1996 RRA Financial ReportI
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ROSEMEAD REDEVELOPMENT AGENCY
FINANCIAL AND COMPLIANCE REPORT
JUNE 30, 1996
I CONTENTS
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INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
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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
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Notes to financial statements
9-19
SUPPLEMENTARY INFORMATION
Special revenue funds:
Combining balance sheet
20
Combining statement of revenue, expenditures and changes in fund balances
21
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INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AUDIT
GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES
22
REPORTS REQUIRED BY GOVERNMENT AUDITING STANDARDS
' Independent auditor's report on:
Compliance based on an audit of the general purpose financial statements 23
Internal control structure 24 and 25
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McGLADREY&PULLEN, LLP
Certified Public Accountants and Consultants
RSM
international
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, a component unit 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 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
governmental auditing standards issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
' audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
t In our opinion, the general purpose financial statements referred to above present fairly, in all
material respects, the financial position of the Rosemead Redevelopment Agency as of June 30,
1996, and the results of its operations for the year then ended in conformity with generally
accepted accounting principles.
I Suite300
In accordance with Government Auditing Standards, we have also issued a report dated
October 21, 1996 on our consideration of the entity's internal control structure and a report dated
October 21, 1996 on its compliance with laws and regulations.
Pasadena, California
October 21, 1996
140 South Lake Avenue
Pasadena, California 91101-2651
(818) 795-7950 FAX(818)795-9820
%,447 1 f
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Worldwide
Services
Through
RSM International
ROSEMEAD REDEVELOPMENT AGENCY
COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS
June 30, 1996
Assets
Cash and investments
Receivables
Due from other funds
Property and equipment
Amount available in debt service fund
Amount to be provided for retirement of general
long-term debt
Total assets
Liabilities and Equity
Liabilities
Governmental Fund Types
Special Debt Capital
Revenue Service Proiects
$ 4,009,969 $ 2,344,150 $ 19,298,152
46,663 11,193 368,934
$ 4,056,632 $ 2,355,343 $ 19,667,086
Checks issued in excess of bank balance $ - $ - $ -
Accounts payable and accrued liabilities 17,270 - 477,807
Arbitrage rebate payable - - 180,000
Due to City of Rosemead - - 525
Due to other funds - - -
Tax allocation notes and 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
17,270 658,332
2,355,343
3,967,172 -
72,190 - 19,008,754
4,039,362 2,355,343 19,008,754
$ 4,056,632 $ 2,355,343 $ 19,667,086
See Notes to Financial Statements.
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Totals
Account Groups (Memorandum Only)
General General
Fixed Long-term
Assets Debt 1996 1995
$ $ $ 25,652,271 $ 27,224,069
426,790 400,624
- 423,574
8,406,272 8,406,272 8,193,760
- 2,355,343 2,355,343 2,490,820
33,829,657 33,829,657 33,959,180
$ 8,406,272 $ 36,185,000 $ 70,670,333 $ 72,692,027
$ $ $ $ 894,599
495,077 361,945
180,000 -
525 225,478
- 423,574
36,185,000 36,185,000 36,450,000
36,185,000 36,860,602 38,355,596
8,406,272 8,406,272
8,193,760
_ 2,355,343
2,490,820
3,967,172
3,913,958
- 19,080,944 19,737,893
8,406,272 - 33,809,731 34,336,431
$ 8,406,272 $ 36,185,000 $ 70,670,333 $ 72,692,027
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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, 1996
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
Intergovernmental
Capital outlay
Debt service:
Principal
Interest
Arbitrage rebate expense (credit)
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
Fund Balance, ending
$ - $ - $ 2,671,909
253,214 1,779 1,749,265
165,148 - 31,659
418,362 1,779 4,452,833
31,544 - 1,861,174
109,930 - -
13,249 - 37,891
90,000 - 953,266
63,978
265,000
2,006,154 -
- 180,000
244,723 2,271,154 3,096,309
173,639 (2,269,375) 1,356,524
2,133,898
- (2,133,898)
2,133,898 (2,133,898)
173,639 (135,477) (777,374)
3,865,723 2,490,820 19,786,128
$ 4,039,362 $ 2,355,343 $ 19,008,754
See Notes to Financial Statements.
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Totals (Memorandum Only)
1996 1995
$ 2,671,909 $ 3,411,909
2,004,258 1,049,474
196,807 87,368
4,872,974 4,548,751
1,892,718 2,985,673
109,930
67,373
51,140
118,436
1,043,266
1,093,887
-
175,330
63,978
23,071
265,000
260,000
2,006,154
2,019,153
180,000
(153,976)
-
2,364,600
5,612,186
8,953,547
(739,212)
(4,404,796)
2,133,898 2,143,861
(2,133,898) (2,143,861)
(739,212) (4,404,796)
26,142,671 30,547,467
$ 25,403,459 $ 26,142,671
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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, 1996
Special Revenue Funds
Over
(Under)
Budget Actual Budget
Revenue
Property tax increment $ _ $ _ $
Use of money and property 151,700 253,214 101,514
Other 150,000 165,148 15,148
301,700 418,362 116,662
Expenditures
Current:
Improvement to project area
45,000
31,544
(13,456)
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Operating
504,100
109,930
(394,170)
Professional fees
16,000
13,249
(2,751)
City administrative services
60,000
90,000
30,000
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1ntergovemmental
_
_
_
Capital outlay
_
-
Debt service:
,
Principal
_
_
Interest
Arbitrage rebate expense (credit)
_
-
_
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Investment loss
_
_
625,100
244,723
(380,377)
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Revenue over (under) expenditures
(323,400)
173,639
497,039
Other Financing Sources (Uses)
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Operating transfers from (to) other funds
Revenue and other financing sources
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over (under) expenditures and other
financing uses
$ (323,400)
173,639 $
497,039
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Fund Balance, beginning
3,865,723
Fund Balance, ending
$
4,039,362
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Debt Service Fund
Capital Projects Fund
Over
Over
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(Under)
(Under)
Budget Actual
Budget
Budget
Actual
Budget
$ - $ - $
- $
3,303,540
$ 2,671,909 $
(631,631)
130,000 1,779
(128,221)
685,080
1,749,265
1,064,185
- -
-
31,659
31,659
130,000 1,779
(128,221)
3,988,620
4,452,833
464,213
I - - - 3,995,400 1,861,174 (2,134,226)
- 40,500
37,891
(2,609)
959,200
953,266
(5,934)
- 175,300
-
(175,300)
-
-
- 64,200
63,978
(222)
265,000
265,000
- -
-
-
2,005,503
2,006,154
651 =
-
180,000
-
180,000
2,270,503
2,271,154
651 5,234,600
3,096,309
(2,138,291)
(2,140,503)
(2,269,375)
(128,872) (1,245,980)
1,356,524
2,602,504
2,270,503 2,133,898 (136,605) (2,270,503) (2,133,898) 136,605
$ 130,000 (135,477) $ (265,477) $ (3,516,483) (777,374) $ 2,739,109
2,490, 820 19,786,128
' $ 2,355,343 $ 19,008,754
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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, 1996
Totals
Over
(Under)
Budget
Actual
Budget
Revenue
Property tax increment
$ 3,303,540
$ 2,671,909
$ (631,631)
Use of money and property
966,780
2,004,258
1,037,478
Other
150,000
196,807
46,807
4,420,320
4,872,974
452,654
Expenditures
Current:
Improvement to project area
Operating
Professional fees
City administrative services
Intergovernmental
Capital outlay
Debt service:
Principal
Interest
Arbitrage rebate expense (credit)
Investment loss
4,040,400
1,892,718
(2,147,682)
504,100
109,930
(394,170)
56,500
51,140
(5,360)
1,019,200
1,043,266
24,066
175,300
-
(175,300)
64,200
63,978
(222)
265,000
265,000
-
2,005,503
2,006,154
651
-
180,000
180,000
8,130,203 5,612,186 (2,518,017)
Revenue over (under) expenditures (3,709,883) (739,212) 2,970,671
Other Financing Sources (Uses)
Operating transfers from (to) other funds -
Revenue and other financing sources
over (under) expenditures and other
financing uses $ (3,709,883) (739,212) $ 2,970,671
Fund Balance, beginning 26,142,671
Fund Balance, ending
See Notes to Financial Statements.
$ 25,403,459
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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.
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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
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:
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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.
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.
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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
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.
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.
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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
Receivables
' Property taxes receivable represent the portion of the March 1, 1995 levy, which was collected
after June 30, 1996 and before August 31, 1996. Property taxes attach as an enforceable lien on
property as of March 1 and are due and payable in two equal installments on the following
' November 1 and February 1. Unpaid taxes become delinquent on December 10 and April 10.
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
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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 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.
Budget matters
Budgets presented in this report for comparison to actual amounts are presented in accordance
with generally accepted accounting principles. The modified accrual basis of accounting is
employed in the preparation of the budget. Reported budget amounts represent the original
adopted budget as amended. The legal level of budgetary control is at the fund level.
Unexpended budgeted amounts lapse at the end of the budget year.
Note 2. Cash and Investments
The components of cash and investments at June 30, 1996 are as follows:
Cash in bank $ 620,388
Time certificates of deposit 1,357,771
1,978,159
Investments 1,355,685
Cash with fiscal agent 2,344,152
Guaranteed insurance contracts 14,583,729
Investment in State Treasurer's Investment Pool 5,390,546
$ 25,652,271
Cash
At year end, the carrying amount of the Agency's deposits was $1,978,159 and the bank balance
was $1,983,866. Of the bank balance, $397,942 was covered by federal depository insurance or
by collateral held in the Agency's name, and $1,585,924 was uninsured and uncollateralized.
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ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 2. Cash and Investments, Continued
In accordance with state statutes, the Agency maintains deposits at those depository institutions
insured by the Federal Deposit Insurance Corporation. The California Government Code
requires California banks and savings and loan associations to collateralize the deposits of
governmental entities by pledging government securities as collateral. The market value of
pledged securities must equal at least 110% of those deposits. California law also allows
financial institutions to secure the deposits of governmental entities by pledging first trust deed
mortgage notes having a collateral value of 150% of an agency's total deposits.
Investments
State statutes authorize the Agency to invest any available funds in securities issued or
guaranteed by the United States Treasury or agencies of the United States, bank certificates of
deposit, bankers acceptances, negotiable certificates of deposit, the State 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 $2,344,152 which is invested in a guaranteed
insurance contract which accrues interest monthly at a rate of 5.8%, maturing October 1, 2013.
Investments also included $14,583,729 of amounts in various guaranteed insurance contracts
which accrue interest quarterly at rates ranging from 7.18% to 7.41%, maturing October 1, 1999.
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ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 2 Cash and Investments, Continued
The Agency's investments are categorized in the following schedule to give an indication of the
level of risk assumed by the entity at year end.
Category Carrying Market
1 2 3 Amount Value
Investment
U.S. Government
and government
agency securities
State and
municipal bonds
Cash with fiscal
agent
Guaranteed
insurance
contracts
Investment in
State Treasurer's
$ $ - $ 485,390 $ 485,390 $ 493,891
- 870,295 870,295 891,759
$ $ - $ 1,355,685 1,355,685 1,385,650
2,344,152 2,344,152
14,583,729 14,583,729
Investment Pool 5,390,546 5,390,546
Total investments $ 23,674,112 $ 23,704,077
The three preceding risk description categories are defined as follows:
1 Investments that are insured, registered or for which the securities are held by the
Agency or its agent in the Agency's name.
2 Uninsured and unregistered investments for which the securities are held by the
counterparty's Trust Department (if a bank) or agent in the Agency's name.
3 Uninsured and unregistered investments for which the securities are held by the
counterparty's Trust Department (if a bank) or agent, but not in the Agency's name.
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ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 3. Receivables
m
Receivables as of June 30, 1996 consisted of the following:
Special
m
Revenue Debt
Capital
Fund Service
Projects
Total
Property tax increment $ - $ -
$ 25,252
$ 25,252
Accrued interest 46,663 11,193
343,682
401,538
$ 46,663 $ 11,193
$ 368,934
$ 426,790
I Note 4. Reimbursement Agreements and Related Parry Transactions
a 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, 1996.
The amount due to the City is $525 as of June 30, 1996.
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Note 5. Property and Equipment
During the year ended June 30, 1996, the changes in the general fixed assets were as follows:
Balance
Balance
June 30,
June 30,
1995
Acquisitions 1996
Land $ 4,187,639 $ - $ 4,187,639
Buildings and improvements 3,495,712 70,163 3,565,875
Furniture and fixtures 510,409 142,349 652,758
$ 8,193,760 $
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212,512 $ 8,406,272
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ROSEMEAD REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
Note 6. Long-term Debt
The following is a summary of general long-term debt transactions for the year ended June 30,
1996:
Tax
Tax
Allocation
Allocation
Bonds
Bonds
Series A 1993
Series B 1993 Total
Balance, June 30, 1995 $ 34,275,000 $ 2,175,000 $ 36,450,000
(Payments) of principal - (265,000) (265,000)
Balance, June 30 1996 $ 34,275,000 $ 1,910,000 $ 36,185,000
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 6. Long-term Debt, Continued
The annual requirements, principal and interest to amortize the outstanding debt as of June 30,
1996 are as follows:
During the Year
Series 1993A Bonds
Series 1993B Bonds
Ending June 30,
Principal Interest
Principal
Interest
Total
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1997
$ - $ 1,892,193
$ 280,000
$ 106,420
$ 2,278,613
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
Years thereafter
34,275,000 41,738,780
350,000
20,650
76,384,430
$ 34,275,000 $ 51,199,745
$ 1,910,000
$ 395,580
$ 87,780,325
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, contingency 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.
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. 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.
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I ROSEMEAD REDEVELOPMENT AGENCY
I
NOTES TO FINANCIAL STATEMENTS
0 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
a revenue for low and moderate income housing. The Agency has made findings that, for the year
ended 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, 1996, 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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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 October 21, 1996,
the agreement continues to remain on hold.
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ROSEMEAD REDEVELOPMENT AGENCY
COMBINING BALANCE SHEET - SPECIAL REVENUE FUNDS
June 30, 1996
Assets
Cash and investments
Receivables
Due from other funds
Total assets
Liabilities and Equity
Liabilities, accounts payable an
accrued liabilities
Agency equity, fund balances,
reserved for low-moderate
income housing
Unreserved, designated for
redevelopment projects
Total liabilities and equity
Low-Moderate
Income
Rosemead
Housing
Housing
Set-aside
Development
Totals
Fund
Corporation
1996
1995
$ 3,920,509
$ 89,460
$ 4,009,969 $
3,615,984
46,663
-
46,663
2,214
-
-
-
423,574
$ 3,967,172
$ 89,460
$ 4,056,632 $
4,041,772
$ $ 17,270 $ 17,270 $ 176,049
3,967,172 - 3,967,172 3,913,958
- 72,190 72,190 (48,235)
$ 3,967,172 $ 89,460 $ 4,056,632 $ 4,041,772
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I ROSEMEAD REDEVELOPMENT AGENCY
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES
IN FUND BALANCES - SPECIAL REVENUE FUNDS
a Year Ended June 30, 1996
Low-Moderate
Income
Housing
Set-aside
Fund
Rosemead
Housing
Development
Corporation
otals
1996
995
Revenue
Use of money and property
$ 253,214
$ - $
253,214 $
222,108
Other
165,148
165,148
41,671
253,214
165,148
418,362
263,779
Expenditures
Current:
Improvements to project area
-
31,544
31,544
1,632,536
Operating
109,930
109,930
67,373
Professional fees
-
13,249
13,249
51,974
City administrative services
-
90,000
90,000
140,150
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Investment loss
461,876
-
244,723
244,723
2,353,909
Revenue over (under)
expenditures
253,214
(79,575)
173,639
(2,090,130)
Other Financing Sources (Uses),
operating transfers (to) from
other funds
(200,000)
200,000
-
Revenue and other
financing sources over
(under) expenditures
and other financing uses
53,214
120,425
173,639
(2,090,130)
'
Fund Balance (Deficit), beginning
3,913,958
(48,235)
3,865,723
5,955,853
Fund Balance, ending
$ 3,967,172
$ 72,190 $
4,039,362 $
3,865,723
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Y Certified Public Accountants and Consultants international
a INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AUDIT
GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES
To the Governing Board
Rosemead Redevelopment Agency
B 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, 1996 and have issued our report thereon, dated
October 21, 1996. 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.
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In connection with our audit, we performed the procedures contained in the publication entitled
Cnfidelines 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 appropriate regulatory agencies 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.
Pasadena, California
October 21, 1996
Suite 300
140 South Lake Avenue
Pasadena, California 91 101-2651
(818) 795-7950 FAX (818) 795-9820
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Worldwide
Services
Through
RSM International
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MCGLADREY&PULLENrLLP RSM
e Certified Public Accountants and Consultants international
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE BASED ON AN
AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS
I To the Board of Directors
Rosemead Redevelopment Agency
Rosemead, California
We have audited the general purpose financial statements of the Rosemead Redevelopment
Agency, a component unit of the City of Rosemead, California, as of and for the year ended
June 30, 1996, and have issued our report thereon, dated October 21, 1996.
' 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.
' Compliance with laws, regulations, contracts and grants applicable to the Rosemead
Redevelopment Agency, is the responsibility of the entity's management. As part of obtaining
reasonable assurance about whether the financial statements are free of material misstatement,
we performed tests of the entity's compliance with certain provisions of laws, regulations,
contracts and grants. However, the objective of our audit of the financial statements was not to
' provide an opinion on overall compliance with such provisions. Accordingly, we do not express
such an opinion.
' The results of our tests disclosed no instances of noncompliance that are required to be reported
herein under Government Auditing Standards.
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.
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Pasadena, California
October 21, 1996
Suite 300
140 South Lake Avenue
Pasadena, California 91101-2651
(818)7957950 FAX (818)795-9820
23
Worldwide
Services
Through
RSM International
I
McGLADREY&PULLEN,LLP RSM
,I® Certified Public Accountants and Consultants international
1
O INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL STRUCTURE
1 To the Board of Directors
Rosemead Redevelopment Agency
Rosemead, California
' We have audited the general purpose financial statements of the Rosemead Redevelopment
Agency, a component unit of the City of Rosemead, California, as of and for the year ended
June 30, 1996, and have issued our report thereon, dated October 21, 1996.
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.
The management of the Rosemead Redevelopment Agency is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related costs of
internal control structure policies and procedures. The objectives of an intemal control structure
are to provide management with reasonable, but not absolute, assurance that assets are
' safeguarded against loss from unauthorized use or disposition, and that transactions are executed
in accordance with management's authorization and recorded properly to permit the preparation
of financial statements in accordance with generally accepted accounting principles. Because of
' inherent limitations in any internal control structure, errors or irregularities may nevertheless
occur and not be detected. Also, projection of any evaluation of the structure to future periods is
subject to the risk that procedures may become inadequate because of changes in conditions or
' that the effectiveness of the design and operation of policies and procedures may deteriorate.
In planning and performing our audit of the financial statements of the Rosemead
' Redevelopment Agency, as of and for the year ended June 30, 1996, we obtained an
understanding of the internal control structure. With respect to the internal control structure, we
' obtained an understanding of the design of relevant policies and procedures and whether they
have been placed in operation, and we assessed control risk in order to determine our auditing
procedures for the purpose of expressing our opinion on the financial statements and not to
' provide an opinion on the internal control structure. Accordingly, we do not express such an
opinion.
1
Suite 300
140 South Lake Avenue
Pasadena, California 91101-2651
(818) 795-7950 FAX(818)795-9820
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Worldwide
Services
Through
RSM International
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Our consideration of the internal control structure would not necessarily disclose all matters in
the internal control structure that might be material weaknesses under standards established by
the American Institute of Certified Public Accountants. A material weakness is condition in
which the design or operation of one or more of the internal control structure elements does not
reduce to a relatively low level the risk that errors and irregularities 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.
Pasadena, California
October 21, 1996
25