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1996 City Financial Report1 1 1 1 1 t CITY OF ROSEMEAD, CALIFORNIA i FINANCIAL REPORT I JUNE 30 1996 LJ 1 1 1 1 �1 CONTENTS INDEPENDENT AUDITOR'S REPORT 1 GENERAL PURPOSE FINANCIAL STATEMENTS Combined balance sheet — all fund types and account groups 2 and 3 Combined statement of revenue, expenditures and changes in fund balance — all governmental fund types 4 and 5 Combined statement of revenue, expenditures and changes in fund balances — budget and actual — general, special revenue, debt service and capital project funds 6-8 Statement of revenue, expenses and changes in fund balance — pension trust fund 9 Statement of cash flows — pension trust fund 10 Notes to financ statements 11 -28 SUPPLEMENTARY INFORMATION General Fund: Revenue detail — budget and actual 29 Expenditure detail — budget and actual 30 Special Revenue Funds: Combining balance sheet 31 - 32 Combining statement of revenue, expenditures and changes in fund balances 33 -34 Combining balance sheet, fiduciary funds 35 Statement of changes in assets and liabilities, all agency funds 36 I 1 I ` ` MCGLADREY &PULLEN, ® Certified Public Accountants and Consultants INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Rosemead Rosemead, California RSM international We have audited the accompanying general purpose financial statements of the City of Rosemead, California, as of and for the year ended June 30, 1996. These general purpose financial statements are the responsibility of the City'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 "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 general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Rosemead, California, as of June 30, 1996, and the results of its operations and the cash flows of its pension trust fund 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 October 21, 1996 on our consideration of the City of Rosemead's internal control structure and a report dated October 21, 1996 on its compliance with laws and regulations. Our audit was made for the purpose of forming an opinion on the general purpose financial statements ' taken as a whole. The combining, individual fund and account group statements and schedules listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Rosemead, California. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. San Bernardino, California October 21, 1996 Suite 300 140 South Lake Avenue Pasadena, California 91101 -2651 (818) 795 -7950 FAX (818) -9820 /,� Worldwide Services Through RSM International CITY OF ROSEMEAD, CALIFORNIA COMBINED BALANCE SHEET — ALL FUND TYPES AND ACCOUNT GROUPS June 30, 1996 I Assets and Other Debits Cash and investments Receivables Due from other funds Property and equipment Other Debits Amount available in debt service fund Amount to be provided for retirement of general long -term debt Total assets and other debits Liabilities, Municipal Equity and Other Credits Liabilities Governmental Fund Types General $ 7,975,718 1,174,257 769,465 Special Revenue $ 5,378,192 1,138,113 Debt Capital ' Service Proiects $ 2,344,150 $ 19,298,152 ' 11,193 368,934 $ 9,919,440 $ 6,516,305 $ 2,355,343 $ 19,667,086 ' Checks issued in excess of bank balance $ - $ $ - $ - Accounts payable and accrued liabilities 1,124,846 326,286 - 477,807 Arbitrage rebate payable - - - 180,000 Due to other funds - 768,940 - 525 Due to other governmental agencies - - - - Deferred revenue - 244,663 - Refundable deposits - - - Deferred compensation 190,000 Tax allocation notes and bonds - Accrued vacation pay and compensatory time 1,566 Accrued litigation settlement Total liabilities 1,316,412 1,339,889 658,332 Municipal Equity and Other Credits Investment in general fixed assets - - - dbl Fun a ance. Reserved: Long -term receivable Debt service Low - moderate income housing Employees retirement Unreserved: Designated for: Capital projects Building and equipment replacement Litigation settlements Self- insurance Contingencies Undesignated Total municipal equity and other credits Total liabilities, municipal equity and other credits See Notes to Financial Statements. 687,269 - - - 2,355,343 3,967,172 - 19,008,754 1,720,000 - - 750,0001 - 280,000 , - 2,680,000 2,485,759 1,209,244 8,603,028 5,176,416 2,355,343 19,008,754 $ 9,919,440 $ 6,516,305 $ 2,355,343 $ 19,667,086 2 I i Fiduciary Fund Types Account Groups Total (Memorandum Only) ' General Trust and General Long -term Agency Fixed Assets Debt 1996 1995 $ 747,943 $ $ - $ 35,744,155 $ 34,592,282 19,786,128 1,720,000 2,692,497 3,724,491 750,000 500,000 _ 769,465 1,816,654 2,680,000 13,074,309 - 13,074,309 12,831,946 3,300,225 226,085 13,074,309 - 2,355,343 2,355,343 2,490,820 - - 34,217,633 34,217,633 34,334,786 $ 747,943 $ 13,074,309 $ 36,572,976 $ 88,853,402 $ 89,790,979 $ $ - $ - $ - $ 894,599 - 1,928,939 1,515,319 ' 180,000 - 769,465 1,816,654 - 320,000 ' 244,663 242,938 86,228 86,228 104,592 435,630 - - 625,630 357,828 - 36,185,000 36,185,000 36,450,000 ' 275,629 277,195 239,146 - - 112,347 112,347 142,242 ' 521,858 - 36,572,976 40,409,467 42,083,318 - 13,074,309 - 13,074,309 12,831,946 _ _ 687,269 717,796 2,355,343 2,490,820 = 3,967,172 3,913,958 226,085 - 226,085 237,788 ' 19,008,754 19,786,128 1,720,000 969,000 750,000 500,000 280,000 280,000 2,680,000 2,680,000 3,695,003 3,300,225 226,085 13,074,309 48,443,935 47,707,661 $ 747,943 $ 13,074,309 $ 36,572,976 $ 88,853,402 $ 89,790,979 1 3 CITY OF ROSEMEAD, CALIFORNIA COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE — ALL GOVERNMENTAL FUND TYPES Year Ended June 30, 1996 Revenue Property taxes and special assessments Othertaxes Licenses and permits Intergovernmental Charges for services Fines, forfeitures and penalties Use of money and property Arbitrage rebate Other Expenditures Current: General government Public safety Public works Public health Public recreation Community service Intergovernmental Capital outlay Debt service: Principal Interest Arbitrage rebate expenditure Investment loss 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 Residual Equity Transfer Fund Balance, ending See Notes to Financial Statements. Governmental Fund Types Special Debt Capital General Revenue Service Projects $ $ 365,184 $ - $ 2,671,909 3,664,031 94,723 43,857 760,191 - _ - 3,177,566 2,977,953 - - 531,055 8,000 - _ 303,930 61,470 - _ 460,479 294,473 1,779 1,749,265 102,536 165,314 31,659 R QQQ 7RR 2 277 QOA 77(1 n Act .11 1,808,268 94,723 43,857 4,419,427 313,999 _ 63,806 1,863,689 1,861,174 44,863 - _ 1,868,823 861 955,219 912,133 55,206 63,978 265,000 2,006,154 - - 180,000 9,215,612 3,185,405 2,271,154 2,149,009 (215,824) 686,989 (2,269,375) 2,303,824 1,157,737 224,782 2,133,898 941,913 476,552 (135,477) (777,374) 7,387,388 4,973,591 2,490,820 19,786,128 273,727 (273,727) - _ $ 8,603,028 $ 5,176,416 $ 2,355,343 $ 19,008,754 4 Total (Memorandum Only) ' 1996 1995 $ 3,037,093 $ 3,798,723 3,664,031 3,907,616 760,191 699,234 1 6,155,519 539,055 6,733,543 564,962 365,400 317,969 2,505,996 1,383,762 153,976 299,509 233,630 17,326,794 17, 793,415 i 1,946,848 1,918,204 4,733,426 4,666,871 3,788,669 4,400,953 44,863 39,852 1,869,684 1,901,397 ' 1,867,352 2,090,216 j - 175,330 119,184 1,713,742 I 265,000 260,000 2,006,154 2,019,153 ' 180,000 - 2,364,600 16,821,180 21,550,318 I 505,614 (3,756,903) t 3,516,417 5,829,861 (3,516,417) (5,829,861) 505,614 (3,756,903) 0 34,637,927 38,394,830 S $ 35,143,541 $ 34,637,927 1 5 CITY OF ROSEMEAD, CALIFORNIA 11 COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - , BUDGET AND ACTUAL - GENERAL, SPECIAL REVENUE, DEBT SERVICE AND CAPITAL PROJECT FUNDS , Year Ended June 30, 1996 General Special Revenue , Over (Under) Revenue Budget Actual Budget Budget Actual Property taxes and special assessments $ - $ - $ - $ 360,000 $ 365,184 Othertaxes 3,883,000 3,664,031 (218,969) - - , Licenses and permits 817,100 760,191 (56,909) - - Intergovernmental 3,000,870 3,177,566 176,696 4,099,555 2,977,953 Charges for services 472,290 531,055 58,765 8,000 8,000 Fines, forfeitures and penalties 229,500 303,930 74,430 60,000 61,470 Use of money and property 330,200 460,479 130,279 162,050 294,473 Other 89,650 102,536 12,886 150,150 165,314 ' 8,822,610 8,999,788 177,178 4,839,755 3,872,394 Expenditures Current: General government 1,706,589 1,808,268 101,679 17,600 94,723 ' Public safety 4,566,570 4,419,427 (147,143) 346,860 313,999 Public works 85,120 63,806 (21,314) 3,322,962 1,863,689 Public health 40,000 44,863 4,863 - - Public recreation 2,198,729 1,868,823 (329,906) - 861 Community service 1,378,403 955,219 (423,184) 1,246,430 912,133 Appropriations reserves 73,352 - (73,352) - _ Capital outlay 39,254 55,206 15,952 ' Debt service: Principal _ _, Interest _, Arbitrage rebate expense - - _ - 10,088,017 9,215,612 (872,405) 4,933,852 3,185,405 Revenue over (under) ' expenditures (1,265,407) (215,824) 1,049,583 (94,097) 686,989 Other Financing Sources (Uses) ' Operating transfers: From other funds 1,097,300 1,157,737 60,437 224,782 (To) other funds - (435,219) 1,097,300 1,157,737, 60,437 (210,437) Revenue and other financing sources over (under) expendi- tures and other financing (uses) $ (168,107) 941,913 $ 1,110,020 $ (94,097) 476,552 Fund Balance, beginning 7,387,388 4,973,591 ' Residual Equity Transfer 273,727+ (2 73 , 727) Fund Balance, ending $ 8,603,028 $ 5,176,416 , See Notes to Financial Statements. ' 6 ' ' 265,000 265,000 - _ Special 2,005,503 2,006,154 651 Revenue Debt Service _ Capital Projects _ - Over (Under) 180,000 Over (Under) (1,748,447) 2,270,503 Over (Under) 651 Budget Budget Actual Budget Budget Actual Budget $ 5,184 $ $ $ $ 3,303,540 $ 2,671,909 $ (631,631) (2,140,503) (1,121,602) (128,872) (123,380) 2,303,824 2,427,204 1,470 - - - - - - - 132,423 130,000 1,779 (128,221) 685,080 1,749,265 1,064,185 (3,081,198) 15,164 - - (210,437) - 31,659 31,659 ' (967,361) 130,000 1,779 (128,221) 3,988,620 4,452,833 464,213 ' 77,123 52,400 43,857 (8,543) (32,861) - - (1,459,273) 3,995,400 1,861,174 (2,134,226) 861 (334,297) 64,200 63,978 (222) O $ 570,649 $ 130,000 8 1 I (135,477) $ (265,477) $ (3,491,183) (777,374) $ 2,713,809 2,490,820 19,786,128 $ 2,355,343 $ 19,008,754 1 7 265,000 265,000 - _ ' 2,005,503 2,006,154 651 _ - _ - 180,000 180,000 (1,748,447) 2,270,503 2,271,154 651 4,112,000 2,149,009 (1,962,991) 781,086 (2,140,503) (2,269,375) (128,872) (123,380) 2,303,824 2,427,204 224,782 2,270,503 2,133,898 (136,605) - (435,219) - - (3,367,803) (3,081,198) 286,605 (210,437) 2,270,503 2,133,898 (136,605) (3,367,803) (3,081,198) 286,605 O $ 570,649 $ 130,000 8 1 I (135,477) $ (265,477) $ (3,491,183) (777,374) $ 2,713,809 2,490,820 19,786,128 $ 2,355,343 $ 19,008,754 1 7 ' CITY OF ROSEMEAD, CALIFORNIA ' COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL — GENERAL, SPECIAL REVENUE, DEBT SERVICE AND CAPITAL PROJECT FUNDS, CONTINUED June 30, 1996 Total (Memorandum Only) ' Over (Under) Revenue Budget Actual Budget 1 8 Property taxes and special assessments $ 3,663,540 $ 3,037,093 $ (626,447) taxes 3,883,000 3,664,031 (218,969) ' Other Licenses and permits 817,100 760,191 (56,909) intergovernmental 7,100,425 6,155,519 (944,906) Charges for services 480,290 539,055 58,765 Fines, forfeitures and penalties 289,500 365,400 75,900 Use of money and property 1,307,330 2,505,996 1,198,666 Other 239,800 299,509 59,709 17,780,985 17,326,794 (454,191) Expenditures Current: General government 1,776,589 1,946,848 170,259 ' Public safety 4,913,430 4,733,426 (180,004) Public works 7,403,482 3,788,669 (3,614,813) ' Public health Public recreation 40,000 2,198,729 44.863 1,869,684 4,863 (329,045) Community service 2,624,833 1,867,352 (757,481) Appropriations reserves 73,352 - (73,352) Capital outlay 103,454 119,184 15,730 Debt service: Principal 265,000 265,000 - Interest 2,005,503 2,006,154 651 Arbitrage rebate expense 180,000 180,000 21,404,372 16,821,180 (4,583,192) Revenue over (under) ' expenditures (3,623,387) 505,614 4,129,001 Other Financing Sources (Uses) ' Operating transfers: From other funds 3,367,803 3,516,417 148,614 (To) other funds (3,367,803) (3,516,417) (148,614) I Revenue and other financing sources over (under) expendi- tures and other financing (uses) $ (3,623,387) 505,614 $ 4,129,001 Fund Balance, beginning 34,637,927 Residual Equity Transfer Balance, ending $ 35,143,541 B Fund See Notes to Financial Statements, 1 8 CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND BALANCE — PENSION TRUST FUND Year Ended June 30, 1996 Operating revenue, interest and other investment income $ 12,645 Operating expenses: Administrative fees 3,629 Pension benefits 20,719 24,348 Net (loss) (11,703) ' Fund balance, beginning 237,788 Fund balance, ending $ 226,085 See Notes to Financial Statements. I I I I i I i I I I 1 8 9 ' CITY OF ROSEMEAD, CALIFORNIA ' STATEMENT OF CASH FLOWS — PENSION TRUST FUND Year Ended June 30, 1996 ' Cash Flows from Operating Activities Net (loss) Adjustments to reconcile net (loss) to net cash (used in) operating activities: Administrative expenses payable Unrealized interest and investment income Net cash (used in) operating activities Cash Flows Provided by Investing Activities Proceeds from the sale and maturity of annuity contracts Net increase in cash and cash equivalents Cash, beginning Cash, ending ' See Notes to Financial Statements. 1 10 $ (11,703) 3,629 (12,645) (20,719) 20,719 I I n CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS ' Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and Significant Accounting Policies ' Reporting Entity As required by generally accepted accounting principles, these financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the ' government's operations and are controlled by common governing boards; therefore, data from these units are combined with data of the primary government. The blended component units included in the City of Rosemead (the City) reporting entity are the Rosemead Redevelopment Agency (the Agency) and the Rosemead Housing Development Corporation (the Corporation), which is a component unit of the ' Agency. The Agency has the same fiscal year as the City. The component unit financial statements can be obtained from the City Clerk. ' Nature of operations City of Rosemead The City 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 Los Angeles County departments under contract. Some of the contracts now in effect are for police, street maintenance and ' animal control. Rosemead Redevelopment Agency The Agency finances street, park and utility improvements. It also acquires and constructs major capital facilities, all within the Rosemead Project Area No. 1. Rosemead Housing Development Corporation ' The Corporation accounts for the construction, financing and operations of low and moderate income housing. It is a California nonprofit benefit corporation organized under Section 501(c)(3) of the Internal Revenue Code. I 1 ' CITY OF ROSEMEAD, CALIFORNIA ' NOTES TO FINANCIAL STATEMENTS t Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and Significant Accounting Policies, Continued ' Measurement Focus, Basis ojAccounting and Basis of Presentation The accounts of the City and its component units are organized and operated on the basis of funds and account groups. A fund is an independent fiscal and accounting entity with a self - balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid ' management in demonstrating compliance with finance- related legal and contractual provisions. The minimum number of funds are maintained consistent with legal and managerial requirements. Account groups are a reporting device to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. ' The government has the following fund types and account groups: ' Governmental Funds are used to account for the general government activities. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenue is recognized when susceptible to ' accrual (i.e., when they are "measurable and available "). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The government considers all revenue available if it is ' collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long -term debt, which is recognized when due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources In determining when to recognize intergovernmental revenue (grants, subsidies and shared 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, moneys must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, revenue is recognized based ' upon the expenditures recorded. In the other, moneys are virtually unrestricted as to purpose of expenditure and nearly irrevocable, i.e., revocable only for failure to comply with prescribed compliance requirements, e.g., equal employment opportunity. These resources are reflected as revenue at the time ' of receipt, or earlier if they meet the criterion of availability. Other major revenue that is determined to be susceptible to accrual includes taxes and interest. Major revenue that is determined not to be susceptible to accrual because it is either not available soon enough to pay liabilities of the current period ' or not objectively measurable include licenses, permits, fines and forfeitures. Expenditures are recorded when the liability is incurred, except for interest on long -term debt and sick ' pay, which are recorded when paid. Vacation pay is recorded as an expenditure in the year it is earned, to the extent it is paid in that year or within 90 days after year end; otherwise, it is recorded as an expenditure when it is paid. Estimated losses on insurance claims are charged to expense in the period the loss is determinable. The accrual basis of accounting is used for the Pension Trust Fund utilizing the flow of economic resources measurement focus. Under the accrual basis of accounting, revenue is recognized when earned and expenses are recorded when incurred. The Pension Trust Fund applies applicable FASB pronouncements issued prior to November 1989 to its financial accounting and reporting. D 12 I I I I CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note]. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and Significant Accounting Policies, Continued The General Fund accounts for all financial resources except those required to be accounted for in another fund. These resources are devoted to financing the general services that the City performs for its citizens. Special Revenue Funds account for the proceeds of specific revenue sources (other than special assessments, expendable trusts and major capital projects) that are legally restricted to expenditures for specified purposes. The Special Revenue Funds and their purposes are as follows: The Traffic Safety Fund accounts for the receipt of vehicle code fines which are expended for traffic safety enforcement. The State Gas Tax Fund accounts for funds collected from the State of California which are used for a street construction, street maintenance, engineering and administrative costs. The Air Quality Management District Fund accounts for the City's share of automobile registration fees collected from the State by the South Coast Air Quality Management District. The funds are used in improving transportation systems and to reduce reliance on private vehicles. The Local Transportation Fund accounts for State grants used to finance the construction of bikeways and sidewalks. The Public Transportation Funds account for the City's share of additional sales tax collected in the County of Los Angeles as a result of Propositions A and C. The funds are used to finance public transportation projects. The Community Development Block Grant Fund accounts for Community Development Block Grants received from the United States Department of Housing and Urban Development. The 1976 Community Parklands Grant Fund accounts for funds to be used for park projects. The Street Lighting Fund accounts for the operation of street lights within the City. The Narcotics Seizure Fund accounts for the funds received from the County of Los Angeles from the ' confiscation of cash and other valuables seized during drug related police raids. The funds are used to further enhance the City's drug related crime prevention and detection programs. ' The 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. H 1 13 I I I G 0 li, 1 C 1 1 1 iI I Q CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and Significant Accounting Policies, Continued The Rosemead Housing Development Corporation accounts for the construction and financing of low and moderate income housing. It is a California nonprofit public benefit corporation organized under Section 501(c)(3) of the Internal Revenue Code. The California Wildlife Grant Fund accounts for a State grant for preapproved specified park projects. The Debt Service Fund accounts for the accumulation of resources for the payment of general long -term debt principal, interest and related costs. Capital Projects Fund (Redevelopment 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 Rosemead Redevelopment Agency. Fiduciary Fund Types Fiduciary Funds account for assets held by the government in a trustee capacity or as an agent on behalf of others. Trust funds account for assets held by the government under the terms of a formal trust agreement. The City's Fiduciary Fund Types are as follows: The Pension Trust Fund, a nonexpendable trust fund, accounts for the activity of the retirement plan for employees of the City using the accrual basis of accounting. The Agency Funds account 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 and deferred compensation plans for qualified employees. The Agency funds are custodial in nature and do not present results of operations or have a measurement focus. Agency funds are refundable deposits and deferred compensation. Account Groups The General Fixed Assets Account Group is used to account for the City's fixed assets. The General Long -term Debt Account Group is used to account for general long -term debt and certain other liabilities that are not specific liabilities of proprietary or trust funds. The following is a summary of significant accounting policies: Cash investments and other investments The City 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. All investments are stated at cost or amortized cost except those of the Deferred Compensation Plan and Pension Trust Fund, which are stated at market value. Investment earnings are allocated based on the source of funds. 14 I L CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and Significant Accounting Policies, Continued Receivables j I 1 1 1 1 F 1 n U j I Property taxes attach as an enforceable lien on property as of March 1. Taxes are levied on July 1 and are payable in two installments on December 10 and April 10. The County of Los Angeles bills and collects the property taxes and remits them to the City in installments during the year. Property taxes received within 60 days after the City's fiscal year end are considered "measurable" and "available" and are accrued in the City's financial statements. 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 City are accounted for in the general fixed assets account group. Public domain (infrastructure) general fixed assets, consisting of certain improvements other than buildings, such as roads, sidewalks and bridges, are not capitalized. Property and equipment 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 budgeting future operations. Vacation pay and compensatory time City employees accumulate vacation hours which 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 vested portion of vacation and sick leave by employees at June 30, 1996 that is expected to be paid within 90 days after year end is included in accrued liabilities in the General Fund. The amount not expected to be paid within 90 days is included in the General Long -term Debt Account Group. 15 I I CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and Significant Accounting Policies, Continued "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. Additionally, the 1995 totals presented in the "Memorandum Only" columns are included to provide a summarized comparison with comparable 1996 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. Certain expenditures for the year ended June 30, 1995 have been reclassified, with no effect on net revenue over expenditures, to be consistent with the classifications adopted for the fiscal year ended June 30, 1996. ' Note 2. Budget Matters The annual budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and estimated revenue for all governmental fund types. 1 1 1 Budgets presented in this report for comparison to actual amounts are presented in accordance with generally accepted accounting principles. Reported budget amounts represent the original adopted budget as amended. The City Manager is authorized to make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the governing council. The legal level of budgetary control is the department level. The governing council made several supplemental budgetary appropriations throughout the year, none considered to be material. In all funds, unexpended budgeted amounts lapse at the end of the budget year. IL 1 1 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 3. Cash and Investments The components of cash and investments at June 30, 1996 are as follows: Cash in bank Time certificates of deposit Cash subtotal Other investments Cash with fiscal agent Guaranteed issuance contracts Investment in State Treasury's Investment Pool Investment in annuity contracts Cash and investments total Cash $ 2,376,633 2,457,771 4,834,404 4,146,825 2,344,152 14,583,729 9,173,331 661,714 $ 35,744,155 At year end, the carrying amount of the City's and Agency's deposits (i.e., cash in bank and time certificates of deposit) was $4,834,404 and the bank balance was $4,916,112. Of the $4,916,112 bank balance, $480,935 was covered by federal depository insurance, and $4,435,177 was uninsured and uncol lateral ized. In accordance with State statutes, the Agency maintains deposits at those depository institutions insured by the Federal Depository Insurance Corporation. The California Government Code requires California banks and savings and loan associations to collateralize governmental entities' deposits by pledging government securities as collateral. The market value of pledged securities must equal at least 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a collateral value of 150% of an Agency's total deposits. The City and the Agency maintain cash and investment pools that are available for use by all funds. Each fund's or fund type's share of the pool balance is reported in the financial statements as cash and cash investments. Earnings from the pooled investments are allocated monthly to each participating fund based on a formula that takes into consideration each fund's average investment in the pool. Investments State statutes authorize the City 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, repurchase agreements, commercial paper and bonds, registered warrants or treasury notes of the State of California and its local agencies. Investments include cash with fiscal agent for $2,344,152, which is invested in a guaranteed insurance contract which accrues interest monthly at an interest rate of 5.8 %, maturing October 1, 2013. 17 I 1 1 1 , 1 n 1 I I I' CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 4. Cash and Investments, Continued Investments in annuity contracts included $226,085 and $435,629 invested in the Pension Trust Fund and Deferred Compensation Plan, respectively. These investments were carried at market value. Investments also included $14,583,729 of amounts invested in various Guaranteed Investment Contracts which accrue interest quarterly at interest rates ranging from 7.18% to 7.41 %, maturing through October 1, 1999. Other investments are categorized in the following schedule to give an indication of the level of risk assumed by the entity at year end. $ $ - $ 4,146,825 4,146,825 Cash with fiscal agent Guaranteed Investment Contracts Investment in State Treasurer's Invest- ment Pool Total other investments The three preceding risk description categories are defined as follows: 2,344,152 14,583,729 4,077,386 2,344,152 14,583,729 9,173,331 9,173,331 $ 30,248,037 $ 30,178,598 Category I I 1 Investments that are insured, registered or for which the securities are held by the City or its agent in the City's name. 2 Uninsured and unregistered investments for which the securities are held by counter - party's trust department (if a bank) or agent, in the City's name. 3 Uninsured and unregistered investments for which the securities are held by counter - party's Trust Department (if a bank) or agent, but not in the City's name. 18 Category Carrying Market Inves Type 1 2 3 Amou Value U.S. government and government agency securities S - S $ 2,067,732 $ 2,067,732 S 2,107,430 State and municipal bonds - 890,520 890,520 892,000 Corporate bonds - 1,188,573 1,188,573 1,077,956 $ $ - $ 4,146,825 4,146,825 Cash with fiscal agent Guaranteed Investment Contracts Investment in State Treasurer's Invest- ment Pool Total other investments The three preceding risk description categories are defined as follows: 2,344,152 14,583,729 4,077,386 2,344,152 14,583,729 9,173,331 9,173,331 $ 30,248,037 $ 30,178,598 Category I I 1 Investments that are insured, registered or for which the securities are held by the City or its agent in the City's name. 2 Uninsured and unregistered investments for which the securities are held by counter - party's trust department (if a bank) or agent, in the City's name. 3 Uninsured and unregistered investments for which the securities are held by counter - party's Trust Department (if a bank) or agent, but not in the City's name. 18 I CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 4. Receivables Receivables as of June 30, 1996 consist of the following: Special Capital General Revenue Debt Service Projects Total Property tax increment $ - $ - $ - $ 25,252 $ 25,252 Accrued interest 117,080 46,663 11,193 343,682 518,618 Due from local utility companies (A) 687,269 - - - 687,269 Due from other governmental agencies 133,197 1,091,450 - - 1,224,647 Transient occupancy tax 193,267 - - - 193,267 Other 43,444 - - 43,444 $ 1,174,257 $ 1,138,113 $ 11,193 $ 368,934 $ 2,692,497 (A) During the year ended June 30, 1987, the Agency approved a reimbursement agreement with a local utility company, advancing the utility company funds required to install a water line and a water main extension. The total amount advanced was $493,807. The Agency then contributed the receivable to the City at the present valued amount. The City is to collect this receivable from the utility company in 40 annual installments of $12,345, with the final installment due June 30, 2027. During the year ended June 30, 1990, the Agency approved a similar reimbursement agreement with a local utility company, advancing the utility company funds required to replace various water mains. The total amounts advanced under this agreement were $334,705 during the year ended June 30, 1990 and $29,372 during the year ended June 30, 1992. The Agency then contributed the receivables to the City. The City is to collect the receivables from the utility company in 15 noninterest- bearing annual installments of $35,987 and $1,958, with the final installments due June 30, 2005 and September 30, 2006. During the year ended June 30, 1994, the Agency approved an additional reimbursement ' agreement with a local utility company, advancing the utility company funds required to install a water main and fire service improvements. The total amount advanced was $311,600. The Agency then contributed the receivable to the City at the present valued amount of $212,431. The City is to collect this receivable from the utility company in 15 annual installments of $20,773, with the final installment due June 30, 2006. I 1 19 I I I I I I I I I I I I I I II IJ I I I I CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 5. Interfund Receivables and Payables Interfund receivables and payables as of June 30, 1996 are as follows: Interfund Funds Receivables Payables i General Fund Special Revenue Funds: Traffic Safety Local Transportation Fund Community Development Block Grant Narcotics California Wildlife Grant Capital Projects Fund Note 6. Property and Equipment $ 769,465 $ 769,465 Changes in property and equipment during the year ended June 30, 1996 were as follows: Land Buildings and improvements Vehicles Furniture and office equipment Special equipment and machinery Other improvements Note 7. Employee Pension Plans $ 769,465 $ 8,158 759,382 1,400 768,940 525 Balance, Balance, June 30, 1995 Acquisitions Disposals June 30, 1996 $ 2,893,234 $ - $ - $ 2,893,234 7,384,369 70,163 - 7,454,532 240,940 36,972 25,648 252,264 981,840 144,432 - 1,126,272 494,247 1,168 495,415 837,316 15,276 852,592 $ 12,831,946 $ 268,011 $ 25,648 $ 13,074,309 The City had a defined contribution pension plan which covered substantially all retired employees and was funded by a group annuity contract. Plan participants became vested upon the dissolution of the plan on September 8, 1992. There were no contributions to this plan for the fiscal year ended June 30, 1996. On September 8, 1992, participants of the plan who were current employees had their share of the annuity contract transferred to the California Public Employee Retirement System (PERS). The value of the annuity contract for retired employees was $226,085 as of June 30, 1996. 20 I CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 7. Employee Pension Plans, Continued Effective November 1, 1992, the City became a member of PERS, an agent multiple - employer public employee retirement system that acts as a common investment and administrative agent for cities in the State. The City's payroll for employees covered by PERS for the calendar year ended December 31, 1995 was $1,175,661 and total payroll was $1,757,783. All full -time City employees are eligible to participate in PERS. Benefits vest after five years of service. City employees who retire at or after age 60 with five years of credited service are entitled to an annual retirement benefit, payable monthly for life. Retirement benefits are calculated using a formula which multiplies years of credited service by a sliding scale (based on age) by the employee's highest annual salary during service. PERS also provides death and disability benefits to participating employees. Benefit provisions and all other requirements are established by State statute and City ordinance. Employees are required to contribute 7% of their salary to the plan. The City contributes the employee's ' portion as well as the remaining contribution requirement required to fund the plan. PERS has in its investments no securities in the form of bonds, notes, leases receivable, loans or any other instrument representing debt of the City or any of the other governments included as part of the City's reporting entity, or any parties related to the City or the other governments included as part of the City's reporting entity. I 1 Funding status and progress: The amount shown as the pension benefit obligation is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step -rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of the system on a going concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value of credited projected benefits and is independent of the funding method used to determine contributions to the system. The total PERS pension benefit obligation was computed as of June 30, 1995 as part of an actuarial valuation performed. Significant actuarial assumptions used to determine the pension benefit obligation include: A rate of return on the investment of present and future assets of 8.5% per year compounded annually. Projected salary increases of 4.5% per year compounded annually, attributable to inflation. No increases attributable to seniority/merit. No postretirement benefit increases. 21 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 7. Employee Pension Plans, Continued A comparison of the pension benefit obligation applicable to the City's employees with the plan assets as of June 30, 1995 is as follows: I 1 1 1 Total pension benefit obligation Net assets available for benefits, at cost (market value $2,000,984) Unfunded pension benefit obligation $ 224,349 1,447,675 Actuarially determined contribution requirements and contribution made $ 319,611 1,701,598 2,021,209 1,882,394 I $ 138,815 I i PERS uses the Entry Age Normal Actuarial Cost Method, which is a projected benefit cost method. That is, it takes into account those benefits that are expected to be earned in the future as well as those already accrued. According to this cost method, the normal cost for an employee is the level amount which would fund the projected benefit if it were paid annually from date of employment until retirement. PERS uses a modification of the Entry Age Cost Method in which the employer's total normal cost is expressed as a level percentage of payroll. PERS also uses the level percentage of payroll method to amortize any unfunded actuarial liabilities. The amortization period of the unfunded actuarial liability is not longer than 30 years for contracting public agencies. The significant actuarial assumptions used to compute the actuarially determined contribution requirement are the same as those used to compute the pension benefit obligation as described earlier in this Note. 22 Pension benefit obligation: Retirees and beneficiaries receiving benefits and terminated employees not yet receiving benefits Current employees: Accumulated employee contributions including allocated investment earnings Employer - financed, vested Employer - financed, nonvested I 1 1 1 Total pension benefit obligation Net assets available for benefits, at cost (market value $2,000,984) Unfunded pension benefit obligation $ 224,349 1,447,675 Actuarially determined contribution requirements and contribution made $ 319,611 1,701,598 2,021,209 1,882,394 I $ 138,815 I i PERS uses the Entry Age Normal Actuarial Cost Method, which is a projected benefit cost method. That is, it takes into account those benefits that are expected to be earned in the future as well as those already accrued. According to this cost method, the normal cost for an employee is the level amount which would fund the projected benefit if it were paid annually from date of employment until retirement. PERS uses a modification of the Entry Age Cost Method in which the employer's total normal cost is expressed as a level percentage of payroll. PERS also uses the level percentage of payroll method to amortize any unfunded actuarial liabilities. The amortization period of the unfunded actuarial liability is not longer than 30 years for contracting public agencies. The significant actuarial assumptions used to compute the actuarially determined contribution requirement are the same as those used to compute the pension benefit obligation as described earlier in this Note. 22 I CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS ! Note 7. Employee Pension Plans, Continued The contribution to the plan for the fiscal year ended June 30, 1996 totaling $183,055 was made in accordance with actuarially determined requirements computed through an actuarial valuation performed as of June 30, 1995. The contribution consisted of: Normal cost (6.761% of current covered payrol l) $ 79,894 Amortization of the unfunded actuarial accrued liability (8.73% of current covered payroll) 103,161 $ 183,055 Amounts contributed on behalf of: City (8.491% of current covered payroll) 100,337 Employees (7% of current covered payroll) 82,718 $ 183,055 Trend information Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Historical information for the years available is as follows: Note 8. Deferred Compensation Agreements The City has a deferred compensation plan which is organized under Internal Revenue Code 457. The Q plan allows eligible employees to defer a portion of their gross income to future years not to exceed the lesser of $7,500 or 25% of the participant's includible compensation. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. The deferred 0 compensation and accumulated earnings thereon totaled $435,630 at June 30, 1996 1 23 Unfunded (Overfunded) Pension Contribu- Benefit Obli- tion to 1 Unfunded (Over- gation as Percentage System as Percentage of Year Net Assets funded) Pension of Covered Covered Ended Available Pension Benefit Percentage Benefit Annual Covered Annual Annual June 30 for Benefits Obligation Refunded Obligation Payroll Payroll Payroll 1993 $ 1,148,500 $ 288,240 398.3 % $ (860,260) $ 1,318,110 (65.3) % 15.491 % 1994 1,580,000 1,814,350 87.1 234,340 1,301,610 18.0 15.491 1995 1,882,390 2,021,200 93.1 138,810 1,331,870 10.4 15.491 Showing unfunded pension benefit obligation as a percentage of annual covered payroll approximately adjusts for the effects of inflation for analysis purposes. Note 8. Deferred Compensation Agreements The City has a deferred compensation plan which is organized under Internal Revenue Code 457. The Q plan allows eligible employees to defer a portion of their gross income to future years not to exceed the lesser of $7,500 or 25% of the participant's includible compensation. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. The deferred 0 compensation and accumulated earnings thereon totaled $435,630 at June 30, 1996 1 23 CITY OF ROSEMEAD, CALIFORNIA ' NOTES TO FINANCIAL STATEMENTS ' Note 8. Deferred Compensation Agreements, Continued ' The deferred compensation plan is fully funded by the City as the deferred compensation is earned by the employees. Plan assets and the related liability to employees are accounted for in an agency fund at the current market value of the annuity contracts and time certificates of deposit. 1 1 1 1 H lI All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. The City has no liability for losses under the plan, but does have the duty of due care that would be required of any ordinary prudent investor. The administrative and reporting functions of the plan are being handled by an insurance company. Note 9. Self- insurance Program The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and injuries to employees. Beginning in 1977, the City of Rosemead became a member of the Southern California Joint Powers Insurance Authority (the Authority) (a joint powers authority of 77 California cities) for the purpose of pooling their losses and claims of workers' compensation and general liability with those of other member cities. The Authority is governed by a Board of Directors which is composed of one representative and an alternate selected by the City Council of each city. Each board member has one vote regarding control of all budgeting, financial and management issues coming before the Board of Directors. The City of Rosemead, through the Authority, has a self - insured retention of $20,000. The amount exceeding the self - insured retention level, excluding costs for "property damage only" occurrences which have a total incurred value of $2,000 or less, will be shared pro ratably among the pool based upon each member's share of cost under $30,000 up to a maximum of $500,000. Any losses above $500,000, including claims adjusting costs and administrative expenses, are shared pro rata based upon each member's share of aggregate payroll. The City has employers' liability insurance up to $5,000,000 per occurrence. The coverage under this arrangement includes statutory liability under California Workers' Compensation Law and any liability under law for damages arising from employment. Settled claims have not exceeded coverage for these risks in any of the last three fiscal years. 1 24 CITY OF ROSEMEAD, CALIFORNIA ' NOTES TO FINANCIAL STATEMENTS ' Note 10. Long -term Debt ' Tax allocation bonds, Series 1993 A and B In November 1993, the Rosemead Redevelopment Agency issued tax allocation bonds in the amount of $34,275,000 (Series 1993A) and taxable tax allocation refunding bonds in the amount of $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 1993A and B, ' respectively. From the proceeds, $14,652,398 of Series A 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 on or after October 1, 2033, and Series 1993B bonds mature on or after 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 Fund in October 1991. The reallocation had the effect of satisfying the $423,574 borrowed from the 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. ' Compensated absences That portion of the liability for the vested compensated absences totaling $275,629 which is not expected to be paid from available resources is reported in the General Long -term Debt Account Group. ' Other long -term debt The City has included amounts in the long -term debt group of accounts for the litigation settlement. The following is a summary of the general long -term debt transactions for the year ended June 30, 1996: 1 25 Accrued Tax Allocation Tax Allocation Vacation and Bonds Series Bonds Series Litigation Compensatory 1993A 19938 Settlement Time Total Balance, June 30, 1995 $ 34,275,000 $ 2,175,000 $ 142,242 $ 233,364 $ 36,825,606 Payments of principal - (265,000) - - (265,000) Additions 42,265 42,265 ' Reductions in settlement (29,895) (29,895) ' Balance, June 30, 1996 $ 34,275,000 $ 1,910,000 $ 112,347 $ 275,629 $ 36,572,976 1 25 t i 1 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 10. Long -term Debt, Continued The annual requirements, principal and interest to amortize the outstanding debt as of June 30, 1996 are as follows: I Accrued Series 1993 Vacation and During the Year A and B Litigation Compensa- Ending June 30, Bonds Settlement tory Time Interest Total 1997 $ 280,000 $ 35,574 $ 275,629 $ 2,006,477 $ 2,597,680 1998 295,000 37,666 - 1,989,427 2,322,093 1999 310,000 39,107 - 1,971,450 2,320,557 2000 330,000 - - 1,951,663 2,281,663 2001 345,000 - 1,932,853 2,277,853 Years thereafter 34,625,000 - - 41,759,430 76,384,430 $ 36,185,000 $ 112,347 $ 275,629 $ 51,611,300 $ 88,184,276 j Dejeasance ojprior debt The Agency has advance refunded prior 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, 1996, $19,215,000 of bonds outstanding are considered defeased. FM ,■ H I CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS Note 11. Budget Overexpenditures and Deficit Expenditures exceeded Appropriations for the year ended June 30, 1996 in the following departments Note 12. 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 the set -aside requirement amounts incurred through June 30, 1991 and during the fiscal years ended June 30, 1994, 1995 and 1996 are allowed to be deferred until the fiscal year ended June 30, 2023 as a result of a housing deficit repayment plan devised by the Agency as required by law. As of June 30, 1996, the accumulated set -aside amount not yet funded was approximately $4,947,000. Litigation The City was a defendant in a lawsuit along with 13 other cities, the County of Los Angeles, five county garbage collection districts and the State of California for reimbursement of landfill cleanup costs of hazardous waste dumped between 1948 and 1984. The plaintiffs claimed that the cities either accepted for transport or arranged for disposal or treatment of municipal waste which contained hazardous materials. The plaintiffs also claimed that these materials have been released from the landfill into the environment. 27 Amount of Over - Appropriations Expenditures expenditures General Fund Travel and meetings $ 18,000 $ 27,753 $ 9,753 City administration 451,480 671,716 220,236 City clerk 71,150 71,833 683 City treasurer 12,000 12,875 875 City garage 30,540 32,154 1,614 Animal regulation 50,000 51,443 1,443 Narcotics forfeiture - 90 90 Street lighting 192 192 Traffic signs and striping maintenance - 890 890 Aquatics 292,000 297,355 5,355 Capital outlay 39,254 55,206 15,952 Traffic Safety Fund Public safety 60,000 61,470 1,470 Community Parklands Grant Fund Public recreation - 861 861 Note 12. 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 the set -aside requirement amounts incurred through June 30, 1991 and during the fiscal years ended June 30, 1994, 1995 and 1996 are allowed to be deferred until the fiscal year ended June 30, 2023 as a result of a housing deficit repayment plan devised by the Agency as required by law. As of June 30, 1996, the accumulated set -aside amount not yet funded was approximately $4,947,000. Litigation The City was a defendant in a lawsuit along with 13 other cities, the County of Los Angeles, five county garbage collection districts and the State of California for reimbursement of landfill cleanup costs of hazardous waste dumped between 1948 and 1984. The plaintiffs claimed that the cities either accepted for transport or arranged for disposal or treatment of municipal waste which contained hazardous materials. The plaintiffs also claimed that these materials have been released from the landfill into the environment. 27 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS ' Note 12. Commitments and Contingent Liabilities, Continued ' The City and the plaintiffs reached a settlement of the above referenced matter for $946,726. The City's insurers have agreed to pay $447,467, with the City paying the balance of $499,259. Of this amount, $300,000 was deposited in an escrow account in January 1994. The remaining amount of $199,259 will ' be paid over the next five years with interest at various rates not to exceed 5 %. The present value of the remaining payments as of June 30, 1996 was $112,347. This amount is included in the City's long -term debt account group as of June 30, 1996. In addition, the City enacted a user fee, imposed on residential and commercial refuse bills, to help offset the settlement. ' In late July 1995, the 13 cities involved in the above litigation received a claim for indemnity. The Fortune 500 companies who utilized the landfill are now being sued for traditional tort damages to their persons and property. The Fortune 500 companies have in turn filed claims with the 13 cities asserting that, if they are liable, then the cities are proportionately liable up to an aggregate total of $3,000,000 for claims in excess of $40,000,000. The City of Rosemead has denied the claim. An application for leave ' to file a late claim was also denied. At the present, there is not enough information to assess the ultimate outcome. ' Advance agreement In February 1996, 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 October 21, 1996, the agreement continues to remain on hold. ' Note 73. Pronouncement Issued But Not Yet Adopted ' In November 1994, the Governmental Accounting Standards Board issued Statement of Governmental Accounting Standards No. 27, Accounting for Pensions by State and Local Governmental Employers. This Statement establishes standards for measurement, recognition, and display of pension expense and related liabilities, assets and disclosures in the financial statements of state and local government employers. Statement No. 27 is required to be adopted for years beginning after June 15, 1997, with early implementation encouraged. The City has not completed its assessment of the effect that the ' adoption of Statement No. 27 will have on its financial statements. 28 F CITY OF ROSEMEAD, CALIFORNIA REVENUE DETAIL - BUDGET AND ACTUAL - GENERAL FUND Year Ended June 30, 1996 L_ J 1 Taxes Maintenance district Real estate transfer tax Trailer coach fees Sales and use tax Franchise fees Transient occupancy tax 1996 Over (Under) 1995 Budget Actual Budget Actual $ 1,500 $ 1,291 $ (209) $ 1,336 35,000 40,404 5,404 36,739 500 - (500) - 2,550,000 2,309,758 (240,242) 2,582,644 576,000 577,004 1,004 568,020 720,000 735,574 15,574 718,877 3,883,000 3,664,031 (218,969) 3,907,616 I L� Licenses and Permits Business license fees Building permit fees Public work permit Tentative map fees Development review fees Final map fees Occupancy permit fees Sewer connection Strong motion fees Rehabilitation permit fees Intergovernmental Financial aid to local agencies Motor vehicle in lieu tax Other vehicle taxes COPS grant Other state grants Charges for Services Filing and certification fees Other current charges Environmental impact reports Recreation fees Assessments Special community events Fines, Forfeitures and Penalties, court fines and forfeitures Use of Money and Property Interest earned on investments Rental income Other SANE program Repairs to and sale of City property Miscellaneous 40,000 36,547 (3,453) 39,676 630,000 525,405 (104,595) 470,999 37,000 62,941 25,941 67,206 12,500 8,610 (3,890) 2,186 1,000 5,767 4,767 3,116 16,000 33,229 17,229 23,485 55,000 55,987 987 56,370 22,000 29,513 7,513 34,095 2,000 2,192 192 2,101 1,600 - (1,600) - 817,100 760,191 (56,909) 699,234 850,000 1,037,006 187,006 807,644 2,150,000 2,071,934 (78,066) 1,959,222 870 852 (18) 869 - 56,774 56,774 - - 11,000 11,000 160,855 3,000,870 3,177,566 176,696 2,928,590 35,000 59,410 24,410 47,858 179,180 224,124 44,944 225,940 100 - (100) 400 231,060 235,175 4,115 224,286 4,100 6,510 2,410 25,363 22,850 5,836 (17,014) 25,115 472,290 531,055 58,765 548,962 229,500 303,930 74,430 280,636 275,000 403,084 128,084 227,893 55,200 57,395 2,195 61,558 330,200 460,479 130,279 289,451 45,000 32,077 (12,923) 42,124 1,100 6,274 5,174 1,107 43,550 64,185 20,635 103,031 89,650 102,536 12,886 146,262 $ 8,822,610 $ 8,999,788 $ 177,178 $ 8,800,751 29 r CITY OF ROSEMEAD, CALIFORNIA EXPENDITURE DETAIL - BUDGET AND ACTUAL - GENERAL FUND Year Ended June 30, 1996 General Government Travel and meeting City council City administration City clerk Finance City treasurer City attorney General government buildings Community promotion City garage Public Safety Law enforcement Animal regulation Parking control Crossing guard Emergency services Narcotics forfeiture Street lighting Public works Engineering and administration Street and highway construction Traffic signs and striping maintenance ' Public Health, services ' . Community Service Planning Building regulation Engineering Community improvements ' Capital Outlay I Appropriations Reserves 1996 Over (Under) 1995 Budget Actual Budget Actual $ 18,000 Public Recreation ' Administration 68,540 Parks ' Recreation Aquatics 451,480 Dinsmoor Heritage House ' . Community Service Planning Building regulation Engineering Community improvements ' Capital Outlay I Appropriations Reserves 1996 Over (Under) 1995 Budget Actual Budget Actual $ 18,000 $ 27,753 $ 9,753 $ 24,392 68,540 64,427 (4,113) 59,961 451,480 671,716 220,236 456,339 71,150 71,833 683 83,456 223,857 204,522 (19,335) 205,309 12,000 12,875 875 13,022 146,000 95,584 (50,416) 163,829 404,200 361,008 (43,192) 390,979 280,822 266,396 (14,426) 299,868 30,540 32,154 1,614 28,653 1,706,589 1,808,268 101,679 1,725,808 4,281,960 4,173,429 (108,531) 4,083,079 50,000 51,443 1,443 47,553 121,400 115,200 (6,200) 118,484 89,210 76,862 (12,348) 75,743 24,000 2,211 (21,789) 10,412 - 90 90 - 192 192 4,566,570 4,419,427 (147,143) 4,335,271 36,620 35,875 (745) 48,992 48,500 27,041 (21,459) 3,219 - 890 890 35,170 85,120 63,806 (21,314) 87,381 40,000 44,863 4,863 39,852 181,359 176,641 (4,718) 168,235 1,150,480 824,550 (325,930) 740,400 570,990 566,891 (4,099) 549,923 292,000 297,355 5,355 305,294 3,900 3,386 (514) 3,321 2,198,729 1,868,823 (329,906) 1,767,173 204,395 172,956 (31,439) 218,723 525,700 448,651 (77,049) 378,261 304,600 250,551 (54,049) 227,979 343,708 83,061 (260,647) 379,595 1,378,403 955,219 (423,184) 1,204,558 39,254 55,206 15,952 53,433 73,352 (73,352) $ 10,088,017 $ 9,215,612 $ (872,405) S 9,213,476 30 Cash and cash investments Receivables Due from other funds Liabilities and Municipal Equity $ $ ' CITY OF ROSEMEAD, CALIFORNIA 440,906 8,000 - 448,906 $ 165,974 15,100 - $ 181,074 COMBINING BALANCE SHEET - SPECIAL REVENUE FUNDS $ $ 442,979 94,044 _ 537,023 ' June 30, 1996 ' ' Liabilities Community Traffic Air Quality Local Public Development ' Safety State Gas Management Transporta- Transporta- Block Grant $ - Assets Fund Tax Fund District Fund tion Fund tion Funds Funds $ 20,455 Cash and cash investments Receivables Due from other funds Liabilities and Municipal Equity $ $ - 8,158 - 8,158 $ $ 440,906 8,000 - 448,906 $ 165,974 15,100 - $ 181,074 $ $ $ $ 442,979 94,044 _ 537,023 $ $ 155,000 966,148 _ 1,121,148 ' ' Liabilities ' Accounts payable $ - $ 84,847 $ 20,455 $ $ 76,324 $ 117,103 Due to other funds 8,158 - - - 759,382 Deferred revenue - - I - - - 244,663 ' Total liabilities 8,158 84,847 20,455 76,324 1,121,148 Municipal Equity t Reserved for low- moderate income housing - _ Unreserved, undesignated 364,059 160,619 460,699 ' Total municipal equity - 364,059 160,619 460,699 Total liabilities and , municipal equity $ 8,158 $ 448,906 $ 181,074 $ $ 537,023 $ 1,121,148 31 ' Totals 1976 Low- moderate Rosemead Community Street Narcotics Income Set- Housing California Parklands Lighting Seizure Aside Housing Development Wildlife Grant Fund Fund Fund Fund Corporation Grant 1996 1995 $ 41,293 $ 110,348 $ 10,287 $ 3,920,509 $ 89,460 $ 1,436 $ 5,378,192 $ 4,826,440 _ _ _ 46,663 - - 1,138,113 1,514,753 _ _ _ _ - - - 689,961 $ 41,293 $ 110,348 $ 10,287 $ 3,967,172 $ 89,460 $ 1,436 $ 6,516,305 $ 7,031, $ $ - $ 10,287 $ - $ 17,270 $ - S 326,286 $ 647,898 _ _ 1,400 768,940 1,166,727 _ _ - 244,663 242,938 ' 10,287 - 17,270 1,400 1,339,889 2,057,563 _ - 3,967,172 - - 3,967,172 3,913,958 ' 41,293 110,348 - - 72,190 36 1,209,244 1,059,633 41,293 110,348 - 3,967,172 72,190 36 5,176,416 4,973,591 $ 41,293 $ 110,348 $ - $ 3,967,172 $ 89,460 $ 1,436 $ 6,516,305 $ 7,03 1,1 5 4 32 ' CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - SPECIAL REVENUE FUNDS June 30, 1996 Community ' Traffic State Gas Tax Air Quality Local Public Development Safety Fund Management Transporta- Transporta- Block Grant Fund District Fund tion Fund tion Funds Funds ' Revenue Special assessments $ - $ - $ - $ _ $ _ $ Intergovernmental - 951,914 58,175 41,264 970,492 956,072 Charges for services - 8,000 - - - - , Fines, forfeitures and penalties 61,470 - - - _ _ Use of money and property - 21,937 - 16,890 Other - - 166 - - - ' 6 1,4 70 981, 58, 41,264 987,38 956, Expenditures ' Current: General government - - _ _ Public safety 61,470 - - _ _ ' Public works - 960,289 41,160 806,663 55,577 Public recreation - - _ _ _ Community services - 7,503 3,762 900,868 Capital outlay - - _ _ _ _ , Investment loss - 61,470 967,792 j 44,922 - 806,663 956,445 , Revenue over (under) expenditures - 14,059 13,419 41,264 180,719 (373) Other Financing Sources (Uses) Operating transfers: From other funds - - - 373 (To) other funds (85,219) - (85,219) 373 Revenue and other fi- nancing sources over (under) expenditures and other financing ' (uses) 14,059 13,419 (43,955) 180,719 Fund balance, beginning 350,000 147,200 43,955 279,980 , Residual equity transfer - _ _ _ Fund balance, ending $ $ 364,059 $ 160,619 $ $ 460,699 $ ' 33 Totals ' 1976 Low - moderate Rosemead Community Street Narcotics Income Set- Housing California Parklands Lighting Seizure aside Housing Development Wildlife Grant Fund Fund Fund Fund Corporation Grant 1996 1995 $ $ 365,184 $ $ $ $ - $ 365,184 $ 386,814 ' _ 36 2,977,953 3,804,953 8,000 16,000 - 61,470 37,333 ' 2,130 302 253,214 - - 294,473 266,945 165,148 165,314 41,671 2,1 3 65,184 302 253,214 165,148 36 3,872,394 4,553,716 94,723 - 94,723 119,497 206,155 46,374 313,999 331,600 _ _ _ _ - 1,863,689 2,960,435 861 861 134,224 912,133 885,658 - 1,637,238 _ _ _ - - 461,876 861 206,155 46,374 - 94,723 - 3,185,405 6,530,528 1,269 159,029 (46,072) 253,214 70,425 36 686,989 (1,976,812) ' - - 24,409 - 200,000 - 224,782 2,314,443 - (200,000) (150,000) (435,219) (2,486,594) - - 24,409 (200,000) 50,000 - (210,437) (172,151) 1,269 159,029 (21,663) 53,214 120,425 36 476,552 (2,148,963) ' 40,024 225,046 21,663 3,913,958 (48,235) - 4,973,591 7,122,554 - (273,727) - - - - (273,727) - $ 41,293 $ 110,348 $ - $ 3,967,172 $ 72,190 $ 36 $ 5,176,416 $ 4,973,591 ' 34 ' Pension CITY OF ROSEMEAD, CALIFORNIA COMBINING BALANCE SHEET — FIDUCIARY FUNDS June 30, 1996 Refundable Assets Trust Fund Deposits Deferred Compensation Totals 1996 1995 and cash investments $ 226,085 $ 86,228 $ 435,630 $ 747,943 $ 697,483 ' Cash Receivables 3,600 $ 226,085 $ 86,228 $ 435,630 S 747,943 $ 701,083 Liabilities and Municipal Equity Liabilities ' Due to other funds $ $ $ $ $ 875 Refundable deposits - 86,228 - 86,228 104,592 ' Deferred compensation - - 435,630 435,630 357,828 Total liabilities - 86,228 435,630 521,858 463,295 Municipal Equity Fund balance, reserved for employees' ' retirement 2 2 6, 085 - - 226,085 237,788 Total liabilities and municipal equity $ 226,085 $ 86,228 $ 435,630 $ 747,943 $ 701,083 ' 35 !I CITY OF ROSEMEAD, CALIFORNIA ! STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - ALL AGENCY FUNDS Year Ended June 30, 1996 ! Balance, June 30, ! Balance, Refundable Deposit Fund July 1, 1995 Additions Deletions 1996 Assets Cash and cash investments $ 101,867 $ 27,230 $ 42,869 $ 86,228 t Receivables 3,600 3,600 Total assets $ 105,467 $ 27,230 $ 46,469 $ 86,2 ! Liabilities Refundable deposits $ 104,592 $ 27,230 $ 45,594 $ 86,228 ! Due to other funds 875 - 875 - Total liabilities $ 105,467 $ 27,230 $ 46,469 $ 86,228 Employees Deferred Compensation Fund ! Assets Cash and cash investments $ 11,777 $ 8,327 $ 11,400 $ 8,704 Investments in deferred compensation plans 346,051 80,875 426,926 ! Total assets $ 357,828 $ 89,202 $ 11,400 $ 435,630 Liabilities ! Deferred compensation $ 357,828 $ 89,202 $ 11,400 $ 435,630 ! i 1 1 ! ! ! 36 !I