1991 RRA Financial ReportI
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Rosemead Redevelopment Agency
Rosemead, California
ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 305 1991
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ROSEMEAD REDEVELOPMENT AGENCY
COMPONENT UNIT FINANCIAL REPORT
JUNE 30, 1991
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CONTENTS
INDEPENDENT AUDITORS' REPORT 1
COMPONENT UNIT FINANCIAL STATEMENTS
Combined balance sheet, all fund types and account groups 2
Combined statement of revenue, expenditures and changes
in fund balances, all governmental fund types 3
Statement of revenue, expenditures and changes
in fund balances - budget and actual - debt service fund 4
Notes to financial statements 5 - 11
McGLADREY & PULLEN
Certified Public Accountants and Consultants
I INDEPENDENT AUDITORS' REPORT
' To the Governing Board
Rosemead Redevelopment Agency
Rosemead, California
We have audited the accompanying component unit financial statements of Rosemead
' Redevelopment Agency, Rosemead, California, as of and for the year ended June 30, 1991,
as listed in the table of contents. 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.
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 component unit financial statements referred to above present fairly, in
' all material respects, the financial position of Rosemead Redevelopment Agency, Rosemead,
California, as of June 30, 1991, and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.
' Pasadena, California
September 13, 1991
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ROSEMEAD REDEVELOPMENT AGENCY
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
June 30, 1991
ASSETS
Cash and cash investments
Cash and investments with fiscal agent
Other investments
Receivables
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
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LIABILITIES
Accounts payable
j Due to City of Rosemead
Tax allocation notes
Total liabilities
AGENCY EQUITY
Investment in general fixed assets
Fund balances:
Reserved for debt service
Unreserved, designated for
redevelopment projects
Total equity
Total liabilities and equity
See Notes to Financial Statements.
Governmental Fund TVDes
Capital
Debt
Projects
Service
$ 3,157,519
$
-
2,668,179
7,123,147
-
320,810
106,027
$ 10.601.476 $ 2.774,206
$ 992,225 $
169,934
$ 1.162.159 $
$ - $
2,774,206
9.439.317
$ 9.439.317 $ 2.774.206
10.601.476 $ 2.774.206
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' Total
Account Groups (Memorandum Only)
General General
' Fixed Long-term
Assets Debt 1991 1990
$ _ $ 3,157,519 $ 3,803,232
2,668,179 2,973,099
- 7,123,147 8,366,402
' - 426,837 1,178,170
4,080,571 4,080,571 3,428,577
- 2,774,206 2,774,206 3,079,126
7,590,794 7,590,794 8,915,874
1 $ 4,080,571 $ 10,365,000 $ 27,821,253 $ 31,744,480
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$ $ $ 992,225 $ 448,958
' 169,934 168,896
10 365,000 10,365,000 11,991000
1 $ $ 10,365,000 $ 11,527,159 $ 12,612,854
$ 4,080,571 $ $ 4,080,571 $ 3,428,577
' - 2,774,206 3,079,126
9,439,317 12,623,923
$ 4,080,571 $ $ 16,294,094 $ 19,131,626
' 4,080,571 $ 10,365,000 $ 27,821,253 $ 31,744,480
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I FUND BALANCE, ENDING
ROSEMEAD REDEVELOPMENT AGENCY
COMBINED STATEMENT OF REVENUE, EXPENDITURES
AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
Year Ended June 30, 1991
REVENUE
Property tax increment
Interest
Other
EXPENDITURES
Current:
Improvements to project
area
Professional fees
City administrative services
Intergovernmental
Debt service:
Principal
Interest
Revenue (under)
expenditures
OTHER FINANCING
SOURCES (USES)
Operating transfers:
From other funds
(To) other funds
Revenue and other
financing sources
(under) expenditures
and other financing
uses
FUND BALANCE,
BEGINNING
Total
Capital Debt (Memorandum Only)
Projects Service 1991 1990
$ 3,059,892 $ - $ 3,059,892 $ 3,204,232
817,037 268,350 1,085,387 1,492,360
95.169 13.463 108,632 109.304
$ 3.972.098 $ 281.813 $ 4,253,911 $ 4.805.896
$ 4,585,062 $ - $ 4,585,062 $ 6,421,291
33,867 - 33,867 28,024
522,158 - 522,158 274,114
334,705
1,630,000 1,630,000 1,515,000
972.350 972,350 1.101.760
$ 5,141,087 $ 2,602,350 $ 7,743,437 $ 9,674,894
$ (1,168,989) $ (2,320,537) $ (3,489,526) $ (4,868,998)
2,015,617 2,015,617 2,465,032
(2,015,617) (2,015,617) (2,465,032)
$ (3,184,606) $ (304,920) $ (3,489,526) $ (4,868,998)
12.623.923 3.079.126 15,703,049 20,572.047
9.439.317 $ 2.774.206 $12,213.523 $ 15.703.049
I See Notes to Financial Statements.
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REVENUE
' Interest
Other
ROSEMEAD REDEVELOPMENT AGENCY
STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL -
DEBT SERVICE FUND
Year Ended June 30, 1991
EXPENDITURES
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Debt service:
Principal
Interest
' Revenue over (under) expenditures
OTHER FINANCING SOURCES,
' operating transfers from other funds
' Revenue and other financing sources
over (under) expenditures
' FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
See Notes to Financial Statements.
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Over
(Under)
Budget Actual Budget
$ 241,000 $ 268,350 $ 27,350
- 11463 13.463
241,000 $ 281.813 $ 40.813
$ 1,630,000 $ 1,630,000 $
972,350 972.350
$ Z602,350 $ 2,602.350 $
$ (2,361,350) $ (2,320,537) $ 40,813
2,602,350 2.015.617 (586.733)
$ 241,000 $ (304,920) (545.9201
3.079.126
1-2 .774.206
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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
Signirwant Accounting and Reporting Policies
Reporting entity
The Rosemead Redevelopment Agency (Agency) is a component unit of the City of
Rosemead. These financial statements contain information for the Agency only.
Nature of operations
The Agency finances street, park and utility improvements within the Rosemead Project
Area No. 1.
Description of funds and account groups
The accounts of the Agency are organized on the basis of funds or groups of accounts, 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 Capital Projects Fund accounts for the financial resources of the Agency to be used for
the acquisition or construction of major capital facilities within the Agency.
The Debt Service Fund accounts for the accumulation of resources for the payment of
general long-term debt principal, interest and related costs.
Account Groups
The General 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 storm
drainage systems).
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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NOTES TO FINANCIAL STATEMENTS
Note L Reporting Entity, Nature of Operations, Description of Funds and Account Groups and
Significant Accounting and Reporting Policies, Continued
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. Available means collectible within the current period or soon enough thereafter
to pay current liabilities. Property taxes that have been levied and are due on or before
year end are recognized as revenue if they have been collected within sixty days after year
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
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 they mature.
' Receivables
Property taxes receivable represent the uncollected March 1, 1991 levy which is due to the
' Agency at June 30, 1991. 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. 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.
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I NOTES TO FINANCIAL STATEMENTS
' Note 1. Reporting Entity, Nature of Operations Description of Funds and Account Groups and
Significant Accounting and Reporting Policies, Continued
' 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 that amount which is not available to liquidate current
liabilities. The unreserved portion represents the amount available for budgeting future
operations.
Memorandum totals
' Total columns on the combined statements are captioned "memorandum only" to indicate
that they are presented only to facilitate financial analysis. Data in these columns do not
present financial position or results of operations in conformity with generally accepted
accounting principles. Neither is such data comparable to a consolidation because interfund
eliminations have not been made in the aggregation of this data.
' 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.
Budget-to-actual comparisons are not presented for the capital projects fund since the
budgeted appropriations relate to all future appropriations as well as current year
appropriations.
I Note 2 Cash and Cash Investments
I The components of cash and cash investments at June 30, 1991 are as follows:
Cash in bank
' Time certificates of deposit
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$ 107,519
3.050.000
$ 3,157.519
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I requirements of state law 2,867,973
Note 2 Cash and Cash lrwe&ments, Continued
At year end, the carrying amount of the Agency's deposits was $3,157,519 (cash in bank,
above) and the bank balance was $3,319,253. A summary of collateralization of the bank
balances is presented below:
Insured or collateralized with securities held
by the City or its agent in the City's name $ 451,280
Uncollateralized (in accordance with GASB 3),
this category includes any bank balance that
is collateralized with securities held by the
pledging financial institution or by its trust
department or agent but not in the City's name,
although balances so collateralized meet the
$ 3.319,253
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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.
The Agency's other investments are categorized in the following schedule to give an
indication of the level of risk assumed by the entity at year end.
NOTES TO FINANCIAL STATEMENTS
Category Carrying Market
Investment Type 1 2 3 Amount Value
U.S. government and
government agency
securities
State and municipal
bonds
Corporate bonds
Investment in State
Treasurer's Investment
Pool
Total other investments
$ 420,940 $ $
193,300
$ 420,940 $ 430,783
193,300 200,680
4,378,908 4,378,907 4364,110
$ 614,240 $ - $ 4,378,908
$ 4,993,147 $ 4,995,573
2,130,000 2,130,000
$ 7,121147 $ 7,125.573
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NOTES TO FINANCIAL STATEMENTS
Note 2 Cash and Cash Investments, Contumed
The 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
by the financial institution's trust department or agent in the Agency's
name.
3 Uninsured and unregistered investments for which the securities are held
by the financial institution, broker or dealer, or by its trust department or
agent but not in the Agency's name.
Note 3. Receivables
Receivables as of June 30, 1991 consisted of the following:
Capital Debt
Projects Service
' Property tax increment
Accrued interest
$ 200,217 $ -
120,593 106,027
$ 320,810 $ 106,027
Note 4. Reimbursement Agreements and Related Party Transactions
The Agency has entered into various reimbursement agreements with the City of Rosemead
which require the City to install certain public improvements for the benefit of the
Rosemead Redevelopment Agency Project Area No. 1. In addition, the City is to provide
administrative services, facilities and other operating services for a nominal fee.
The amount due to the City totaling $169,934 as of June 30, 1991 is noninterest-bearing.
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NOTES TO FINANCIAL STATEMENTS
Note 5. Property and Equipment
During the year ended June 30, 1991, the changes in the general fixed asset were as follows:
Iand
Buildings and improvements
Furniture and fixtures
Note 6 Long Term Debt
Balance Balance
June 30, June 30,
1990 Acquisitions 1991
$ 2,172,808 $ 177,500 $ 2,350,308
1,041,361 408,213 1,449,574
214.408 66.281 280,689
$ 3,428.577 $ 651,994 $ 4,080,571
In August 1987, $14,930,000 of bonds was issued by the Agency to finance public
improvements within the Agency's Project Area No. 1. The bonds bear interest from 7.75%
to 9.20% with interest payable semiannually on September 1 and March 1. Principal
matures annually on September 1 through 1995. Payment of the bonds is collateralized by
a pledge of tax revenues to be received by the Agency.
The following is a summary of general long-term debt transactions for the year ended June
30, 1991, which consisted entirely of the Tax Allocation Notes Series 1987.
Balance, June 30, 1990
Retirements
Balance, June 30, 1991
$ 11,995,000
1.630.000
$ 10,365,000
The annual requirements, principal and interest, to amortize the outstanding Tax Allocation
Notes Series 1987 as of June 30, 1991 are as follows:
Years Ending
June 30. Principal Interest Total
1992
$ 1,760,000 $
828,617
$ 2,588,617
1993
1,900,000
669,813
2,569,813
1994
2,055,000
496,781
2,551,781
1995
2,230,000
309,312
2,539,312
1996
2.420.000
105.875
2,525.875
10.365.000 $
2,410,398
$ 12.775.398
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NOTES TO FINANCIAL STATEMENTS
Note 7. Commitments and Contingent Liabilities
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 any of the required 20% set
aside. As of June 30, 1991, the accumulated set aside amount not yet funded was
approximately $3,650,000. The law requires the Agency to devise a plan to fund the
accumulating amount and to begin funding it by 1996.
Note & Subsequent Event
The Agency is expected to issue $11,725,000 of Subordinated Lien Tax Allocation Bonds,
during October 1991. These bonds are being issued to provide funds for the acquisition,
construction, improvement and financing of improvements contemplated by the
Redevelopment Plan for the Agency's Redevelopment Project Area No. 1. The principal
amount is expected to be repaid starting October 1, 1996 through October 2,002. The bonds
would be subordinated to the payment of the Tax Allocation Notes as explained in Note 6
to the financial statements.
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