682
0.06682
0.06682
0.06682
0.06682
0.06682
0,06682
0,06682
006682
006682
1.01209
1.01167
1.00990
1,00861
100755
1.00697
1.00604
1.00541
100450
100430
0.20615
0.20298
0.21070
0.20818
0.21361
0.22574
0.21893
0,23351
0,24566
0.25288
Notes:
'In 1978, California voters passed Proposition 13 which set the properly tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides
within. In addition to the 100% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.
' Overlapping rates are those of local and county governments that apply to property owners within the Cov Not all overlapping rates apply to all city property owners.
' City's share of I% Levy is based on the City, s share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in
tax ratio forms,
' RDA rate is based on the largest RDA tax rate area (TRA) and includes only rate(s). from indebtedness adopted prior to 1989 per California Sure statute. RDA direct and overlapping
rates are applied only to the incremental progeny values.
° Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section information.
Source'. L.A. County Assessor 1999/00 - 2008/09 Tax Rate Table and HDL Coren R Cone
95
CITY OF ROSEMEAD
Principal Property Tax Payers
Current Year and Nine Years Ago
2008/09
Taxpayer
Rosemead Place, LLC $
Walmart Real Estate Business Trust
Rosemead Hwang, LLC
AFG Investment Fund 5 LLC
General Electric Credit Auto Auctions, Inc.
420 Boyd Street LLC
Macy's California Inc.
Southern California Edison Co.
California Federal Savings & Loan
Sunshine Inn
Aespace America, Inc.
May Company Department Stores
Hsi Lai University
Chicago Title Insurance Company
Builder Square LLC
H C C Industries, Inc.
Tony & Helen Hua Trust, Et. Al.
Taxable
Assessed
Value
ank
Percent of
Total City
Taxable
Assessed
Value
44,225,721
1
1.32%
39,169,235
2
1.16%
31,570,937
3
0.94%
23,460,000
4
0.70%
20,654,488
5
0.61%
18,000,000
6
0.54%
16,053,368
7
0.48%
15,628,091
8
0.46%
13,154,503 9 0.39%
10,086,980 10 0.30%
1999/00
Percent of
Total City
Taxable Taxable
Assessed Assessed
Value Rank Value
14,863,882 2 0.84%
0.00%
9,221,467
5
0.52%
7,469,309
7
0.42%
31,629.317
1
1.78%
14,564,858
3
0.82%
11,194,858
4
0.63%
8,330,000
6
0.47%
7.110.560
8
0.40%
6,813,151
9
0.38%
6,250,000
10
0.35%
Source: Hdl Coren & Cone, Los Angeles County Assessor 2008/09 Combined Tax Rolls.
96
D
D
1
CITY OF ROSEMEAD
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal
Taxes Levied
Fiscal Year of Levy Collections in
Total Collections to Date
Year Ended
for the
Percent Subsequent
Percent
June 30
Fiscal Year
Amount
of Levy Years
Amount
of Levy
2000
$ 1,013,510
$1,013,495
100.00% -
$1,013,495
100.00%
2001
1,059,067
1,059,033
100.00% -
1,059,033
100.00%
2002
1,111,483
1,111,453
100.00% -
1,111,453
100.00%
2003
1,181,683
1,161,629
98.30% -
1,161,629
98.30%
2004
1,262,684
1,262,622
100.00% -
1,262,622
100.00%
2005
1,364,266
1,203,406
88.21% -
1,203,406
88.21%
2006
2,054,921
2,054,859
100.00% -
2,054,859
100.00%
2007
2,269,752.
2,147,626
94.62% -
2,147,626
94.62%
2008
2,442,009
2,406,199
98.53% -
2,406,199
98.53%
2009
2,569,429
2,435,807
94.80% -
2,435,807
94.80%
* Information not available.
Note: For these years the information was not available so an estimate was made to reduce the
total collections to date to 100%.
Source: HDL Coren & Cone and Los Angeles County Auditor Controller's Office
97
CITY OF ROSEMEAD
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal Year
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
Tax
Allocation
Bonds
$ 34,970,000
34,625,000
34,255,000
33,830,000
33,385,000
32,920,000
37,100,000
37,455,000
36,350,000
35,435,000
Percentage
of Personal
Income i
2.31%
2.14%
2.10%
2.00%
1.93%
1.65%
7.70%
7.30%
6.74%
6.41%
Debt
Per
Capita'
617
604
619
612
595
580
649
655
633
617
Notes: Details regarding the City's outstanding debt can be found in the notes to the
financial statements.
i These ratios are calculated using personal income and population for the prior calendar yeas
98
1
CITY OF ROSEMEAD
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Tax
Percent of
Allocation
Assessed
Per
Fiscal Year
Bonds
Value
Capita
1999/00
34,970
1.97%
617
2000/01
34,625
1.87%
604
2001/02
34,255
1.76%
619
2002/03
33,830
1.63%
612
2003/04
33,385
1.49%
595
2004/05
32,920
1.36%
580
2005/06
37,100
1.40%
649
2006/07
-37,455
1.29%
655
2007/08
36,350
1.15%
633
2008/09
35,435
1.05%
617
General bonded debt is debt payable with governmental fund resources and general
obligation bonds recorded in enterprise funds (of which, the City has none).
Assessed value has been used because the actual value of taxable property is not
readily available in the State of California.
99
CITY OF ROSEMEAD
Direct and Overlapping Governmental Activities Debt
June 30, 2009
Percentage
Gross Bonded
Applicable
Net Bonded
Debt Balance
To Citv
Debt
Overlapping Debt
' Metropolitan Water District
$ 137,096.151
0.322%
441,450
Garvey School District DS 2000 Series A
6.789,903
51.516%
3,497,886
Garvey School District DS 2000 Series B
6,344,519
51.516%
3,268,442
Garvev School District 2004 Series 2005
8.913.736
51.516%
L592,000
Garvey Sch DS 2004 Set 2006
10,999,898
51.516%
5,666.707
Garvey Sch DS 2004 Ser C
8,997,964
51.516%
41635.391
Rosemead Sch Dist DS 2000 Ser A
6,775,000
69.191%
4,687.690
Rosemead Sch Dist DS 2000 Set B
9,350.000
69.191%
6,469,359
Rosemead Sch DS 2000 Ser C
6.890.000
69.191%
4,767,260
El Monte UN HSD DS 2002 Ser A
41475,000
14.010%
626.948
El Monte Union HI DS 2002 Series B
6,580,000
14.010%
921,858
El Monte Un HSD DS 2006 Ref Bds
38.005.173
14.010%
5,324,525
El Monte Un Hi DS 2002 Set C
83.746.269
14.010%
11.732.852
L.A. CCD DS 2001 Set A
27,815.000
0.316%
87.895
L.A. CCD DS 2003 Ser B
77.040.000
0.316%
243.446
L.A. CCD DS 2003 Taxable Ser 2004B
23,385,000
0.316%
73.897
L.A. CCD DS 2001 Taxable Ser 2004A
75,105.000
0.316%
237,332
LACC DS Ref 2001 Series 2005 A
432.345.000
0.316%
L366,210
LA CCD DS 2001 2006 Series B
381000,000
0.316%
1,210.280
LA CCD DS 2003, 2006 Series C
30$500,000
0.316%
974.860
LACC DS 2001, 2008 Ser E-1
276,500.000
0.316%
873,740
LACC DS 2001, 2008 Taxable Set E-2
15.000.000
0.316%
47,400
LACC DS 2003. 2008 Set F-1
364.915.000
0.316%
1.153.131
LACC DS 2003. 2008 Taxable Ser F-2
425,000,000
0.316%
1,343.000
Pasadena Area CCD DS 2002 Series A
3,715,000
2.616%
97.184
Pasadena CCD DS 2006 Series B
581,980,000
2.616%
15,224,597
Pasadena CCD DS 2006 Ref BD Series C
20.763,399
2.616%
543.171
Montebello Unif DS 1998 Series 98
14,079,698
1.429%
201,199
Montebello Unif SO DS 98 Series 99
13,072,854
1.429%
186,811
Montebello USD DS 1998 Series 2001
11397.827
1.429%
191,455
Montebello USD DS 1998 Series 2004
14,540.273
1.429%
207.781
Montebello Unified DS 1998 Series 2002
13,618,989
1.429%
194,615
Montebello Unif DS 2004 Set 2005
27,640.000
1.429%
394,976
Montebello Unified DS 2004 Set 2008
35,000,000
1.429%
500.150
San Gabriel USD DS 2002 Series A
11,087,600
1.339%
148.463
San Gabriel USD DS 2002 Series B
6,708,892
1.339%
89.832
San Gabriel USD DS 2005 Ref Bonds
17285.000
1.339%
231,446
San Gabriel USD DS 2002 Series 2007 C
10,832,878
1.339%
145,052
San Gabriel USD DS 2008 Ser A
20,548,245
1.339%
275.141
Total Overlapping Debt -xr y ` .
- _
: 82,
-875,433
2008/09 Assessed Valuation: $2,774,190,090 After Deducting $588,456,056 Redevelopment Increment
Debt to Assessed Valutation Ratios:
Direct Debt
0.00%
Overlapping Debt
2.99%
Total Debt
2.99%
* This fund is a portion of a larger agency, and is repsonsible for debt in areas outside the city.
This report reflects debt which is being repaid through voter-approved property tax indebtedness. It excludes
mortgage revenue, tax allocation bonds. interim financing obligations, non-bonded capital lease obligations, and
certificates of participation, unless provided by the city.
Source: Hill Coren R Cone, L.A. County Assessor and Auditor Combined 2008/09 Lien Date Tax Rolls
100
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r
CITY OF ROSEMEAD
Pledged-Revenue Coverage
Last Ten Fiscal Years
(In Thousands)
Tax Allocation Bonds
Fiscal Year
Ended
Tax
Debt Service
June 30
Increment
Principal
Interest
Coverage
2000
2,990;564
330,000
13951,663
1.31
2001
21945;877
3453000
1,932,853
1.29
2002
3,197,754
370,000
1,912,843
1.40
2003
3,105,416
425,000
1,891,273
1.34
2004
3,376,579
445,000
1,870,873
1.46
2005
3,494,330
465,000
1,836,765
1.52
2006
3,310,295
490.000
1.559,114
1.62
2007
4,029,714
780,000
1,505,781
1.76
2008
6,219,884
1,105,000
1,567,849
2.33
2009
5,649,896
915,000
1,531,987
2.31
Note: Details regarding the city's outstanding debt can be found in the notes to the financial
statements. Operating expenses do not include interest or depreciation expenses.
102
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1
CITY OF ROSEMEAD
Demographic and Economic Statistics
Last Ten Calendar Years
Per
Personal Capita Unemployment
Fiscal Population Income Personal Rate
Year (1) (in thousands)( 2) Income (2) (3)
1999/00
57,328
1,621,007
28,276
5.40%
2000/01
55,351
1,634,072
29,522
5.90%
2001/02
55,289
1,692,452
30,611
6.10%
2002/03
56,065
1,727,026
30,804
6.80%
2003/04
56,710
1,991,372
35,115
6.00%
2004/05
57,189
482,011
36,746
4.50%
2005/06
57,144
513,123
39,011
4.60%
2006/07
57,427
539,163
41,875
4.90%
2007/08
57,422
552,450
42,916
4.47%
2008/09
57,594
N/A
N/A
11.10%
Sources: (1) California State Department of Finance
(2) U.S. Department of Commerce - Bureau of Economic Analysis
(3) State of California Employment Development Department (data shown
is for the County)
103
CITY OF ROSEMEAD
Principal Employers
Current Year and Nine Years Ago
2009
2000 *
Percent of
Percent of
Number of
Total
Number of Total
Employer
Employees
Employment i
Employees Employment
Southern California Edison
1
4,000
16.26%
0.00%
Garvey School District
2
953
3.87%
0.00%
Panda Restaurant Group, Inc.
3
400
1.63%
- 0.00%
Wal-Mart
4
420
1.71%
- 0.00%
Rosemead School District
5
337
1.37%
- 0.00%
Hemetic Seal Corporation
6
130
0.53%
- 0.00%
Irish Construction
7
75
0.30%
- 0.00%
Target
8
200
0.81%
- 0.00%
Marge Carson, Inc.
9
80
0.33%
- 0.00%
Don Bosco Tech
10
90
0.37%
- 0.00%
Double Tree
11
90
0.37%
- 0.00%
Based upon Employment Development Department's estimate of 24,900 residents employed in 2008-09
* Information for 2000 is not available.
Source: City of Rosemead and Rosemead Chamber of Commerce
104
0
CITY OF ROSEMEAD
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Full-Time and Part-time Employees as of June 30
Function
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
General government
16
16
19
16
14
15
18
17
19
16
Public safety 1
25
19
16
23
22
17
23
22
34
39
Community
development
8
12
6
5
6
6
6
11
23
18
Parks and recreation
100
101
107
117
97
94
103
101
103
135
Total
149
148
148
161
139
132
150
151
179
208
The City of Rosemead contracts with the Los Angeles County Sheriffs Department for all police services
with the exception of parking control and crossing guards which are provided by City personnel.
The City of Rosemead is part of the Los Angeles County Fire Protection District which provides fire fighting,
fire prevention; and plan check services for the City.
105
CITY OF ROSEMEAD
Operating Indicators
by Function
Last Ten Fiscal Years
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Police:
Arrests
1,292
1,310
1,299
1,102
1,081
1,230
1,315
1,786
1,506
1,478
Parking citations issued
n/a
n/a
n/a
n/a
14,676
18,357
15,176
13,210
11,766
10,517
Fire:
Number of emergency calls
n/a
2,634
2,809
2,728
2,733
2,800
2,868
2,994
3,094
1,834
Inspections
117
117
117
117
117
117
117
117
2,518
2,093
Public works:
Street resurfacing (miles)
4.9
-
1.7
-
1.3
-
1.3
2.5
1.1
1.1
Parks and recreation:
Number of recreation classes
400
400
400
420
450
530
720
775
484
397
Number of facility rentals
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
540
453
Source: City of Rosemead
106
1
CITY OF ROSEMEAD
Capital Asset Statistics
by Function
Last Ten Fiscal Years
Fiscal Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Public Safety:
Sheriff stations
I
I
I
I
I
I
I
I
I
I
Fire:
Fire stations
2
2
2
2
2
2
2
2
2
2
Public works:
Streets (miles)
76.80
76.80
76.80
76.80
76.80
76.80
76.80
76.80
77.55
77.55
Strectlights
2,483
2,571
2,506
2,700
2,700
2,702
2,705
2,706
2,712
2,712
Traffic signals
39
39
39
39
39
39
39
41
42
42
Parks and recreation:
Parks
10
10
10
10
10
10
10
10
10
10
Community centers
2
2
2
2
2
2
2
2
2
2
Source: City of Rosemead
107
(This page intentionally left blank)
108
Rosemead City Hall
8838 E. Valley Boulevard Rosemead, CA 91770
Telephone: (626) 569-2100
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I
ROSEMEAD COMMUNITY DEVELOPMENT
COMMISSION
FINANCIAL STATEMENTS
Fiscal Year Ended June 30, 2009
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
1
FINANCIAL STATEMENTS
' Fiscal Year Ended June 30, 2009
TABLE OF CONTENTS
1
' INDEPENDENT AUDITORS' REPORT
1 FINANCIAL STATEMENTS
Government-wide Financial Statements
' Statement of Net Assets
Statement of Activities
Fund Financial Statements
Balance Sheet - Governmental Funds
' Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Assets
Statement of Revenues, Expenditures and Changes in Fund
' Balances - Governmental Funds
Reconciliation of Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
' Statement of Activities
Notes to the Basic Financial Statements
' REQUIRED SUPPLEMENTARY INFORMATION
' Notes to Required Supplementary Information
Low-Moderate Income Housing Set-Aside Schedule of Revenues,
Expenditures and Changes in Fund Balances - Budget and Actual
' Rosemead Housing Development Corporation Schedule of Revenues,
Expenditures and Changes in Fund Balances - Budget and Actual
' Supplementary Information:
Computation of Low/Moderate Housing Fund - Excess Surplus
' Report on Compliance and Other Matters and on Internal Control Over
Financial Reporting Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
' Schedule of Findings and Recommendations
1
Paqe
3
4
8
25
26
27
28
29
31
1
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Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-474-2020 ph
949-2635520 fx
www.mhm-pc.com
Board of Directors
Rosemead Community Development Commission
Rosemead, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the governmental activities and
each major fund of the Rosemead Community Development Commission (the Commission), a
component unit of the City of Rosemead, California, as of and for the year ended June 30,
2009, which collectively comprise of the Commission's basic financial -statements as listed in the
table of contents. These financial statements are the responsibility of the Commission's
management. Our responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
1 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
1 management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
1
1
1
i
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities and each major fund of the
Commission as of June 30, 2009, and the respective changes in financial position thereof for
the year then ended, in conformity with accounting principles generally accepted in the United
States of America.
The Commission has not presented management's discussion and analysis which according to
accounting principles generally accepted in the United States of America is necessary to
suoDlement. althouah not required to be Dart of. the basic financial statements.
The information identified in the accompanying table of contents as required supplementary
information is not a required part of the basic financial statements but is 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.
1
I
' Board of Directors
Rosemead Community Development Commission
' Page Two
' Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Rosemead Community Development Commission's basic financial
statements. The supplementary information is presented for purposes of additional analysis and
is not a required part of the basic financial statements. The supplementary information has
' been subjected to the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
t In accordance with Government Auditing Standards, we have also issued our report dated
December 18, 2009 on our consideration of the Commission's internal 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 assessing the results of our audit.
/Vat 1a 1ncl*^1 P
' Irvine, California
December 18, 2009
1
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
' Statement of Net Assets
June 30, 2009
1
[1
I
Assets
Cash and investments (note 2)
Receivables:
Accounts
Accrued interest
Due from City of Rosemead
Land held for resale
Deferred charges
Capital assets, net (note 5)
Land
Other capital assets, net
Total assets
Liabilities and Net Assets
Liabilities:
Accounts payable
Deposits payable
Due to City of Rosemead
Accrued interest payable
Noncurrent liabilities (note 6):
Due within one year
Due in more than one year
Total liabilities
Net assets:
Invested in capital assets,
net of related debt
Restricted for:
Low-moderate income housing
Unrestricted
Total net assets
See accompanying notes to the basic financial statements.
3
$ 12,277,260
118,239
52,025
351
4,407,616
453,207
2,425,898
13,928,331
33,662,927
459,574
34,527
485,082
618,346
964,802
37,225,542
39, 787, 873
9,046,660
5,966,004
(21,137,610)
$ (6,124,946)
1
1
1
1
Governmental activities:
Community development
Interest. expense
Total governmental
activities
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Statement of Activities
Fiscal Year ended June 30, 2009
Program Revenues
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
$ 4,533,007
1,523,391
409,139
$ 6,056,398 409,139
General revenues:
Taxes:
Property taxes
Investment income
Other general revenues
Total general revenues
Change in net assets
Net assets at beginning of year
Net assets at end of year
See accompanying notes to the basic financial statements.
4
(4,123, 868)
(1, 523, 391)
(5,647,259)
5,668,563
.291,192
6,617
5,966,372
319,113
(6,444,059)
$ (6,124,946)
I Due from City of Rosemead
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Balance Sheet - Governmental Funds
June 30, 2009
Assets:
Cash and investments
Receivables:
Accounts
Accrued interest
Land held for resale
Advances to other funds (note 4)
Total assets
' Liabilities and Fund Balance
Liabilities:
Accounts payable
' Deposits payable
Due to City of Rosemead
Advances from other funds (note 4)
' Total liabilities
I
Fund balance:
Reserved for:
Encumbrances
Land held for resale
Advances to other funds
Unreserved, reported in:
Special revenue funds
Debt service funds
Capital projects funds
Total fund balance
Total liabilities and fund balance
Low-Moderate
Rosemead
Income
Housing
Housing
Development
Debt
Capital
Set-Aside
Corporation
Service
Projects
Total
$ 1,499,153
512,628
7,551,374
2,714,105
12,277,260
-
13,682
104,557
-
118,239
1,773
26,951
23,301
52,025
-
-
351
351
-
4,407,616
4,407,616
4,477,945
-
-
4,477,945
$ 5,978,871
526,310
.7,682,882
7,145,373
21,333,436
$ 2,615 - 401,029 55,930 459,574
- 34,527 - - 34,527
10,252 351,600 - 123,230 485,082
- - 4,477,945 - 4,477,945
12,867 386,127 4,878,974 179,160 5,457,128
115,000 115,000
4,407,616 4,407,616
4,477,945
- 4,477,945
1,488,059
140,183 - 1,628,242
-
- 2,803,908 - 2,803,908
- 2,443,597 2,443,597
5,966,004
140,183 2,803,908 6,966,213 15,876,308
$ 5,978,871
526,310 7,682,882 7,145,373 21,333,436
See accompanying notes to the basic financial statements.
5
I ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
'
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
'
June 30, 2009
Fund balances of governmental funds
$ 15,876,308
'
f
Amounts reported for governmental activities in the statement o
net assets are different because:
'
Capital assets, net of depreciation, have not been included
as financial resources in governmental fund activity.
'
Capital assets
22,246,786
Accumulated depreciation
(5,892,557)
'
Long-term debt has not been included in the governmental fund activity.
Advances from City
(2,497,920)
Bonds payable
(35,435,000)
'
Unamortized bond premiums
(257,424)
Cost associated with the issuance of debt are capitalized and amortized in the
statement of net assets and expensed in the governmental funds.
Deferred charges
453,207
'
Accrued interest payable for the current portion of interest due on
bonds payable has not been reported in the governmental funds.
(618,346)
'
Net assets of governmental activities
(6,124,946)
I
' See accompanying notes to the basic financial statements.
' 6
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
' Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
Fiscal Year ended June 30, 2009
Low-Moderate Rosemead
Income
Housing
Housing
Development
Debt
Capital
Set-Aside
Corporation
Service
Projects
Total
'
Revenues:
Taxes
$
5,649,896
18,667
5,668,563
Rental income
-
409,139
-
-
409,139
'
Investment income
22,643
140
261,591
6,818
291,192
Other
6,011
606
6,617
Total revenues
22,643
415,290
5,912,093
25,485
6,375.511
'
Expenditures:
Current:
General government
-
720,018
104,396
1,183,769
2,008,183
'
Public safety
1,016,479
1,016,479
Public works
-
-
-
303,371
303,371
Community development
256,220
-
-
256,220
'
Debt service:
Principal
-
-
915,000
915,000
Interest and fiscal charges
-
1,531,986
-
1,531,986
'
Total expenditures
256,220
720,018
3,567,861
1,487,140
6,031,239
'
Excess (deficiency) of
revenues over (under)
expenditures
(233,577)
(304,728)
2,344,232
(1,461,655)
344,272
'
Other financing sources (uses):
Transfers in (note 4)
928,000
250,000
2,330,533
3,508,533
Transfers out (note 4)
(250,000)
-
(3,258,533)
-
(3,508,533)
Transfers to City of Rosemead
-
(388,020)
(388,020)
'
Total other financing
sources (uses)
678,000
250,000
(3,258,533)
1,942,513
(388,020)
'
Change in fund balances
444,423
(54,728)
(914,301)
480,858
(43,748)
Fund balances at beginning
of year
5,521,581
194,911
3,718,209
6,485,355
15,920,056
Fund balances at end of year
$ 5,966,004
140,183
2,803,908
6,966,213
15,876,308
'
'
See accompanying notes to the basic finan
cial statements.
1
7
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
' Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures,
' and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Fiscal Year ended June 30, 2009
' Net changes in fund balances of governmental funds
Amounts reported for governmental activities in the statement of
' activities is different because:
Governmental funds report capital outlay as expenditures. However, in
' the statement of activities, the cost of those assets is'allocated over their
estimated useful lives as depreciation expense. This is the amount by which
capital outlays exceeded depreciation in the current period.
' Depreciation expense
Bond issuance costs, premiums, discounts, and similar items are recorded
as expenditures in governmental funds when debt is first issued, whereas
these amounts are deferred and amortized in the statement of activities.
This amount is the net offset of the differences.
' Repayment of bond principal is an expenditure in the governmental funds,
' but the repayment reduces long-term liabilities in the statement of net assets.
The statement of net assets includes accrued interest on long term debt.
' Change in net assets of governmental activities
1 See accompanying notes to the basic financial statements.
I
8
$ (43,748)
(560,734)
29,760
915,000
(21,165)
$ 319,113
1
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' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' Fiscal Year ended June 30, 2009
(1) Summary of Significant Accounting Policies
(a) Reporting Entity
' The Rosemead Redevelopment Agency was established in June 1972 pursuant
to State of California Health and Safety Code Section'33000 entitled Community
Redevelopment Law. The Agency's name was changed to the Rosemead
1 Community Development Commission (the Commission) in January 2002. Its
purpose is to finance street, park and utility improvements. It also acquires and
constructs major capital facilities all within the Rosemead Project Area No. 1. The
Commission is a blended component unit of the City of Rosemead, California,
' (the City) and is included in the basic financial statements of the City. The
financial statements contain information for the Commission only. The City's
financial statements can be obtained from the Finance Department of the City.
Governmental Accounting Standards Board (GASB) Statement No. 14. The
Financial Reporting Entity, defines the reporting entity as the primary government
' and those component units for which the primary government is, or has the
potential to be, financially accountable. Financial accountability is defined as
appointment of a voting majority of the component unit's Board and either (a) the
' primary government has the ability to impose its will or (b) the possibility that the
component unit will provide a financial benefit to, or impose a financial burden
on, the primary government.
' Based upon the above criteria, the Rosemead Housing Development Corporation
(the Corporation), is a blended component unit of the Commission as the
Commission's governing board serves as the governing board of the
' Corporation.
Since the City Council of the City also serves as the Board of Directors of the
' Commission, the City, in effect, has the ability to influence and control
operations. Therefore, the City has oversight responsibility for the Commission.
Accordingly, the Commission is a blended component unit of the City.
' (b) Basis of Accounting and Measurement Focus
' The basic financial statements of the Commission are composed of the following:
Government-wide financial statements
Fund financial statements
' . Notes to the basic financial statements
1
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
1 (1)
1
I
(Continued)
Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Government-wide Financial Statements
Government-wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental and business-type activities of
the primary government (including its blended component units); as well as its
discreetly presented component units. The Community Development
Commission of the City of Rosemead has no business-type activities or
discretely presented component units. Eliminations have been made in the
Statement of Activities so that certain allocated expenses are recorded only once
(by the function to which they were allocated). However, general government
expenses have not been allocated as indirect expenses to the various functions
of the Commission.
' Government-wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long-term)
' economic resources and obligations of the reporting government are reported in
the government-wide financial statements. Basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the
' financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange-like
transactions are recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from nonexchange
' transaction are recognized in accordance with the requirements of GASB
Statement No. 33.
' Program revenues include charges for services and payments made by parties
outside of the reporting government's citizenry if that money is restricted to a
particular program. Program revenues are netted with program expenses in the
' statement of activities to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the
government-wide financial statements, rather than reported as expenditure.
Proceeds of long-term debt are recorded as a liability in the government-wide
financial statements, rather than as other financing source. Amounts paid to
reduce long-term indebtedness of the reporting government are reported as a
1 reduction of the related liability, rather than as an expenditure
1 10
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Fund Financial Statements
The underlying accounting system of the Commission is organized and operated
on the basis of separate funds, each of which is considered to be a separate
accounting entity. The operations of each fund are accounted for with a separate
set of self-balancing accounts that comprise its assets, liabilities, fund equity,
revenues and expenditures or expenses, as appropriate. Governmental
resources are allocated to and accounted for in individual funds based upon the
purposes for which they are to be spent and the means by which spending
activities are controlled.
Fund financial statements for the primary government's governmental,
proprietary, and fiduciary funds are presented after the government-wide
financial statements. These statements display information about major funds
individually and nonmajor funds in the aggregate for governmental and enterprise
funds. Fiduciary statements include financial information for fiduciary funds and
similar component units. Fiduciary funds primarily represent assets held by the
Commission in a custodial capacity for other individuals or organizations. The
Commission has no enterprise funds or fiduciary funds.
Governmental Funds
In the fund financial statements, governmental funds and agency funds are
presented using the modified-accrual basis of accounting. Their revenues are
recognized when they become measurable and available as net current assets.
Measurable means that the amounts can be estimated, or otherwise determined.
Available means that the amounts were collected during the reporting period or
soon enough thereafter to be available to finance the expenditures accrued for
the reporting period. The Commission uses a sixty day availability period.
Revenue recognition is subject to the measurable and available criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
recognized as revenues in the period in which the underlying exchange
transaction upon which they are based takes place. Imposed non-exchange
transactions are recognized as revenues in the period for which they were
imposed. If the period of use is not specified, they are recognized as revenues
when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government-mandated and voluntary non-
exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
11
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
' (1) Summary of Significant Accounting Policies, (Continued)
' (b) Basis of Accounting and Measurement Focus (Continued)
Governmental Funds. (Continued)
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
' assets and current liabilities are generally included on their balance sheets. The
reported fund balance (net current assets) is considered to be a measure of
"available spendable resources." Governmental fund operating statements
' present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable
resources" during a period.
' Non-current portions of long-term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not
be considered "available spendable resources," since they do not represent net.
current assets. Recognition of governmental fund type revenues represented by
' noncurrent receivables are deferred until they become current receivables.
Noncurrent portions of other long-term receivables are offset by fund balance
reserve accounts.
' Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities.
Since they do not affect net current assets, such long-term amounts are not
' recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the
' year that resources were expended, rather than as fund assets. The proceeds of
long-term debt are recorded as an other financing source rather than as a fund
liability. Amounts paid to reduce long-term indebtedness are reported as fund
expenditures.
' When both restricted and unrestricted resources are combined in a fund,
expenses are considered to be paid first from restricted resources, and then from
' unrestricted resources.
1 12
t ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
' (1) Summary of Significant Accounting Policies, (Continued)
' (c) Property Taxes
Real property taxes are levied for the period from July 1 to June 30 against
property owners of record on March 1. The taxes are due in two installments, on
December 10 and April 10, and become delinquent after December 10 and April
10, respectively. 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 sixty days of the end of the fiscal year in the fund
financial statements.
t (d) Maior Funds
'
The Commission reports the following major governmental funds:
Low-Moderate Income Housing Set-Aside Fund - Accounts for the 20% of gross
property tax increment revenue received by the Commission to fund future
'
projects involving the replacement or rehabilitation of low- and moderate-income
housing within City limits.
'
Rosemead Housing Development Corporation (the Corporation) - Accounts for
the construction and financing of low- and moderate-income housing.
'
Debt Service Fund - Accounts for the accumulation of resources for the payment
of principal, interest and related costs associated with all long-term debt of the
Commission.
t
Capital Proiects Fund - Accounts for the 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 Commission.
(e) 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
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.
Changes in fair value that occur during a fiscal year are recognized as
investment income reported for that fiscal year. Investment income includes
interest earnings, changes in fair value and any gains or losses realized upon the
liquidation, maturity or sale of investments.
'
13
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
' (1) Summary of Significant Accounting Policies (Continued)
' (f) 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
government-wide financial statements. Capital assets are defined by the
Commission 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 do not add to the value of an
asset or materially extend an asset's useful life are not capitalized. Construction
in progress costs are transferred to their respective fixed 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:
' Buildings 50 years
Improvements other than buildings 15 years
Furniture and office equipment 7 years
Streets 30 years
Sidewalks 40 years
Vehicles 5 years
' (g) Long-term Obligations
' Long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities statement of net assets. Bond premiums,
discounts and issuance costs are deferred and amortized over the life of the
' bonds. 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.
' 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.
' 14
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1
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
Summary of Significant Accounting Policies, (Continued)
(h) 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.
(i) Low-Moderate Income Housing Set-Aside
On October 9, 1991 the Commission prepaid its housing obligation in the amount
of $6,813,850 from proceeds from its 1987 tax allocation notes. This pre-
payment was restructured in 1993 along with the 1993 series tax allocation
bonds. As a result, the Commission's housing obligation has been reduced by
$469,142 per year until the 2021-22 fiscal year.
Q) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Cash and Investments
Cash and investments as of June 30, 2009 are classified in the accompanying financial
statements as follows:
Statement of net assets:
Cash and investments $12,277,260
Total cash and investments $12277 260
Cash and investments as of June 30, 2009 consist of the following:
Deposits with financial institutions $ 771,091
Investments 11,506,169
Total cash and investments $12.277.260
15
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Investments Authorized by the California Government Code and the City's Investment
Policy
The table below identifies the investment types that are authorized for the City by the
California Government Code and the City's investment policy. The table also identifies
certain provisions of the California Government Code (or the City's investment policy, if
more restrictive) that address interest rate risk, credit risk, and concentration of credit
risk. This table does not address investments of debt proceeds held by bond trustee that
are governed by the provisions of debt agreements of the City, rather than the general
provisions of the California Government Code or the City's investment policy.
Authorized by
Maximum
Maximum
Investment Types
Investment
Maximum
Percentage
Investment
Authorized by State Law
Policy
Maturi *
of Portfolio*
In One Issuer*
Local Agency Bonds
No
5 years
None
None
U.S. Treasury Obligations
Yes
5 years
None
None
U.S. Agency Securities
Yes
5 years
None
None
Banker's Acceptances
Yes
180 days
40%
30%
Commercial Paper
Yes
270 days
25%
10%
Negotiable Certificates of Deposit
Yes
1 year
30%
None
Repurchase Agreements
No
1 year
None
None
Reverse Repurchase Agreements
No
92 days
20% of base value None
Medium-Term Notes
Yes
5 years
10%
None
Mutual Funds
Yes
N/A
20%
10%
Money Market Mutual Funds
Yes
N/A
20%
10%
Mortgage Pass-Through Securities
No
5 years
20%
None
County Pooled Investment Funds
No
N/A
None
None
Local Agency Investment Fund
Yes
N/A
None
None
JPA Pools (other investment pools)
No
N/A
None
None
* Based on state law requirements or investment policy requirements, whichever is more
restrictive.
16
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
' Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt
' agreements, rather than the general provisions of the California Government Code or the
City's investment policy. The table below identifies the investment types that are
authorized for investments held by bond trustee. The table also identifies certain
' provisions of these debt agreements that address interest rate risk, credit risk, and
concentration of credit risk.
Maximum Maximum
' Authorized Maximum Percentage Investment
Investment Type Maturity Allowed In One Issuer
Local Agency Bonds
None
None
None
'
U.S. Treasury Obligations
None
None
None
U.S. Agency Securities
None
None
None
Banker's Acceptances
1 year
None
None
'
Commercial Paper
1 year
None
10%
Repurchase Agreements
30 days
None
None
Money Market Mutual Funds
N/A
20%
10%
Local Agency Investment Fund
N/A
None
None
'
Investment Agreements
N/A
None
None
Certificates of Deposits
1 year
None
None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the greater
the sensitivity of its fair value to changes in market interest rates. One of the ways that the
' Agency manages its exposure to interest rate risk is by purchasing a combination of
shorter term and longer term investments and by timing cash flows from maturities so that
a portion of the portfolio is maturing or coming close to maturity evenly over time as
' necessary to provide the cash flow and liquidity needed for operations.
1
1 17
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
' (2) Cash and Investments, (Continued)
' Disclosures Relating to Interest Rate Risk, (Continued)
Information about the sensitivity of the fair values of the Agency's investments (including
' investments held by bond trustee) to market interest rate fluctuations is provided by the
following table that shows the distribution of the Agency's investments by maturity:
' Remaining Maturing (in Months)
12 Months 13 to 24 25 to 60 More Than
' Investment Type Or Less Months Months 60 Months
State investment pool $10,363,111 10,363,111
Held by bond trustee:
' Money market fund 4 4 -
Investment agreement 1,143,054 1,143,054
' Total $j1-5D6-162 10.363.115 1 143 054
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to
the holder of the investment. This is measured by the assignment of a rating by a
' nationally recognized statistical rating organization. Presented below is the minimum rating
required by (where applicable) the California Government Code, the City's investment
policy, or debt agreements, and the actual rating as of year end for each investment type.
' Minimum Exempt Rating as of Year End
Legal From Not
' Investment Type Rating Disclosure AAA Rated
State investment pool $10,363,111 N/A - 10,363,111
' Held by bond trustee:
Money market fund 4 AAA 4
Investment agreement 1,143,054 N/A - 1,143,054
' Total $11.506.169 - 4 11.506.165
1 18
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
(2) Cash and Investments (Continued)
' Concentration of Credit Risk
The investment policy contains no limitations on the amount that can be invested in any
' one issuer beyond that stipulated by the California Government Code. Investments in any
one issuer (other than U.S. Treasury securities, mutual funds, and external investment
pools) that represent 5% or more of total Agency investments are as follows:
' Issuer Investment Tvpe Reported Amount
AIG Match Funding Corp Investment agreement $ 1,143,054
Custodial Credit Risk
' Custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be able
to recover collateral securities that are in the possession of an outside party. The custodial
credit risk for investments is the risk that, in the event of the failure of the counterparty
' (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of
its investment or collateral securities that are in the possession of another party. The
California Government Code and the 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 Agency deposits by pledging first trust deed mortgage notes having a
value of 150% of the secured public deposits. As of June 30, 2009, $115,620 of the
Corporation's deposits with financial institutions in excess of federal depository insurance
' limits were held in uncollateralized accounts
For investments identified herein as held by bond trustee, the bond trustee selects the
investment under the terms of the applicable trust agreement, acquires the investment,
and holds the investment on behalf of the reporting government.
Investment in State Investment Pool
The Agency is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by the California Government Code under the oversight of the Treasurer of the
' State of California. The fair value of the Agency's investment in this pool is reported in the
accompanying financial statements at amounts based upon the Agency'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.
1 19
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' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
1 (3) Operating Lease
' The Corporation entered into a 55-year lease agreement with the City for the use of the
Angelus Senior Housing facility for $60,000 annually, expiring June 2047. Total lease
commitments remaining are $2,280,000 for the Angelus Senior Housing facility at June
30, 2009. The Corporation also entered into a 55-year lease agreement with the City
for use of the Garvey Senior Housing facility for $72,000 annually, expiring November
2057. Total lease commitments remaining are $3,486,000 for the Garvey Senior
' Housing facility at June 30, 2009. The Corporation paid $60,000 and $72,000 in lease
payments to the City during the year ended June 30, 2009 for the Angelus and Garvey
Senior Housing facilities, respectively.
(4) Interfund Activity
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Noncurrent Interfund Receivable and Payable Balances
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, 2009, the accumulated set-aside amount not yet funded was
approximately $4,477,945. As required by law, the Commission devised a plan to fund
the accumulating amount.
Interfund transfers were as follows for the year ended June 30, 2009:
Transfer In
Low-Moderate Income
Housing Set-Aside
Redevelopment Agency
Capital Projects Fund
Rosemead Housing
Development Corporation
Transfer Out
Amount
Redevelopment Agency
Debt Service Fund
$ 928,000 (A)
Redevelopment Agency
Debt Service Fund
2,330,533 (B)
Low-Moderate Income
Housing Set-Aside
250,000
Total
$ 3 508 533
The following describes the significant transfers in and transfers out included in the
financial statements:
(A) To record the low and moderate income housing set-aside for the year ended
June 30, 2009.
(B) To transfer remaining tax increment net of pass through payments, 20% set
aside and debt service payments to the Capital Projects Fund.
20
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
(5) Capital Assets
Capital asset activity for the year ended June 30, 2009 is as follows:
Balance at Balance at
June 30, 2008 Increases Decreases June 30, 2009
Governmental activities:
Capital assets not being
depreciated:
Land
$ 2,425,898
2,425,898
Total capital assets, not
being depreciated
2,425,898
2,425,898
Capital assets being depreciated:
Buildings and improvements
18,273,719
- 18,273,719
Vehicles
93,280
- 93,280
Furniture and office equipment
1,453,889
1,453,889
Total capital assets being
depreciated
19,820,888
- 19,820,888
Less accumulated depreciation for:
Buildings and improvements
(3,947,296)
(468,480)
- (4,415,776)
Vehicles
(70,421)
(18,655)
- (89,076)
Furniture and office equipment
(1,314,106)
7( 3,599)
(1,387,705)
Total accumulated
depreciation
(5,331,823)
56( 0,734)
(5,892,557)
Total capital assets being
depreciated, net
14,489,065
56( 0,734)
13,928,331
Governmental activities
capital assets, net
$16.914.963
)
16 354 229
Depreciation expense was charged entirely to the community development function
of the Commission for the year ended June 30, 2009.
21
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
(6) Long-Term Debt
Long-term debt consists of the following at June 30, 2009:
' Balance at Balance at Due within Due Beyond
June 30. 2008 Additions Reductions June 30. 2009 One Year One Year
Governmental activities:
' Advances from City $ 2,497,920 - 2,497,920 - 2,497,920
Tax allocation bonds,
Series 2006A 12,415,000 845,000 11,570,000 870,000 10,700,000
' Tax allocation bonds,
Series 2006B 23,935,000 70,000 23,865,000 75,000 23,790,000
Unamortized bond
premiums 277,226 19,802 257,424 19,802 237,622
' $39.125.146 9a4 $ 2 38.190.344 96 $42 37 225 542
' Advances from City
In November 2007 the City of Rosemead's General Fund advanced to the Rosemead
Community Development Commission $2,497,920 at an interest rate of 5.25% to be
paid back over 20 years. Accrued interest is payable in annual installments of
$131,141 beginning on September 28, 2008, and continuing until September 28, 2027,
at which time the remaining principal and interest shall be due in full. The amount
outstanding at June 30, 2009 is $2,497,920.
Tax Allocation Bonds. Series 2006A
On March 9, 2006, the Commission issued tax allocation bonds in the amount of
$14,005,000 (Series 2006A) to: (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 purchased 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. Bond premiums are amortized over the
life of the bonds. The unamortized balance as of June 30, 2009 was $257,424. A
surety bond has been acquired to satisfy the reserve requirements. As of June 30,
' 2009 the outstanding balance was $11,570,000.
Tax Allocation Bonds, Series 2006B
' In December 2006, the Commission issued $24,230,000 in Project Area No. 1 Tax
Allocation Bonds. The bonds mature in amounts ranging from $70,000 to $1,430,000
with interest rates ranging from 3.25% to 4.25% through October 1, 2025. The net
proceeds were used to refund the remaining $23,095,000 amount outstanding on the
1993 Tax Allocation Bonds. The securities were deposited in an irrevocable trust with
an escrow agent to provide for all future debt service payments on the 1993 Bonds. As
a result, the entire 1993 Bonds are considered to be defeased and the liability for those
bonds has been removed from the government-wide financial statements.
1 22
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes.to the Basic Financial Statements
' (Continued)
(6) Long-Term Debt (Continued)
'
A surety bond has been acquired to satisfy the reserve requirements.
As of June 30,
2009, $23,865,000 of the bonds are outstanding.
'
At June 30, 2009, debt service requirements to maturity fo
r governmenta
l activities long-
term debt are as follows:
'
2006A Tax Allocation Bonds
2006B Tax All
ocation Bonds
Year Ending June 30
Principal Interest
Principal
Interest
'
2010
$ 870,000 478,131
75,000
1,037,674
2011
900,000 449,856
75,000
1,035,049
2012
930,000 419,481
80,000
1,032,336
2013
965,000 386,931
80,000
1,029,536
'
2014
1,000,000 353,156
85,000
1,026,649
2015-2019
5,720,000 1,032,780
460,000
5,088,680
2020-2024
1,185,000 124,223
6,110,000
4,437,556
2025-2029
7,510,000
2,992,678
2030-2034
9,390,000
1,084,064
111 570.000 3,244,558
23-a6-5000
18 764 222
1 (7) Risk Management
' The Commission is exposed to various risks of loss related to torts; thefts of, damage to
and destruction of assets; errors and omissions; and natural disasters. The Commission,
through the City, carries commercial liability insurance coverage. The Commission
carries no insurance coverage for natural disasters. Since the Commission does not
' have any employees (it uses employees from the City), it is not liable for injury to
employees, workers' compensation, or employee health and accident insurance. The
City has had no reductions in insurance coverage, nor did the City have any settlements
I that were in excess of insurance coverage in any of the three preceding years
1 23
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Required Supplementary Information
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(1)
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(2)
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to Required Supplementary Information
Fiscal Year Ended June 30, 2009
Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally
accepted in the United States of America for the governmental fund. All annual
appropriations lapse at fiscal year end.
On or before the last day in March of each year, the Commission submits a request for
appropriations to the City Manager so that a budget may be prepared. Before the first
Thursday of June 30, the proposed budget is presented to the Commission's governing
board for review. The governing board 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
Commission's department heads, with approval of the Finance Director and City
Manager, may make transfers of appropriations within a department and between
departments within a fund. Transfers of appropriations between funds must be approved
by the governing board. The legal level of budgetary control (i.e., the level at which
expenditures may not legally exceed appropriations) is the fund level. The governing
board made several supplemental budgetary appropriations throughout the year. The
supplemental budgetary appropriations made in the governmental funds are detailed in
the required supplementary information.
Encumbrance accounting is employed in the governmental funds. Encumbrances (e.g.,
purchase orders, contracts) outstanding at each year end are reported as reservations of
fund balances and do not constitute expenditures or liabilities because the commitments
will be re-appropriated and honored during the subsequent year.
Excess Expenditures Over Appropriations
Expenditures exceeded appropriations in the following funds:
Fund Budget
Rosemead Housing
Development Corporation $ 694,400
25
Actual Variance
720,018 (25,618)
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Low-Moderate Income Housing Set-Aside
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
I
Revenues:
Investment income
'
Total revenues
Expenditures:
'
Current:
Community development
Total expenditures
Excess (deficiency) of
'
revenues over
(under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
'
Total other financing
sources (uses)
'
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance
Original Final Positive
Budget Budget Actual (Negative)
$ 22,643 22,643
22,643 22,643
336,520
336,520
256,220
80,300
336,520
336,520
256,220
80,300
(336,520) (336,520) (233,577) 102,943
1,299,000 1,299,000 928,000 (371,000)
(17,800) (17,800) (250,000) 232,200
1,281,200
1,281,200
678,000
603,200
944,680
944,680
444,423
(500,257)
5,521,581
5,521,581
5,521,581
$ 6,466,261
6,466,261
5,966,004
500,257
I
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' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Rosemead Housing Development Corporation
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2009
I
'
Revenues:
Intergovernmental
Interest income
Total revenues
' Expenditures:
Total other financing
sources (uses)
Current:
General government
'
Total expenditures
'
Excess (deficiency) of
revenues over
(under) expenditures
'
Other financing sources (uses):
Transfers in
' Change in fund balances
Fund balance at beginning of year
' Fund balance at end of year
Variance
Original Final Positive
Budget Budget Actual (Negative)
$ 421,700 421,700 415,150 (6,550)
- - 140 140
421,700 421,700 415,290 (6,410)
694,400 694,400 .720,018 (25,618)
694,400 694,400 720,018 (25,618)
(272,700) (272,700) (304,728) (32.028)
250,000 250,000 250,000
250,000 250,000 250,000
(22,700) (22,700) (54,728) (32,028)
194,911 194,911 194,911
$ 172,211 172,211 140,183 (32,028)
I
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Computation of Low/Moderate Housing Fund - Excess Surplus
June 30, 2009
Fund Balance - June 30, 2009 $ 5,966,004
Less Unavailable Amounts:
Advances to Other Funds (4,477,945)
Available Low/Moderate Income Housing Funds 1,488,059
Limitation (Greater of $1,000,000 or Four Years Set-Aside):
Set-aside for last four years
2008 - 2009 928,000
2007 - 2008 1,691,206
2006 - 2007 1,589,305
2005 - 2006 1,338,783
Total set-aside for last four years 5,547,294
Base limitation 1,000,000
Greater Amount 5,547,294
Computed Excess Surplus - June 30, 2009 $
2g
'
Mayer Hoffman McCann P.C.
An Independent CPA Firm
'
2301 Dupont Drive, Suite 200
Irvine, California 92612 -
949-474-2020 ph
949-263-5520 fx
www.mhm-pc.com
' Board of Directors
Community Development Commission of the City of Rosemead
Rosemead, California
' REPORT ON COMPLIANCE AND OTHER MATTERS AND ON INTERNAL CONTROL OVER
FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
' We have audited the financial statements of the Community Development Commission of the
City of Rosemead (Commission), as of and for the year ended June 30, 2009, which collectively
comprise the Commission's basic financial statements and have issued our report thereon
t dated December 18, 2009. 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.
Compliance and Other Matters
' As part of obtaining reasonable assurance about whether the Commission's financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
Such provisions included those provisions of laws and regulations identified in the Guidelines for
Comptroller Audits of California Redevelopment Agencies, issued by the State Controller and as
' interpreted in the Suggested Auditing Procedures for Accomplishing Compliance Audits of
California Redevelopment Agencies, issued by the Governmental Accounting and Auditing
Committee of the California Society of Certified Public Accountants. However, providing an
' opinion on compliance with those provisions was not an objective of our audit and, accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
' Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Commission's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Commission's internal control over financial reporting.
' Accordingly, we do not express an opinion on the effectiveness of the Commission's internal
control over financial reporting.
1
1 29
I
' Board of Directors
Community Development Commission of the City of Rosemead
Rosemead, California
' Page Two
' A control deficiency exists when the design or operation of a control does not allow
management or employees, in. the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
' deficiency, or combination of control deficiencies, that adversely affects the Commission's ability
to initiate, authorize, record, process, or report financial data reliably in accordance with
generally accepted accounting principles such that there is more than a remote likelihood that a
misstatement of the Commission's financial statements that is more than inconsequential will
' not be prevented or detected by the Commission's internal control. We consider the item that
has been described in the accompanying schedule of findings and recommendations to be a
significant deficiencies in internal control over financial reporting.
' A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the Commission's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily disclose all
' deficiencies in internal control that might be significant deficiencies and, accordingly, would not
necessarily disclose all significant deficiencies that are also considered to be material
weaknesses. We did not identify any deficiencies in internal control over financial reporting that
' we consider to be material weaknesses, as defined above.
We noted certain matters we reported to the management of the City of Rosemead in a
separate letter dated December 18, 2009.
' This report is intended solely for the information and use of the Board of Directors,
management, and the State Controller and is not intended to be and should not be used by
' anyone other than these specifieyd~ parties.
,W11 #*WW4 61V11
' Irvine, California
December 18, 2009
1 30
F
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Schedule of Findings and Recommendations
June 30, 2009
' (09-1) Establishment of System Access Rights
' In accordance with the implementation of the new audit risk assessment standards, we
modified our approach to testing accounting system access controls. During our
procedures, we noted that all finance personnel have the ability to perform the following
functions:
t • Establish vendors and process invoices for payment
Make changes to the payroll master file (adding and deleting employees, making
pay rate changes, etc.)
• Process payroll
• Electronically transfer funds from the City's checking account
Recommendation
We recommend that the City restrict system access rights for each individual in the
Finance Department with respect to that individual's capability to electronically transfer
funds from the City's checking account in order to adequately safeguard City assets.
Management's Corrective Actions Planned
Access rights are currently being defined based on job duties. Particular attention is
being paid to assigning access rights based on internal controls as well as job duties.
For example, check printing access will be assigned to one person and data input
access to a different person.
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Hoffma
McCan
An Inde0e
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ndent CPA Firm
www.mhm-pc.com
our roots run deep
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ROSEMEAD HOUSING DEVELOPMENT
CORPORATION
FINANCIAL AND COMPLIANCE REPORT
Fiscal Year Ended June 30, 2009
I
' ROSEMEAD HOUSING DEVELOPMENT CORPORATION
FINANCIAL AND COMPLIANCE REPORT
Fiscal Year Ended June 30, 2009
TABLE OF CONTENTS
r PPa e
INDEPENDENT AUDITORS' REPORT
1
FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Assets
3
Statement of Activities
4
Fund Financial Statements
Balance Sheet
5
o
Reconciliation of the Fund Balance of Governmental Funds
to the Statement of Net Assets
6
Statement of Revenues, Expenditures and Changes in Fund
a
Balances
d Ch
7
anges
Reconciliation of the Statement of Revenues, Expenditures an
in Fund Balances to the Statement of Activities
8
9
Notes to the Basic Financial Statements
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information, 18
t Schedule of Revenues, Expenditures and Changes in Fund
Balances - Budget and Actual 19
' Report on Compliance and other Matters and on Internal Control over
Financial Reporting Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 20
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Mayer Hoffman McCann P.C.
'
An Independent CPA Firm
_ 2301 Dupont Drive, Suite 200
Irvine, California 92612
.949-474-2020 ph
949-263-5520 fx
www.mhm-pc.com
' Rosemead Housing Development Corporation
Board of Directors
' City of Rosemead, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the governmental activities and the
major fund of the Rosemead Housing Development Corporation (the Corporation), a component
unit of the Community Development Commission of the City of Rosemead, California, as of and
for the year ended June 30, 2009, which collectively comprise the Corporation's basic financial
statements as listed in the table of contents. These financial statements are the responsibility of
the Corporation'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 opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities and the major fund of the
' Corporation as of June 30, 2009, and the respective changes in financial position thereof for the
year then ended, in conformity with accounting principles generally accepted in the United
States of America.
' The Corporation has not presented management's discussion and analysis which according to
accounting principles generally accepted in the United States of America is necessary to
' supplement, although not required to be part of, the basic financial statements.
I
Rosemead Housing Development Corporation
Board of Directors
' Page Two
' The information identified in the accompanying table of contents as required supplementary
' information is not a required part of the basic financial statements but is 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.
In accordance with Government Auditing Standards, we have also issued our report dated
December 18, 2009 on our consideration of the Corporation's internal 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 assessing the results of our audit.
a Irvine, California.
December 18, 2009
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Statement of Net Assets
June 30, 2009
Governmental
Activities
Assets
Cash and investments (note 2)
$ 512,628
Receivables
13,682
Capital assets, net (note 4)
9,260,652
Total assets
9,786,962
Liabilities and Net Assets
Liabilities:
Refundable deposits
34,527
Due to City of Rosemead
351,600
Total liabilities 386,127
Net assets:
Invested in capital assets 9,260,652
Unrestricted 140,183
Total net assets $ 9,400,835
See accompanying notes to the basic financial statements.
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Governmental activities:
General government
Total governmental
activities
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Statement of Activities
Fiscal Year Ended June 30, 2009
Program Revenues Net (Expense)
Operating Capital Revenue and
Charges for Contributions Contributions Changes in
Expenses Services and Grants and Grants Net Assets
$ 959,233 409,139 250,000 (300,094)
$ 959,233 409,139 250,000 . - (300,094)
General revenues
investment income
140
Other general revenues
. 6,011
Total general revenues
6,151
Change in net assets
(293,943)
Net assets at beginning of year
9.694.778
Net assets at end of year
$ 9,400,835
See accompanying notes to the basic financial statements.
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Governmental Funds
Balance Sheet
June 30, 2009
Assets:
Cash and investments
Other receivables
Total assets
Liabilities and Fund Balance
Liabilities:
Refundable deposits
Due to City of Rosemead
Total liabilities
Fund balance, unreserved
Total liabilities and fund balance
General
$ 512,628
13,682
$ 526,310
$ 34,527
351,600
386,127
140,183
$ 526,310
See accompanying notes to the basic financial statements.
5
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30, 2009
Fund balances of governmental funds $ 140,183
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets, net of depreciation, have not been included
as financial resources in governmental fund activity.
Capital assets 11,171,141
)
Accumulated depreciation (1,910,489
Net assets of governmental activities $ 9,400,835
See accompanying notes to the basic financial statements.
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
Fiscal Year Ended June 30, 2009
Revenues:
Rental income
Investment income
Other
Total revenues
Expenditures:
Operating
Administrative services paid to City of Rosemead
Facility rent paid to City of Rosemead
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures .
Other financing sources (uses):
Transfers from City of Rosemead
Total other financing sources (uses)
Change in fund balance
Fund balance at beginning of year
Fund balance at end of year
General
Fund
$ 409,139
140
6,011
415,290
368,418
219,600
132,000
720,018
(304,728)
250,000
250,000
(54,728)
194,911
$ 140,183
See accompanying notes to the basic financial statements.
7
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
' Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures,
' and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Fiscal Year Ended June 30, 2009
Net changes in fund balances of governmental funds
Amounts reported for governmental activities in the statement of
activities is different because:
Depreciation expense on capital assets is reported in the government-wide
statement of activities and changes in net assets, but they do not require the
use of current financial resources. Therefore, depreciation expense is not
reported as expenditures in the governmental fund.
Depreciation expense
' Change in net assets of governmental activities
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0
See accompanying notes to the basic financial statements.
1
8
$ (54,728)
(239,215)
$ (293,943)
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2009
(1) Summary of Significant Accounting Policies
' (a) Reporting Entity
' The Rosemead Housing Development Corporation (the Corporation) is a
nonprofit corporation whose purpose is to provide assistance to the Rosemead
Community Development Commission (the Commission) to account for the
' construction, financing and operations of low- and moderate-income housing for
the benefit of the City of Rosemead (the City). The Corporation currently
maintains the Angelus and Garvey Senior Housing facilities. The Corporation is
exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code
(IRC) and applicable state statutes.
Governmental Accounting Standards Board (GASB) Statement No. 14, The
'
Financial Reporting Entity, defines the reporting entity as the primary government.
and those component units for which the primary government is financially
accountable. Financial accountability is defined as appointment of a voting
majority of the component unit's Board and either (a) the primary government
has the ability to impose its will or (b) the possibility that the component unit will
provide a financial benefit to or impose a financial burden on the primary
'
government. Since the Board of Directors of the Commission and the Council
members also serve as the Board of Directors of the Corporation, the
Commission and the City, in effect, have the ability to influence and control
operations. Therefore, the Commission has oversight responsibility for the
Corporation. Accordingly, in applying the criteria of GASB Statement No. 14, the
financial statements of the Corporation are included in the Commission's and the
City's financial reports.'
The Corporation has the same fiscal year as the City and the Commission.
These financial statements contain information for the Corporation only. The
City's and the Commission's financial reports may be obtained by contacting the
Financial Department of the City.
0
(b) Basis of Accounting and Measurement Focus
The basic financial statements of the Corporation are composed of the following:
• Government-wide financial statements
Fund financial statements
Notes to the basic financial statements
1
1
' ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
' (1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus (Continued)
Government-wide Financial Statements
Government-wide financial statements display information about the reporting
' government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental and business-type activities of
the primary government (including its blended component units), as well as its
discreetly presented component units. The Corporation has no business-type
activities or discretely presented component units. Eliminations have been made
in the Statement of Activities so that certain allocated expenses are recorded
only once (by the function to which they were allocated), However, general
government expenses have not been allocated as indirect expenses to the
various functions of the Commission.
Government-wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long-term)
' economic resources and obligations of the reporting government are reported in
the government-wide financial statements. Basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the
financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange-like
transactions are recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from nonexchange
transaction are recognized in accordance with the requirements of GASB
Statement No. 33.
Program revenues include charges for services and payments made by parties
outside of the reporting government's citizenry if that money is restricted to a
O particular program. Program revenues are netted with program expenses in the
statement of activities to present the net cost of each program.
a Amounts paid to acquire capital assets are capitalized as assets in the
government-wide financial statements, rather than reported as expenditure.
Proceeds of long-term debt are recorded as a liability in the government-wide
financial statements, rather than as other financing source, Amounts paid to
reduce long-term indebtedness of the reporting government are reported as a
reduction of the related liability, rather than as an expenditure.
' 10
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
' Notes to the Basic Financial Statements
(Continued)
' (1) Summary of Significant Accounting Policies (Continued)
(b) Basis of Accounting and Measurement Focus (Continued)
Fund Financial Statements
The underlying accounting system of the Corporation is organized and operated
on the basis of separate funds, each of which is considered to be a separate
accounting entity. The operations of each fund are accounted for with a separate
set of self-balancing accounts that comprise its assets, liabilities, fund equity,
' revenues and expenditures or expenses, as appropriate. Governmental
resources are allocated to and accounted for in individual funds based upon the
purposes for which they are to be spent and the means by which spending
activities are controlled.
Fund financial statements for the primary government's governmental,
proprietary, and fiduciary funds are presented after the government-wide
financial statements. These statements display information about major funds
individually and nonmajor funds in the aggregate for governmental and enterprise
funds. Fiduciary statements include financial information for fiduciary funds and
similar component units. Fiduciary funds primarily represent assets held by the
Corporation in a custodial capacity for other individuals or organizations. The
' Corporation has no enterprise funds or fiduciary funds.
Governmental Funds
' In the fund financial statements, governmental funds and agency funds are
presented using the modified-accrual basis of accounting. Their revenues are
recognized when they become measurable and available as net current assets.
' Measurable means that the amounts can be estimated, or otherwise determined.
Available means that the amounts were collected during the reporting period or
soon enough thereafter to be available to finance the expenditures accrued for
' the reporting period. The Corporation uses a sixty day availability period.
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' ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
1 .
' (1) Summary of Significant Accounting Policies (Continued)
(b) Basis of Accounting and Measurement Focus (Continued)
' Governmental Funds (Continued)
Revenue recognition is. subject to the measurable and available criteria for the
' governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
' recognized as revenues in the period in which the underlying exchange
transaction upon which they are based takes place. Imposed non-exchange
transactions are recognized as revenues in the period for which they were
' imposed. If the period of use is not specified, they are recognized as revenues
when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government-mandated. and voluntary non-
exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
assets and current liabilities are generally included on their balance sheets. The
' reported fund balance (net current assets) is considered to be a measure of
available spendable resources." Governmental fund operating statements
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable
resources" during a period.
' Non-current portions of long-term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not
be considered "available spendable resources," since they do not represent net
current assets. Recognition-of governmental fund type revenues represented by
noncurrent receivables are deferred until they become current receivables.
Noncurrent portions of other long-term receivables are offset by,fund balance
reserve accounts.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities.
Since they do not affect net current assets, such long-term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
12
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
' Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies (Continued)
(b) Basis of Accounting and Measurement Focus (Continued)
'
Governmental Funds (Continued)
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long-term debt are recorded as an other financing source rather than as a fund
liability. Amounts paid to reduce long-term indebtedness are reported as fund
'
expenditures.
When both restricted and unrestricted resources are combined in a fund,
expenses are considered to be paid first from restricted resources, and then from
'
unrestricted resources.
(c) Maior Fund
The Corporation reports the General Fund as its only major fund.
(d) Cash and Investments
Cash includes amounts in demand and time deposits. Investments, if any, are
'
reported in the accompanying balance sheet at fair value, except for certain
market and investment contracts that are reported at cost because they
money
are not transferable and they have terms that are not affected by changes in
market interest rates.
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
i
ns or
and investments includes interest earnings; changes in fair value; any ga
losses realized upon the liquidation, maturity or sale of investments; property
rentals; and the sale of City-owned property.
B
(e) Capital Assets
a. Capital assets, which include buildings and improvements, and furniture and
equipment, are reported as part of governmental activities in the government-
wide financial statements. Capital assets are defined by the Corporation 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.
1 13
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
'
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies (Continued)
'
(e)
Capital Assets (Continued)
The cost of normal maintenance and repairs that do not add to the value of an
asset or materially extend an asset's useful life are not capitalized.
Costs associated with construction in progress are recorded in their respective
'
capital assets category upon approval by the Corporation's governing board,
which approximates the completion date.
'
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:
Buildings 50 years
Improvements 15 years
Furniture and equipment 7 years
(f)
Income Taxes
'
The Corporation is exempt from federal income taxes under Section 501(c)(3) of
the IRC and a similar exemption under state law.
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uit
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(g)
Fun
q
y
In the fund financial statements, governmental funds report reservations of fund
t
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.
(h)
Rental Income
The management company collects rent payments on the first day of the month
and recognizes revenue in the month due. Monthly rental income per unit ranges
from $250 to $450 and is approved by the annual budget.
(i) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
1 14
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' ROSEMEAD HOUSING DEVELOPMENT CORPORATION
' Notes to the. Basic Financial Statements
(Continued)
' (2) Cash and Investments
Cash and investments at June 30, 2009 consisted of deposits with financial institutions.
The carrying amount of the Corporation's deposits was $512,628.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in 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
Corporation maintains its bank accounts at financial institutions that are collateralized
with securities held by the pledging financial institution, or by its Trust Department or
agent, but not in the Corporation's name. The primary difference between the carrying
' amount and the bank balance are deposits in transit and outstanding checks. In
accordance with state statutes, the Corporation maintains deposits at those depository
institutions insured by the FDIC. The California Government Code (the Code) requires
' California banks and savings and loan associations to collateralize the deposits of
governmental entities by pledging government securities as collateral. The market value
of pledge securities must equal at least 110% of those deposits. California law also
1 allows financial institutions to secure the deposits of governmental entities by pledging
first trust deed mortgage notes having a collateral value of 150% of a corporation's total
deposits. As of June 30, 2009, $262,628 of the Corporation's deposits with financial
institutions in excess of federal depository insurance limits were held in_uncollateralized
' accounts.
(3) Reimbursement Agreements and Related-party Transactions
The Corporation has entered into a reimbursement agreement with the City for the
Corporation's administrative services. The Corporation paid $219,600 for administrative
services to the City during the year ended June 30, 2009. The Corporation is funded, in
part, by advances from the Commission.
The Corporation has also entered into a 55-year lease agreement with the City for the
Angelus Senior Housing facility at $60,000 annually, expiring June 2047. Total lease
commitments remaining are $2,280,000 for the Angelus Senior Housing facility at June
30, 2009. The Corporation has also entered into a 55-year lease agreement with the City
for the Garvey Senior Housing facility at $72,000 annually, expiring November 2057.
Total lease commitments remaining are $3,486,000 for the Garvey Senior Housing
facility at June 30, 2009. The Corporation paid $60,000 and $72,000 in lease payments
to the City during the year ended June 30, 2009 for the Angelus and Garvey Senior
Housing facilities, respectively.
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1
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' (5)
1
(6)
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0
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
Capital Assets
During the year ended June 30, 2009, the changes in capital assets were as follows:
Governmental activities:
Capital assets being depreciated:
Buildings and improvements
Furniture and equipment
total capital assets being
depreciated
Less accumulated depreciation for,
Buildings and improvements
Furniture and equipment
Total accumulated
depreciation
Total governmental activities
capital assets, net
Balance Balance
June 30. 2008 Additions Deletions June 30. 2009
$11,042,597
128,544
11,171.141
(1,561,096) (220,852)
(110,178) 1( 8,363)
(1,671,274) 239 215)
11,042,597
128,544
11,171,141
- (1,781,948)
(128,541)
(1,910,489)
232 5) 9 260 652
$ 9,499,867
Depreciation expense is allocated to the general government function in the statement of
activities.
Risk Management
The Corporation is exposed to various risks of loss related to torts; thefts of, damage to
and destruction of assets; errors and omissions; and natural disasters. The Corporation,
through the City, carries commercial liability insurance coverage. The Corporation
carries no insurance coverage for natural disasters. Since the Corporation does not have
any employees (it uses employees from the City), it is not liable for injury to employees,
workers' compensation, or employee health and accident insurance. The City has had
no reduction in insurance coverage, nor did the City have any settlements that were in
excess of insurance coverage in any of the three preceding years.
Property Management and Operations
The Corporation has two agreements with a management company, dated July 1994
and April 2002, to operate the development housing. These agreements are
automatically renewed for successive periods of one year, unless terminated by the
Corporation. The management company is responsible for collecting rents and receipts,
employing an on-site manager and maintaining financial records. Total fees paid to the
management company were $25,092 for the Angelus Senior Housing facility and
$35,424 for the Garvey Senior Housing facility during fiscal year ended June 30, 2009.
16
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Required Supplementary Information
17
' ROSEMEAD HOUSING DEVELOPMENT CORPORATION
' Notes to Required Supplementary Information
Fiscal Year Ended June 30, 2009
' (1) Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally
accepted in the United States of America for the governmental fund. All annual
1 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
Corporation's governing board for review. The governing board 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
' Corporation's, department heads, with approval of the Finance Director and City
Manager, may make transfers of appropriations within a department and between.
departments within a fund. Transfers of appropriations between funds must be approved
' by the governing board. The legal level of budgetary control (i.e., the level at which
expenditures may not legally exceed appropriations) is the fund level.
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 re-appropriated and honored during the subsequent year.
(2) Excess Expenditures Over Appropriations
' Fund Budget Actual Variance
' Rosemead Housing
Development Corporation $694,400 720,018 (25,618)
11
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Rosemead Housing Development Corporation
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2009
Revenues:
Rental income
Investment income
Other
Total revenues
Expenditures:
Current:
Operating
Administrative services paid to City of Rosemead
Facility rent paid to City of Rosemead
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other financing sources (uses):
Transfers in
Total other financing
sources (uses)
Change in fund balance
Fund balance at beginning of year
Fund balance at end of year
Original Final
Budget Budget
$ 416,000 416,000
5,700 5,700
421,700 421,700
Variance-
Positive
Actual (Negative)
409,139
140
6,011
415,290
336,200
336,200
368,418 (32,218)
226,200
226,200
219,600 6,600
132,000
132,000
132,000
694,400
694,400
720,018 (25.618)
(272,700) (272,700) (304 728) (32 028)
250,000 250,000 250,000
250,000
(22,700)
194,911
$ 172,211
250,000
(22,700)
194,911
172,211
(32,028)
(32,028)
19
250,000
(54,728)
194,911
140,183
(6,861)
140
311
6,410
I
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H
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-474-2020 ph
949-263-5520 fx
w .mhm-pc.com
REPORT ON COMPLIANCE AND OTHER MATTERS AND ON-INTERNAL CONTROL
OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Directors
Rosemead Housing Development Corporation
We have audited the financial statements of the governmental activities and the governmental
fund of the Rosemead Housing Development Corporation (the Corporation), a component unit
of the Community Development Commission of the City of Rosemead, California, as of and for
the year ended June 30, 2009, which collectively comprise the Corporation's .basic financial
statements and have issued our report thereon dated December 18, 2009. 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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Corporation's financial statements
are free of material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Corporation's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Corporation's internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the Corporation's internal
control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely. basis. A significant deficiency is a control
20
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11
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Board of Directors
Rosemead Housing Development Corporation
Page Two
deficiency, or combination of control deficiencies, that adversely affects the Corporation's ability
to initiate, authorize, record, process, or report financial data reliably in accordance with
generally accepted accounting principles such that there is more than a remote likelihood that a
misstatement of the Corporation's financial statements that is more than inconsequential will not
be prevented or detected by the Corporation's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the Corporation's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily disclose all
deficiencies in internal control that might be significant deficiencies or material weaknesses. We
did not identify any deficiencies in internal control over financial reporting that we consider to be
' material weaknesses, as defined above.
We noted certain matters we reported to the management of the City of Rosemead in a
separate letter dated December 18, 2009.
This report is intended solely for the information and use of the Board of Directors, and
management of the Corporation's and is not intended to be and should not be used by anyone
other than these specified parties.
Irvine, California
December 18, 2009
I
I
I
I
1 21
Mayer
Hoffma
IN M McCan
rode
an
n RC.
ceneent CPA Flan
www.mhm-pc.com
our roots run deep
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-4742020 ph
949-263-5520 fx
www.mhm-pc.com
Honorable Mayor and Members of City Council
City of Rosemead
Rosemead, California
ATTACHMENT B
In planning and performing our audit of the financial statements of the City of Rosemead (the
City) as of and for the year ended June 30, 2009, 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, we considered the City's internal control
over financial reporting (internal control) as a basis for designing our auditing procedures for the
purpose of expressing our opinion on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. However, as discussed below, we identified
certain deficiencies in internal control that we consider to be significant deficiencies and other
deficiencies that we consider to be material weaknesses.
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency,
or a combination of control deficiencies, that adversely affects the entity's ability to initiate,
authorize, record, process, or report financial data reliably in accordance with generally
accepted accounting principles such that there is more than a remote likelihood that a
misstatement of the entity's financial statements that is more than inconsequential will not be
prevented or detected by the entity's internal control. Matters conforming to this definition are as
follows:
(1) Establishment of System Access Rights
In accordance with the implementation of the new audit risk assessment standards, we
modified our approach to testing accounting system access controls. During our
procedures, we noted that all finance personnel have the ability to perform the following
functions:
• Establish vendors and process invoices for payment
• Make changes to the payroll master file (adding and deleting employees, making
pay rate changes, etc.)
• Process payroll
• Electronically transfer funds from the City's checking account
Posting journal entries to the general ledger
Honorable Mayor and
City of Rosemead
Page Two
Members of City Council
(1) Establishment of System Access Rights (Continued)
Recommendation
We recommend that the City restrict key accounting system processes to a minimum
number of individuals. Each individual in the Finance Department should have different
access rights depending on their accounting duties.
Management's Corrective Actions Planned
Access rights are currently being defined based on job duties.
being paid to assigning access rights based on internal controls
For example, check printing access will be assigned to one
access to a different person.
Particular attention is
as well as job duties.
person and data input
We noted other certain matters involving the internal control structure and its operation where
improvements could be made. We offer the following recommendation for consideration by the
City to strengthen its internal control structure.
(2) Improved Controls Over Cash Receipts
During our review over cash receipts, we observed that checks received were not,
in all cases, being endorsed "For deposit only" immediately upon receipt.
Recommendation
We recommend that the City employees restrictively endorse checks immediately
upon receipt in order to further mitigate the risk of misappropriation.
Management's Corrective Actions Planned
"For deposit only" stamps have been delivered to all sites that accept cash. Staff at
those sites have been instructed to stamp checks as soon as they receive them.
Staff is finalizing documentation with Bank of the West for Electronic Deposit Service. It
is expected that the service will be operational in early 2010.
(3) Adjustments Detected by the Audit Process
Paragraph 19 of the Statement on Auditing Standards No. 112 requires that the auditor
include in the report of significant control deficiencies any material adjustments detected
by the audit process. For the year ended June 30, 2009, material adjustments detected
by the audit process were as follows:
Honorable Mayor and Members of City Council
City of Rosemead
Page Three
(3) Adjustments Detected by the Audit Process (Continued)
Adjustment to accrue pass-through liabilities of property taxes for amounts
relating to the audit period.
Management's Corrective Actions Planned
Staff has already started monthly reviews of the general ledger. The monthly reviews
will eliminate the need for most if not all adjusting entries by the auditors.
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the entity's internal control. We did not identify any
deficiencies in internal control that we consider to be material weaknesses.
The City's written responses to the items identified in our audit have not been subjected to the
audit procedures applied in the audit of financial statements and, accordingly, we express no
opinion on them.
This communication is intended solely for the information and use of management, City Council,
and others within the organization, and is not intended to be and should not be used by anyone
other than these specified parties.
Irvine, California
December 18, 2009
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-474-2020 ph
949-263-5520 fx
www.mhrn-pc.com
Honorable Mayor and Members of the City Council
City of Rosemead
Rosemead, California
ATTACHMENT C
We have audited the financial statements of the governmental activities, the business-type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund information
of the City of Rosemead ("the City"), California, as of and for the year ended June 30, 2009, and have issued our
report thereon dated December 18, 2009. Professional standards require that we provide you with the following
information related to our audit.
Our Responsibility under U.S. Generally Accepted Auditing Standards and OMB Circular A-133
Our responsibility, as described by professional standards, is to express opinions about whether the financial
statements prepared by management with your oversight are fairly presented, in all material respects, in
conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not
relieve you or management of your responsibilities.
In planning and performing our audit, we considered the City's internal control over financial reporting in order to
determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not
to provide assurance on the internal control over financial reporting. We also considered internal control over
compliance with requirements that could have a direct and material effect on a major federal program in order to
determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report
on internal control over compliance in accordance with OMB Circular A-133.
As part of obtaining reasonable assurance about whether the City's financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grants, noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of
our audit. Also in accordance with OMB Circular A-133, we examined, on a test basis, evidence about the City's
compliance with the types of compliance requirements described in the "U.S. Office of Management and Budget
(OMB) Circular A-133 Compliance Supplement" applicable to each of its major federal programs for the purpose
of expressing an opinion on the City's compliance with those requirements. While our audit provides a reasonable
basis for our opinion, it does not provide a legal determination on the City's compliance with those requirements.
Scope and Timing of the Audit
We performed the audit according to the planned scope and timing previously communicated to you in a separate
letter to the Honorable Mayor and Members of the City Council on August 3, 2009.
Significant Audit Findings
We have separately reported to you in a separate letter dated December 18, 2009 the deficiencies in internal
control that we consider to be significant deficiencies.
Honorable Mayor and Members of the City Council
City of Rosemead
Rosemead, California
Page Two
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 8
to the financial statements, the City changed accounting policies related to other post employment benefits by
implementing Statement of Governmental Accounting Standards (GASB Statement) No. 45 during the fiscal year
ended June 30, 2009. We noted no transactions entered into by the governmental unit during the year for which
there is a lack of authoritative guidance or consensus. There are no significant transactions that have been
recognized in the financial statements in a different period than when the transaction occurred.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements
and because of the possibility that future events affecting them may differ significantly from those expected. The
most sensitive estimate affecting the financial statements was:
Judgments concerning which capital projects represent ordinary maintenance activities
necessary to keep an asset operational for its originally intended useful life versus
significant improvement, replacement, and life extending projects that should be capitalized
as additions to capital assets.
The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement
disclosures are particularly sensitive because of their significance to financial statement users. The most
sensitive disclosures affecting the financial statements were:
The disclosure of fund balance deficits in Note 12 to the financial statements. This footnote
makes the financial statement user aware of the excess of expenditures over revenues.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,
other than those that are trivial, and communicate them to the appropriate level of management. Management
has corrected all such misstatements. The following material misstatements detected as a result of audit
procedures were corrected by management:
• An adjustment to record pass-through liabilities of property taxes for amounts related to the fiscal
year ended June 30, 2009.
• An adjustment to record deferred revenue for a grant receivable that was not collected within the
City's availability period.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to
the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during
the course of our audit.
Honorable Mayor and Members of the City Council
City of Rosemead
Rosemead, California
Page Three
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated December 18, 2009.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting
principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that
may be expressed on those statements, our professional standards require the consulting accountant to check
with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the governmental unit's auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a condition
to our retention.
This information is intended solely for the use of the City of Rosemead and is not intended to be and should not
be used by anyone other than these specified parties.
December 18, 2009
Irvine, California
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-474-2020 ph
949-263-5520 fx
www.nnhm-pc.com
Honorable Mayor and City Council
City of Rosemead, California
ATTACHMENT D
INDEPENDENT ACCOUNTANTS' REPORT ON AGREED UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS
We have applied the procedures enumerated below to the appropriations limit worksheets
prepared by the City of Rosemead California for the year ended June 30, 2009. These
procedures, which were agreed to by the City of Rosemead; California and the League of
California Cities (as presented in the League publication entitled Article X1118 Appropriations
Limitation Uniform Guidelines) were performed solely to assist the City, of Rosemead, California
in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The
City's management is responsible for maintaining the appropriations limit records and its
calculations.
This engagement to apply agreed-upon procedures was performed in accordance with
attestation standards established by the American Institute of Certified Public Accountants. The
sufficiency of the procedures is solely the responsibility of the specified users of the report.
Consequently, we make no representation regarding the sufficiency of the procedures described
below either for the purpose for which this report has been requested or for any other purpose.
The procedures performed and the results of those procedures were as follows:
1. We obtained the worksheets referred to above and compared the limit and annual
adjustment factors included in those worksheets to the limit and annual adjustment
factors that were adopted by resolution of the City Council. We also compared the
population and inflation options included in the aforementioned wgrksheets to those that
were selected by a recorded vote of the City Council.
Results: No exceptions were noted as a result of our procedures.
2. We recalculated the mathematical computations reflected in the City worksheets.
Results: No exceptions were noted as a result of our procedures.
3. We compared the current year information used to determine the current year limit and
found that it agreed to worksheets prepared by the City and to information provided by
the State Department of Finance.
Results: No exceptions were noted as a result of our procedures.
4. We compared the amount of the prior year appropriations limit presented in the
worksheets to the amount adopted by the City Council for the prior year.
Honorable Mayor and City Council
City of Rosemead, California
Page 2
Results: No exceptions were noted as a result of our procedures.
We were not engaged to, and did not, perform an audit, the objective of which would be the
expression of an opinion on the worksheets referred to above. Accordingly, we do not express
such an opinion. Had we performed additional procedures, other matters might have come to
our attention that would have been reported to you. No procedures have been performed with
respect to the determination of the appropriation limit for the base year, as defined by the
League publication entitled Article X1118 Appropriations Limitation Uniform Guidelines.
This report is intended solely for the information and use of the City of Rosemead, California
and should not be used by those who have not agreed to the procedures and taken
responsibility for the sufficiency of the procedures for their purposes.
/,I mod" ~ /~7n. /nGlNw^ / •
Irvine, California
December 18, 2009