1998 RRA Financial Report1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
a
1
Rosemead Redevelopment Agency
Rosemead, California
ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 305 1998
r I■■■■■\
i■■■■■■■►
MMMMMEMwa
■ @19MEQ ■
IMMMMMMOff
I
0
1
1
I
0
1
I]
1
ROSEMEAD REDEVELOPMENT AGENCY
FINANCIAL AND COMPLIANCE REPORT
JUNE 30,1998
1
~I
L
I budget and actual - all governmental fund types
CONTENTS
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
FINANCIAL STATEMENTS
Combined balance sheet - all fund types and account groups
Combined statement of revenue, expenditures and changes in
fund balances - all governmental fund types
Combined statement of revenue, expenditures and changes in fund balances -
Notes to financial statements
2 and 3
4 and 5
6-8
9-18
e SUPPLEMENTARY INFORMATION
Special revenue funds:
Combining balance sheet - special revenue funds
Combining statement of revenue, expenditures and changes in fund balances -
soecial revenue funds
a INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AUDIT
GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES
A
0
1
F
.1
1
19
20
21
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL
CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENTAL AUDITING STANDARDS
22 and 23
I
I
1
C
I
I
I
I
0
I
I
I
III
LJ
1
1
1
1
1
01 McGLADREY&PULLEN,LLP
0 Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
To the Governing Board
Rosemead Redevelopment Agency
Rosemead, California
RSM
international
We have audited the accompanying general purpose financial statements of Rosemead Redevelopment
Agency (the Agency), a component unit of the City of Rosemead, California, as of and for the year ended
June 30, 1998. These general purpose financial statements are the responsibility of the Agency's
management. Our responsibility is to express an opinion on these general purpose financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Governmental 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 general purpose financial statements referred to above present fairly, in all material
respects, the financial position of the Rosemead Redevelopment Agency as of June 30, 1998, and the
results of its operations for the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report dated September 18,
1998 on our consideration of Rosemead Redevelopment Agency's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and
grants.
Pasadena, California
September 18, 1998
Suite 300
140 South Lake Avenue
Pasadena, California 91101-2651
(626) 795-7950 FAX (626) 795-9820
IAI 19
Worldwide
Services
Through
RSM International
ROSEMEAD REDEVELOPMENT AGENCY
COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS
June 30, 1998
Assets
Cash and investments
Receivables
Due from the City of Rosemead
Property and equipment
Amount available in debt service fund
Amount to be provided for retirement of general
long-term debt
Total assets
Liabilities and Equity
Liabilities
Governmental Fund Types
Special Debt Capital
Revenue Service Proiect
$ 4,598,505 $ 2,322,681 $ 18,394,832
71,703 30,593 287,784
$ 4,670,208 $ 2,353,274 $ 18,682,616
Accounts payable and accrued liabilities $ 15,707 $ $ 309,914
Due to the City of Rosemead - 6,994
Tax allocation bonds - -
Total liabilities 15,707 316,908
Agency Equity
Investment in general fixed assets - -
Fund balances:
Reserved for debt service - 2,353,274
Reserved for low-moderate income housing 4,565,862 - -
Unreserved, designated for redevelopment
projects 88,639 18,365,708
Total equity
Total liabilities and equity
See Notes to Financial Statements.
4,654,501 2,3 53,274 18,365,708
$ 4,670,208 $ 2,353,274 $ 18,682,616
2
a
a
A
Account
Totals
General General
Fixed Long-term
Assets Debt 1998 1997
$ $ $ 25,316,018 $ 25,322,732
390,080 601,120
- 1,634
8,718,584 8,718,584 8,479,999
2,353,274 2,353,274 2,355,613
- 33,256,726 33,256,726 33,549,387
$ 8,718,584 $ 35,610,000 $ 70,034,682 $ 70,310,485
$ $ $ 325,621 $ 231,661
6,994
35,610,000 35,610,000 35,905,000
35,610,000 35,942,615 36,136,661
8,718,584 - 8,718,584 8,479,999
- - 2,353,274 2,355,613
- 4,565,862 4,251,917
- 18,454,347 19,086,295
8,718,584 - 34,092,067 34,173,824
$ 8,718,584 $ 35,610,000 $ 70,034,682 $ 70,310,485
3
ROSEMEAD REDEVELOPMENT AGENCY
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND
BALANCES - ALL GOVERNMENTAL FUND TYPES
Year Ended June 30, 1998
Revenue
Property tax increment
Use of money and property
Other
Expenditures
Current:
Improvements to project area
Operating
Professional fees
City administrative services
Debt service:
Principal
Interest
Revenue over(under)expenditures
Other Financing Sources (Uses)
Operating transfers:
From other funds
(To) other funds
Revenue and other financing sources
over (under) expenditures and other
financing sources (uses)
Fund Balance, beginning
Fund Balance, ending
See Notes to Financial Statements.
Special Debt Capital
Revenue Service Proiecu
$ - $ - $ 2,770,865
404,506 141,574 1,213,094
160 - 44,855
404,666 141,574 4,028,814
-
-
1,350,424
173,512
-
-
7,540
-
40,604
90,000
-
954,262
-
295,000
-
-
1,984,054
-
271,052
2,279,054
2,345,290
133,614
(2,137,480)
1,683,524
372,039 2,135,141
(150,000) - (2,357,180)
222,039 2,135,141 (2,357,180)
355,653 (2,339) (673,656)
4
1
i
1
1
A
1
A
A
A
A
A
A
A
a
A
A
A
1
Totals (Memorandum Only)
1998 1997
$ 2,770,865 $ 2,845,775
1,759,174 1,769,114
45,015 43,919
4,575,054 4,658,808
1,350,424
758,811
173,512
240,850
48,144
30,442
1,044,262
1,067,006
295,000
280,000
1,984,054
1,991,333
4,895,396
4,368,442
(320,342)
290,366
2,507,180 2,526,194
(2,507,180) (2,526,194)
(320,342) 290,366
25,693,825 25,403,459
$ 25,373,483 $ 25,693,825
5
ROSEMEAD REDEVELOPMENT AGENCY
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND
BALANCES - BUDGET AND ACTUAL - ALL GOVERNMENTAL FUND TYPES
Year Ended June 30, 1998
ial Revenue Funds
Over
(Under)
Budget Actual Budget
Revenue
Property tax increment $ $ - $
Use of money and property 281,350 404,506 123,156
Other 5,000 160 (4,840)
286,350 404,666 118,316
Expenditures
Current:
Improvement to project area - -
Operating 1,303,600 173,512 (1,130,088)
Professional fees 10,150 7,540 (2,610)
City administrative services 90,000 90,000
Debt service:
Principal - -
Interest
Revenue over (under) expenditures
Other Financing Sources (Uses)
Operating transfers from (to) other funds
1,403,750 271,052 (1,132,698)
(1,117,400) 133,614 1,251,014
222,039 222,039
Revenue and other financing sources
over (under) expenditures and other
financing uses
Fund Balance, beginning
Fund Balance, ending
See Notes to Financial Statements.
1
$ (11,117,400) 355,653 $ 1,473,053
4,298,848
$ 4,654,501
6
1
1
a
0
u
Debt Service Fund
Capital Projects Fund
Over
Over
(Under)
(Under)
Budget Actual
Budget
Budget
Actual
Budget
$ - $ - $
-
$ 2,700,000
$ 2,770,865 $
70,865
130,000 141,574
11,574
345,000
1,213,094
868,094
- -
-
-
44,855
44,855
130,000 141,574
11,574
3,045,000
4,028,814
983,814
6,682,250
1,350,424
(5,331,826)
35,000
40,604
5,604
-
-
957,200
954,262
(2,938)
295,000
295,000
- -
-
1,984,053
1,984,054
1 -
-
2,279,053
2,279,054
1 7,674,450
2,345,290
(5,329,160)
(2,149,053)
(2,137,480)
11,573 (4,629,450)
1,683,524
6,312,974
2,279,050 2,135,141 (143,909) (2,279,050) (2,357,180) (78,130)
$ 129,997 (2,339) $ (132,336) $ (6,908,500)
2,355,613
$ 2,353,274
7
(673,656) $ 6,234,844
19,039,364
$ 18,365,708
1
1
1
1
a
8
e
v
0
ROSEMEAD REDEVELOPMENT AGENCY
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND
BALANCES - BUDGET AND ACTUAL - ALL GOVERNMENTAL FUND TYPES,
CONTINUED
Year Ended June 30, 1998
Totals
Over
(Under)
Actual
Revenue
Property tax increment
Use of money and property
Other
Expenditures
Current:
Improvement to project area
Operating
Professional fees
City administrative services
Debt service:
Principal
Interest
Revenue over (under) expenditures
Other Financing Sources (Uses)
Operating transfers from (to) other funds
Revenue and other financing sources
over (under) expenditures and other
financing uses
Fund Balance, beginning
Fund Balance, ending
$ 2,700,000 $ 2,770,865 $ 70,865
756,350 1,759,174 1,002,824
5,000 45,015 40,015
3,461,350 4,575,054 1,113,704
6,682,250
1,350,424
(5,331,826)
1,303,600
173,512
(1,130,088)
45,150
48,144
2,994
1,047,200
1,044,262
(2,938)
295,000
295,000
1,984,053
1,984,054
1
11,357,253
4,895,396
(6,461,857)
(7,895,903)
(320,342)
7,575,561
$ (7,895,903) (320,342) $ 7,575,561
25,693,825
$ 25,373,483
See Notes to Financial Statements.
8
I
1
I
I
I
I
O
O
ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and
Significant Accounting and Reporting Policies
The Rosemead Redevelopment Agency (the Agency) was established in Rosemead pursuant to State of
California Health and Safety Code Section 33000, entitled Community Redevelopment Law. 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 Agency is a component unit of the City of Rosemead
and is included in the general purpose financial statements of the City. The Agency has the same fiscal
year as the City. The financial statements contain information for the Agency only. The City financial
statements can be obtained from the Finance Department of the City.
The financial statements of the Agency have been prepared in conformity with generally accepted
accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards
Board (GASB) is the accepted standard-setting body for establishing governmental accounting and
financial reporting principles. The more significant of the Agency's accounting principles are described
below:
Reporting entity
As required by generally accepted accounting principles, these financial statements present the
government and its component unit, an entity for which the government is considered to be financially
accountable. A blended component unit, although a legally separate entity, is, in substance, part of the
government's operations and; therefore, data from this unit is combined with data of the primary
government.
The blended component unit included in the Agency's reporting entity is the Rosemead Housing
Development Corporation (the Corporation). The Corporation is a California nonprofit public benefit
corporation organized under Section 501(c)(3) of the Internal Revenue Code. The Corporation accounts
for the construction, financing and operations of low and moderate income housing.
Fund accounting
The accounts of the Agency are organized on the basis of funds or account groups, each of which is
considered to be a separate accounting entity. The operations of each fund are accounted for by
providing a separate set of self-balancing accounts which comprise its assets, liabilities, equity, revenue
and expenditures.
The various funds and account groups are presented as follows:
Governmental fund types
The Special Revenue Funds account for the proceeds of specific revenue resources (other than major
capital projects) that are legally restricted to expenditures for specified purposes. The Special Revenue
Funds and their purposes are as follows:
Low-Moderate Income Housing Set-Aside Fund - Accounts for the 20% of gross property tax
e increment revenue received by the Agency to fund future projects involving the replacing or
rehabilitation of low and moderate income housing within City limits.
9
8
I
1
1
ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and
Significant Accounting and Reporting Policies, Continued
Rosemead Housing Development Corporation - Accounts for the construction and financing of low
and moderate income housing.
The Debt Service Fund accounts for the accumulation of resources for the payment of general
long-term debt principal, interest and related costs.
' The Capital Projects Fund accounts for 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 Agency.
' Accouni groups
' The General Fixed Assets Account Group accounts for all Agency general fixed assets.
The General Long-term Debt Account Group accounts for the outstanding principal balances of all
' Agency long-term debt expected to be financed from governmental fund types.
The following is a summary of the significant accounting and reporting policies:
' Basis of accounting
1 Governmental fund types are accounted for using the modified accrual basis of accounting. Revenue is
recognized in the accounting period in which it becomes both measurable and available to finance the
expenditures of the current period. "Measurable" means the amount of the transaction can be
determined. "Available" means collectible within the current period or soon enough thereafter to pay
current liabilities.
Expenditures are generally recognized in the accounting period in which the fund liability is incurred, if
measurable, except expenditures for debt service on long-term obligations, which are recognized when
due.
Change in Accounting Principle
The Agency adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain
Investments and for External Investment Pools. This Statement requires that investments be reported at
their fair value and that all changes in fair value be reflected in income for the period in which they
occur. The adoption of this Statement had no material effect on the financial statements for fiscal year
ended June 30, 1998.
Cash and investments
The Agency pools cash and investment resources of some of its funds in order to facilitate the
management of cash. Cash applicable to a particular fund is readily identifiable. The balance in the
pooled cash accounts is available to meet current operating requirements.
10
B
I
I
1
1
1
1
1
I
I
I
I
ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and
Significant Accounting and Reporting Policies, Continued
Investments are accounted for at fair value, with the exception of Guaranteed Investment Contracts. The
City of Rosemead has identified these investments as either being nonnegotiable, having a redemption
value that was fixed and not linked to some sort of index or other market-determined factor, and the
investments are with reputable organizations with good credit standing so that the value of the
investments was not significantly impaired as of year end. No loss is recognized when fair value
declines below cost, since it is the policy of the Agency to hold such investments until they mature.
Investment earnings are allocated based on the source of funds.
Receivables
Property taxes receivable represent the portion of the March 1, 1997 levy, which was collected after
June 30, 1998 and before August 31, 1998. Property taxes attach as an enforceable lien on property as of
March 1 and are due and payable in two equal installments on the following November 1 and February 1.
Unpaid taxes become delinquent on December 10 and April 10. The agency accrues only those taxes
which are received within 60 days after year end.
All other receivables are reported at their gross value and, where appropriate, are reduced by the
estimated portion that is expected to be uncollectible.
Property and equipment
All property and equipment of the Agency are accounted for in the general fixed assets account group.
Property and equipment items acquired or constructed for general governmental operations are recorded
as expenditures in the fund making the expenditure and capitalized in the General Fixed Assets Account
Group.
All general fixed assets which were purchased or constructed are stated at cost. Assets acquired by gift
or bequest are recorded at their fair market value at the date of transfer. No depreciation is recorded on
general fixed assets.
Fund balances
The reserved portion of the fund balances represents that amount which has been legally identified for
the specific purpose or it represents that amount which is not available to liquidate current liabilities.
The unreserved portion represents the amount available for future appropriations. Designated fund
balances represent tentative plans for future use of financial resources.
"Memorandum Only" total columns
Included on the combined financial statements are total columns captioned "Memorandum Only" to
indicate that they are presented only for informational purposes. Adjustments to eliminate interfund
transactions have not been recorded in arriving at such amounts and the memorandum totals are not
intended to fairly present the financial position or results of operations of the reporting entity taken as a
whole.
I
1
i
ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note I. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and
Significant Accounting and Reporting Policies, Continued
Additionally, the 1997 totals presented in the "Memorandum Only" columns are included to provide a
summarized comparison with comparable 1998 amounts and are not intended to present all information
necessary for a fair presentation of financial position and results of operations in accordance with
generally accepted accounting principles.
Budget matters
Budgets presented in this report for comparison to actual amounts are presented in accordance with
generally accepted accounting principles. The modified accrual basis of accounting is employed in the
preparation of the budget. Reported budget amounts represent the original adopted budget as amended.
The legal level of budgetary control is at the fund level.
Unexpended budgeted amounts lapse at the end of the budget year.
Note 2. Cash and Investments
The components of cash and investments at June 30, 1998 are as follows:
Cash:
Cash in bank $ 863,291
Time certificates of deposit 1,887,350
Cash subtotal 2,750,641
Investments
Debt securities investments 1,605,853
Cash with fiscal agent 2,322,682
Guaranteed investment contracts 6,134,383
Investment in State Treasurer's Investment Pool 12,502,459
Investments subtotal 22,565,377
Cash and equivalents total $ 25,316,018
Cash
At year end, the carrying amount of the Agency's deposits was $2,750,641 and the bank balance was
$2,788,486. Of the bank balance, $498,925 was covered by federal depository insurance or by collateral
held in the Agency's name, and $2,289,561 was collateralized by depository collateral pools as described
in the following paragraph.
12
I
I
ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
' Note 2 Cash and Investments, Continued
In accordance with state statutes, the Agency maintains deposits at those depository institutions insured
' by the Federal Deposit Insurance Corporation. The California Government 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 pledged securities must equal at least 110% of
' those deposits. California law also allows financial institutions to secure the deposits of governmental
entities by pledging first trust deed mortgage notes having a collateral value of 150% of an agency's total
deposits.
Investments
' State statutes authorize the Agency to invest any available funds in securities issued or guaranteed by the
United States Treasury or agencies of the United States, bank certificates of deposit, bankers
acceptances, negotiable certificates of deposit, the State Treasurers Investment Pool (LAIF), repurchase
agreements, commercial paper and bonds, and registered warrants or treasury notes of the State of
California and its local agencies. An advisory board has been established to monitor the LAIF's
compliance with regulations and investment alternatives established by the State.
Investments include cash with fiscal agent of $2,322,682 which includes $2,321,421 invested in a
guaranteed investment contract which accrues interest monthly at a rate of 5.8%, maturing October 1,
2013. Investments also included $6,134,383 of amounts in various guaranteed investment contracts
' which accrue interest quarterly at rates ranging from 7.18% to 7.41 maturing October 1, 1999.
The management of the State of California Pooled Money Investment Account (referred to as LAIF) has
indicated to the Agency that as of June 30, 1998 the amortized cost value of the pool was
$31,920,000,841 and the estimated fair value of the pool was $31,932,227,970. The Agency's share of
the fair value is $12,502,459. Included in the State of California Pool is 4.37% invested in certain
derivatives or similar products, and 95.63% invested in nonderivative financial products. The Agency's
share of LAIF is not subject to custodial credit risk categorization.
I
1
I
1
I
13
'
'
ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
'
Note 2. Cash and Investments, Continued
The Agency's investments as of June 30, 1998 are categorized in
the following sc
hedule to give an
indication of the level of risk assumed by the entity at year end:
Category
Carrying
Investment 1 2 3
Amount
Fair Value
U.S. government
and government
'
agency securities $ $ $ 1,106,258
$ 1,106,258
$ 1,106,258
State and municipal
bonds 499,595
499,595
499,595
$ $ 1,605,853
1,605,853
1,605,853
Cash with fiscal agent
2,322,682
2,322,682
'
Guaranteed invest-
ment contracts
6,134,383
6,297,612
Investment in State
Treasurer's
Investment Pool
12,502,459
12,502,459
Total investments
$ 22,565,377
$ 22,728,606
1
14
11
1
I
u
I
ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 2 Cash and Investments, Continued
The three preceding risk description categories are defined as follows:
Category Description
Investments that are insured, registered or for which the securities are held by the Agency
or its agent in the Agency's name.
2 Uninsured and unregistered investments for which the securities are held by the
counterparty's Trust Department (if a bank) or agent in the Agency's name.
3 Uninsured and unregistered investments for which the securities are held by the
counterparty's Trust Department (if a bank) or agent, but not in the Agency's name.
Note 3. Receivables
Receivables as of June 30, 1998 consisted of the following:
Special
Revenue Debt Capital
Fund Service Projects Total
' Property tax increment $ - $ - $ 43,747 $ 43,747
Accrued interest 71,703 30,593 244,037 346,333
1
I
11
I
$ 71,703 $ 30,593 $ 287,784 $ 390,080
Note 4. Reimbursement Agreements and Related Party Transactions
The Agency has entered into various reimbursement agreements with the City of Rosemead which
require the City to install certain public improvements for the benefit of the Rosemead Redevelopment
Agency Project Area No. 1. In addition, the Agency reimburses the City for administrative services,
facilities and other operating services which totaled $1,097,300 for the fiscal year ended June 30, 1998.
The Agency and City are commonly controlled by the City Council.
The amount due to the City is $6,994 as of June 30, 1998.
15
IJ
1
1
1
I
ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 5. Property and Equipment
During the year ended June 30, 1998, the changes in the general fixed assets were as follows:
Balance
Balance
June 30,
June 30,
1997
Acquisitions 1998
Land $ 4,187,639 $ - $ 4,187,639
Buildings and improvements 3,590,366 143,622 3,733,988
Furniture and fixtures 701,994 94,963 796,957
$ 8,479,999 $ 238,585 S 8,718,584
'
Note 6. Long-term Debt
The following is a summary of general
long-term debt transactions fo
r the year ended June 30, 1998:
'
Tax
Tax
Allocation
Allocation
'
Bonds
Bonds
Series 1993A
Series 1993B Total
'
Balance, June 30, 1997
$ 34,275,000
$ 1,630,000 $ 35,905,000
(Payments) of principal
(295,000) (295,000)
Balance, June 30 1998 $ 34,275,000 $ 1,335,000 $ 35,610,000
In November 1993, the Rosemead Redevelopment Agency issued tax allocation bonds amounting to
' $34,275,000 (Series 1993A) and taxable tax allocation refunding bonds amounting to $2,435,000 (Series
1993B) to finance a portion of the cost of the redevelopment area known as Project Area No. I. The
bonds bear interest ranging from 4.6% to 5.6% and 5.2% to 5.9% for Series 1993A and B, respectively.
' $14,652,398 of Series A proceeds and $2,382,551 of Series B proceeds, along with the existing reserve
amount of $2,651,000 on deposit with the fiscal agent, were used to purchase U.S. government securities.
Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt
' service payments on the 1987 and 1991 Tax Allocation Bonds which are, therefore, considered defeased.
Series 1993A bonds mature after October 1, 2001 and before October 1, 2033, and Series 1993B bonds
mature on or before October I, 2001.
' In addition, the 1993 bond issue reallocated the $6,813,850 of the proceeds from the 1991 bond issue
deposited in the Low-Moderate Income Housing Set-Aside Fund in October 1991. The reallocation had
the effect of satisfying the $423,574 borrowed from the Educational Revenue Augmentation Fund
(ERAF) in fiscal year ended June 30, 1993 and satisfying the set-aside requirements as follows:
$812,342 for fiscal year ended June 30, 1992, $847,147 for fiscal year ended June 30, 1993 and $469,142
for each of the fiscal years ended June 30, 1997 through June 30, 2022.
16
ROSEMEAD REDEVELOPMENT AGENCY
' NOTES TO FINANCIAL STATEMENTS
'
Note 6. Long-term Debt, Continued
The annual require
ments, principal and i
nterest to amortize the outstan
ding debt as of
June 30, 1998 are
'
as follows:
During the Year
Series 1993A
Bonds
Series 1993B Bonds
'
Ending June 30,
Principal
Interest
Principal
Interest
Total
1999
$ - $
1,892,193
$ 310,000
$ 67,995
$ 2,270,188
2000
-
1,892,193
330,000
50,065
2,272,258
2001
1,892,193
345,000
30,655
2,267,848
2002
20,000
1,892,193
350,000
10,325
2,272,518
2003
425,000
1,891,273
-
-
2,316,273
Years thereafter
33,830,000
37,955,314
71,785,314
$ 34,275,000 $
47,415,359
$ 1,335,000
$ 159,040
$ 83,184,399
' Defeasance of prior debt
The Agency has advance refunded two bond issues, which are considered defeased and, accordingly, the
long-term debt liability has been removed from the general long-term debt account group. The Agency
is, however, contingently liable if, for any reason, the funds on deposit are not sufficient to retire the
defeased debt. On June 30, 1998, $7,732,335 of outstanding bonds are considered defeased.
Note 7. Risk Management
The Agency 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 Agency, through the City of Rosemead, carries
commercial liability insurance coverage. The Agency carries no insurance coverage for natural disasters.
Since the Agency does not have any employees (it uses employees from the City of Rosemead), it is not
liable for injury to employees, workers' compensation and employee health and accident insurance. The
City of Rosemead bonds its employees.
1
I
17
I ROSEMEAD REDEVELOPMENT AGENCY
C
NOTES TO FINANCIAL STATEMENTS
1 Note 8. Commitments and Contingent Liabilities
Low-Moderate Income Housing Set-Aside Fund
1 Under state law, the Agency is required to set aside a portion of its property tax increment revenue for
low- and moderate-income housing. The Agency has made findings that, for the years ended June 30,
1 1986 through June 30, 1991, it was allowed to defer funding of the set-aside. The set-aside amounts
incurred during the fiscal year ended June 30, 1994, 1995, 1996 and 1997 were also deferred until the
fiscal year ending June 30, 2023, as provided by the Agency's adoption of the housing deficit repayment
1 plan. As of June 30, 1998, the accumulated set-aside amount not yet funded was approximately
$4,947,000. As required by law, the Agency devised a plan to fund the accumulating amount.
1
0
Ll
I1
0
LJ
0
1
1
1
1
1
Advance agreement
In February 1995, the Agency approved an agreement with a local utility company to advance the utility
company $117,600 required to install water distribution mains within the Agency redevelopment area.
The agreement was put on hold by the Agency and, as of September 18, 1998 the agreement continues to
remain on hold.
18
1
11
1
1
ROSEMEAD REDEVELOPMENT AGENCY
COMBINING BALANCE SHEET - SPECIAL REVENUE FUNDS
June 30, 1998
Low-Moderate
Income
Rosemead
Housing
Housing
Set-Aside
Development
Totals
Assets
Fund
Corporation
1998
1997
Cash and investments
$ 4,494,159
$ 104,346
$ 4,598,505 $
4,291,049
Receivables
71,703
-
71,703
40,694
Total assets
$ 4,565,862
$ 104,346
$ 4,670,208 $
4,331,743
Liabilities and Equity
Liabilities, accounts payable and
accrued liabilities $ $ 15,707 $ 15,707 $ 32,895
Agency equity, fund balances,
reserved for low-moderate
income housing 4,565,862 - 4,565,862 4,251,917
Unreserved, designated for
redevelopment projects - 88,639 88,639 46,931
Total liabilities and equity $ 4,565,862 $ 104,346 $ 4,670,208 $ 4,331,743
19
1
1
ROSEMEAD REDEVELOPMENT AGENCY
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN
FUND BALANCES - SPECIAL REVENUE FUNDS
Year Ended June 30, 1998
Low-Moderate
Income
Rosemead
Housing
Housing
Set-Aside
Development
Totals
Fund
Corporation
1998
1997
evenue
Use of money and property $ 241,906
$ 162,600 $
404,506 $
356,886
Other -
160
160
3,156
241,906
162,760
404,666
360,042
Expenditures
Current:
Operating
173,512
173,512
240,850
Professional fees
7,540
7,540
9,898
City administrative services
90,000
90,000
90,000
271,052
271,052
340,748
Revenue over (under)
expenditures
Other Financing Sources:
Operating transfers:
From other funds
(To) other funds
Revenue and other
financing sources over
(under) expenditures and
other financing sources
Fund Balance, beginning
Fund Balance, ending
241,906 (108,292) 133,614 19,294
222,039
(150,000)
150,000 372,039
- (150,000)
390,192
(150,000)
72,039
150,000 222,039
240,192
313,945
4,251,917
41,708
46,931
355,653
4,298,848
259,486
4,039,362
$ 4,565,862 $
88,639
$ 4,654,501
$ 4,298,848
20
1 106
McGLADREY&PULLEN, LLP
Certified Public Accountants and Consultants
RSM
international
1
I
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AUDIT
GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES
To the Governing Board
' Rosemead Redevelopment Agency
Rosemead, California
' We have audited the general purpose financial statements of the Redevelopment Agency of the City of
Rosemead, California (the Agency), a component unit of the City of Rosemead, California, as of and for
the year ended June 30, 1998 and have issued our report thereon, dated September 18, 1998. These
' component unit financial statements are the responsibility of the Agency's management. Our
responsibility is to express an opinion on these component unit financial statements based on our audit.
' In connection with our audit, we performed the procedures contained in the publication entitled
Guidelines for Compliance Audits of California Redevelopment Agencies, as promulgated by the
Controller of the State of California in connection with a review of the Agency's compliance with laws,
' regulations and administrative requirements governing activities of the Agency as required by
Section 33080.1(a) of the Health and Safety Code of the State of California. The procedures we
performed would not necessarily disclose instances of noncompliance because they were based on
' selective tests of accounting records and related data.
During the performance of the aforementioned procedures, nothing came to our attention that would lead
' us to believe that the Agency did not comply with applicable laws, regulations and administrative
requirements governing its activities.
This report is to be used solely for filing with the State Controller's office, the Los Angeles County
Auditor/Controller and the Agency's fiscal agents and is not intended for any other purpose. This
restriction is not intended to limit the distribution of this report which, upon acceptance by the Agency, is
a matter of public record.
1
e~z x V:g
Pasadena, California
September 18, 1998
Suite300 Worldwide
140 South Lake Avenue Services
Pasadena, California 91101-2651 21 Through
(626) 795-7950 FAX(626)795-9820 RSM International
I 106
C
I
1
1
1
1
1
CI
r
GI
H
1
I
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON
INTERNAL CONTROL OVER FINANCIAL REPORTING BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Governing Board
Rosemead Redevelopment Agency
Rosemead, California
RSM
international
We have audited the general purpose financial statements of the Rosemead Redevelopment Agency (the
Agency), a component unit of the City of Rosemead, California, as of and for the year ended June 30,
1998, and have issued our report thereon dated September 18, 1998. We conducted our audit in
accordance with generally accepted auditing standards and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the Agency'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 and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance that are required to be reported under
Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Agency's internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the
financial statements and not to provide assurance on the internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in
the internal control over financial reporting that might be material weaknesses. A material weakness is a
condition in which the design or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that misstatements in amounts that would be material in relation
to the financial statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters involving
the internal control structure and its operations that we consider to be material weaknesses as defined
above.
Suite 300
140 South Lake Avenue
Pasadena, California 91101-2651
(626) 795-7950 FAX (626) 7959820
McGLADREY&PULLEN, LLP
Certified Public Accountants and Consultants
Worldwide
Services
Through
22 RSM International
I
1 This report is intended for the information of the governing board and management of the Rosemead
Redevelopment Agency. However, this report is a matter of public record and its distribution is not
1 limited. /
1 Pasadena, California
September 18, 1998
1
1
1
1
1
1
1
1
1
1
1
1
1
23
1
~li
i