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1995 RRA Financial ReportI 1 i 1 1 1 11 1 1 1 1 1 1 1 1 1 1 1 1 Rosemead Redevelopment Agency Rosemead, California ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 309 1995 r ■■■■■LL ,qqiii#,!j 1 1 1 1 ROSEMEAD REDEVELOPMENT AGENCY FINANCIAL REPORT June 30, 1995 1 1 1 1 i i i 1 1 CONTENTS INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION I FINANCIAL STATEMENTS Combined balance sheet - all fund types and account groups 2 and 3 Combined statement of revenues, expenditures and changes in fund balances - all governmental fund types 4 and 5 Combined statement of revenue, expenditures and changes in fund balances - budget and actual - all governmental fund types 6 -8 Notes to financial statements 9-16 SUPPLEMENTARY INFORMATION Special revenue funds: Combining balance sheet 17 Combining statement of revenues, expenditures and changes in fund balances 18 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AUDIT GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES 19 McGLADREY&PULLEN, LLP Certified Public Accountants and Consultants ' INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION IJ ' To the Governing Board Rosemead Redevelopment Agency Rosemead, Califomia We have audited the accompanying 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, 1995, as listed in the table of contents. These financial statements are the responsibility, of the Agency's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements ' are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. ' In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Redevelopment Agency of the City of Rosemead, Califomia as of June 30, 1995, and the results of its operations and cash flows of its Enterprise Fund for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The combining financial statements listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the financial statements of the Redevelopment Agencv of the Citv of Rosemead, California. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. San Bernardino, California ' October 13, 1995 n J 1 I J r I J I d I THIS PAGE IS INTENTIONALLY LEFT BLANK ROSEMEAD REDEVELOPMENT AGENCY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS June 30, 1995 Governmental Fund ASSETS Special Revenue Debt Service Capital Projects Cash and investments $ 3,615,984 $ 2,390,426 $ 21,217,659 Receivables 2,214 100,394 298,016 Due from other funds 423,574 - Property and equipment - Amount available in debt service fund Amount to be provided for retirement of general long-term debt Total assets $ 4.041.772 $ 2,490.820 $ 21,515,675 LIABILITIES AND EOUITY Liabilities: Checks issued in excess of bank balance Accounts payable and accrued liabilities Arbitrage rebate payable Due to City of Rosemead Due to other funds Tax allocation notes and bonds Due to other governments Total liabilities Agencv Equity: Investment in general fixed assets Fund balances: Reserved for debt service Reserved for low-moderate income housing Unreserved, designated for redevelopment projects Total equity Total liabilities and equity See Notes to Financial Statements. 2 $ - $ $ 894,599 176,049 185,896 , 225,478 423,574 , 176,049 1,729,547 ' , - 2,490,820 3,913,958 (48,235) - - - 19.786,128 ' 3.865,723 2,490.820 19,786.128 $ 4.041.772 $ 2.490.820 $ 21J15.675 , 1 1 i 1 i Totals Account Groups (Memorandu m Onlv) General General Fined Long-Term Assets Debt 1995 1994 $ $ $ 27,224,069 $ 30,350,262 400,624 896,990 423,574 423,574 8,193,760 - 8,193,760 4,542,729 - 2,490,820 2,490,820 2,423,295 - 33,959,180 33,959,180 34,462,035 $ 8.193,760 $ 36,450,000 $ 72,692,027 $ 73,098,885 $ $ $ 894,599 $ 361,945 616,594 - 153,976 225,478 148,780 423,574 423,574 36,450,000 36,450,000 36,710,000 - - 175,330 36,450,000 38,355,596 38,228,254 8,193,760 - 8,193,760 4,542,729 - - 2,490,820 2,423,295 - 3,913,958 6,353,876 - - 19,737 893 21,550 731 8,193,760 - 34,336,431 34,870,631 $ 8,191760 $ 36,450.000 $ 72.692.027 $ 73,098.885 3 ROSEMEAD REDEVELOPMENT AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES Year Ended June 30, 1995 Special Debt Capital Revenue Service Projects Revenue: Property tax increment $ - $ - $ 3,411,909 Use of money and property 222,108 202,817 624,549 Other 41,671 45,697 263,779 202,817 4,082,155 Expenditures: Current: Improvements to project area 1,632,536 - 1353,137 Operating 67,373 - Professional fees 51,974 - 66,462 Citv administrative services 140,150 - 953,737 Intergovernmental - - 175,330 Capital outlav - - 23,071 Debt service: Principal - 260,000 - Interest - 2,019,153 Certificate refunding _ _ Issuance costs _ _ Arbitrage rebate expense (credit) - - (153,976) Investment loss 461,876 - 1.902,724 2,353,909 2,279,153 4,320,485 Revenues over(under)expenditures (2,090,130) (2,076,336) (238,330) Other Financing Sources (Uses): Proceeds from sale of bonds, net of discounts of $701,815 _ Payments to refunding escrow agent - - Operating transfers: From other funds - 2,143,861 (To) other funds - - (1143,861) - 2,143,861 (2,143,861) Revenue and other financing sources over (under) expenditures and other financing uses (2,090,130) 67,525 (2,382,191) Fund Balance, beginning 5,955,853 2,423,295 21,948,754 Restatement of beginning fund balance (Note 2) - - 219,565 Fund Balance, ending $ 3,865,723 $ 2,490,820 $ 19,786,128 See Notes to Financial Statements. 4 1 1 Totals (Memorandum Only) 1995 1994 $ 3,411,909 $ 3,185,746 1,049,474 1,393,003 87,368 136,982 4,548,751 4,715,731 2,985,673 2,658,762 67,373 - 118,436 76,512 1,093,887 1,131,317 175,330 175,295 23,071 20,966 260,000 2,055,000 2,019,153 1,137,474 - 2,651,000 183,403 (153,976) (59,745) 2,364,600 8,953,547 10,029,984 (4,404,796) (5,314,253) - 36,008,184 - (17,034,949) 2,143,861 3,019,123 (2,143,861) (3,019,123) - 18,973,235 (4,404,796) 13,658,982 30,327,902 16,668,920 219,565 - $ 26,142,671 $ 30,327,902 5 ROSEMEAD REDEVELOPMENT AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - ALL GOVERNMENTAL FUND TYPES Year Ended June 30, 1995 Special Revenue Funds Over (Under) Budget Actual Budget Revenue: Property tax increment $ - $ $ Use of money and property 113,500 222,108 108,608 Other 10,500 41,671 31,171 124,000 263,779 139,779 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 Revenues over (under) expenditures Other Financing Sources (Uses): Operating transfers from (to) other funds Revenue and other financing sources over (under) expenditures and other financing uses Fund Balance, beginning Restatement of beginning funds balance (Note 2) Fund Balance, ending See Notes to Financial Statements. 1665,000 1,632,536 (1,032,464) 1,600 67373 65,773 17,000 51,974 34,974 150,000 140,150 (9,850) - 461,876 461,876 2,833,600 2,353,909 (479,691) (1709,600) (2,090,130) 619,470 I $ (1709,600) (2,090,130) $ 619,470 5,955,853 $ 3,865,723 I 1 6 1 I I 1 Debt Service Fund Capital Projects Funds Over Over (Under) (Under) Budget Actual Budget Budget Actual Budget $ - $ - $ 3,170,000 $ 3,411,909 $ 241,909 35,000 202,817 167,817 602,500 624,549 22,049 - 136,000 45,697 (90 303) 35,000 202,817 167,817 3,908,500 4,082,155 173,655 - 4,002,350 1,353,137 (2,649,213) 43,500 66,462 22,962 959,200 953,737 (5,463) - 175,300 175,330 30 _ - - 27,750 23,071 (4,679) 260,000 260,000 2,019,153 2,019,153 - - (153,976) (153,976) ' - - - 1,902,724 1,902,724 2.279,153 2179,153 5,208,100 4,320,485 (887,615) (2,244,153) (2,076,336) 167,817 (1,299,600) (238330) 1,061,270 2,279,153 2,143,861 (135 292) (2,279,153) (2,143,861) 135,292 $ 35,000 67,525 $ 31525 $ (3,578,753) (2,382,191)$ 1,196,562 2,423,295 21,948,754 219,565 $ 2,490,820 $ 19,786.128 (continued) I I 7 I ROSEMEAD REDEVELOPMENT AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - ALL GOVERNMENTAL FUND TYPES (CONTINUED) Year Ended June 30, 1995 Totals Over (Under) Revenue: Property tax increment Use of money and property Other 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 Actual $ 3,170,000 3,411,909 $ 241,909 751,000 1,049,474 298,474 146,500 87,368 (59,132) 4,067,500 4,548,751 481,251 6,667350 2,985,673 (3,681,677) 45,100 67,373 22,273 976,200 118,436 (857,764) 325,300 1,093,887 768,587 - 175,330 175,330 27,750 23,071 (4,679) 260,000 260,000 2,019,153 2,019,153 - (153,976) (153,976) - 2,364,600 2,364,600 10,320.853 8,953,547 (1367,306) Revenues over(under)expenditures Other Financing Sources (Uses): Operating transfers from (to) other funds Revenue and other financing sources over (under) expenditures and other financing uses Fund Balance, beginning Restatement of beginning funds balance (Note 2) Fund Balance, ending (6,253,353) (4,404,796) 1.848,557 1 $ (6253,353) (4,404,796)$ 1.848,557 30,327,902 ' 219,565 $ 26.142.671 , I I 8 I s I ROSEMEAD REDEVELOPMENT AGENCY I NOTES TO FINANCIAL STATEMENTS I Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and Significant Accounting and Reporting Policies The Redevelopment Agency (the "Agencv") 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 reporting entity also includes the financial information of the Community Facilities District No. 1990-I. ' 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: t 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: i 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 and financing of low and moderate income housing. ' Fund Accountine: The accounts of the Agency are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts which comprise its assets, liabilities, equity, revenue and expenditures. The various funds and account groups are presented as follows: Governmental Fund Types: The Special Revenue Funds account for the proceeds of specific revenue resources (other than major capital projects) that are legally restricted to expenditures for specified purposes. The Special Revenue Funds and their purposes are as follows: 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. The Rosemead Housing Development Corporation accounts for the construction and financing of low and moderate income housing. 9 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 Debt Service Fund accounts for the accumulation of resources for the payment of general long-term debt principal, interest and related costs. The Capita! 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 Genera! Fixed Assets Account Group accounts for all Agency general fixed assets except for public domain fixed assets (e.g., streets, bridges, sidewalks, curbs, gutters and stone drainage systems). The Genera! Long-Term Debt Account Group accounts for the outstanding principal balances of all Agency long-term debt expected to be financed from Governmental Fund Types. The following is a summary of the significant accounting and reporting policies: Basis of accounting: Governmental fund types are accounted for using the modified accrual basis of accounting. Revenue is recognized in the accounting period in which it becomes both measurable and available. "Measurable" means the amount of the transaction can be determined. "Available" means collectible within the current period or soon enough thereafter to pay current liabilities. In determining when to recognize intergovernmental revenues, 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 will be paid to the Agency; therefore, revenues are 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 revenues at the time of receipt or earlier if they meet the criterion of availabilitv. 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. I I 10 ROSEMEAD REDEVELOPMENT AGENCY ' NOTES TO FINANCIAL STATEMENTS Note 1. Reporting Entity, Nature of Operations, Description of Funds and Account Groups, and Significant Accounting and Reporting Policies (Continued) Cash investments and other investments are accounted for at cost or amortized cost. No loss is recognized when market values decline below cost, since it is the policy of the Agency to hold such investments until thev mature. Investment earnings are allocated based on the source of funds. Receivables: Property taxes receivable represent the portion of the March 1, 1994 levy, which was collected after June 30, 1995 and before August 31, 1995. Property taxes attach as an enforceable lien on property as of March I and are due and payable in two equal installments on the following November I and February I. 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, is 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. 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 items acquired or constructed for general governmental operations are recorded as expenditures in the fund making the expenditure and capitalized in the General Fixed Assets Account Group. All general fixed assets which were purchased or constructed are stated at cost. Assets acquired by gift or bequest are recorded at their fair market value at the date of transfer. No depreciation is recorded on general fixed assets. Fund balances: The reserved portion of the fund balances represents that amount which has been legally identified for the specific purpose or it represents that amount which is not available to liquidate current liabilities. The unreserved portion represents the amount available for future appropriations. Designated fund balances represent tentative plans for future use of financial resources. "Memorandum Only" total columns: Included on the combined financial statements are total columns captioned "Memorandum Only" to indicate that they are presented only for informational purposes. Adjustments to eliminate interfund transactions have not been recorded in arriving at such amounts and the ' memorandum totals are not intended to fairly present the financial position or results of operations of the reporting entity taken as a whole. Additionally, the 1994 totals presented in the "Memorandum Only" columns are included to provide a summarized comparison with comparable 1995 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. I 11 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) 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. ■ Unexpended budgeted amounts lapse at the end of the budget year. Note 2. Restatement The beginning balance in the Capital Projects Fund has been retroactively restated to correct for prior year property tax revenues. The effect of this restatement was to increase fund balance b_v $219.565 from the amounts previously reported. Note 3. Cash and Investments The components of cash and investments at June 30, 1995 are as follows: Cash in bank $ 166,069 Time certificates of deposit 1,339,941 Investments 1,330,482 Cash with fiscal agent 2,389,776 Guaranteed insurance contracts 17,785,850 Investment in State Treasurer's Investment Pool 4,211,951 $ 27,224,069 Cash: At year end, the carrying amount of the Agency's deposits was $1,506,010 and the bank balance was $1,535,179. Of the bank balance, $214,959 was covered by federal depository insurance or by collateral held in the Agencvs name, and $1,320,220 was uninsured and uncollateralized. The balance ' consisted of the following: Cash in bank Time certificates of deposit $ 166,069 1,339,941 $ L506,010 I 12 W ROSEMEAD REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS Note 3. Cash and Investments (Continued) 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 an agency's deposits by pledging government securities as collateral. The market value of pledged securities must equal at least 110% of an agency's deposits. ' California law also allows financial institutions to secure agency deposits by pledging first trust deed mortgage notes having a 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, registered warrants or treasury notes of the State of California and its local agencies. Investments also included $17,785,850 of amounts invested in various Guaranteed Insurance Contracts which accrue interest quarterly at interest rates ranging from 7.18% to 7.41 maturing October 1, 1999. 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 Investment l 2 3 Amount Value U.S. Government and government $ $ $ 476,863 $ 476,863 $ 490,337 agency securities _ $ $ State and municipal bonds - 853,619 853,619 844,595 Guaranteed Insurance - 17,785,850 17,785,850 17,785,850 $ - $ $ 19. 16332 19,116332 19,120.782 C h i as w th fiscal agent 2,389,776 2,389,776 Investment in State Treasurer's Investment Pool 4,211,951 4,211,951 Total investments $ 25,718.059 $ 25.722.509 Th e three preceding risk description categories are defined as follows: Category Description 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 b_v 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. 13 ROSEMEAD REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS , Note 3. Cash and Investments (Continued) Investment loss: Prior to February 1995, the Agency's investments included corporate and government bonds with maturities extending through December 2043. As of February 1995, the carrying value of these investments approximated $18,496,000 with a market value of approximately $16,131,400. In December 1994, the Agency affected a change in investment policy in order to conform to maturity limitations in the government code and to improve liquidity and reduce market value risk associated with longer term investments. As a result of this change, the Agency sold this portfolio, resulting in a loss due to a market value decline of $2,364,600. The proceeds from the sale were reinvested in the Guaranteed Investment Contracts referred to above. Note 4. Receivables ' Receivables as of June 30, 1995 consisted of the following: Special Revenue Debt Capital Fund Service Projects Total Property tax increment $ - $ - $ 237,683 $ 237,683 Accrued interest 2,214 100,394 60,333 162,941 $ 2,214 $ 100,394 $ 298,016 $ 400 624 Note 5. Interfund Receivables and Payables Interfund receivables and payables as of June 30, 1995 are as follows: Interfund Funds Receivables Pa abler Special Revenue Fund, low-moderate income housing set-aside fund $ 423,574 $ - Capital Projects Fund - 423,574 $ 423,574 $ 423,574 r. Note 6. Reimbursement Agreements and Related Party Transactions The Agency has entered into various reimbursement agreements with the City of Rosemead which require the City to install certain public improvements for the benefit of the Rosemead Redevelopment Agency ' Project Area No. 1. In addition, the City is to provide administrative services, facilities and other operating services which totaled $1,097,300 for the fiscal year ended June 30, 1995. The amount due to the City totaling $225,500 as of June 30, 1995 is noninterest bearing. 14 I ROSEMEAD REDEVELOPMENT AGENCY I NOTES TO FINANCIAL STATEMENTS Note 7. Property and Equipment f! I During the year ended June 30, 1995, the changes in the general fixed assets were as follows: Land Buildings and improvements Furniture and fixtures I Note 8. Long-term Debt Balance Balance June 30, June 30, 1994 Acquisitions 1995 $ 4,187,639 $ - $ 4,187,639 1,789,977 1,705,735 3,495,712 402,444 107,965 510,409 $ 63380,060 $ 1.813.700 $ 8.193,760 ' The following is a summary of general long-term debt transactions for the year ended June 30, 1995: California Tax Tax Budget Allocation Allocation Trailer Bonds Bonds Bill SB1135 Series A 1993 Series B 1993 Total Balance, June 30, 1994 $ 175,330 $ 34,275,000 $ 2,435,000 $ 36,885,330 (Payments) of principal (175,330) (260,000) (435,330) Additions Advance refunding - - - Balance, June 30 1995 $ $ 34.275,000 $ 2,175,000 $ 36,450,000 In November 1993, the Rosemead Redevelopment Agency issued tar 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 1994 A and B, respectively. From these 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. Govcmment 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. 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, 1995, $21,635,000 of bonds outstanding are considered defeased. I I 15 ROSEMEAD REDEVELOPMENT AGENCY ' NOTES TO FINANCIAL STATEMENTS Note 8. Long-term Debt (Continued) The annual requirements, principal and interest, to amortize the outstanding debt as of June 30 1995 are as follows: , During the Year Ending Series 1993A Bonds Series 1993B Bonds June 30, Principal Interest Principal Interest Total 1996 $ - $ 1,892,193 $ 265,000 $ 120,200 $ 2,277,393 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 Years thereafter 34,275,000 41,738,780 695,000 61,310 76.770,090 ' $ 34.275.000 $ 51.199.745 $ 2,175,000 $ 515,780 $ 88.165.525 Note 9. Commitments an d 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 revenues 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. As of June 30, 1995, the accumulated set-aside amount not yet funded was $5,504,525. As required by law, the Agency devised a plan to fund the accumulating amount. The fiscal year ending June 30, 1994, 1995 and 1996 obligation is deferred until the fiscal year ending June 30, 2023, as provided by the Agency's adoption of the housing deficit repayment plan. 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 Agencv ' redevelopment area. The agreement was put on hold by the Agency and, as of October 13, 1995, continues to remain on hold. I I 1' 1, 16 11 ROSEMEAD REDEVELOPMENT AGENCY COMBINING BALANCE SHEET SPECIAL REVENUE FUNDS June 30, 1995 Low-Moderate Income Rosemead Housing Housing Set-Aside Development Totals ASSETS Fund Corporation 1995 1994 Cash and investments $ 3,490,384 $ 125,600 $ 3,615,984 $ 6,095,681 Receivables and prepaid expenses - 2,214 2,214 25,512 Due from other funds 423,574 - 423,574 423,574 Total assets $ 3,913,958 $ 127.814 $ 4,041,772 $ 6.544.767 r 1 a 11 I I 11 I LIABILITIES AND EQUITY Liabilities, accounts payable, and accrued liabilities Agency Equity, fund balances, reserved for low-moderate income housing Unreserved Total liabilities and equity $ - $ 176,049 $ 176,049 $ 589,914 3,913,958 - 3,913,958 6,353.876 - (48,235) (48 235) (398,023) $ 3,913,958 $ 127,814 $ 4,041,772 $ 6,545,767 17 ROSEMEAD REDEVELOPMENT AGENCY COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - SPECIAL REVENUE FUNDS Year Ended June 30, 1995 Low-Moderate i Income Rosemead Housing Housing Set-Aside Development Totals Fund Corporation 1995 1994 Revenue Use of money and property $ 222,108 $ $ 222,108 $ 257,989 Other - 41,671 41,671 71,106 222,108 41,671 263,779 329,095 Expenditures Current: Improvements to project area Operating Professional fees City administrative services Investment loss Revenue over (under) expenditures Other Financing Sources (Uses), operating transfers (to) from other funds Revenue and other financing sources over (under) expenditures and other financing uses Fund Balance (deficit) Beginning Ending 18 1 't 1,632,536 1,632,536 1,837,331 67,373 67,373 - - 51,974 51,974 19,389 150 140MO 140,150 150,000 461,876 - 461,876 - , 462,026 1,891,883 2,353,909 2,006,720_ (239,918) (1,850,212) (2,090,130) (1,677,625) (2,200,000) 2,200,0001 I (2,439,918) 349,788 (2,090,130) (1,677,625) 1 6,353,876 (398,023) 5,955,853 7,633,478 $ 3,913,958 $ (48,235)$ 3,865,723 $ 5955,853 I I I i McGLADREY&PULLEN, LLP Certified Public Accountants and Consultants I INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AUDIT GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES To the Governing Board Rosemead Redevelopment Agency Citv of Rosemead, California Rosemead, California 1 We have audited the 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, 1995 and have issued our report thereon, dated October 13, 1995. These component unit financial statements are the responsibility of the Agency's management. Our responsibility is to express an opinion on these component unit financial statements based on our audit. In connection with our audit, we performed the procedures contained in the publication entitled "Guidelines for Compliance Audits of California Redevelopment Agencies," as promulgated by the Controller of the State of California in connection with a review of the Agency's compliance with laws, regulations and administrative requirements governing activities of the Agency, as required by Section 33080.1(a) of the Health and Safety Code of the State of California. The procedures we performed would not necessarily disclose instances of noncompliance because they were based on selective tests of accounting records and related data. During the performance of the aforementioned procedures, nothing came to our attention that would lead us to believe that the Agency did not comply with applicable laws, regulations and administrative requirements governing its activities. This report is to be used solely for filing with 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. San Bernardino, California October 13, 1995 I 19 I i