1997 RRA Financial ReportI
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Rosemead Redevebpment Agency
Rosemead, California
ANNUAL FMNCML REPORT
MSCAL YEAR DINED JUNE 309 1997 j
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ROSEMEAD REDEVELOPMENT AGENCY
FINANCIAL AND COMPLIANCE REPORT
JUNE 30, 1997
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CONTENTS
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION I
FINANCIAL STATEMENTS
Combined balance sheet - all fund types and account groups 2 and 3
Combined statement of revenue, expenditures and changes in
fund balances - all governmental fund types 4 and 5
Combined statement of revenue, expenditures and changes in fund balances -
budget and actual - all governmental fund types 6-8
Notes to financial statements 9- 17
SUPPLEMENTARY INFORMATION
Special revenue funds:
Combining balance sheet - special revenue funds 18
Combining statement of revenue, expenditures and changes in fund balances -
snecial revenue funds 19
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AUDIT
GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES 20
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 21 and 22
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10 McGLADREY&PULLEN, LLP
® Certified Public Accountants and Consultants
RSM
international
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I N audit provides a reasonable basis for our opinion.
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
To the Governing Board
Rosemead Redevelopment Agency
Rosemead, California
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, 1997. 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
In our opinion, the general purpose financial statements referred to above present fairly, in all material
t respects, the financial position of the Rosemead Redevelopment Agency as of June 30, 1997, 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 30,
1997 on our consideration of Rosemead Redevelopment Agency's internal control over financial reporting
I and our tests of its compliance with certain provisions of laws, regulations, contracts and grants
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I Pasadena, California
September 30, 1997
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Suite 300
140 South Lake Avenue
Pasadena, California 91101-2651
(626) 795-7950 FAX (626) 7959820
Worldwide
Services
Through
RSM International
ROSEMEAD REDEVELOPMENT AGENCY
COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS
June 30, 1997
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
Accounts payable and accrued liabilities
Arbitrage rebate payable
Due to the City of Rosemead
Tax allocation bonds
Total liabilities
Agency Equity
Investment in general fixed assets
Fund balances:
Reserved for debt service
Reserved for low-moderate income housing
Unreserved, designated for redevelopment
projects
Total equity
Total liabilities and equity
See Notes to Financial Statements.
Governmental Fund Types
Special Debt Capital
Revenue Service Proiects
$ 4,291,049 $ 2,344,420 $ 18,687,263
40,694 11,193 549,233
- - 1,634
$ 4,331,743 $ 2,355,613 $ 19,238,130
$ 32,895 $ $ 198.766
766
2,355,613
4,251,917 -
46,931 - 19,039,364
4,298,848 2,355,613 19,039,364
$ 4,331,743 $ 2,355,613 $ 19,238,130
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Totals
Account Groups (Memorandum Onlv_ )
General General
Fixed Long-term
Assets Debt 1997 1996
$ $ $ 25,322,732 $ 25,652,271
601,120 426,790
1,634 -
8,479,999 - 8,479,999 8,406,272
- 2,355,613 2,355,613 2,355,343
- 33,549,387 33,549,387 33,829,657
$ 8,479,999 $ 35,905,000 $ 70,310,485 $ 70,670,333
$ $ $ 231,661 $ 495,077
- 180,000
- 525
35,905,000 35,905,000 36,185,000
35,905,000 36,136,661 36,860,602
8,479,999 - 8,479,999 8,406,272
- - 2,355,613 2,355,343
- 4,251,917 3,967,172
- - 19,086,295 19,080,944
8,479,999 - 34,173,824 33,809,731
$ 8,479,999 $ 35,905,000 $ 70,310,485 $ 70,670,333
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ROSEMEAD REDEVELOPMENT AGENCY
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND
BALANCES - ALL GOVERNMENTAL FUND TYPES
Year Ended June 30, 1997
Special Debt Capital
Revenue Service Proiects
Revenue
Property tax increment
Use of money and property
Other
Expenditures
Current:
Improvements to project area
Operating
Professional fees
City administrative services
Capital outlay
Debt service:
Principal
Interest
Arbitrage rebate expense (credit)
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 uses
Fund Balance, beginning
Fund Balance, ending
$ - $ - $ 2,845,775
356,886 135,601 1,288,447
3,156 - 28,943
360,042 135,601 4,163,165
-
-
758,811
240,850
-
-
9,898
-
20,544
90,000
-
977,006
280,000
1,991,333
340,748
2,271,333
1,756,361
19,294
(2,135,732)
2,406,804
390,192 2,136,002
(150,000) - (2,376,194)
240,192 2,136,002 (2,376,194)
259,486 270 30,610
4,039,362 2,355,343 19,008,754
$ 4,298,848 $ 2,355,613 $ 19,039,364
See Notes to Financial Statements.
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Totals (Memorandum Onl
1997
1996
$ 2,845,775
$ 2,671,909
1,769,114
2,165,608
43,919
35,457
4,658,808
4,872,974
758,811
1,892,718
240,850
109,930
30,442
51,140
1,067,006
1,043,266
-
63,978
280,000
265,000
1,991,333
2,006,154
-
180,000
4,368,442
5,612,186
290,366
(739,212)
2,526,194 2,133,898
(2,526,194) (2,133,898)
290,366 (739,212)
25,403,459 26,142,671
$ 25,693,825 $ 25,403,459
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ROSEMEAD REDEVELOPMENT AGENCY
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND
BALANCES - BUDGET AND ACTUAL - ALL GOVERNMENTAL FUND TYPES
Year Ended June 30, 1997
Revenue
Property tax increment
Use of money and property
Other
Expenditures
Current:
Improvement to project area
Operating
Professional fees
City administrative services
Capital outlay
Debt service:
Principal
Interest
Arbitrage rebate expense (credit)
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
See Notes to Financial Statements.
Special Revenue Funds
Over
(Under)
Budget Actual Budget
288,200 356,886 68,686
5,000 3,156 (1,844)
293,200 360,042 66,842
664,800
240,850
(423,950)
16,000
9,898
(6,102)
90,000
90,000
770,800
340,748
(430,052)
(477,600)
19,294
496,894
240,192 240,192
$ (477,600) 259,486 $ 737,086
4,039,362
$ 4,298,848
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Debt Service Fund
Fund
Over
Over
(Under)
(Under)
Budget Actual Budget
Budget
Actual
Budget
$ $ $
$ 3,300,000
$ 2,845,775
$ (454,225)
130,000 135,601 5,601
441,571
1,288,447
846,876
- - -
-
28,943
28,943
130,000 135,601 5,601
3,741,571
4,163,165
421,594
280,000
1,998,613
280,000
1,991,333
6,958,200
758,811 (6,199,389)
38,000
20,544 (17,456)
959,200
977,006 17,806
2,500
- (2,500)
(7,280)
2,278,613
2,271,333
(7,280)
7,957,900
1,756,361
(6,201,539)
(2,148,613)
(2,135,732)
12,881
(4,216,329)
2,406,804
6,623,133
2,278,613 2,136,002 (142,611) (2,278,613) (2,376,194) (97,581)
$ 130,000 270 $ (129,730) $ (6,494,942) 30,610 $ 6,525,552
2,355,343 19,008,754
$ 2,355,613 $ 19,039,364
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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, 1997
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
Capital outlay
Debt service:
Principal
Interest
Arbitrage rebate expense (credit)
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
$ 3,300,000 $ 2,845,775 $ (454,225)
859,771 1,769,114 909,343
5,000 43,919 38,919
4,164,771 4,658,808 494,037
6,958,200
758,811
(6,199,389)
664,800
240,850
(423,950)
54,000
30,442
(23,558)
1,049,200
1,067,006
17,806
2,500
-
(2,500)
280,000
280,000
1,998,613
1,991,333
(7,280)
11,007,313
4,368,442
(6,638,871)
(6,842,542)
290,366
7,132,908
$ (6,842,542) 290,366 $ 7,132,908
25,403,459
$ 25,693,825
See Notes to Financial Statements.
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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 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
increment revenue received by the Agency to fund future projects involving the replacing or rehabilitation
' of low and moderate income housing within City limits.
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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.
Account 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
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. "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.
In determining when to recognize intergovernmental revenue, the legal and contractual requirements of the
individual programs are used as guidance. There are, however, essentially two bases for this revenue
recognition. In one, monies must be expended on the specific purpose or project before any amounts may
be recognized by the Agency; therefore, revenue is recognized based upon the expenditures recorded. In the
other, monies are virtually unrestricted as to purpose of expenditure and nearly irrevocable, i.e., revocable
only for failure to comply with prescribed compliance requirements, such as equal employment
opportunity. These resources are reflected as revenue at the time of receipt or earlier if they meet the
criterion of availability.
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 paid.
Cash investments and other 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.
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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
' Cash investments and other investments are accounted for at cost or amortized cost. No loss is recognized
when market 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, 1997 and before August 31, 1997. Property taxes attach as an enforceable lien on property as of
March I 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. An allowance based on historical
collection experience is provided for uncollectible taxes.
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.
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' 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
' Additionally, the 1996 totals presented in the "Memorandum Only" columns are included to provide a
summarized comparison with comparable 1997 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.
I Unexpended budgeted amounts lapse at the end of the budget year.
' Note 1. Cash and Investments
The components of cash and investments at June 30, 1997 are as follows:
Cash in bank $ 482,032
Time certificates of deposit 1,861,783
2,343,815
Investments 1,426,569
Cash with fiscal agent 2,344,422
' Guaranteed investment contracts 11,009,930
Investment in State Treasurer's Investment Pool 8,197,996
' S 25,322,732
Cash
' At year end, the carrying amount of the Agency's deposits was $2,343,815 and the bank balance was
$2,349,979. Of the bank balance, $390,157 was covered by federal depository insurance or by collateral
' held in the Agency's name, and $1,959,822 was uninsured and uncollateralized.
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.
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ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 2. Cash and Investments, Continued
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 Treasurer's Investment Pool, repurchase agreements,
commercial paper and bonds, and registered warrants or treasury notes of the State of California and its
local agencies.
Investments include cash with fiscal agent of $2,344,422 which includes $2,343,658 invested in a
guaranteed investment contract which accrues interest monthly at a rate of 5.8%, maturing October 1,
2013.
Investments also included $11,009,930 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 Agency's investments as of June 30, 1997 are categorized in the following schedule to give an
indication of the level of risk assumed by the entity at year end.
Investment
U.S. Government
and government
agency securities
State and municipal
bonds
Cash with fiscal agent
Guaranteed invest-
ment contracts
Investment in State
Treasurer's
Investment Pool
Total investments
Category Carrying Market
1 2 3 Amount Value
$ - $
- $ 769,241 $ 769,241 $ 766,519
657,328 657
$ - $ - $ 1,426,569
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1,426,569
2,344,422
11,009,930
1,445,968
2,344,422
11,332,740
8,197,996 8,197,996
$ 22,978,917 $ 23321,126
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ROSEMEAD REDEVELOPMENT AGENCY
TO FINANCIAL STATEMENTS
Note 1. Cash and Investments, Continued
The three preceding risk description categories are defined as follows:
Category
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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 arc 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, 1997 consisted of the following:
Special
Revenue Debt Capital
Fund Service Projects Total
' Property tax increment
Accrued interest
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$ - $ - $ 232,540 $ 232,540
40,694 11,193 316,693 368,580
$ 40,694 $ 11,193 $ 549,233 $ 601,120
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 City is to provide administrative services, facilities and other operating
services which totaled $1,097,300 for the fiscal year ended June 30, 1997.
The amount due from the City is $1,634 as of June 30, 1997.
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Series A 1993 Series B 1993 Total
' Balance, June 30, 1996 $ 34,275,000 $ 1,910,000 $ 36,185,000
(Payments) of principal (280,000) (280,000)
' Balance, June 30 1997 $ 34,275,000 $ 1,630,000 $ 35,905,000
' 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. 1. The bonds
bear interest ranging from 4.6% to 5.6% and 5.2% to 5.9% for Series 1995 A 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 1993 A bonds mature on or after October 1, 2033 and Series 1993 B bonds mature on or before
October 1, 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.
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ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 5. Property and Equipment
During the year ended June 30, 1997, the changes in the general fixed assets were as follows:
Balance
June 30,
Land
Buildings and improvements
Furniture and fixtures
Note 6. Long-term Debt
Balance
June 30,
1996 Acquisitions 1997
$ 4,187,639 $ - $ 4,187,639
3,565,875 24,491 3,590,366
652,7 8 49,236 701,994
$ 8,406,272 $ 73,727 $ 8,479,999
The following is a summary of general long-term debt transactions for the year ended June 30, 1997:
Tax
Tax
Allocation
Allocation
Bonds
Bonds
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ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STA
Note 6. Long-term Debt, Continued
The annual requirements, principal and interest to amortize the outstanding debt as of June 30, 1997 are as
follows:
During the Year Series 1993A Bonds Series 19938 Bonds
Ending June 30, Principal Interest Principal Interest Total
1998
$ $ 1,892,193
$ 295,000 $
91,860
$ 2,279,053
1999
1,892,193
310,000
76,520
2,278,713
2000
1,892,193
330,000
59,470
2,281,663
2001
1,892,193
345,000
40,660
2,277,853
2002
20,000 1,892,193
350,000
20,650
2,282,843
Years thereafter
34,255,000 39, 846,587
-
-
74,101,587
$ 34,275,000 $ 49,307,552 $ 1,630,000 $ 289,160 $ 85,501,712
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 arc not sufficient to retire the defeased
debt. On June 30, 1997, $16,470,000 is considered defeased consisting of $9,660,149 of bonds
outstanding and $6,809,851 of interest.
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.
Note 8. Commitments and Contingent Liabilities
Low-Moderate Income Housing Set Aside Fund
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, 1986
through June 30, 1991, it was allowed to defer funding of the set-aside. The set-aside amounts incurred
during the fiscal years ending June 30, 1994, 1995 and 1996 were also deferred until the fiscal year ending
June 30, 2023, as provided by the Agency's adoption of the housing deficit repayment plan. As of June 30,
1997, 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.
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ROSEMEAD REDEVELOPMENT AGENCY
I NOTES TO FINANCIAL STATEMENTS
' Note 8. Commitments and Contingent Liabilities, Continued
' 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 30, 1997, the agreement continues to
remain on hold.
Note 9. Pronouncement Issued but Not Yet Adopted
' In January 1997, the Government Accounting Standards Board issued Statement of Governmental
Accounting Standards No. 31, Accounting and Financial Reporting for Certain Investments and for
External Investment Pools. This Statement establishes new financial reporting standards for investments
held by government external investment pools, interest-eaming investment contracts, open-end mutual
funds and debt and equity securities. Statement No. 31 is required to be adopted for years beginning after
June 15, 1997. The effect of adopting this Statement would have been to increase investments and fund
I balance by approximately $342,000 as of June 30, 1997
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ROSEMEAD REDEVELOPMENT AGENCY
COMBINING BALANCE SHEET - SPECIAL REVENUE FUNDS
June 30, 1997
Low-Moderate
Income
Rosemead
Housing
Housing
Set-Aside
Development
Totals
Assets
Fund
Corporation
1997
1996
Cash and investments
$ 4,21 1,223
$ 79,826
$ 4,291,049 $
4,009,969
Receivables
40,694
-
40,694
46,663
Total assets
$ 4,251,917
$ 79,826
$ 4,331,743 $
4,056,632
Liabilities and Eauitv
Liabilities, accounts payable and
accrued liabilities $ - $ 32,895 $ 32,895 $ 17,270
Agency equity, fund balances,
reserved for low-moderate
income housing 4,251,917 - 4,251,917 3,967,172
Unreserved, designated for
redevelopment projects - 46,931 46,931 72,190
Total liabilities and equity $ 4,251,917 $ 79,826 $ 4,331,743 $ 4,056,632
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' ROSEMEAD REDEVELOPMENT AGENCY
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN
FUND BALANCES - SPECIAL REVENUE FUNDS
' Year Ended June 30, 1997
'
'
Low-Moderate
Income
Housing
Set-Aside
Fund
Rosemead
Housing
Development
Corporation
otals
1997
996
Revenue
Use of money and property
$ 194,553
$ 162,333 $
356,886 $
414,564
Other
3,156
3,156
3,798
194,553
165,489
360,042
418,362
'
Expenditures
Current:
Improvements to project area
-
-
-
31,544
Operating
-
240,850
240,850.
109,930
Professional fees
9,898
9,898
13,249
City administrative services
-
90,000
90,000
90,000
-
340,748
3402748
244,723
Revenue over (under)
expenditures
194,553
(175,259)
19,294
173,639
Other Financing Sources (Uses):
Operating transfers:
From other funds
240,192
150,000
390,192
200,000
(To) other funds
(150,000)
-
(150,000)
(200,000)
'
90,192
150,000
240,192
Revenue and other
'
financing sources over
(under) expenditures
and other financing uses
284,745
(25,259)
259,486
173,639
90
6
3
865
723
Fund Balance, beginning
3,967,172
72,1
4,039,3
2
,
,
'
Fund Balance, ending
$ 4,251,917
$ 46,931 $
4,298,848 $
4,039,362
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1
MCGLADREY&PULLEN, LLP RSM
' e Certified Public Accountants and Consultants international
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, 1997 and have issued our report thereon, dated September 30, 1997. 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.
i
' Pasadena, California
September 30, 1997
I
Suite 300
140 South Lake Avenue
Pasadena, California 91101-2651
(626) 795-7950 FAX (626) 795-9820
20
Worldwide
Services
Through
RSM International
McGLADREY&PULLENrLLP
Certified Public Accountants and Consultants
RSM
international
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I results of our tests disclosed no instances of noncompliance that are required to be reported under
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
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,
1997, and have issued our report thereon dated September 30, 1997. 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
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.
I
Suite300 Worldwide
140 South Lake Avenue Services
Pasadena, California 91101-2651 Through
(626) 795-7950 FAX(626)795-9820 21 RSM International
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 limited.
i
Pasadena, California
September 30, 1997
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